BUSINESS IN THE PRESS

LESSON 1 – Aspects of the environment and business

Aim and description

In the following section you will read articles discussing various aspects of the environment. Most of

these articles were chosen by your peers in previous years, as this was their topic of choice. The aim is

to give you a better understanding of environmental issues related to business, and to help you become

more familiar with some of the economic as well as social implications they have. Some articles are

written with a very clear "aim", political or other – please bear that in mind when reading the articles.

When you work with this compendium, please do the following: read the articles and answer ALL the

questions. You do not need to provide long answers; a few supporting words, or a line to help you

remember what you want to say will do. The teacher will check your answers in class, so please try to

be distinct and to the point. You do not need to print the compendium, if you prefer to bring a laptop

instead – but please remember to answer the questions!

Your answers provide the basis for our discussion in class. When we meet, the teacher will divide you

into small groups so that you get a chance to discuss the articles/your answers. If you have other

questions, or if you think about other things when you read – so much the better, as that can provide

further input into our discussions. Please remember that the point of this exercise is for you to read a

number of texts and to be able to discuss them in class, in order to practice your English.

Comprehension /discussion questions on “Big business says addressing climate change 'rates very

low on agenda'”

1. What are some of the reasons given in the article for companies’ lack of action concerning climate

change?

2. Do you think the authors believe that governments or businesses should take the lead in addressing

climate change? Who do you believe should be more responsible?

Comprehension /discussion questions on “Much More Than a Buzzword” 1. After having read this article, how would you describe “corporate social responsibility” (CSR) and

“environmental stewardship” and what relevance do these two concepts have for businesses, according to the article?

2. To what extent do you agree with MBA professor Houston Peschl that your generation and the next generation of business leaders will “want to work for a company that cares”? Discuss.

Discussion question on both Comprehension /discussion questions on “Big business says

addressing climate change 'rates very low on agenda'” & “Much More Than a Buzzword”

1

1. Discuss the factors that you believe could affect how committed a company is to addressing climate

change and impact on the environment. 2. In cases where companies are simply engaging in “lofty talk”, what do you believe are their reasons

for doing so?

Comprehension /discussion questions on “How green is their growth”

1. According to this article, what is the traditional assumption of the relationship between

environmental issues and economic growth in developing countries?

2. Do the findings of Mr Esty’s research confirm or disprove this assumption? In what ways? What

cannot be easily read from the results?

3. How might economic growth bring about further harm to the environment?

4. The author suggests that “good governance” is the solution to this potential problem. What do

you think is meant by this? Do you believe this is the key? Is it feasible in developing countries?

Comprehension /discussion questions on “On the Rebound”

1. According to the article, what attempts to protect the environment are being made by politicians,

economists, engineers and “greens”? Which of these attempts does the article focus on?

2. Explain “the rebound effect” in your own words

3. Why is “the rebound effect” greater with low-income groups? In what ways do rich people

contribute to “the rebound effect”?

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Comprehension /discussion questions on “The Greening of the U.S. Consumer”

1. According to the article, who is the current concern for the environment now reaching? What other

factors might be contributing to their more cautious spending plans?

2. What negative repercussions might this trend have on the economy? 3. How and why are consumers making use of carbon offsetting programs? Do you think this is

justified?

4. (The article mentions the US government’s economic stimulus plans. What does this involve and

do you think it will work?)*

* Answering this question will involve some private research

Discussion question on “On the Rebound” and “The Greening of the U.S. Consumer”

While the first of these article concentrates on the “the rebound effect” of energy efficiency, the second

would appear to contradict the existence of “the rebound effect” on the U.S. consumer. In your

opinion, can “the rebound effect” be in any way countered by a growing awareness of environmental

issues and the consequent changing attitudes of the public towards? Justify your answer.

Comprehension /discussion questions on “Who’s the Greenest

Of Them All?”

1. What challenges does the article describe that there is for assessing which company is the

“greenest”?

2. According to the article, are they positive of negative towards finding a common ground for

assessing companies on their environmental status? Exemplify and argue your case.

3. What do you think are the most important parameters for assessing sustainability?

4. Try to think of examples of companies that are either seen as very “green” or very “polluting” (or

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accused of “greenwashing”) – discuss whether you agree with these popular images.

Comprehension /discussion questions on “Economic crisis gives us a chance of repairing climate

damage”

1. What do you think about the author’s view that the current crises are a result of “human greed

largely unrestrained by ethics”?

2. One could say that the author argues that it is good, from a climate point of view, that we are in a

financial recession at the moment – to what extent do you agree?

Discussion question on “Poor Countries Shouldn’t Sacrifice Growth to Fight Climate Change”

1. What does the author think about weighing growth on the one hand and climate change on the other,

when it comes to poor countries?

2. To what extent do you agree with the author? Justify your answer, and tell us what flaws you

can find in his argument – if any. Comprehension /discussion questions on “CHINA SPENDS BILLIONS ON ENVIRONMENTAL

IMPROVEMENTS, BUT IS THE WINDOW OF OPPORTUNITY CLOSING?”

1. What are the environmental challenges facing China as its businesses and industries grow?

2. Name some of the environmental projects currently under way in China today.

3. According to the article, what are some of the most important differences between doing business in

China and in the west? How would you overcome these differences if you were seeking to do

business in China?

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4. What “window” does the author speak of in the title of this article? How does the future look for

doing business in China? Comprehension /discussion questions on “China’s climate change opportunity”

1. How should one look at the claim that the West “tends to measure with a double standard”; to

what extent do you agree?

2. What implications will it have, if the West allows for the developing countries to get the same

living standard as they have, and what implications does it have if the West tries to curb the

aspiration of the developing countries to increase their standard of living?

3. What does the author seem to think of China’s contribution to global climate change and of the

West’s, respectively? Do you detect any particular bias?

Comprehension /discussion questions on “Environment: From car-borne to carbon challenges”

1. Why is this particular wave of environmental awareness here to stay?

2. Name some of the things that companies and governments are doing to protect the environment.

3. What kind of services do the environmental consultancy agencies offer?

4. How does Andy Mulholland believe environmental consultancy can be compared to management

consultancy? Can you think of any other parallels?

5. In light of what you read in the previous article about doing business in China, do you think these

environmental consultancy agencies could break into the Chinese market? Justify your answer.

5

Comprehension /discussion questions on “Why the Copenhagen climate talks matter” and

“Copenhagen climate deal: Spectacular failure - or a few important steps?”

1. To what extent do you think the author’s/experts of the respective had a positive view on the

Copenhagen Climate Talks?

2. Which was the most positive and most negative in your opinion? Why is that, do you think?

Argue your case.

3. What seems to you to be the most important outcome of the Copenhagen Talks? Why do you

choose that?

4. Should dealing with climate change be a voluntary task for individual countries and supervised

by the UN, or do you think there is another and better way of coming to grips with this issue?

5. To what extent do you think that climate change is a real issue and to what extent is it a media

hype or a political scam? Who has the most to gain from making climate change into such a big

deal? Discuss.

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Vocabulary

Sustainable causing little or no damage to the environment and therefore able to

continue for a long time

Due diligence the detailed examination of a company and its financial records, done

before becoming involved in a business arrangement with it

Arbiter someone who makes a judgment, or decides what will be done

Cadre group unit in a business

Perplex to confuse and worry someone slightly by being difficult to understand

Tout to advertise / to persuade people to buy a product or service

Grouse complaint

Propel cause to move

Rhetoric language designed for a purpose (often persuasive)

Lofty excessively noble

Baseline starting point (in this case) a basic measurement

Conglomerates a large corporation formed from the merger of many

At the cutting edge the latest / most advanced stage in development

Stewardship supervision / management

Ardent enthusiastic / passionate

Champion (in this case) someone who fights for a cause

Co-op a group of business

Shop around look for the best at the lowest price before buying

Hub centre of activity (in this case) centre of distribution

Getting granular looking into the fine details

Trajectory path/ direction

Assiduously closely / carefully

Churn out produce routinely in large quantities

Forgo do without

Arteries of globalization the passage (metaphorical)

Vigorous involving great effort

Hardly stretching not causing any great adjustment or personal discomfort

Fritter away waste

Lobby seek to influence (usually a politician or public official)

Burnish enhance (figurative)

Hold them to account ensure that they do what they have promised

Poll short for ‘opinion poll’ = an assessment of public opinion

usually obtained by questionnaire

Pioneer be the first to develop / set an example for others

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Canvas cover (in this instance, involve)

Convene call people together for a meeting

Core financials Basic financial principles / equations

Scope the extent of something

Carbon pricing mechanisms strategies for charging people for the carbon they emit

Pointedly directly

Death toll number of people to die as a result of something

Environmental Sustainability Index list showing which countries are better at protect environment

In a nutshell in the fewest possible words

Sponsored paid for (usually by a large group or company)

Orthodoxy generally accepted doctrine or theory

Variable factor liable to change

Ranking a position in a scale of achievement

Woes troubles

Malnutrition an unbalanced diet usually through lack of food

Vicious circle a problem whereby the cause and effect endlessly aggravate

each other worsening the problem

Burden duty or misfortune

Shift gear change pace or direction

Benign less harmful to the environment

fares better performs / turns out better

noxious poisonous

epidemics widespread disease

surge sudden, powerful upwards movement

heat waves period of prolongued, often dangerous heat

leapfrog jump over to avoid

Panacea a solution or remedy for difficulties

Tinker with play around with

Incandescent emitting light as a result of being heated

Frugal sparing with regards spending

Mitigate make less severe or painful

Paucity insufficient in quantity

Albeit although

Gauge estimate or determine the magnitude of something

Crusade organized campaign geared at change

Tide current wave / trend

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Pick up steam become widely recognized / popular

Eschew deliberately avoid

Forecast predict

Exacerbate make worse

Free up make available

Engender cause, bring about

Freewheeling without care (metaphorical)

Laddering up climbing the social ladder (colloquial)

Retailers shops / department stores etc…

Letting up stopping / reduction

Philanthropic seeking to promote the welfare of others / selfless

Potholes a hole in the surface of the road

Palpitations rapid, strong, irregular heart beat

Barrage bombardment

Heralding giving a sign that something is about to happen

Per capita per person / per head

Subsidies money given to an struggling industry by the government to

help them keep prices low and compete on the market

Mandates an official order / law

At odds with contradictory / ill-filling

Surpluses more than is needed or can be sold

OECD countries organization for economic co-operation and development / a

group of countries committed to democracy and the market

economy

Stumbling block causing difficulty or hesitation

Commodity prices price of raw material / agricultural product

Crop yields the amount of corn / barley / rye etc… produced in a harvest

Drought abnormally low rainfall and thus water shortage

FAO Food and agriculture organization

Chronic long-lasting and difficult

Rationing fixed, small amounts of food allotted to individuals in times of

shortage

Impetus force

Acreage Land used for agricultural purposes but not necessarily

measured in acres

Directive an official instruction

Council of ministers Now known as The Council of the European Union. This

institution consists of government ministers from all the EU

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countries, who take detailed decisions and pass EU laws.

Arable suitable for growing crops

Pondering considering

Pursuing seeking to attain

Violate break or fail to comply with a rule

Mandatory compulsory / required by law

Hazardous potentially dangerous

Tariffs tax or duty on imports and exports

Levy impose a tax on

Surcharges additional payments

Emerging becoming apparent

Rehabilitation restoring something to its former condition

Grant money given from one government and not to be repaid

Discount (in this case) disregard

Makes a run guarantees success

Virtually almost

Aggregate value a value created by the total supply or (in this case) demand for

goods in an economy at a specific time

Concession (in this case) a thing granted in response to demands

Water velocity the flow of water

Trade show a fair with a number of stalls where professionals in the same

industry exhibit their products or services

Facilitate to make an action easier

Hampered impeded from making progress

Discriminatory showing bias towards one category/ thing / person over another

Harassment aggressive pressure or intimidation

Onerous involving great amounts of effort

Broker (verb) arrange or negotiate

Multilateral agreed on by three or more parties

Veteran a person with a lot of experience

FTSE 100 100 blue chip stocks that trade on the London stock exchange

Suppliers companies who sell goods to other (often larger) companies

Disclose make public

Marks and Spencer A British chain of department stores

Carbon neutral producing no carbon emissions

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Cap (verb) put a limit on

Substantially a lot

Carbon footprint the impact of human activity on the environment, measured by

amount of harmful gasses emitted in the life cycle of a product

Supply chain the complete network of organizations delivering to each other

Procure obtain

Paradigm typical example

Integral central

Thrive do very well (esp. in business)

Fall foul of come into conflict with

Remote far from the cities / towns

Sizable quite large

Revenues company income

Staff retention ability to keep employees for long periods

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businessincalgary.com | BUSINESS IN CALGARY April 2014 • 70

Big business says addressing climate change 'rates very low on agenda'

Poll of 500 major firms reveals that only one in 10 regard global warming

as a priority By Tricia Holly Davis, Geoffrey Lean and Susie Mesure Sunday, 27 January 2008

Global warming ranks far down the concerns of the world's biggest companies,

despite world leaders' hopes that they will pioneer solutions to the impending

climate crisis, a startling survey will reveal this week.

