THE GALLON ENVIRONMENT LETTER

Canadian Institute for Business and the Environment

Fisherville, Ontario, Canada

Tel. 416 410-0432, Fax: 416 362-5231

Subscriptions: subscriptions@gallonletter.ca

Vol. 16, No. 10, February 28, 2012

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This is the honoured reader edition of the Gallon Environment Letter and is distributed at no charge: send a note with Add GL or Delete GL in the subject line to subscriptions@gallonletter.ca. Subscribers receive a more complete edition without subscription reminders and with extensive links to further information following almost every article. Organizational subscriptions are $184 plus HST/GST and provide additional benefits detailed on the web site. Individual subscriptions are only $30 (personal emails/funds only please) including HST. If you would like to subscribe please visit http://www.cialgroup.com/subscription.htm If you feel you should be receiving the paid subscriber edition or have other subscriber questions please contact us also at subscriptions@gallonletter.ca. This current free edition is posted on the web site about a week or so after its issue at http://www.cialgroup.com/whatsnew.htm. Back free editions from January 2009 are also available.

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ABOUT THIS ISSUE

This editorial in this issue reviews the Harper government's attitude towards the environment and makes some suggestions for where we can all go from here. One place to go is industry leadership of environmental initiatives and, with that in mind, we list some of the more significant environmental awards that are available to Canadian companies. Being among those that are convinced that positive action for the environment needs to become a matter of competition among companies, we urge our corporate readers to compete for some of the many awards that are available. It will almost certainly improve your environmental and economic performance. To make reading interesting for our individual readers our awards summary also presents some of the most recent winners and their achievements.

We suspect that some readers view awards with some scepticism. Given the limited resources often provided to judges, we are not surprised that recipients are sometimes not as worthy as the award suggests. However, there are also some awards designed to highlight the infamous. Our list would not be complete without our mentioning these.

In other news and views, we welcome two Letters to the Editor in this issue (please send more to editor@gallonletter.ca), we include some advice on environmental insurance policies, and we report on the new status of the founder of the World Business Council on Sustainable Development. The Royal Ontario Museum has an exhibition on the collapse of the Mayan civilization and leads us to ponder on the possibility of similarities between that situation and today's situation in some parts of the world. We explore whether the US National Parks Service is encouraging people to consume more heavily sugared beverages and we analyse the message of a recent book that explores methods of thinking.

Our next issue will contain GallonLetter's reporting from the recent Energy, Utility and Environment Conference held in Phoenix, Arizona, last month.

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HARPER GOVERNMENT MAY BE RISKING ENVIRONMENTAL BACKLASH

Many industry leaders could attest as to how working with environmental groups and social responsibility critics, substantially reducing confrontation, is a far more effective strategy than engaging the community of critics in battle. That is a lesson that they might do well to convey to the Harper government. Harper's pugnacious approach toward citizens who see the environment as more important than does his government will almost certainly result in more confrontation, increased intervention by US and overseas environmental groups, more boycotts of Canadian products, and greater difficulty in working with other countries, most likely including Europe but possible also the US and Asian trade partners. No country wants to do business with a partner that is seen to be destroying environmental resources of global significance.

Despite attempts by Environment Minister Peter Kent to reassure Canadians that the government is not against all environmentalists, only those that are against Canada's economic priorities, the evidence suggests that the Harper government really has no truck with environmental policies. Early in its first mandate, funds previously granted to environmental groups were slashed. Funding to the Canadian Environment Network, a group that facilitated communication between the federal government and environmental groups, and hence benefitted the government to a considerable extent, were eliminated. The National Round Table on the Environment and the Economy has been marginalized and few would be surprised if its funding is eliminated in an upcoming budget. Funding for Sustainable Development Technology Canada, one of the few quasi-government initiatives working to support greening of industry through support to sustainable technologies, was delayed and slashed. The government has stated that it will change the Environmental Assessment Act to reduce the length of hearings and, implicitly, reduce the number of issues that can be addressed and potentially the number of interveners. Nothing useful is happening on the climate change front and the government has attempted, unsuccessfully, to avoid international censure by withdrawing from the Kyoto Protocol. In the early days of its first mandate the Harper government promised to harmonize Canada's climate change rules with those of the United states but now that the US is taking action on some environmental issues even this pledge seems to have been set aside. Environmental initiative after initiative is stalled within Health Canada, Environment Canada, Natural Resources Canada, and elsewhere inside government. Ministers and backbenchers have recently taken to attacking environmental and social responsibility groups, often using incorrect information to support their case.

