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.
Brazil’s economy has been booming. During the past decade, it grew from the ninth to the sixth-largest in the world. While this growth has brought many socioeconomic benefits, it’s come with a downside: significant environmental impacts. Brazil has the highest rate of deforestation worldwide, while pollution threatens the country’s drinking water supply. Despite a decrease in national greenhouse gas emissions of late, agriculture emissions and energy demand are still rising.
While manufacturing is a critical part of the U.S. economy, it’s struggled over the last several years—both financially and environmentally. Overall U.S. manufacturing employment has dropped by more than one-third since 2000. Meanwhile, U.S. industry—of which manufacturing is the largest component—still uses more energy than any other sector and serves as the largest source of U.S. and global greenhouse gas emissions.
The good news is that energy efficiency can help U.S. manufacturing increase profits, protect jobs, and lead the development of a low-carbon economy. The Midwest’s pulp and paper industry is a case in point: New WRI analysis finds that the pulp and paper sector—the third-largest energy user in U.S. manufacturing—could cost-effectively reduce its energy use in the Midwest by 25 percent through use of existing technologies. These improvements could save hundreds of thousands of jobs, lower costs, and help the United States achieve its goal of reducing emissions by 17 percent by 2020. As the White House moves to cut carbon dioxide pollution in America, energy efficiency improvements in Midwest pulp and paper mills are a tangible example of the win-win-win emissions-reduction opportunities in U.S. industry.
Labeled the “queen of the forest” for its size and beauty, the Brazil nut tree plays an important social and environmental role in the Amazon. During the annual harvest, from November to March, when both its seeds and nuts are collected, the tree also provides a critical supplementary source of income for communities across the region.
While other natural resource management activities risk increasing deforestation in the Amazon, nut harvesting is not harmful to nature, since it depends on the forest’s continued existence. Local company Ouro Verde was created with this in mind, selling Brazil nut products marketed as sustainable, including extra virgin nut oil, nut butter and granulate. Ouro Verde created 47 jobs, and many more new business opportunities in the Amazon region, placing an economic value on the rainforest for local communities. About 1.3 million hectares of rain forest are sustainably managed by Ouro Verde supplier partners.
Ouro Verde is a shining example of the type of company WRI’s New Ventures project was created to support. Founded in 1999, New Ventures identifies, mentors, and provides promising small- and medium-sized enterprises (SMEs) with access to investment. New Ventures supports companies in six rapidly growing emerging markets – Brazil, China, Colombia, India, Indonesia, and Mexico – where the environment and development decisions being made today will impact the entire world. To date, we have facilitated more than $225 million in investment and worked with 346 innovative enterprises.
In 2010, SMEs supported by New Ventures reduced CO2 by 135,021 tons, the equivalent of removing over 112,000 cars from the road for one year. In addition, 1,490,448 hectares of land – an area larger than Connecticut - was placed under sustainable management by New Ventures companies or was conserved by sustainable land use companies in the New Ventures portfolio.
Managing carbon is not just good for the environment. It’s also a way for business to save money, cut risks, and create new business opportunities. The Greenhouse Gas Protocol (GHGP), created by WRI and the World Business Council for Sustainable Development (WBCSD), is the leading international standard for companies to measure their carbon emissions so they can manage, report on, and reduce them.
In 2011, the GHG Protocol launched two new standards in response to demand from both the market and stakeholders for greenhouse gas emissions information across a company or product’s value chain. The Corporate Value Chain Standard can help a company identify which parts of its value chain it should target to reduce emissions. The Product Life Cycle Standard may be used to develop new low-carbon product lines that can give companies a competitive edge or pinpoint climate-related risks in a product’s life cycle.
The new standards took three years to develop. Close to 2,500 partners worldwide participated and 60 companies from 17 countries road-tested the standards. Even before their release, two major initiatives – The Sustainability Consortium and the Consumer Goods Forum – committed to use the standards. Their endorsement is a breakthrough and a clear signal that the new standards will be widely adopted by companies globally. The Consumer Goods Forum, for example, represents over 400 companies and retailers with a combined three trillion dollars in sales.
By enabling corporations to reduce their use of carbon, the new GHGP standards can play a role in significant global GHG emission reductions.