Nearly nine in 10 of them do not rate it as a priority, says the study, which

canvassed more than 500 big businesses in Britain, the US, Germany, Japan,

India and China. Nearly twice as many see climate change as imposing costs on

their business as those who believe it presents an opportunity to make money.

And the report's publishers believe that big business will concentrate even less on

climate change as the world economy deteriorates.

The survey demolishes George Bush's insistence that global warming is best

addressed through voluntary measures undertaken by business – and does so at

the most embarrassing juncture for the embattled President. For this week he is

convening a meeting of the world's largest economies to try to persuade them to

agree with him.

The meeting – in Hawaii on Wednesday and Thursday – follows the US's refusal to

accept binding targets for reducing carbon dioxide emissions, the main cause of

global warming, in international negotiations in Bali last month, and is seen as an

attempt to develop a less rigorous approach to the crisis.

But the new report shows that even business does not support this, with four out

of the five companies surveyed wanting governments to take a central role in

tackling climate change.

The survey, carried out by the consulting firm Accenture, found that only 5 per

cent of the companies questioned – and not one in China – regarded global

warming as their top priority. And only 11 per cent put it in second or third place.

Overall it ranked eighth in business leaders' concerns, below increasing sales,

reducing costs, developing new products and services, competing for talented

staff, securing growth in emerging markets, innovation and technology. Although

most are taking limited action to reduce their own emissions, almost one in five

had done nothing.

Mark Spelman, global head of strategy at Accenture, told The Independent on

Sunday at the World Economic Forum in Davos last week: "Climate change is not

going to get nearly the same degree of attention here as it would have achieved if

the economic outlook were brighter. Whenever there are underlying economic

concerns, people will focus on them."

The report makes it clear that – in contradiction of the Bush administration's

position – business is waiting for governments to take the lead. Nearly half of all

12

businessincalgary.com | BUSINESS IN CALGARY April 2014 • 71

the companies worldwide said that climate change was already a major issue for

them and three in five expected it to be so within five years. But more than half

confessed to be struggling to understand its implications.

Matthew Farrow, head of environment for the Confederation of British Industry,

agreed that companies are having a hard time digesting climate change, but

added: "The core financials need to be right, but business also needs to

understand how climate change will affect the marketplace and realise those

business opportunities."

Some 67 per cent of the businesses surveyed agreed they have a role to play in

tackling global warming, but only four out of 10 felt in a position to fulfil it. In

China only 14 per cent of those questioned felt in a strong position.

The report concludes: "Businesses clearly are seeking long-term signals about

where and how to invest. They are reluctant to make big investments in climate

change-related initiatives until the scope of future regulation becomes clearer".

This point has been made to US and European governments by businesses in their

own countries. The European Corporate Leaders on Climate Change group, made

up of the heads of major companies – which persuaded both Tony Blair and EU

President José Manuel Barroso to make climate change a priority – has called for

"a strong and clear policy framework" to enable cuts in emissions.

And the US Climate Action Partnership – which includes the heads of blue-chip

companies such as General Electric, DuPont, and Alcoa – has urged Mr Bush to

"establish a mandatory emissions pathway" leading to a reduction of up to 30 per

cent in US emissions within 15 years.

Yesterday, Mark Kenber, policy director at the Climate Group, said: "These disappointing findings highlight the fact that carbon pricing mechanisms are not

yet strong enough for businesses to incorporate climate change risks and opportunities into traditional business strategy".

13

businessincalgary.com | BUSINESS IN CALGARY April 2014 • 72

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much more than a buzzword • Environmental Stewardship

Much More Than a

B Corporate social responsibility is about governance and doing the right thing By John harDy

ver since mass media went mainstream and corporate

public relations types churned out the kinds of things

the boss wanted the public to hear, there has been a

steady gush of fancy but meaningless business buzzwords

flying around.

Conservation. Recycling. Saving the planet. Holistic.

Organic. Ozone layer. Green.

And environmental stewardship.

Gradually, as media smartened up, became more discrimi-

nating and asked bolder and more serious questions, a new

breed of business leaders and senior management also became

more discriminating and serious about

legit issues and being social-savvy, and as

a result refocused corporate priorities.

And so the former buzzword, environ-

mental stewardship, was transformed into

just one key aspect of the big picture that

is corporate social responsibility.

Today, from the MBA classrooms of the

Haskayne Business School, the board-

rooms and executive offices of giant

Calgary companies, trendy think-tank

open-concept offices like DIRTT and other

Calgary indie startups to remote Tervita

job sites – environmental stewardship is

taken very seriously and is a very hot

topic.

“It’s much more detailed and complex

“Sustainability takes into account

all kinds of capital and it

can no longer be taken for granted.

There are hard scientific metrics

that can now be linked to the

financial statements.”

~ Houston Peschl of entrepreneurship and innovation at the Haskayne School

of Business. “It’s a part of being a responsible business.

“Realistically, we must speak the lan-

guage of business: money and ROI.

Economic capital used to be the only way

to measure business success. But it’s get-

ting more and more accepted that it’s no

longer just about economics, anymore.

There is a triple bottom line: social, emo-

tional and environmental (natural) capital.

“Sustainability takes into account all

kinds of capital and it can no longer be

taken for granted. There are hard scien-

tific metrics that can now be linked to the

financial statements,” he cautions, mak-

ing a passionate point.

Although the corporate responsibility of

“environmental stewardship” has specific

aspects in specific divisions of specific

than it sounds but it’s all part of a spec-

trum,” explains Houston Peschl, instructor

Houston Peschl, Instructor of Entrepreneurship and

Innovation at the Haskayne School of Business

Calgary businesses and industries, there

is increasing consensus, especially among

14

businessincalgary.com | BUSINESS IN CALGARY April 2014 • 73

“It’s not window dressing. It’s a key, long-term investment in a community.”

~ Jeff Gaulin

business leaders, that the serious com-

mitment is no longer token lip service,

positioning publicity or what is cynically

called greenwashing.

The corporate responsibility that is

environmental stewardship is both a cor-

porate attitude and a focused business

plan unto itself.

“Corporate social responsibility is mul-

tifaceted,” says Jeff Gaulin, the dynamic

and gung-ho vice president of mar-

keting and communications at Tervita

– the Calgary-based environmental and

energy services company that provides

primarily the energy industry with ser-

vices ranging from waste management,

drilling and coring to well servicing and

other environmental services. “It’s based

Jeff Gaulin, Vice President of Marketing and Communica- tions at Tervita

“It’s not window dressing. It’s a key,

long-term investment in a community.

“We are in the business of business

and no company can just do their busi-

ness and walk away. Corporate social

responsibility is about governance and

doing the right thing. It’s not about

charity. It is about integrity, the way we

do business, and very simply it’s part of

our culture.”

Especially in the energy sector-dominant

West, there’s a harmless but misleading

and inaccurate assumption that environ-

mental stewardship refers only to oil and

gas companies and oil service businesses.

As a national and global priority, the cor-

porate social responsibility of environmental

stewardship involves manufacturing, finan-

on people – our people and the people in the communities

where we operate.

cial, transportation, mining, forestry, utilities, even health care

and most other business sectors.

Where organizations

meet their match for

beverage container

recycling.

And I pick up the empties

- Jorge Campusano

Calgary Drop-In Centre

I collect all the empties

- Adrian Francis

Ruth’s Chris Steakhouse

LoveToRecycle.ca matches

organizations that want to recycle

their beverage containers with the

many compatible recycling resources

and services available in Alberta.

Find your perfect partner or sign

up to be a Pick Up Service at:

15

businessincalgary.com | BUSINESS IN CALGARY April 2014 • 74

much more than a • Environmental Stewardship

Another uniquely Calgary-based example of fresh, new environmental

stewardship, as well as parlaying innovative sustainability into a

dynamic business and success story, is DIRTT – the state-of-the-art

Calgary company that is almost amusingly hard to describe.

There’s not much immunity when it comes to walking the

walk of environmental stewardship. The western high profile

of oil and gas-related businesses are merely one effective,

good example of what can be done and how it can be done.

There is enthusiastic worldwide interest (and praise) for

the leadership in environmental stewardship being shown by

Canada’s Oil Sands Innovation Alliance (COSIA), the coalition

and environmental think-tank formed by Canada’s 12 major

oil producers (including BP, ConocoPhillips and Shell).

The COSIA action plan includes ambitiously confronting

the carbon footprint and greenhouse gas (GGE) problems

and has made considerable early progress in reducing nitro-

gen oxide (NOx) and sulphur dioxide (SO2) emissions.

“Environmental stewardship is a management tool as well

as a commitment,” Gaulin explains. “Sustainability is about

the long term and Tervita is on the right path. Basically

we see ourselves as the sustainability partner for our ‘three

big buckets’ of customer partners: oil and gas, mining and

industrial.

“Corporate social responsibility has changed the way we

operate at the front end. We position it at the forefront of

our planning and what we do. It’s a much more proactive

approach, not an after-the-fact review.”

Tervita is also a good example of not only a rock-solid

commitment of incorporating environmental stewardship

but also weaving it into the fibre of how the company works

and what it stands for, internally and externally.

A recent Tervita newsletter, targeting staff at all levels,

featured an informational update, underscoring the com-

pany’s sustainability focus.

“Tervita is committed to environmental due diligence.

This commitment is supported by the work done in 2013

by the environment and regulatory (E&R) team to manage

Tervita’s environmental performance and risk.

“Supported by an interdepartmental steering and working

committee, Tervita is developing a company-wide environ-

mental management system (EMS).

“The EMS assists operations across North America in

implementing and measuring sustainable practices as they

relate to the environment, such as providing a standard pro-

cess for handling and reporting spills, tracking how much

energy and water is issued at Tervita’s 87 fixed facilities

and how much fuel is expended by nearly 1,000 light-duty

trucks.

“The system provides procedures and tools to help man-

age Tervita’s activities, products and services to identify,

monitor and manage environmental risk continually.

“Over time, Tervita will see benefits such as improved

environmental performance and compliance. The EMS

makes us more competitive, strengthens our reputation and

increases customer trust.

“Employees can be assured that our company is making

every effort to manage environmental risks by meeting or

exceeding regulatory requirements as well as our own inter-

nal best management practices. It’s a win-win situation!”

The company’s approach in walking the walk of environ-

mental stewardship is not only refreshing, it’s part of the

new and redefined standards of business practice that starts

as early as the MBA classroom, if not before.

As Haskayne’s Houston Peschl explains, companies are no

longer emphasizing sustainability because they have to, for

regulatory reasons. They are convinced that it is the right

thing to do and they genuinely want to do it.

“We even sense it in the classroom,” he says. “For many

students, it’s like a bell curve. For some it is a passion and

they are extremely in tune and aware about many aspects

of corporate social responsibility. It sometimes depends on

their culture and their previous education.

“Studying corporate social responsibility aspects like

environmental stewardship gives the students a lens of sus-

tainability, to view the positive impact of corporations and

how a company (like Tervita) impacts the world.”

The MBA professor has a unique perspective to cite a

positive and encouraging contemporary observation. “The

millennial generation is the next generation of business

leaders, and they want to work for a company that cares.”

Another uniquely Calgary-based example of fresh, new

environmental stewardship, as well as parlaying innovative

sustainability into a dynamic business and success story, is

DIRTT – the state-of-the-art Calgary company that is almost

amusingly hard to describe.

The well-known and widely-respected business name,

DIRTT, is a catchy and unusual acronym for Doing It Right

This Time – because the last time, with conventional con-

struction, the computer didn’t exist to go from design, to

real-time 3D, to specifications and on the manufacturing

floor.