Virtually all of Canada's environmental laws and regulations were introduced by Conservative governments. There is nothing traditionally anathema between conservatives and the environment. Many of those who vote Conservative, citizens, corporate donors, and foundations, also support environmental initiatives. There is no evidence to indicate that conservatism and conservation have separated, though GallonLetter does accept that the extreme right wing of the Conservative Party of Canada shares Prime Minister Harper's strong dislike of many things environmental. However, the extreme right is very unlikely to be a large enough cohort to re-elect a Harper majority government in 2015.

Both the environment and Canada's international reputation are important to Canadians. Both are threatened if the Harper government continues on its present anti-environment trajectory. Maybe the government is planning a big environmental push in 2014, ahead of the next election, but if so some public consultation should already be underway. The risk of the present strategy is not only that environment may become an election issue in 2015 but that funding, support, environmental activism, and outside attacks on the self-image of Canadians may become more and more real as 2015 approaches. If President Obama is re-elected this Fall, as seems increasingly likely, criticism of Canada's lack of environmental progress may even come from the US administration.

The problem, in our opinion, rests not only with the Harper government but also with environmental activists and business leaders who continue to stress an old paradigm: that the environment is best protected and improved through government regulation and marketplace control. Today more and more jurisdictions are demonstrating that the environment and the economy do go hand in hand and that one of the best ways, if not the only way, to a sustainable economy is through protection of the environment. Clearly the Harper government is not especially enthusiastic about increased regulation of industry but is more likely to be interested in initiatives which enhance Canada's competitiveness and grow our economy. Without expecting all to agree, we urge Canada's environmental leaders to enhance promotion of the positive role of green business in providing jobs and economic well-being for decades into the future.

GallonLetter will be exploring these opportunities in greater detail through the balance of this year.

Colin Isaacs

Editor

PS. For one example of environmental groups and industry working together in a potentially successful way, visit GallonDaily.com and scroll down to: Environmentalists agree to offset plan from fertilizer giant.

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CORPORATE AWARDS AND RECOGNITION

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The following is a directory of national and major regional environmental awards and recognition programs that are available to Canadian companies. It isn’t complete. If you are aware of an award which we have missed, please email details to us at editor@gallonletter.ca

We will include an update in a future issue. We will also be posting a list of award programs on the GallonLetter website later in the year and for this would welcome details of local as well as regional, national and international awards.

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GLOBE AWARDS FOR ENVIRONMENTAL EXCELLENCE

Ms. Carine Vindeirinho, Director, International Relations, Coordinator, GLOBE Awards wrote to us about the GLOBE Awards for Environmental Excellence, an set of awards which we already consider to be the most high profile in Canada, "The deadline for application in our 2012 edition just closed but people might still be interested in finding out who the finalists and winners will be. Finalists will be announced Feb 27 and winners will be announced on Mar 16 in a ceremony held during the GLOBE 2012 Closing Luncheon.

For information about award categories for the 2012 edition, past winners and important dates, please visit www.theglobeawards.ca GLOBE Headquarters: is in Vancouver, BC where Globe 2012 will be held March 14-15, 2012 at the Vancouver Convention Centre. http://www.globeseries.com "

This year's judging panel consists of:

Mike Harcourt, Former Vancouver Mayor; Former BC Premier; Chairman, QUEST, Victoria, BC
Denis Leclerc, President & CEO, Écotech Québec, Montreal, QC
Melanie Nadeau, Senior Manager, Sustainability, Emera, Halifax, NS
Mark Rudolph, President, justenvironment, Campbellville, ON
Laura Selanders, Senior Manager, Environmental Stewardship & Sustainability, The Home Depot, Toronto, ON

The 2011 award winners were:

The Corporate Award for Environmental Excellence - Walmart Canada

The Award for Best Green Consumer Product - Tetra Pak Canada Inc.

The Award for Best Green Consumer Product - Honorary Small Business Award -

Mariclaro Canada Inc.

The Award for Best Green Retailing Practices - The Beer Store

The Award for Technology Innovation and Application -

Ostara Nutrient Recovery Technologies Inc. (see separate article)

The Award for Excellence in Urban Sustainability - BC Housing Management Commission

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ONTARIO BUSINESS ACHIEVEMENT AWARDS

The Ontario Chamber of Commerce deadline for Ontario Business Achievement Awards is June 1, 2012. The OBAAs turn 30 this year over which time there have been 300 OBAA winners. A number of the categories could apply to corporate responsibility such as the ICAO Award for Governance or the Innovation Award. Both the Desjardins Award for Large Business and the RBC Royal Bank Award for Small Business mention environmental stewardship and corporate citizenship as an aspect of winning. Both are available to two businesses each.

