WRI’s New Ventures project identifies, mentors, and provides small and medium-sized enterprises (SMEs) with access to investment. New Ventures operates in five of the world’s most vibrant emerging economies – Brazil, China, India, Indonesia, and Mexico – where current business and development trends will impact the entire world. In 2007, New Ventures Mexico launched an independent institution – Centro de Negocios Sustentables. With a $400,000 grant from Mexico’s Ministry of Economics, the Center, the first of its kind in Mexico, provides sustainable SMEs with a wide range of services from business acceleration and incubation to market access through the Green Pages. Since its founding, New Ventures has provided comprehensive support to over 150 entrepreneurs and facilitated $38 million in investments for sustainable companies.
Four years ago, few financial firms factored climate change impacts into their operations. Now, due in large part to WRI’s work to examine the risks and opportunities that climate change is creating for business, industry leaders such as ABN AMRO, Bank of America, Citi, Goldman Sachs, HSBC, JPMorgan Chase, and Lehman Brothers are committing significant resources and billions of dollars toward cleaner technologies and climate change solutions. What started as “boutique research” is now a mainstream issue. WRI believes that financial markets attuned to environmental issues will create powerful incentives for companies to improve their environmental performance, while also ensuring better returns for investors.
In early 2007, the politics of climate change experienced a tectonic shift when the CEOs of ten major corporations and four national environmental groups – including WRI – joined together in calling on the U.S. government to quickly enact strong national legislation requiring significant reductions in greenhouse gas (GHG) emissions. The U.S. Climate Action Partnership (USCAP) and its bold proposals have advanced the policy debate in Congress. As USCAP membership grows (now at thirty one participating organizations representing over 2 million people in membership and over $2 trillion in market capitalization) so does the number of climate bills introduced. WRI was instrumental in the formation of USCAP, which is the result of a ten-year effort to engage the private sector in the design of business strategies and market-based policies to achieve strong national GHG reduction goals.
The Case of Midwest Pulp and Paper Mills
This report highlights the critical role of energy efficiency in improving the economic and environmental performance of Midwest pulp and paper mills. WRI’s analysis finds that less efficient facilities could realize significant annual energy cost savings, and decrease their greenhouse gas...
The Asian Development Bank was established in 1966 to help its forty eight developing member countries reduce poverty and improve the quality of life of their citizens. In 2009, the Bank launched a new program of technical assistance to encourage the growth of small- and medium-enterprises (SMEs) in India and Indonesia that provide environmental and social benefits.
Ella Delio works in WRI’s New Ventures project, which promotes business solutions that align the need for sound financial returns with environmental and social goals. She and her team were the Bank’s primary advisors in developing the new program. “SMEs,” Delio explains, “are the engines of equitable economic growth in emerging market nations. Accounting for an average of 34% of the GDP and employing in excess of 60% of the labor force, SMEs are great sources of innovation and often provide strong linkages to poor communities. They have the capacity to transform the economic development paradigm by delivering business models that are pro-poor and pro-environment.”
Alexander Perera leads WRI’s work in renewable energy. Looking back to the year 2000, he recounts how few companies were thinking about green power options and how few utilities offered them. “Commercial and industrial use of renewable energy in the U.S. totaled less than 250 megawatts – equal to just one quarter the output of a large coal-fired power plant.”
Nine years later, a pioneering group of fifteen U.S. companies quadrupled this output, reaching a collective goal of purchasing 1,000 megawatts of new, cost competitive green power generated from renewable resources. In reaching this landmark, the Green Power Market Development Group (GPMDG) has helped catalyze a dramatic scale up of the domestic renewables industry.
WRI convened the Group and has worked with companies to explore workable renewable energy technologies, financing strategies, and partnership arrangements. It also helped the Group establish best practices for green power purchasing. “Companies now obtain green power from a variety of sources,” says Perera, “including solar and wind power, biomass, low-impact hydropower, and landfill gas.”
Core members of the GPMDG include Alcoa, Dow Chemical, DuPont, FedEx, GM, Georgia-Pacific, Google, IBM, Interface, J&J, Michelin NA, Natureworks, Pitney Bowes, Staples, and Starbucks.
In January 2010, the U.S. Securities and Exchange Commission issued new guidance clarifying that publicly-traded companies need to disclose financially material impacts related to climate change. Material impacts may range from compliance costs related to emissions regulation, to the physical impacts of changing weather patterns on operations.
The SEC ruling creates more incentives for capital to flow to sustainable businesses, while also improving awareness of the importance of climate change among the financial community. Companies are expected to improve GHG emissions accounting and reporting - an important stepping stone to managing and reducing corporate carbon footprints. WRI plans to continue engagement with the SEC, companies, and other advocates to help develop more specific rules, methodologies, and guidance relating to environmental disclosure.
For the past decade, WRI’s Markets and Enterprise Program (MEP) has been working to analyze material impacts of climate change on companies. MEP’s publication, Coming Clean, was one of the first reports identifying the need for improved corporate disclosure and providing specific recommendations for the SEC that were grounded in detailed financial analysis. Since then, WRI has worked closely with the investment community, as well as businesses, to foster support for better financial analysis and climate change-related reporting.
Meanwhile, WRI’s GHG Protocol team has worked over the last six years to build the foundation, constituency and the accounting infrastructure for companies to engage in corporate emissions disclosure and prepare for exactly this type of requirement. The GHG Protocol’s Corporate Accounting and Reporting Standard in particular is an important precursor to the SEC requirements. The SEC guidance refers to three business programs – the Carbon Disclosure Project, The Climate Registry, and the Global Reporting Initiative - that illustrate increasing corporate disclosure of climate change impacts and risks. All three of the programs’ greenhouse gas emissions reporting components are based on the GHG Protocol’s Corporate Standard.
Since 2007, both the Markets and Enterprise Program and the GHG Protocol Team have also been working through an international collaborative effort – the Climate Disclosure Standards Board (CDSB), which includes the Carbon Disclosure Project (CDP), The Climate Registry (TCR), CERES, and the World Economic Forum (WEF) to inform and guide SEC and other national financial accounting regulatory boards to address the issue of climate change reporting in the financial statements.