And, unlike ‘the last time,’ sustainability wasn’t tied to a

company’s bottom line.

Doing It Right This Time (DIRTT) affordably manufactures

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individualized spaces and the business of the business is cre-

ating customizable and sustainable architectural interiors for

offices, showrooms, retail stores, doctor’s offices and more.

“Our focus is to reduce, rethink and reuse sustainability to

its logical conclusion,” grins Julie Pithers, a senior member

of the DIRTT management and manufacturing operations

team but whose formal business card creatively and surpris-

ingly does say: ‘DIRTTbag.’

“A big part of what we do is look-

ing closely at every job, at everything

we design or create and at every aspect

of how we do things. We don’t expect

clients to throw everything away but, as

our founder and president says, ‘Nobody

wants to sustain ugly.’”

She refers to Mogens Smed, the acclaimed

business visionary whose bright idea not

only created DIRTT in 2005 but continues to

transform the core platform of sustainabil-

ity into a booming $140-million business,

based in Calgary with offices and manufac-

turing in B.C., Georgia and Arizona.

“Our approach and philosophy is defi-

nitely from the heart,” Pithers admits, “but

with optimizing the workplace real estate, conserving energy

and maximizing available light, working with existing spaces

in existing buildings, whenever possible, and always quality

over quantity.

“It’s all about sustainability on various levels.”

The learning curve of environmental stewardship, and the

big picture of corporate social responsibility, is steep but it

is unarguably a vital fact of business life.

Some businesses and their management

embrace it with more gusto than others.

“Because money is the language of

business, we must ‘monetize’ the true

social impact of best practices and busi-

ness decisions,” Peschl suggests about the

present and the future. “The way a com-

pany will keep growing and succeeding is

to leverage their social impact.”

He adds that the timing is ideal for the

surge of corporate social responsibility.

“As we preach in our business school

classrooms: this is one of the few times

in your life when you have access to

four generations in the workplace: the

board, senior management, managers

it’s also smart business strategy. We deal Julie Pithers, “DIRTTbag” at DIRTT Environmental Solutions and students.” biC

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17

Environment and development

How green is their growth Jan 24th 2008 From The Economist print edition

A new argument that economic progress can help to ease environmental woes, just so long as the governance is good too

CAN poor countries afford to be green? That is a question which politicians in the developing world have often asked rather pointedly. To them, it seems that the

obsession of some rich types with preserving forests and saving cuddly animals like pandas or lemurs, while paying less attention to the human beings living

nearby, is both cynical and hypocritical.

There is, of course, plenty of evidence that greenery and growth are not polar

opposites. After decades of expansion in China and other fast-emerging

economies, some of the negative side-effects and their impact on human welfare, above all the death toll caused by foul air and water, are horribly clear. Yet the

relationship between growth and the state of the environment is far from simple. Some new light has been cast by a team of researchers led by Daniel Esty of Yale University, who delivered their conclusions this week to the World Economic

Forum in Davos, Switzerland. What they presented was the latest annual

Environmental Sustainability Index, which grades the “environmental health” of

150 countries—using many indicators, from population stress and eco-system

health to social and institutional capacity. This year's report focuses on the link between the state of the environment and human health.

In a nutshell, what the new report (also sponsored by the European Commission and Columbia University) suggests is that poor countries have been quite right to

challenge the sort of green orthodoxy which rejects the very idea of economic

growth. Indeed, the single biggest variable in determining a country's ranking is income per head. But that doesn't imply that economic growth automatically leads

to an improvement in the environment.

The team's finding is that growth does offer solutions to the sorts of

environmental woes (local air pollution, for example) that directly kill humans. This matters, because about a quarter of all deaths in the world have some link to

environmental factors. Most of the victims are poor people who are already vulnerable because of bad living conditions, lack of access to medicine, and

malnutrition. Among the killers (especially of children) in which the environment plays a role are diarrhoea, respiratory infections and malaria. These diseases

reinforce a vicious circle of poverty and hopelessness by depressing production. According to the World Bank, the economic burden on society caused by bad

environmental health amounts to between 2% and 5% of GDP. Mr Esty's analysis suggests that as

poor countries get richer, they usually invest heavily in

environmental improvements, such

18

as cleaning up water supplies and

improving sanitation, that boost human health. (Their economies

may also shift gear, from making steel or chemicals to turning out

computer chips.)

But the link between growth and

environmentally benign outcomes is much less clear, the study suggests,

when it comes to the sort of pollution that fouls up nature (such

as acid rain, which poisons lakes and forests) as opposed to directly

killing human beings. The key to addressing that sort of pollution, Mr

Esty argues, is not just money but

good governance.

QuickTime™ and a TIFF (Uncompressed) decompressor

are needed to see this picture.

19

A closer look at the rankings makes

this relationship clearer. Of course it is no surprise that Switzerland fares

better than Niger. But why is the poor Dominican Republic much healthier and greener than nearby Haiti? Or Costa

Rica so far ahead of Nicaragua, whose nature and resources are broadly similar?

And why is wealthy Belgium the sick man of western Europe, with an environmental record worse than that of many developing countries?

A mixture of factors related to good government—accurate data, transparent administration, lack of corruption, checks and balances—all show a clear

statistical relationship with environmental performance. Among countries of comparable income, Mr Esty concludes, tough regulations and above all,

enforcement are the key factors in keeping things green.

QuickTime™ and a TIFF (Uncompressed) decompressor

are needed to see this picture.

All this may be a helpful way of looking at pollution in the classic

sense, but there is another factor that may upset all previous

calculations about the relationship between growth and the state of

the earth: climate change. Greenhouse emissions do not

poison people, or lakes or woods, in

the direct or obvious way that noxious chemicals do. But at least

in the medium term, they clearly alter the earth in ways that harm

the welfare of the poor.

20

Paul Epstein of the Harvard Medical

School says the impact both on nature and directly on humanity of

global warming will swamp all other environmental factors. As

alterations in the climate lead to mass migrations, epidemics will spread; as temperate zones warm up, tropical

diseases like malaria will surge; storms will overwhelm sewer systems; heat

waves will push ozone levels up.

He may be right, but here too economic growth, coupled with good governance, may yet prove to be a source of solutions rather than problems. At the moment,

perhaps 2 billion people have no formal access to modern energy—they make do

with cow dung, agricultural residue and other solid fuels which are far from healthy. Unless foresight and intelligence are applied to the satisfaction of these

people's needs, they may embrace the filthiest and most carbon-emitting forms of fossil-fuel energy as soon as they get the chance.

A mixture of economic growth and transparent governance may offer the only

chance of avoiding that disaster. Indeed, everyone will gain if poor countries find a way to leapfrog over the phases of development which in so many other places

did terrible harm to the environment.

21

On the rebound Dec 17th 2007 From Economist.com

Energy pleas ignore an important bit of economics ENERGY efficiency is probably the most popular environmental panacea. While

politicians discuss complicated global climate-change deals, economists tinker with intricate emissions-trading schemes and engineers design a new generation

of nuclear-power plants, many greens advocate simpler steps: buying more

efficient cars, replacing wasteful incandescent bulbs with efficient fluorescent ones and installing proper insulation. The International Energy Agency reckons that

more efficient manufacturing, cosier houses and frugal transport could reduce energy demand worldwide by a third by 2050.

With that in mind, governments are prodding businesses to make their products more efficient. A voluntary agreement between the European Union and big

carmakers has helped boost fuel economy 12% above its 1995 level, although the target of 25% by 2009 will not be met.

The airline industry has promised great strides in jet-engine efficiency to mitigate the environmental damage caused by flying. Best of all, unlike proposals for

green taxes or higher electricity prices to pay for expensive windmills and nuclear

plants, the prospect of lower power and petrol bills makes efficiency measures attractive to consumers.

Given that transport accounts for between one-quarter and one-third of the emissions of most developed countries, a 12% improvement in fuel efficiency

sounds impressive. But economists know better.

Because fuel costs are a significant part of the total price of running a car,

lowering them means cheaper motoring. And cheaper motoring, all other things being equal, means more motoring. The same applies to flying, home insulation

or industrial processes: any reduction in energy use means a reduction in cost which, in turn, leads to an increase in demand, eating into the savings from more

frugal engineering. In energy economics this is known as the “rebound effect.” It was first described in 1865 by William Stanley Jevons, an economist investigating

steam engines.

Since then, says Steve Sorrel, an economist who produced a report about the rebound effect for Britain’s Energy Research Centre, there has been little research

into just how big the rebound effect is. Estimates of the “direct” effect range from almost zero to over 100% (ie, greater efficiency encourages so much more

consumption that net energy use actually goes up).

The precise size of the effect depends on both the good in question and the

wealth of those consuming it. “The potential for a big rebound is higher when you’re looking at low-income groups,” says Mr Sorrel. “Lots of poor people can’t

afford to make their homes as warm as they’d like. So they’ll take any efficiency improvement in the form of more heating, whereas the rich—who are already

comfortable—will probably spend the savings on something else.”

Nor is that the end of it. Rich people may not consume more heating, but

whatever else they spend their money on (a foreign holiday, say, or a new

22

television) will come with an energy cost of its own. Such “indirect” effects are

even harder to quantify, although some estimates range as high as 50%.

The paucity of data has meant that rebound has been ignored in most of the

academic work done around climate change. It was not discussed in the Stern

Review, a weighty piece of economic modelling produced by Sir Nicholas Stern, a former chief economist at the World Bank, which aimed to put a cost on climate

change and a price on avoiding it.

The Intergovernmental Panel on Climate Change, a UN-sponsored group of

experts, notes the effect’s existence but says nothing more. Most economists believe that the direct effect, at least, is fairly small, although they are much less

sure about indirect effects. Others—such as Len Brooks, an energy expert formerly employed by the UK Atomic Energy Authority—reckon that rebound is a

big enough problem to make energy efficiency programmes almost useless.

Answers may now be coming, albeit slowly. Britain’s environment department

commissioned two pieces of work that attempted to gauge the likely size of both the direct and indirect rebound effects across the economy. Published in 2006,

one study estimated the total effect at 26%, the other at 37%, although the use of different assumptions makes the figures hard to compare directly.

Mr Sorrel and his research team, after conducting an exhaustive review of the

literature, will say only that they believe the size of the effect to be at least 10%, and frequently much higher. Whichever estimate is nearest the mark, the effect

seems significant. Environmentalists may wish to re-do their sums.

The Greening of the U.S. Consumer Consumers today are reducing their carbon footprint and their spending. The trend could offset the government's stimulus plans

Lisa Goodson, a 38-year-old mother of three children 5 and under, reuses printer paper by flipping every sheet over when she's done using one side. She wears a sweatshirt to keep warm during the day when she dials down the heat in her house in Greenville, S.C. These small gestures are part of Goodson's personal crusade to reduce her carbon footprint. "I think twice before buying anything for the kids, and I've even talked to my parents about holding back on gifts," says Goodson, who thinks her house is already loaded up with too much stuff and has lately been cleaning out toy boxes and donating toys to charity.

Goodson is part of a small, but growing, tide of consumers who have started shifting their spending patterns because of their concern about global warming. They want to contribute in any way they can to help reduce greenhouse gases. This kind of consumer behavior is starting to pick up steam nationwide. Consumers are choosing to drink tap water over bottled water, carrying reusable bags into supermarkets and eschewing plastic grocery bags, and buying locally produced, in-season foods, rather than purchasing fruits and vegetables that have traveled thousands of miles on carbon-emitting trucks.

"You know there's a shift, when drinking tap water is cooler than drinking Pellegrino or Evian," says Faith Popcorn, founder and chief executive of trend forecasting firm.

End of the Sub-Zero Fridge?

23

All this runs counter to the spending patterns of the last few years. And some economists and retail experts say the trend could exacerbate an already slowing consumer spending outlook. The days of easy credit [the U.S. Federal Reserve cut a key short-term interest ratefrom 6% to 1% in a two-year period after 2001] that freed up cash and engendered high-speed consumption are over for now [BusinessWeek.com, 1/10/08].

And so apparently is the kind of freewheeling spending that saw Americans replace kitchen stoves, refrigerators, and washers and dryers because they wanted to acquire the Viking stove which cost between $3,000 and $10,000, or a brushed-steel Sub-Zero refrigerator for $2,000, though similar appliances were available from mainstream brands like Kenmore or Maytag for a fourth of the price. Kitchen and Bath Business magazine reported the number of home renovations tripled in the last five years to over $100 billion.