The Ontario Global Traders Award is a partnership with the Ministry of Economic Development and Innovation in recognizing small and medium sized private sector for profit companies who export. Again there is nothing to stop a company with good environmental practices to win but there are no specific environmental criteria listed in the overview.

Paid subscribers see link to original documents and references here.

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ALBERTA: EMERALD AWARDS

The Emerald Foundation receives nominations in ten categories relating to environment for the Emerald Awards which open in November and close at the end of February. The 2012 award categories recognize youth, community group, education (school or classroom), public education & outreach (available to individuals, organizations and local initiatives outside the formal education system), not-for-profit associations, large and small businesses, individual and governments.

The Emerald Certified - Shared Footprints Award launched in 2010 by Alberta Sustainable Resource Development must meet the standards for the Emerald Awards and the eight principles of Integrated Land Management. It is presented by Encana.

The Emerald Challenge Award is on a topic set by the Board of Directors on a topic of current importance to the well being of the Alberta Environment. In 2012, the theme is Alberta's Oil Sands presented by Alberta Energy. It is open in individuals, groups, businesses and government.

This year the 21st Annual Emerald Award will be held June 6, 2012 in Calgary.

Alberta Emerald Foundation. 2012 Award Categories. http://emeraldfoundation.ca/emerald-awards/nominations/2012-award-categories

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CANADIAN CONSULTING ENGINEERING AWARDS

The 2012 Canadian Consulting Engineering Awards are a joint project of the Canadian Consulting Engineer CCE magazine and the Association of Consulting Engineering Companies (ACEC).

The awards are processed in several stages. Stage 1 deadline application and a $300 entry fee (fees are common in a number of the awards) are due March 27, 2012. The awards are presented at an awards gala dinner to be held in Ottawa in November 1, 2012.

The highest honour is the Schreyer Award (named for former Governor General Ed S.) which is for the best demonstration of technical excellence. While not overtly an environmental award, some of the winners have demonstrated technical excellence in regard to the environment. Tree for Life Award was inaugurated in 2008 and is specifically for outstanding environmental stewardship in projects selected from all the other award categories.

Like many of the corporate awards, the press release promotes the idea of the value such as winner of the award meeting with high-ranking parliamentarians, being recognized in a special issue of the Canadian Consulting Engineer magazine along with press releases such as to the local area of the winners. Winners are also encouraged to invite their Member of Parliament to the Gala and to submit display boards on their companies at the award event.

Schreyer Award: Genivar Inc.

Genivar Inc.(Murdochville, QC ) won the Schreyer Award in 2011 for the $116 million and four years of site work to decommission the Gaspe Mines for Xstrata Copper Canada said to be the first smelter decommissioning project and the largest mining and metallurgical site closure in Canada. As well as on-site remediation, off site cleanup was done at over 800 homes, commercial and industrial properties in the town of Murdochville and Sandy Beach area affected by airborne pollutants from the smelting operations and copper concentrate handling in boats and trains over 50 years.

Tree for Life: Enermodal Engineering

The Tree for Life Award was won by Enermodal Engineering Ltd.(Kitchener, ON) for its own headquarters in Kitchener which uses 82% less energy than a conventional office. Their HQ uses a metered 69 kWh/m2 compared with the Canadian average of 384 kWh/m2.

Enermodal is in the business of creating green buildings and communities and has worked on 110 LEED certified projects half of which have achieved gold or platinum level.

A company press release in November announced the building called A Grander View, "has become the first LEED Canada triple Platinum building with certifications in the New Construction (NC), Commercial Interiors (CI), and Existing Buildings: Operations & Maintenance (EB:O&M) rating systems. This is also the first ever LEED Canada EB:O&M Platinum certified project.

GallonLetter notes that the LEED's Operations and Management rating applies only to buildings which have been in operation for at least a year and requires renewal every five years. The rating helps address one of the problems with green buildings (and indeed almost all infrastructure) , failure to keep it in good shape or to prevent and repair damage can lead to buildings which fail to meet energy and environmental expectations associated with LEED certification.

Enermodal: Other Awards

The high standard of the building has garnered other awards including

America's Most Livable Building: 2011 Livable Building
Award from the Center for the Built Environment (CBE) at the University of California,
An Urban Design award in the low rise office category from the City of Kitchener. Some of the features recognized include a 5 cubic metre rainwater cistern for toilet flushing, extension of a community trail along the property, native species and pesticide free landscaping, daylighting sensors, 5.5 kW rooftop PV-supplied power and a narrow footprint so all occupants have views of the outdoors.
Healthy Workplace Award at the Gold level from the Region of Waterloo’s Project Health initiative. As well as the building features recognized were, Enermodal’s flex time policies, employee garden plots, organic/local food purchasing policies, and bike storage/showers.

