Moves from Royal Dutch Shell, Petrobras, and all the latest from other brands in corporate responsibility and sustainability this month
Korean carbon cut
South Korea has become the latest country to formalise a 2020 emissions reduction target, with President Lee Myung-bak signing the Basic Law on Low-Carbon Green Growth in January. The law brings together various sustainable development regulations, such as limits on industrial emissions and fuel-efficiency standards for cars.
The law also states that an emissions trading platform should be established, and binds South Korea to cutting its greenhouse gas emissions by 4% by 2020 relative to 2005 levels. This would all add up to a 30% cut over business-as-usual, the South Korean government says.
East African promise
East African companies can now earn plaudits for their corporate social responsibility efforts, with the first East African CSR Awards due to be dished out during the World Economic Forum Africa in Dar-es-Salaam, Tanzania, in May. Nominations will be accepted for companies registered in Burundi, Kenya, Rwanda, Tanzania or Uganda. Initiatives will be judged in one of four categories: best workplace practice; environmental excellence; most ethical and responsible business practice for supply chains; and most sustainable and scalable community investment.
The awards are backed by the East African Business Council, with the judging panel including experts from Harvard University, Nottingham University and the International Business Leaders Forum. The awards open for entries in mid-February.
Oil giant Royal Dutch Shell looks set to find itself in the dock after a Dutch district court in The Hague, where Shell has its headquarters, ruled that a case brought by four farmers from the Niger delta, Nigeria, could proceed. The farmers, supported by Friends of the Earth Netherlands, claim leaking oil from Shell operations has polluted farmland and fishponds, ruining their livelihoods.
Shell has countered that the leaks have had little environmental impact, and were in any case caused by sabotage rather than poor pipeline maintenance. The case is likely to proceed in February when Shell submits a formal response to the allegations.
Make war not business
Indonesia’s armed forces still have their fingers in too many commercial pies, despite government promises to curtail the army’s business activities, according to Human Rights Watch. Indonesian military businesses “have long been implicated in human rights abuses, crime and corruption”, and have been “a platform for extortion, violence, property seizures, and other crimes”, Human Rights Watch says.
The army dabbles in particular in land deals, logging and plantations, and companies directly controlled by the military have assets worth millions. A law passed by Indonesia’s parliament in 2004 required divestment of these interests within five years, but little progress has been made, according to Human Rights Watch analysis.
The Human Rights Watch report, Unkept Promise: Failure to End Military Business Activity in Indonesia, is available at www.hrw.org/en/report.
Brazil’s environment ministry issued a record 1.4bn reais (£482 million) of fines in 2009 for activities such as illegal logging and illicit transportation of wood. The ministry also closed down 16 sawmills and seized about 185,000 cubic metres of wood from the most deforested Amazon states of Mato Grosso, Rondonia and Pará.
The Brazilian government says the rise in fines reflected increased enforcement activity. Brazil scored a small victory over deforestation during 2009, with the rate of Amazon tree-loss dropping by 46%, the biggest decline in 20 years.
Also in Brazil, state-run oil firm Petrobras has teamed up with GE to open, on January 19, the world’s first power plant to be fuelled by sugar-cane-derived ethanol. The 87 megawatt facility at Juiz de Fora in south-eastern Brazil has both a natural gas turbine and an ethanol-powered turbine, and can switch between them instantaneously. GE estimates it could convert a further 770 turbines worldwide to operate on biofuel.
Climate risks are still left out of investment decisions by 44% of money managers and institutional investors, who consider global warming not to be relevant to their risk assessments, a survey has found. Although ever-tightening environmental regulation is having an impact on sectors such as power generation and heavy manufacturing, pension funds and other asset holders have been slow to ask their money managers to factor climate change into their decisions.
The survey was conducted by Ceres, a Boston-based coalition of investors and environmental groups. Separately, investors representing $13trn in assets issued, via Ceres, a statement calling on the United States, Australia and other countries to adopt strong national climate policies to make up for the failure to agree an international treaty at December’s Copenhagen climate summit.
Information and communication technology companies, meanwhile, are paying more attention to their carbon footprint. So says international telecommunications consultancy Frost & Sullivan in its third annual report, “Sustainability in Telecoms: Return on Environmental Investments”.
Firms are finding that environmental initiatives are relevant in the recession because they can lead to lower costs and can help attract customers, the survey claims. Frost & Sullivan expects environmental investment by ICT companies to double in the next two to three years. Alcatel-Lucent, Ericsson and IBM are regarded as ICT environmental leaders.
Must do more
The most carbon-intensive FTSE 100 companies need to do more if they are to help the UK meet a 2020 target to reduce the nation’s greenhouse gas emissions by at least 34% compared with 1990. According to a review carried out by the Carbon Disclosure Project (CDP), just 24 firms are responsible for 87% of declared FTSE 100 emissions, and under current plans, these emissions will be reduced by 1.2% per year until 2020. This is “far short of national targets”, according to the CDP. Just over three-quarters of FTSE 100 firms have emission reduction targets, of which half are for absolute, rather than relative.
Meanwhile, the UK government is expecting the food sector to do its bit to meet emission reduction goals. A Food 2030 strategy published in early January says that all parts of the UK food chain need to be reviewed, including production, processing, distribution, retail, consumption and disposal. Concrete measures that could be taken could include reduced use of refrigeration, additional food-labelling and rationalised use of fertilisers by farmers.
The CDP report, “FTSE 100 Carbon Chasm”, is available at https://www.cdproject.net/CDPResults/FTSE_100_Carbon_Chasm.pdf
The UK government’s “Food 2030” strategy is available at www.defra.gov.uk/foodfarm/food/pdf/food2030strategy.pdf