Newspapers and magazines reported people were installing walk-in closets that were larger than their bedrooms. And to fill those fancy closets, middle America chose to shop at higher- end stores such as Nordstrom (JWN) and Saks (SKS) and started buying luxury items such as Coach (COH) handbags. "It was a time of laddering up, and people were buying the more expensive car or the extravagant vacation, but now they are doing the reverse of that," says Brian Bethune, retail economist at financial analytics firm Global Insight.

Pressures on Consumers Mounting

From the recent swoon of retailers as varied as J.C. Penney (JCP) and Saks, Kohl's (KSS) and Coach, all of whom reported negative or slowing sales, there is no doubt people are pulling back on all fronts. The U.S. Commerce Dept. reported on Jan. 31 that consumer spending, which accounts for two-thirds of the economy, rose by just 0.2% in December, down from a 1% gain in November. It was especially worrisome because December is generally one of the best consumer spending months, with people buying gifts during the peak holiday season.

There are many pressures on consumers -- not only is there no additional free money, since the home equity loan market has dried up, but mortgage payments are on the rise, even as home prices continue to fall across the nation. On top of that, there's no letting up of high gas and heating oil prices. "Consumers have adopted more cautious spending plans," says Richard Curtin, director of the Reuters/University of Michigan consumer sentiment survey, which said on Feb. 1 that consumer confidence had dropped by one-fifth in the last 12 months.

It could be difficult to rely on consumer spending to maintain the kind of growth the U.S. has enjoyed in recent years, especially if you add to all the pressures a fundamental change in consumer behavior. Bridal and children's magazines have been writing about an increasingly popular trend of no-gift wedding and birthday parties, where the hosts identify philanthropic causes or nonprofit groups to which guests can send a check instead.

A Vacation in Your Own Backyard

It's not uncommon to see discussions on travel Web sites about whether it hurts the environment to get on an airplane and one site, responsibletravel.com, even poses the question, "to fly or not to fly?" There's evidence from conversations on these sites that some folks are even opting to take vacations with their children close to home and are discovering county and state parks.

24

Saving for Hard Times

No wonder airlines are working harder to retain eco-minded customers -- Continental (CAL), Delta (DAL), and Virgin have all launched carbon-offset programs. And people are starting to buy carbon-offsets or energy credits from companies that promise to identify ways to make up for carbon emissions or energy use by planting trees or investing in wind or solar energy. One such provider, TerraPass sold about 100,000 such carbon offsets by the end of 2007, a threefold increase since the beginning of the year.

The growing environmental awareness, and tougher economic times, could even influence the effectiveness of economic stimulus plans now being weighed by the Bush Administration and Congress. The kind of free spending the government hopes consumers will revert to might be difficult in this new mood. South Carolina's Goodson says her family of five will probably get a check of $2,100. Will she spend it? "No way," she says. "Spending got us to where we are today, and the last thing that the country needs is for people to hit the mall. I'll put my check in the bank and save it for hard times."

By Pallavi Gogoi

25

Contents Wal-Mart's go-green team 60 Rebuilding earthquake zones with the next disaster in mind 61 Ikea abandons woodfor single-use paper cargo pallets 64 Edited by David Rocks

•Sustainability

Who's the GreenestOf Them All?

9̂

>• Companies are buried in requests for data as groups jockey to be arbiters of sustainability

>• "It's in our... culture to rate. Look at Dancing with the Stars"Every year, Suzanne Fallender'scorporate responsibility office at Intelreceives dozens of requests fromsustainability analysts and nonprofitslooking to rate the company on itswater usage, carbon emissions, work-force diversity, and scores of otherfactors. While some queries can beanswered quickly from Intel's annualsustainability report, others requirefurther research, so Fallender prioritizesa core list of about a dozen requests andresponds to the rest when she can getto them. "There are many, many ratingsout there," she says. "More every year."

Investors and the public are demand-ing increasingly detailed information onnonfinancial metrics that define sustain-ability. Companies that take the lead inthe field, the thinking goes, are likelyto continue churning out profits in an

era of growing global competition, cli-mate change, and diminishing resourc-es. In response, scores of data analysisand rating outfits have sprung up, vyingto be the arbiter of who's really green.That's "confusing, congested, chaotic,"says Allen White, a senior fellow at theTellus Institute, a nonprofit researchgroup. "If you are an investor trying tomove $1 billion, you're left throwing upyour hands. In the worst case, you justignore all of the ratings."

White is one of a small cadre of datajunkies who have spent the past decadetrying to get executives, investors, andnonprofit groups to agree on how todistinguish dirty, risky companies fromcleaner, sustainable ones. As more com-panies publish annual sustainability re-ports, many are looking to the GlobalReporting Initiative, a group White

co-founded in 1997, for guidance onthe most important factors to disclose.Today, 80 percent of the world's 250largest companies use GRl's frameworkfor their sustainability reports, accord-ing to consultancy KPMG.

Investment managers say many com-panies don't go far enough in their disclo-sures. Since GRI's guidelines are volun-tary and reports are rarely audited, fewcompanies provide information on all ofthe group's 100-plus metrics in areas suchas workplace safety, use of recycled ma-terials, or toxic waste spills. "We believecurrent corporate sustainability reportsare insufficient to form a fully integrat-ed and long-term investment view," saysPaul Abberley, CEO of Aviva Investors,an asset manager in London.

Further complicating the issue:CRI doesn't judge performance,

26

November 28 — December 4,2011Bloomberg BusinessWeek

#Sustainability

leaving raters and analysts to evaluatecompanies in ways that are digestiblefor investors. These groups make theirown determinations as to whether, say.Ford is more sustainable than Volkswa-gen or Microsoft is better than Apple.Newsweek's "Green Rankings" rate com-panies on their commitment to the en-vironment, Dow Jones publishes in-dexes of companies it deems the mostsustainable, and the Ethisphere Insti-tute ranks the "World's Most EthicalCompanies." Others carve out nichessuch as evaluating transparency, waterusage, or the suitability of the work-place for employees over 50.

Only a third of these groups rely solelyon corporate sustainability reports; therest seek extra stats, ofien asking com-

panies to slice and dice numbers in waysthat conform to the groups' metrics.Wayne Balta, IBM's environmental affairschief, says companies need a "rock solid"commitment to data analysis to ease thehassles of responding to such queries.(Bloomberg LP, the owner of BloombergBusinessWeek, compiles sustainabilitydata and scores companies on how muchinformation they disclose.)

In 2000, the consulting firm Sustain-Ability, which advises clients on greenbusiness strategies, identified 21 raters;by last year, that number had swelledto 108, both nonprofits and companiesseeking to sell research to investors.IBM's Balta says the rankers' ranks willprobably continue to grow. "It's in ourcollective American culture to rate," he

I'm With Wal-MartThe retailer's six-year push to

clean up its operations has helpedchange its image from the king ofconsumption into a sustainabilityCinderella. Even the greenest of

organizations now tout their closeties to Wal-Mart in promotional

materials. —Karen Weise

Blu SkyeThe consultancy

convinced Wal-Mart CEOLee Scott that green

business is good

ConservationInternational

Helped the companywith a push to make

agriculture morelocal and efficient

1.2mboxes of Fair

Fair Trade USACertifies the origin

of coffee and bananassold in the company's

Sam's Club stores

Bloom EnergyInstalled fuel cellsto provide biogasenergy at multiple

stores

The EDF ishelping cut

The truckfleet has gotten

more efficientsince 2005

RockyMountain Institute

The think tankhelped Wal-Mart

cut energy use bytrucks and stores

20mtons of carbon

EnvironmentalDefense Fund

Advising the retaileron a push to trim

waste and boost useof clean energy

says. "Look at Dancing with the Stars."Many companies face further de-

mands from corporate customers. Wal-Mart, for instance, in 2009 broughttogether retailers, suppliers, and re-search groups to develop a sustainabil-ity index to track suppliers. The group, anonprofit called the Sustainability Con-sortium, is creating standards for cottontowels, TVs, yogurt, and nearly 50 otherproduct categories. For laundry deter-gents, the biggest factor is customersusing energy to heat water for washing,so the new metrics favor products forcold-water use. For laptops, the greatestgreenhouse gas emissions come duringmanufacturing, not use by consumers,so the standards largely address produc-tion methods. "We want to make surewe are sending the right signals, measur-ing the right things," says Jeff Rice, Wal-Mart's director of sustainability.

Some corporations grouse thatthe raters can lack transpar- SolarCityency, though few want to Owns andsay so on the record. About maintains solara quarter of the ranking power systems atgroups disclose no infor- Wal-Mart storesmation on their methods across Californiaand a majority offer only par-tial disclosures, according to "Rate theRaters," a report SustainAbility releasedlast year. When companies feel thatgroups seeking to rank them on howmuch information they disclose aren'ttransparent themselves, "that drivesthem crazy," says Michael Sadowski, avice-president at SustainAbility. LynnBrown, a vice-president at trash-haulinggiant Waste Management, says ratersunderstandably want to compare com-panies with their peers. But she says shefinds it "perplexing" that in one rankingher company is paired with a chemicalmanufacturer and in another it's listedwith Weight Watchers as a "professionalservices" company.

Some raters agree the ratings canbe too opaque. "There are more blackboxes than should be the case," saysCary Krosinsky of Trucost, a sustainabil-ity researcher that helps Newsweek withits ranking.

The Securities and Exchange Com-mission is tiptoeing into the fray and lastyear issued its first guidance on disclo-sure of risks related to climate change.If financial accounting is any precedent,though, consistent regulations won'thappen overnight. It took two centuries

27

Haitians oftenbuiid with

concrete blocksthat haven't

been fully cured

to develop standards for tracking cor-porate finances. With ice caps meltingand deserts growing, a similar time-line won't work now, says Zoe Tcholak-Antitch, North America director for theCarbon Disclosure Project, an investor-led group that has created standards forcompany disclosures of greenhouse gasemissions."We haven't got hundreds ofyears," she says, "to get climate changereporting right." —Karen Weise

The bottom line With more than 100 groups rankingcompanies on sustainability, many investors say it'stime tor global reporting and assessment standards.

Construction

Building Knowledge,Not Just Houses

> A bricklayer's daughter helpscreate safer homes after quakes

*• "Small changes to existing waysof building" can go a long way

When Elizabeth Hausier visited India in2003 to tour areas devastated by earth-quakes years earlier, she was dismayed.Ill Maharashtra state, where a 1993 tem-blor killed 10,000 people, relief agencieshad built thousands of homes for survi-vors. Many people, though, used themonly fur stt)iage and slept in ramshackleshelters. The nonprofits built the houseswith little input from the locals, so resi-dents didn't trust that they would with-

stand another quake. In nearby Gujarat,which had been hit by a quake in 2001,Hausier saw houses built by aid groupsthat ignored local practice by placingdoors on the street rather than facingthe courtyard. "People would knock ahole in the wall and move the door," saysHausier. "That's not very good for earth-quake resistance."

An engineer trained at the Universi-ty of California at Berkeley, Hausier hadlong known that earthquakes rarely killpeople; shoddy construction does. Yetbetter construction isn't the only factorin keeping people safe during earth-quakes. When aid groups don't under-stand local customs and constructionmethods, homeowners are often discon-tented and safety is compromised. Onher India trip. Hausier discovered thatin places where the government hadgiven locals the money and some engi-neering guidance to rebuild their homesafter earthquakes, residents woundup with houses they were moreapt to live in.

That led Hausier, who workedalongside her bricklayer fathernear Chicago during high schooland college, to create a moresustainable approach to rebuild-ing in developing countries. Hernonprofit. Build Change, teach-es homeowners, architects,and contractors how to makestructures stronger. For exam-ple, bricks in Indonesia tend tobe dry and weak; soaking themin water before building can

double the strength of a wall. Hausiersays. "Small changes to existing waysof building" can go a long way towardmaking structures safer, she says.

Her group has helped construct18,000 houses and has trained morethan 4,000 builders in Indonesia,China, and Haiti since 2004. The focuson training runs counter to the ap-proach of many disaster relief groups,says Kathleen Tierney, director of theNatural Hazards Center at the Universityof Colorado at Boulder. Build Change's"primary goal is to help people learnhow to construct a house," Tierney says."That's really different from the kind ofgroup that parachutes in and provides

a service and thenleaves."