Paid subscribers see link to original documents and references here.

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ENERGY STAR MARKET TRANSFORMATION AWARDS: CALL FOR NOMINATIONS

A press release sent for Dianna Miller, Chief, Equipment Labelling Program, Office of Energy Efficiency at Natural Resources Canada, states,

"We are now accepting nominations for the 2012 ENERGY STAR Market Transformation Awards. The deadline to submit a nomination is March 14, 2012. (Please note that, unlike in previous years, this is a fixed deadline that will not be extended.)

The award categories are:

a) ENERGY STAR Manufacturer of the Year: Single product or multiple products

b) ENERGY STAR Retailer of the Year: National or regional

c) ENERGY STAR Advocates: Utilities (large or local), Distributors, or General Promoters (including governments or non-governmental organizations)

Nominees in each category will be assessed using the 5As of Market Transformation: Acceptance, Accessibility, Affordability, Availability and Awareness. Each category has additional assessment criteria, over and above the Five A’s, that are used to select winner. More information is available on our Web site. Winners will be announced on June 5th during the 2012 ENERGY STAR Participants' Meeting, to be held at the Fairmont Château Laurier hotel in Ottawa, Ontario.

If you would like more information on these awards, or to submit a nomination, contact Nancy Fecteau by phone at 613 996-3768 or by e-mail nfecteau[ ]nrcan.gc.ca. "

Canada. Natural Resources Canada. Office of Energy Efficiency. Canada’s ENERGY STAR® Market Transformation Awards 2012. http://oee.nrcan.gc.ca/equipment/manufacturers/478
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CARBON DISCLOSURE PROJECT: LEADERS INDEX CDLI

The top 10% of companies of the 2011 Canadian 200 companies published by the Carbon Disclosure Project Canada are recognized in the CDP Canada Leaders Index for their transparency in releasing both their strategy and emissions. Ranked by their carbon disclosure are:

Suncor Energy Inc

Newmont Mining Corporation

Bank of Montreal

Barrick Gold Corporation

Canadian National Railway Company

Stantec Inc.

TMX Group Inc.

Ritchie Bros. Auctioneers Incorporated

Cenovus Energy Inc.

Boliden Group

ARC Resources Ltd.

SNC-Lavalin Group Inc.

Emera Inc.

BCE Inc.

Kinross Gold Corporation

Encana Corporation

Royal Bank of Canada

Yamana Gold Inc.

Canadian Imperial Bank of Commerce (CIBC)

National Bank of Canada

In the introduction to the 2011 report on the Carbon Disclosure Project in Canada, David McLaughlin, President and CEO of the National Round Table on the Environment and the Economy wrote, "So, we have a collective stake in getting global emissions down. As we do so, Canada can lead in low-carbon economic performance, clean energy technology development and business adaptation to climate change.

The numbers are in. CDP shows Canadian businesses are starting to do just that."

McLaughlin's observation may be spot on - Canadian businesses are starting towards greenhouse gas emissions reduction and reporting. The report says, "The range of scores for the 2011 CDLI is 69 to 92 with an average CDLI score of 77. This is significantly lower than that

of the Global 500, which ranges from 90 to 99 with an average score of 94. The range of scores in the full respondent sample is very wide – running from 10 to 92 with a few companies in every sector scoring below 40, indicating that not all companies are equally advanced in their climate change reporting."

Paid subscribers see link to original documents and references here.

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EDC: SUCCESS STORIES FOR CANADIAN EXPORTING COMPANIES

Highlighting of a company's success under a specific program is also a form of recognition both of the company and the organization running the program. For example, EDC's Knowledge Centre which is intended to help Canadian companies to export their products and services has a section called "Success Stories." One story is about Catalyst Paper (Richmond, BC) described as Canada's largest producer of quality paper and pulp products. About 90% of their product is exported. The company has reduced its greenhouse gas emissions by 70% since 1990. Its export business is insured through EDC's Accounts Receivable Insurance.

Economic Development Canada EDC is Canada’s export credit agency, "offering innovative commercial solutions to help Canadian exporters and investors expand their international business."