In Indonesia,where Build Changehas helped tsunamiand earthquake vic-tims, some home-owners salvagedwindows, doorframes, and timberfrom their dam-aged homes andhired local con-

tractors. They rebuilt their housesfor $3,000 to $8,000, the groupsays. Homes constructed by out-

side relief agencies cost $12,000 to$20,000, Hausier says, because thegroups bought new materials andhad to pay overhead and salariesfor expatriate workers. • O /]

í._ The bulk of Build \JH

18THOUSAND

Numberof houses

Hausler's group,L has heiped build

28

Economic crisis gives us a chance of repairing

climate damage Large-scale investment to fix global finances is an opportunity to move quickly to a low-carbon

economy

• Terry Barker and David King

• guardian.co.uk, Tuesday 17 March 2009 12.56 GMT

The financial crisis that started in May 2007 is a global catastrophe. As central banks, one after another,

reduce interest rates towards zero, they risk the world economy falling into a global liquidity trap in

which monetary and fiscal policies become ineffective and regulation becomes the main instrument for

recovery. The effect of such a trap is to risk global depression and mass unemployment for years to

come.

In the background lurks another crisis — the risk of dangerous climate change. Although these changes

are slow-moving, increasing concentrations of greenhouse gases will risk more climate catastrophes

that will damage human wellbeing and conceivably lead to mass unemployment in the very long run.

These two crises are not independent. Both arise from human greed largely unrestrained by ethics, or

concern for others in distant lands, or future generations. And the state of the world's finances can

either hinder our efforts to tackle climate change or, if the world responds correctly, provide an

unrivalled opportunity to help.

The most prominent policies at the moment are market-based instruments such as emissions trading

schemes, which put a price on carbon dioxide emissions. But the financial crisis is rendering such

policies ineffective. Carbon allowance prices in the EU emissions trading scheme have hit new lows

recently as plunging economies reduce the demand for electricity.

If the short-term reduction in demand for emission permits continues into a collapse of allowance

prices to near zero, then not only does the market lose its ability to cap emissions but we would also

lose the valuable experience built up by companies in the carbon market. One way to restore profitable

allowance prices in the scheme is to tighten the emission reduction targets for 2020. Even an

announcement that such tightening is being considered may be enough to support the prices.

So how can investment best achieve climate change stabilisation at different carbon prices? The

Intergovernmental Panel on Climate Change (IPCC)'s fourth assessment report, published in 2007,

examined this and concluded that most actions proven to reduce greenhouse gas emissions involve

regulation, tradable permits or carbon taxes. Not so many involve direct government investment, such

as making buildings more efficient, reducing deforestation, investing in public transport, and

subsidising and supporting research in renewable energy.

But things have changed since the last IPCC report. The global financial markets are not as they were at

the end of 2006, when the assessment was finalised. We face the prospect of a large and global

unemployment problem, and carbon markets that do not deliver the expected incentive to induce

technological change. In this new context, measures such as taxing carbon, tradable CO2 allowances

and strong regulation of industry begin to seem less immediately attractive than simple direct

investment by governments.

As the financial crisis continues, there is widespread recognition of a need for substantial investment by

governments — fiscal stimuli — to restore confidence, spending and employment to more normal

29

levels. This is where resolving the financial crisis can help climate policy. The investment should be in

decarbonising national economies and international transportation at an accelerated pace.

Such action presents an immediate solution to both crises if combined with the bankrupting of the

insolvent banks, with appropriate protection of depositors and small shareholders. Other global

measures are also needed as a coordinated response to the crises for the investments to work. However,

the scale of the financial crisis means that much more investment will eventually be required. Money

spent on decarbonising is likely to seem small in retrospect.

We are in a global depression, not quite on the scale of the Great Depression Of 1929-1932, but

approaching it in the UK, many other European countries and in Japan. Our January 2009 outlook

suggests that on present policies Britain's GDP will fall by 3.8% in 2009, and then by a further 6.2% in

2010.

Such a sharp contraction in economic activity is bound to have an impact on greenhouse gas emissions.

In a fossil fuel-based global economy, growth is closely correlated with these emissions, so recession

means lower emissions, for a time at least.

This of course does not mean that the financial crisis helps to address the climate change problem

because the effect is hopefully short term. But the crisis may provide the stimulus we need to move to a

low-carbon economy. In dismal economic times, investments in things such as infrastructure and new

technologies become available at lower cost and greater benefit than at other times.

So let us take stock. We have a critical and deepening global financial crisis that demands large-scale

job-creating investment. And we have an impending global climatic crisis that could be partially solved

by large-scale job-creating government investments. If it cannot be quickly resolved, the financial crisis

itself could seriously undermine the market-led climate change policies we have, so there is an

increasing need to go for more direct investment approaches to tackle climate change.

The answer is obvious. The resolution of the global financial crisis must be seen as an opportunity to

kick-start a rapid shift to a low-carbon economy, which is absolutely necessary in the coming decades

if we are to avoid dangerous global climate change.

Sir David King was the government's chief scientific adviser and is now director of the Smith School

for Enterprise and the Environment. Terry Barker is director of the Cambridge Centre for Climate

Change Mitigation Research

• guardian.co.uk © Guardian News and Media Limited 2009

30

Environment

Poor Countries Shouldn’t Sacrifice Growth to Fight Climate Change

By Charles Kenny August 29, 2014

Photograph by Daniel Hayduk/AFP via Getty Images

A man walks through a flooded field to his home in Mikocheni area of Dar es Salaam, Tanzania, on April 12

Last week, a draft of the latest Intergovernmental Panel on Climate Change report on the potential impact of rising global temperatures was leaked to the press. According to news accounts, the panel is set to report that the world may soon approach a temperature where the Greenland ice sheet starts irreversibly melting. Over a few centuries, that could raise sea levels by as much as 23 feet. The Obama administration, meanwhile, disclosed that it’s looking for a strong agreement on carbon emissions at next year’s United Nations Climate Summit—the strongest it can forge without needing U.S. Senate consent.

Obama’s push for more aggressive global action should be especially welcome news to poor countries, since the developing world will be most affected by climate change. Yet developing countries need more economic growth and more energy today—and nothing should stand in the way of that progress. Although it would be nice to believe there’s no trade-off between sustainability and development, such a trade-off undeniably exists. And sustainability for tomorrow should not be burdened on the world’s poorest today.

There’s a widespread, understandable desire to pretend that poor countries don’t need to pollute to develop—that they can escape their poverty without increasing carbon dioxide emissions, for example. A set of “Sustainable Development Goals” being negotiated for signature by a gathering of the world’s leaders at the UN in 2015 will almost certainly call for limiting climate change, preserving biodiversity, and protecting forests and oceans alongside poverty reduction and improvements in global health. It will likely say little or nothing about the trade-offs among these goals and instead suggest they’re all mutually reinforcing pillars of the same overarching agenda. But that’s just not true—or, at least, it’s not true yet.

Take energy use: Global greenhouse gas emissions actually climbed faster from 2000 to 2010 than they did in the previous 30 years, according to the leaked IPCC document. That’s not because of rich countries—the U.S. (PDF) and the U.K. (PDF), among others, have seen declining emissions over the past decade. Instead, carbon emissions have gone up because developing countries have been growing rapidly, and energy consumption has increased as

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a result. Greater energy use remains central to development in low- and middle-income countries. And the cheapest, most reliable form of energy remains fossil fuels.

Climate change is not the greatest challenge faced by the developing world today. The IPCC report suggests as an incomplete estimate that the cost of warming levels of 2.5C above preindustrial levels might reach 2 percent of global income. That burden will fall more heavily on the developing world. And as warming levels rise above 2.5C, the costs increase exponentially. But it’s worth comparing the potential cost of climate change over the next century with the growth rates over the next couple of decades required to end absolute destitution in poor countries. To get close to eliminating $1.25-a-day poverty by 2030, developing countries home to the world’s poorest people will have to grow at about 4.5 percent each year from 2012 to 2030.

To get anywhere near U.S. quality of life, incomes and energy use in the poorest countries need to increase by orders of magnitude. Consider that the average income in a country such as Tanzania is 3 percent of average incomes in the U.S. (adjusted for purchasing power). Doubling Tanzania’s income would still leave it desperately poor. Electricity conception per person in the East African country is 92 kilowatt-hours per year. Americans burn through that much electricity every two and a half days.

This same logic applies to China, the world’s largest emitter of greenhouse gasses. In 2007 more than a quarter of the population of the country still lived on less than $2 a day—that’s about one-seventh of the U.S. poverty line. China needs to see considerably more economic growth and energy production if it is to bring the bulk of its population up to levels of consumption we’d still consider destitution in the U.S.

Nonetheless, there are things that poorer countries could and should do today that are both in their immediate self-interest and that also could help the global environment. One example: Fuel subsidies in developing countries still amount to about $1 trillion, according to the International Monetary Fund. In 2010, Iran slashed its massive fossil fuel subsidies and handed the savings to 80 percent of the population. For poor people, the transfers were worth more than half of their income. That one policy reduced carbon emissions, increased economic efficiency, and reduced inequality all at the same time.

Kenny is a senior fellow at the Center for Global Development and author of The Upside of Down: Why the Rise of the Rest is Great for the West.

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Monday, February 18, 2008 - 9:09 AM MST

CHINA SPENDS BILLIONS ON ENVIRONMENTAL IMPROVEMENTS,

BUT IS THE WINDOW OF OPPORTUNITY CLOSING? Article from Environmental Business Journal Volume XVIII No.7/8 2005

In late April of this year, China Daily reported that, as China's population expands to about 1.6 billion

citizens over the next 25 years, and as the nation's rivers and lakes run dry and become increasingly

polluted, China's water supplies will be stretched to the limit by 2030. Rapid industrialization and

economic growth over the last two decades has combined with this population expansion to place

extreme stress on fresh-water supplies to the point where Chinese officials are pondering drastic

schemes to bring water from the relatively rain-rich south to Beijing and other urban and industrial

centers in the north. Even with such massive transfers, there will still be the need to prevent discharges

of volumes of untreated municipal and industrial wastewater.

China's water problems are by now very well known, as are its air-quality problems. Abundant in coal

resources, China relies on coal to fire approximately 70% of its electricity-generating capacity and is

rapidly catching up to the United States in its greenhouse gas emissions. China is also the world's

second largest importer of oil, and car ownership doubles at a rate of every two years, BBC News

reported late last year. The World Bank claims that China is home to 16 of the world's 20 most polluted

cities.

Keenly aware of these problems, the Chinese government has been aggressively pursuing a variety of

initiatives to clean up its environment, spending billions of dollars in the process. Key air, water and

solid waste laws have been in place for several years, and in January of this year, China's State

Environmental Protection Administration (SEPA) elevated efforts to enforce those laws—for example,

by halting about 30 construction projects because they violated mandatory environmental impact

assessment laws, according to the U.S. Department of Commerce's Office of Energy and

Environmental Industries (OEEI). China's Clean Production Law, which took effect in January 2003,

encourages industrial facilities to conserve energy, use cleaner energy sources, use raw materials more

efficiently, and develop recycling programs. A new Law on Renewable Energy, currently under

development, would require power companies to purchase electricity from renewable sources.

In a well-publicized declaration, the government has vowed to make the 2008 Olympics in Beijing the

"greenest" ever, and the city expects to spend a total of about $12 billion on environmental cleanup in

preparation for the games. As for China's environmental market overall, SEPA estimates that $14.9

billion was spent on environmental projects during 2002, and that the environmental technology market

will grow at a 30% rate annually out to 2010.

OEEI estimates that the total annual market for environmental goods and services in China stands

roughly at $32 billion today, including $19.3 billion in the water/wastewater sector, $9.5 billion in the

air-quality sector, and $3.2 billion for solid and hazardous waste management. OEEI, which has an

active match-making program to support U.S. firms that are trying to serve the Chinese market, says

that U.S. environmental technology exports to China increased by 125% from 2002 to 2004, from $754

million to $1.7 billion. By equipment category, monitoring and analysis systems led the way at $782.8

million in sales during 2004, according to OEEI.

By media, OEEI finds, China and its foreign lenders still spend much more money on water-related

projects than on air- and solid waste-related initiatives. Water tariffs are rising to support funding

demands, and cities are levying wastewater surcharges. Municipal solid waste management is an

emerging priority for SEPA as the volume of waste grows 9% annually.

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Key market developments of recent note include the revision of China's Clean Air Law, which is now

designed to restrict annual sulfur dioxide (SO2) emissions to 10-million tons until 2010 in the nation's

"acid rain" and "SO2 control" zones. OEEI forecasts an enormous market opening up for flue-gas

desulfurization (FGD) equipment as a result of this initiative. China also plans to invest $36 billion to

construct 2,000 municipal sewage treatment facilities, as well as the associated pipeline network, to

meet mandates in China's 10th Five-Year Plan.

Several of China's cities and regions have distinct environmental initiatives requiring substantial

investment. Using a loan from the Asian Development Bank, Hebei Province will undertake a major

wastewater management project that is designed to reduce water pollution and protect the region's

water sources. In 2003, the city of Shanghai embarked upon a hospital waste disposal project under

which it planned to tender about $3 billion in contracts over five years for the collection, transport and

disposal of hospital wastes. The Beijing Nangong Medical Waste Treatment Center began operation in

2004, and upon the expected completion of the second phase of this project later this year, the center's

capacity will increase from 15 tons to 30 tons per day.

Internal and external lending agencies are providing a substantial amount of funding for projects in

China. The China Development Bank has signed a cooperation agreement with the government of

Liaoning Province, under which the bank will provide a $6.05-billion soft loan and a $121-million

technical assistance loan to underwrite the rehabilitation and revival of an industrial complex in

Liaoning. ADB will provide a $35-billion loan to support clean energy projects in Gansu Province,

while the International Finance Corp. agreed in June 2004 to provide $30 million in financing for

China Green Energy Ltd., a concern established to develop and operate power projects nationwide.

Also in June 2004, the World Bank approved a $128-million loan and a $10-million grant from the

Global Environment Fund (GEF) to finance the Guangdong Pearl River Delta Urban Environment

Project.

Although World Bank- and ADB-led projects drive a part of China's environmental market, the U.S.

Trade and Development Agency (TDA) has also gotten into the act, providing more than $10 million in

funds for various environmental projects. These include the establishment of a chemical/hazardous

material emergency response system in Tianjin, the setup of an environmental monitoring project in

Jiangsu Province, and the construction of a major wastewater treatment plant on the Yangtze River in

Chongqing.

JOIN THE THRONG

To say the least, then, the Chinese environmental market is an eye-catching one for U.S. environmental

firms, perhaps more so than the market in any other country outside the United States. Of course, U.S.

firms are not alone in targeting China: the French firms Veolia and Suez dominate the water market

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there, and competition from European Union, Japanese, Canadian and Australian firms is generally

strong. In addition, the home governments of these firms' home countries often provide stronger

support than U.S. firms receive from their government.

Many of these governments provide low-interest soft loans with extended repayment terms, sometimes

up to 40 years, and a significant amount of this work goes towards the development of the policy

infrastructure that's required to make environmental improvement possible. OEEI reports that the

Italian government is subsidizing a two- to three-year, 30-million-Euro (about $38 million) grant for

environmental projects in China, while the EU is subsidizing a five-year Environmental Management

Cooperation project to the tune of some 18-million Euros. The government of Canada is providing $6

million and $8 million, respectively, for two five-year projects that are designed to help China develop

integrated policies that link sustainability imperatives with economic and social development goals.

Financial backing by your home government isn't necessarily what makes a run at the Chinese

environmental market go, according to Bill Stead, a senior vice president with responsibility for

international business development at Earth Tech (Long Beach, Calif.; www.earthtech.com). "I

discount the government support that other companies from other countries get. At the end of the day,

you have to be smart enough to operate on your own," he says, adding "the most beneficial support we

can get is political."

Within the past eight years, Earth Tech has built a business in China that employs approximately 1,000

people, virtually all Chinese nationals, at three water facilities—projects that amount to about $200

million in aggregate value to the company. The projects consist of a sewage treatment plant in

Guangzhou, controlled by Earth Tech on a design-build-finance-operate (DBFO) basis, as well as a

water concession serving about 200,000 people in a municipality east of Beijing and a water treatment

plant upgrade in the city of Tianjin.

As a subsidiary of Tyco International, Earth Tech was able to provide financing for these projects,

which Stead describes as absolutely critical to establishing a business in China. "If we couldn't provide

financing, we wouldn't be there," he remarks. Stead comments that the U.S. concept of selling man-

hours "is not applicable to any extent in China. People there want complete solutions, for a fixed price."

Also essential was establishing a local presence with Chinese nationals representing the company. "It's

a real tough market," says Stead, whose company opened up a rep office in 1997. "You and I will never

think like the Chinese. It's a huge barrier to doing business. You have to have on your staff Chinese

people who have lived in America for a while and have gone back, and can operate cross-culturally."

Going a similar route was SonTek Inc. (San Diego, Calif.; www.sontek.com), a maker of water

velocity measurement equipment. SonTek identified China's enormous market potential during the late

1990s and, in 1999, hired a Chinese-American engineer to build "applications interest" in China,

according to International Sales Manager Chris Ward.

"We go to these trade shows in our market, which are small and focused," Ward recalls. "We get

Chinese people coming by every now and then, and one was a Chinese-American who worked for a

consulting firm in the states. He said, there's a need in China, and we can sell your products there."

SonTek hired an American ex-patriot in China in 2001 to build a distributor base, and since then,

SonTek's parent YSI Environmental has facilitated the opening of several sales offices.

GROWING NATIVE CAPACITY

Earth Tech's Stead reports that his company hopes to close two or three new water concession deals

within the next 12 months, but he suggests that the window of opportunity in China is rapidly closing to

35

outsiders, as Chinese companies increasingly develop the capacity to serve this market. "We are seeing

the emergence of large Chinese companies entering this space," he warns. Chinese construction

companies are already active in the Middle East, and some of the large Hong Kong and Shanghai

companies "are breaking away from their former government companies and are setting up in the water

and environmental business very rapidly," Stead observes. "In the long run, we will see some Asian

companies, mostly Chinese, as major players in this business."

On the equipment side, Earth Tech finds buying locally as increasingly important as well. "Most

products we can buy in China," says Stead. "There are some foreign specialized pumps and so forth that

we bring in, but generally, to compete in China, you have to know how to buy in China. The appetite in

China for international expertise is declining. The window of opportunity that existed over the past 20

years is gone. There have been so many trips by Chinese people internationally that they are getting a

lot more confidence in their ability to do things on their own."

In contrast with the West, where people are very busy and want to reach the deal quickly, in

China, there are hosts of people seemingly "with tons of time to talk to you." emissions.

OEEI affirms that, although U.S. environmental technologies are perceived as innovative and state of

the art, they are also viewed as expensive. This perception, combined with the relative lack of financial

aid from the U.S. government, has historically hampered market entry for U.S. technologies and

products, according to OEEI. And as Bill Stead remarks, "value doesn't count. China, unlike many

countries, is totally driven by cost."

Even if foreign equipment and technology were to remain welcome in China, there are many challenges

to overcome for firms that want to be successful there. Quite apart from tariffs ranging from 5% to 35%

on imported goods, OEEI has identified numerous non-tariff barriers as well. For example, government

purchasing practices are occasionally discriminatory, as is the assessment of fines and fees by local

governments, which often hold joint ventures and multinational corporations to higher environmental

standards than they do for Chinese firms.

OEEI also has heard reports indicating a certain amount of harassment of importers—that is, through

onerous labeling and certification requirements and delays prompted by the influence of competitors on

corruptible officials. And as for intellectual property, the Chinese government has simply not stepped

up to the plate to enforce existing regulations, by many accounts. Of course, there is also the

requirement to broker U.S. imports through local representatives or sell indirectly through multilateral

projects or foreign-funded investment schemes. OEEI recommends that U.S. firms interested in selling

into China establish a "well-managed, legitimate joint venture" or a "wholly owned foreign enterprise,"

but executives with experience in China report that even these options are difficult and don't uniformly

lead to positive experiences.

Then there are simply matters of culture and bargaining style, which differ radically in China from

those with which U.S. executives and sales personnel are most familiar. Notes SonTek's Ward, there

are many middlemen involved in a potential deal, and there is an emphasis on "theory over practice,"

which is to say that "a lot of folks like to look at the science and understand how a technology works,

but then it seems to be hard to install and implement." Striking the deal means "getting down to the

meat and potatoes," Ward stresses. In contrast with the West, where people are very busy and want to

reach the deal quickly, in China, there are hosts of people seemingly "with tons of time to talk to you...

You're trying to get down to what you can actually do for them as opposed to talking to all these

theorists."

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The decision-making process is old-fashioned and less structured than that in the West, Ward

continues. He describes the process as more "feudal," with directors in charge of the process flexing

their prestige and placing little emphasis on the fairness that a structured procurement process would

provide. Then, of course, there's the challenge presented by the final negotiation itself. Chinese

negotiators "expect you to bargain," Ward notes. "The culture is built around this, and in fact, the tone

of the language changes when it gets to the bargaining stage. You have to take the hard line, especially

when you get to price. You have to demonstrate strength. If you cave in right away, you look weak."

So, with a growing native capacity to provide environmental goods and services, assorted tariff and

non-tariff barriers, and a substantially different culture, China might seem a place to avoid. But then

there's that environmental market—$32 billion today, growing at 30% annually for at least the

remainder of the decade. One thing to remember is, with China striving to join the community of

international commerce, both the opportunities and the challenges can change rapidly. As Earth Tech's

Bill Stead puts it, "anything you say about China today will be out of date two years from now."

China’s climate change opportunity

• Source: Global Times [10:40 June 16 2009]

By Gerald Schmidt

China has become strong enough to surpass Germany as the third-largest national economy. Even

suffering from the global recession, China’s economy is still growing. One has to have the greatest

respect for the achievements of the last 30 years. Yet, the challenges ahead are going to be tougher still

– measures against climate change seem to threaten the recovery and further progress, but climate

change is threatening all prior gains. So, the talks on the road to a successor treaty to the Kyoto

protocol are hard.

Chinese politicians, very rightly, point out that the West tends to measure with a double standard.

Industrialized countries’ affluence was built on cheap oil. Their development caused by far the largest

share of the emissions that are now recognized as problematic. This is conveniently overlooked in

arguing that all countries now need to reduce future emissions.

Industrialized countries tend to celebrate their emissions reductions and criticize China’s rising

emissions. A share of these reductions was not really achieved, however, but only “outsourced” to

China when moving manufacturing here. Now, conveniently, these emissions are China’s problem.

37

China’s rise to the third-largest economy – and the largest emitter of CO2 – is taken to imply that the

country has an obligation to reduce its emissions. It is less popular to look at GDP and emissions per

capita, which puts the issue into a very different perspective. China, if compared by population size,

still has low productivity, low material affluence, and low emissions. Industrialized countries,

meanwhile, want to see and portray themselves as exemplary for their highly developed way of life.

The resources used and emissions generated are so large, however, that such a lifestyle must be

changed, and must not be the example for others to follow. In this regard, all countries are developing

countries; change may even be harder for industrialized countries because it appears to mean giving up

some of their affluence.

At present, all attention is on the new treaty. It is understandable that China, where economic

development has brought millions out of poverty, is very concerned about its economic effects. Even

the US and Europe, although in a very different position, are not changing as dramatically as would

befit their status. China, although looking for its own ways, is so far following a Western model of

development only too well, although the problems that this creates – even without counting the effects

climate change could very well cause – are clear. Thus, all the mutual criticism, no matter how

justified, is of little use when the whole world needs to change toward sustainability. Thus, the focus on

emissions reductions is short-sighted. In fact, what we need to work toward are economies and ways of

life that function better, satisfy human needs and protect our environment.

The challenge of a change toward sustainability, in the end, may pose a peculiar opportunity for China:

looking over the unfairness of some of the arguments, China could show that it has not only been

gaining power, but aims for greatness as it develops toward sustainability.

China has a chance to improve its environmental situation as it gets better at serving its citizens, and to

develop its economy toward alternative energy and products designed to satisfy human needs while

having as little negative effect on the environment as possible.

As it does this, it can put other countries to shame (which would certainly get them working on

environmental improvements, too).

The expenses necessary to develop alternative energies that are focused more on quality and

sustainability rather than headlong growth are great, but given China’s commitment to stimulus

spending, it is not impossible.

It would be a good investment in the future.

Gerald Schmidt is an Austrian ecologist and cultural anthropologist working as German lecturer at

Xiangtan University, Hunan

http://opinion.globaltimes.cn/top-photo/2009-06/437281.html

Environment: From car-borne to carbon challenges By Fiona Harvey, Environment Correspondent, FT.com site Published: Nov 19, 2007

Environmental issues have hit the mainstream in the past few years as growing

concerns over problems such as climate change, pollution in developing countries, and the loss of biodiversity have prompted consumers, governments and businesses to start finding solutions.

Tom Woollard, a veteran consultant and business development director at Environmental Resources Management, has seen it all before. He points to previous waves of

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interest in green issues, in the 1970s, 1980s and 1990s. But this one, he thinks, is here to stay.

He explains: "This is much bigger. More people are aware of the importance of these problems. We are coming to the point with issues such as climate change that now it is no longer an option whether to do something about it. It is now a must."

Most companies in the FTSE 100 - and an increasing number around the world - now report on their carbon emissions, though they are not obliged to. Wal-Mart wants its suppliers to start disclosing their carbon emissions. Companies such as Coca-Cola and Cadbury Schweppes are taking steps towards labelling their products based on how much carbon went into their production. A few companies, including HSBC, News Corporation, Dell Computer, British Sky Broadcasting and Marks and Spencer, are even going "carbon neutral".

Governments around the world are toughening environmental regulations. The US is considering a federal regulation that would cap companies' carbon output and allow them to trade in permits to emit carbon, along the lines of the system in the European Union. Waste is also increasingly regulated, as is the use of potentially harmful materials.

With so much corporate and regulatory activity concentrated on making companies greener, the market for environmental consultancy has expanded substantially. Quite how much is difficult to say, because of differing definitions of environmental work. In the UK its growth is estimated by Environmental Data Services at nearly 20 per cent a year. The sector in the UK has been estimated at £1.5bn ($3.1bn) a year.

Environmental consultancies range from one-person firms advising companies on energy efficiency or waste management, to units of large engineering groups. The Big Four and smaller management consultancies also now boast in-house environmental specialisms. For instance, KPMG has a "carbon advisory group" helping companies tackle their impacts on climate change. It also helped Ecotricity, a renewable energy company, raise finance to build wind farms. Booz Allen Hamilton has developed a way to measure the "carbon footprint" of a company's supply chain, and has refurbished its Savoy Court offices to high standards of efficiency.

Deloitte says its activities have included advising investors in areas such as renewable energy; helping organisations to procure waste management services; auditing corporate social responsibility reports; providing services to financial institutions that may have exposure to liabilities resulting from climate change; and advising the UK government on policy options on greenhouse gas reduction.

Charles Gooderham of Deloitte says: "We help clients respond to these challenges through blending environment expertise with business advisory skills. Clients benefit from sound commercial advice underpinned by a detailed knowledge of the underlying environmental drivers."

He says companies should see environmental issues as a core part of their business strategy, not an optional extra: "The best way of sustaining a paradigm shift in corporate behaviour is by making it integral to business strategy and shareholder value."

Carmel McQuaid, a senior consultant on sustainability at PA Consulting, says businesses want to prepare for tougher regulation: "Clients are increasingly seeking guidance and support on how to transform their business to thrive in a carbon constrained world. Management consultancies play a vital role in that, be it quantification and reduction of carbon footprints, developing more next-generation sustainable products and packaging, or enabling public sector projects to set leadership examples."

Consultants are also keen to develop their skills in a specialism that is rapidly expanding, and which interests and motivates people at a personal as well as an intellectual level. For younger people in particular, it is increasingly important to feel that their company is not damaging the environment. Mr Gooderham reports: "Both the opportunity to work on environment related projects, and the environmental performance of Deloitte, are seen as

39

important factors by the younger generation of employees."

But the environmental performance of management consultancies is itself a tricky area. Consultancies are working to cut their "carbon footprint" - witness AT Kearney's decision to be "carbon neutral" within two years.

Achieving a lower environmental impact can be hard. Ms McQuaid notes: "Some could argue that management consultancy is not a sustainable business model due to the large footprint associated with business travel. In a carbon-constrained world, do we really want to have professions that rely on flying their people around the world?"

PA Consulting says staff regularly ask questions about the company's environmental impact, and, increasingly, clients are also asking for evidence of the company's commitment to cutting its impact when procuring services.

Ultimately, companies may find consulting on environmental issues is not so different from advising on general corporate productivity issues. Andy Mulholland, chief technology officer at Capgemini, which helps companies find ways to cut the "carbon footprint" of their computer operations, says: "The environment issue is nothing more than a question of common sense - much of the task is simply good business practice."

ERM: going green helps its clients stay out of the red

Companies are much more aware of the potential damage to their reputation of falling foul of environmental concerns than they were in 1971 when Environmental Resources Management was founded.

In part, that is because of the rise of global communications, says business development director Tom Woollard. "It is so easy to get information now from remote places, non-governmental organisations are much more active and people can use the internet to disseminate information. Companies cannot afford to ignore environmental and social issues, wherever they are operating, or they will be exposed and that could be very damaging."

For ERM and companies like it, concerns such as these have meant substantial growth. ERM is one of a small number of sizeable environmental consultancies in the UK, alongside the likes of RPS Group, SLR Consulting and Hyder Consulting. In addition, the mainstream management consultancies now have environmental specialisms, as do big engineering companies.

ERM was bought by Bridgepoint, the private equity company, in 2005 for $535m. The venture capital group 3i sold the 52 per cent of the company it acquired for £200m in a management buy-out in April 2001.

ERM increased its revenues by 14 per cent in the year to March 31 2007, with gross revenues at about $533m. Its earnings before interest, tax and amortisation (ebita) were $47m over the same period. ERM's ebita was $38m on turnover of $425m before its takeover. In 2003, ERM's gross revenues were $318m and its ebita $30m. In 2003, ERM decided to focus entirely on serving the biggest in its core markets. Consulting to manufacturers and retailers brought in 22 per cent of ERM's sales last year, with oil and gas supply 19 per cent, the chemical and pharmaceutical sector 12 per cent and transport, utilities and construction about 11 per cent.

The broad range of sectors the company works for reflects the growing desire for all sorts of businesses to incorporate environmentally sound practices into their work. "Sustainability issues are now integrating with business development issues, and that is where a lot of opportunities are for environmental consultancies," says Wayne Holden of ERM.

The company has also widened its geographical reach, now operating in more than 40 countries. In March 2007, the company had 3,171 staff - an increase of about 14 per cent over the previous year - and 342 partners, also a rise of 14 per cent. There is much more

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fierce competition for staff among environmental consultancies, reports Mr Woollard. But he says that many graduates are also now keenly seeking a career in environmental consulting.

He says a focus on staff retention is one of the key determinants of success for companies such as ERM: "You have to keep giving people interesting projects that challenge and motivate them. That's what people join us for, to do interesting work."

These projects might include involvement in the preparations for the London Olympics of 2012; helping companies to asess their impact on the climate; or assessing the Republic of Congo's environmental and social regulations, a condition of a World Bank loan to the country.

Unlike many mainstream consultancies, ERM prefers organic growth and a sprinkling of small acquisitions to large-scale mergers or takeovers. Mr Woollard says: "It's all about the culture. Our value is all in our staff. But you can destroy a culture easily or it can disappear overnight. Then if your staff think, 'the culture of this place has changed, I don't like it' - bingo, in six months they're gone."

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EXTENSIVE READING – just to give you an understanding of what the Copenhagen Meeting on Climate Change was all about

Why the Copenhagen climate talks matter

They won't likely deliver a new global treaty on global warming, but the decisions made here may still change our lives. By Steve Hargreaves, CNNMoney.com staff writer

Last Updated: December 7, 2009: 10:55 AM ET

Geoengineering, or deliberately tinkering with the earth's climate, could help if global warming proves

disastrous for mankind, but the ideas are untested and the risks unknown.

NEW YORK (CNNMoney.com) -- It's a massive jamboree, with tempers on both sides of the issue

running hot and no final deal in sight. But even so, we'd better pay attention to what transpires here, the

consequences of action or inaction may be massive. Starting Monday, 15,000 people are expected in

Copenhagen, Denmark. Over the next two weeks they're supposed to be hashing out a successor to the

Kyoto Treaty, the global deal regulating greenhouse gases that expires in 2012.

Among them will be over 100 world leaders, including President Obama and half his cabinet. Hundreds

of environmentalists are also expected, some protesting outside the massive convention center. With

the world's top scientists saying global warming is caused by humans and that quick action is needed to

avoid devastating consequences, the environmentalists will be pushing for cuts in greenhouse gases that

go far beyond what most nations are proposing. On the other side will be a handful of U.S. senators

opposed to any deal at all. The ring leader of this group is James Inhofe, the Oklahoma senator who has

famously called man-made global warming "the greatest hoax ever played on the American people."

They'll question the science behind global warming, holding up recently hacked e-mails from

prominent climate scientists. The e-mails apparently show the scientists, frustrated with a small but

vocal group of global warming skeptics, trying to keep dissenting opinions out of prominent journals

and attempting to hide inconsistencies in the overall data.

Most independent analysts say the hacked e-mails do not change the nature of the debate - the e-mails,

however inappropriate, don't undermine the consensus of hundreds of scientists that have been studying

this issue for decades. Still, might there be conflict between the believers and skeptics at the

convention? "It's a good question," said Kyle Ash, a legislative representative for Greenpeace who's

already in the city. "I'm excited to see what happens." While a new Kyoto treaty isn't expected, thanks

in large part to the U.S. Senate's inability to move climate legislation already approved in the House,

experts expect the framework for an eventual deal will take shape. What that deal looks like will

ultimately affect how much Americans pay in their gas and electric bills, and how quickly the world

cuts greenhouse gas emissions. "It will set the stage for what's to come," said Divya Reddy, an energy

policy analyst at the Eurasia Group, a political risk consultancy. "And that will translate into changes in

lifestyle and energy costs."

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What's on the table

Conference organizers at the United Nations are pushing for three main objectives:

-Numbers from each nation as to how much they can reduce greenhouse gases.

-How those reductions might be achieved.

-And how much money the developed world is willing to give developing nations as they attempt to cut

pollution.

President Obama recently pledged that the United States can reduce emissions by 17% from 2005

levels by 2020. Others nations measure cuts from 1990 levels. Using this standard, the U.S. cut is

roughly 4%. The European Union has already pledged to cut emissions by 20% from 1990 levels by

2020, and has said it might even go for a 30% cut if others nations promise big reductions. China says

it can't cut overall emissions, but is instead promising a 40-45% cut in carbon intensity -- the amount of

emissions created in relation to the growth of its economy -- from 2005 levels. India, Brazil and a host

of other nations have pledged similar reductions. Obama's proposal is roughly in line with legislation

passed in the House, and slightly less aggressive than a bill in the Senate. The Congressional Budget

office estimates the House version will cost the average American household $175 a year by 2020.

Too little?

Scientists have two deadlines for when reductions must be made. Obama's reductions are far below the

25% to 40% cuts scientists say are needed by 2020 to head off the worst effects of climate change. But U.S. lawmakers say their plan will ultimately achieve the reduction scientists say must be made by

2050.

Conference organizers originally hoped to make these commitments binding law in Copenhagen, but

experts say Obama won't move on any deal until he's sure the Senate will pass a climate bill similar to

the one that passed the House this summer. "It is unlikely that the United States will sign up to a

commitment on which it does not think it can deliver," Deloitte analysts Nick Main and Joseph

Stanislaw wrote in a recent research note. "The passage of that [Senate] bill and any eventual passing of

legislation will be a fundamental prerequisite to any agreement." The Senate was expected to take up a

climate change bill early in 2010, but with health care reform still unfinished and financial regulation

reform slated next, passing a climate bill anytime in 2010 now looks optimistic.

As for money to help developing nations tackle emissions and deal with climate related problems like

rising sea levels, Greenpeace is calling for $140 billion a year to be transferred from rich nations to

poorer ones. It's a number broadly in line with what other analysts expect will eventually be passed,

although the breakdown of who pays for what is uncertain. Europe has agreed to contribute $22 to $40

billion a year. In the U.S., the House climate change bill allocates at least $8 billion a year, a figure

that's already baked into the estimated $175 yearly household cost. Ultimately, most analysts expect

Copenhagen will result in a statement of broad principles and agreed upon goals, but little in the way of

action. "The room for surprises is pretty limited," said Paul McConnell, a carbon analyst at Wood

Mackenzie, an energy consultancy. The next major global meeting on climate change is set for next

December in Mexico, and will likely be the next opportunity for supporters of mandatory cuts to get a

binding agreement. http://money.cnn.com/2009/12/03/news/international/copenhagen/index.htm

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What the experts say

Copenhagen climate deal: Spectacular failure - or a few important steps? We ask leading climate change experts for their assessment of the Copenhagen deal

Tuesday 22 December 2009 20.00 GMT

Activists demonstrate outside the Bella Center in Copenhagen at the end of the COP15 UN Climate

Change Conference, 19 Dec 2009. Photograph: Olivier Morin/AFP/Getty Images

Fuqiang Yang, director of global climate solutions, WWF International

The negotiations in Copenhagen ended without a fair, ambitious or legally binding treaty to reduce

greenhouse gas emissions. Despite this, what emerged was an agreement that will, at the very least, cut

greenhouse gases, set up an emissions verification system, and reduce deforestation. Given the

complexity of the issue, this represents a step forward.

I hasten to add that much of the hard work still lies ahead. The Copenhagen accord, the text that came

out of the talks, leaves a long list of issues undecided. Among them are the emissions targets

industrialised nations will accept, and how much climate finance they will offer.

The accord essentially allows countries to set their own greenhouse gas emissions reduction goals for

2020.

But I am optimistic, because the talks did achieve $100bn in aid from industrialised countries to poorer

nations. China, as well, submitted to an emissions verification system under which all nations will

report.

The accord also includes measures to help cut greenhouse gases and reduce deforestation, particularly

in heavily forested developing nations such as Brazil and Indonesia.

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These are big steps forward, and I think it is important to remember that there were achievements made

in Copenhagen. There is still a great deal that needs to be done by China and all other signatories.

Specific, binding targets are extremely important and need to be worked out. But we did see a move

towards an agreement that could keep atmospheric Co2 levels from rising above dangerous levels.

John Prescott, climate change rapporteur for the Council of Europe

I've read a lot about so-called Brokenhagen and the failure to get a legally binding agreement. Frankly

we were never going to get one, just as we didn't get one at Kyoto, when I was negotiating for the EU.

What you need is a statement of principle. At Copenhagen this was a final admission that we cannot let

temperature rise 2C above pre-industrial levels. And to get approval from 192 countries on this

principle is remarkable, considering Kyoto dealt with only 47 nations.

The details and targets to meet that principle will be settled at COP16 in Mexico in 12 months' time.

Until then, countries must show, as Ban Ki-Moon said, greater ambition to turn their backs on the path

of least resistance.

Many of the countries have set out their own carbon action plans by 2020. So let's see them put those

plans into action and put those figures in the annexes to the Copenhagen accord. The rest of the world

will follow.

Copenhagen's achievements are an acceptance of the science (contested at Kyoto), an admission there

will be global emission cuts, and an acceptance that there will have to be verification.

Martin Rees, president of the Royal Society, master of Trinity College, professor of cosmology and astrophysics, university of Cambridge

Plainly the outcome of Copenhagen was less than many hoped – but perhaps not substantially less than

could be realistically expected. The involvement of India and China was clearly going to be crucial. But

the grandstanding by particular nations (and the insistence by some on an unreasonable target of 1.5

degrees) was plainly unhelpful to the negotiations.

We in the UK should surely acclaim the constructive and committed role played by our government,

and by Gordon Brown and Ed Miliband in particular, both in the lead-up to Copenhagen and during the

frustrating and exhasting negotiations last week.

Next year, one hopes the US internal debate will evolve further, so Obama feels able to play a less

muted role. Let's hope also that negotiations within groups of nations are carried forward. There is more

hope of something being agreed among a group of up to 20 key nations (provided the group covers

developing and developed countries), which others then sign up to.

And to be positive, the Copenhagen meeting, circus though it was, carried the process forward. For

instance, it stimulated pledges of funding from developed nations (albeit, not as firmly as might have

been hoped) and made progress on forestry. And it maintained global long-term concerns about climate

change on the international agenda.

Bryony Worthington, climate campaigner with sandbag.org, who helped draft the UK climate change bill

Copenhagen was a spectacular failure on many levels. The UN process was stretched to breaking-point,

with no consensus on any pressing issues.

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The accord that was signed was clearly designed to meet the needs of the US, who always wanted a

voluntary "pledge and review later" type agreement with minimum enforcement.

The sums of money agreed to help developing nations adapt to climate change are so low as to be

insulting.

The future of the major mechanism driving private capital into solutions, the carbon market, has been

left with a question mark over its future, and the long-anticipated agreement on stopping deforestation

lacked clarity.

What happens next? The most honest answer would be to accept that under the current arrangements

consensus will not be reached.

We have to focus on domestic action in big fossil-fuelled economies: the US, China, and Europe. All

three have made pledges about their intentions to act – each has the opportunity to introduce policies

which will create huge markets in climate solutions. If they lead, these solutions will become available

for use in all parts of the world, with the costs of development having been born by those most able to

pay.

That is our best hope.

Gavin Schmidt, climate scientist at Nasa and co­founder of RealClimate.org

Look at the history of environment negotiations – take the ozone ones as the best example. People start

off negotiating very hard and the first agreement does nothing but moderate the problem.

While the Montreal protocol was ultimately a huge triumph, it made an infinitesimally small difference

at first. It took them four amendments to get from reduction to a ban [on CFCs], a process of 20 years

after science identified the problem.

Carbon and climate change are much more complicated, and we're just getting to that 20-year mark

now. Anyone expecting a definitive solution to the problem on timescales any shorter than that is

extremely optimistic.

It's not an event, it's a process. I guarantee that the decisions we will be making in 2050 will not be the

ones made in Copenhagen.

Copenhagen did show some improvement in the process. People are now talking about changes in

greenhouse gas emissions that are commensurate with the size of the problem. Before, they weren't.

People are now seeing the problem for the challenge that it really is. But, in seeing that challenge, it

makes the process – because that challenge is very large.

Kumi Naidoo, executive director, Greenpeace International

The outcome of the summit was not fair, ambitious or legally binding. This eluded world leaders

because they put national economic self-interests, as well as those of climate polluting industries,

before protecting the climate.

Even if all countries reach their pledges, our planet will be propelled towards a 4C temperature rise,

double what leaders say they must achieve. This will have devastating climate impacts, including crop

failures and the disappearance of the Amazon rainforest and the Great Barrier Reef.

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With each month of delay in getting a real climate deal, the chances of the world staying below a 2C

rise slips further away, and the cost to this and the next generation in tackling climate change increases.

To avoid this, industrialised countries as a group – which bear historic responsibility for the problem –

must make the largest emission cuts. They also need to provide at least $140bn a year to help

developing countries.

The non-result from Copenhagen calls into question the ability of leaders to deliver what is needed.

Citizens around the world will need to elect more ambitious leaders and embrace new, low impact

technologies.

Vicky Pope, head of climate change advice at the Met Office

At previous meetings in the runup to Copenhagen, in Barcelona and elsewhere, there was talk about

greenhouse gas targets for 2020 and 2050; it is disappointing that those have been lost, but it is good

that everyone accepted the scientific reality that climate change is a problem and that we need to limit

warming to 2C.

The accord is fairly weak, and we will only know how effective it will be when countries fill in the

table that details their targets to reduce emissions (they have until the end of January to do so).

Only when we have those targets and we can add them up to see the scale of cuts will we be able to

properly judge what has been achieved. It is a positive thing that finance is included, as that could help

to make things happen.

Going forward, the first thing that needs to happen is that the table of targets needs to be filled in. Then

the whole agreement needs to be made legally binding.

Nicholas Stern, chair, Grantham research institute on climate change and the environment, London School of Economics and Political Science

The Copenhagen meeting was a disappointment, primarily because it failed to set the basic targets for

reducing global annual emissions of greenhouse gases from now up to 2050, and did not secure

commitments from countries to meet these targets collectively.

Nevertheless, the road to Copenhagen and the summit itself generated commitments on emissions

reductions from many countries, including, for the first time, from the world's two largest emitters,

China and the US. The Copenhagen accord also did recognise that a rise in global average temperature

should be limited to below 2C.

In addition, the prime minister of Ethiopia, Meles Zenawi, speaking for the African Union, put forward

a very important proposal on financial support, much of which is reflected in the Copenhagen accord,

including the creation of the Copenhagen green climate fund to administer funding for developing

countries.

The current UN framework convention on climate change process has been found wanting over the past

few weeks.

One potential way forward is for Mexico, as hosts of COP16 (the next full summit) in 2010, to convene

a group of 20 representative nations, as Friends of the Chair, to work on a potential treaty and tackle the

outstanding issues and building consensus around strong action. The group should start its work

immediately.

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Dr Myles Allen, head of climate dynamics group in the atmospheric, oceanic and planetary physics department, University of Oxford

On one level, it could be argued it is quite a good outcome.

There is a goal to limit global temperature rise to 2C and an acknowledgement that current

commitments are not enough to meet that goal. It is good that China recognises the 2C goal and that

emissions reductions are the way to go.

I am glad they did not make serious progress towards a legally binding treaty, because the current

thinking that nationally negotiated emissions targets and a system of carbon trading will solve this

problem is flawed. I'm very sceptical about that whole approach.

A legally binding regime based on that principle would lock us into that process, and it could take 20 or

30 years before it became sufficiently obvious it was not working. Once set up, there is enormous

investment in a system like that and it becomes difficult to change. So something close to success in

Copenhagen based on what the politicians were aiming for could have been counterproductive.

It's depressing that governments appear to have walked away from Copenhagen only to say they are

going to spend the next year fighting for the legally binding treaty they wanted it to produce, rather

than use the time to consider some radical alternatives.

One way we have suggested is to target producers rather than emitters. A mandatory requirement on

fossil fuel companies to capture and store carbon emissions, to clean up after themselves, could solve a

big part of the problem without complex international negotiations.

Bernarditas de Castro Muller, former lead negotiator for the G77 plus China group of developing countries

What was achieved in Copenhagen? The Copenhagen accord contains what was possibly the most that

the leaders of the world's biggest countries could give in terms of actions to address climate change.

However, there are problems with the document as it stands. The main one is the process pursued to

reach this agreement, which completely undermined the cardinal rule of multilateralism in international

negotiations, and that is transparency and inclusiveness.

The final session and the mishandling of the process by the Danish presidency delivered the knockout

blow to any meaningful agreement. That this travesty should take place before the eyes of the main

guardian of multilateralism, the UN secretary-general, only added to the irony of the tragic situation.

But the worth of the "deal" (I actually prefer the word "accord"; "deal" sounds like some sleazy

business plot) lies in laying out clearly what each of the major countries could live with in terms of

addressing climate change. In my opinion, it is still inadequate insofar as developed countries'

commitments to reduce emissions are concerned. However, we are always told to take into account the

"political realities" of rich countries. I revolt against this, but have to live with it, and put aside our own

political realities in the developing world, which have to do with basic necessities and even survival

itself.

Where do we go from here? We could take the accord as some kind of political guidance from the

leaders of major countries. We are now clear on where the major groups stand. It is now up to

negotiators to come up with universally agreed next steps.

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Rajendra Pachauri, chairman of the Intergovernmental Panel on Climate Change

I think there are three major achievements that could be listed at Copenhagen:

• The acceptance of a 2C limit for temperature increase, and reference to the scientific basis for doing

so. This indicates that science has finally had an influence on negotiators defining what would represent

dangerous anthropogenic interference with the climate system.

• An agreement was reached between the so-called Basic countries [Brazil, South Africa, China and

India] and the US on a tricky issue, which had become a bone of contention particularly between the

US and China.

• A sum of $30bn has been included in the agreement for funding developing countries' actions during

the period 2010 to 12.

Is the agreement worth anything? The accord would be worth something only if we build on it with a

sense of urgency and take it forward towards a binding agreement by the end of next year.

The next step is that the negotiators, and particularly the leaders of major countries, must now get into

action to see that we come up with an inclusive agreement involving all the countries of the world. This

would require early convening of some meetings under the Conference of the Parties, and a timetable

for specific outcomes to be achieved before Mexico.

guardian.co.uk © Guardian News and Media Limited 2010

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