Canada. Economic Development Canada EDC. Catalyst Paper turns waste into fine paper for export. http://www.edc.ca/EN/Knowledge-Centre/Success-Stories/Pages/export-success-story-catalyst-paper.aspx

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MACLEANS TOP 50 SOCIALLY RESPONSIBLE CORPORATIONS

The Top 50 Socially Responsible Companies in Canada were based on tracking of their environmental, social and governance indicators by a broad range of environmental, social, and governance (ESG) indicators tracked by Jantzi-Sustainalytics.

Among reasons given for selection to Maclean's list are winning other awards. For example:

3M: Energy Star Sustained Award given for the company's global energy conservation.

Brookfield Office Properties Inc: Sustainable Corporate Real Estate Roundtable's "Outstanding Landlord of the Year 2010."

The company's Queen's Quay terminal building won the 2010 BOMA (Building Owners and Managers Association of Canada) Toronto Earth Award and the 2010 BOMA National Earth award for resource preservation and environmentally sound commercial building management

TransAlta: President and CEO Steve Snyder (since retired and replaced in January 2012 with Chief Operating Officer Dawn Farrell) was named the 2010 Canadian Energy Person of the Year by the Energy Council of Canada for leadership in corporate social responsibility and environmental sustainability. TransAlta was also named one of the 15 Carbon Disclosure Project leaders in Canada for transparency on greenhouse gas emissions and climate change strategy.

Paid subscribers see link to original documents and references here.

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GREEN LIVING ECR

Excellence in Corporate Responsibility Awards by Green Living Enterprises was launched in 2011. Last year’s event was at the Toronto Toronto’s TIFF Bell Lightbox, October 26^th, an event GallonLetter’s editor attended. The tribute and The Outstanding Achievement Award to late Ray Anderso, CEO of Interface, Inc. was a highlight to many in the audience.

Among the other 2011 winners were Cenovus Energy Inc., Cascades, LoyaltyOne Inc., Canadian Tire Corporation, Steam Whistle Brewing, Lanefab Design/Build, The Greater Toronto CivicAction Alliance, and TD Bank Financial Group.

Judges include Kelly Baxter of The Natural Step, Valérie Bécaert of CIRAIG, Heather Lang of

Jantzi-Sustainalytics, Bob Willard, author and speaker on corporate sustainability and Matt McCulloch of the Pembina Institute.

Paid subscribers see link to original documents and references here.

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CATIE AWARDS: GREENING OF THE SUPPLY CHAIN

The Canadian Association of Importers and Exporters Catie Awards are presented as part of the annual trade show and conference. Various awards are available for application. The application form for the Greening of the Supply Chain states, "This award recognizes a Canadian company that has initiated, implemented and proven corporate commitment to the greening of the supply chain and reducing their carbon footprint. Candidates include any Canadian importer, exporter, service provider, transportation company, distributor or manufacturer. Companies do not need to be a member of I.E.Canada in order to be eligible for this award."

Paid subscribers see link to original documents and references here.

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CANADIAN AWARD FOR ENVIRONMENTAL INNOVATION

The Royal Canadian Geographical Society and 3M established the Canadian Award for Environmental Innovation for individuals from business, government, academia or community organizations. The award is for projects, programs or initiatives that provide innovative solutions that protect, restore or preserve the environment. Nominations are due by August 31, 2012.

In 2011, the winner was Michel Séguin, who is an independent Canadian Tire dealer in Laval, Quebec. He founded an Environment Committee which set up a program at some stores in Quebec to take back used automotive oil for proper disposal beginning in 1992. In 2010, the Go Eco program was adopted at 98 Canadian Tire stores in Quebec to help increase customer awareness of how important it is to recycle and properly deal with automotive products such as antifreeze, batteries, oil filters and plastic oil bottles. The Canadian Tire automotive centres are also involved in the Go Eco program.

Paid subscribers see link to original documents and references here.

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MEDIA CORP: CANADA'S GREENEST EMPLOYERS

Canada's Greenest Employers are evaluated for their unique environmental programs, for their reduction of environmental footprint, the degree to which employees are involved and the extent to which the employer has a green public identity and whether that attracts people to the organization.

The application is through Canada's Top 100 Employers application process which includes an application fee. There are other categories such as provincial tops, city tops e.g. Greater Toronto Top Employers, and Canada's Best Diversity Employer

The 2012 winners will be announced in the Globe and Mail on April 20, 2012 just ahead of Earth Day.

Each of the winners has a web page at Eluta, a job and career web site operated by the Media Corp, giving a list of the reasons for the win for that year.

Some examples of reasons include product options which GallonLetter's Editor has particular interest in especially as he serves as science advisor for one of the winners. Examples of green products include:

The Home Depot Canada

Eco-options products such as solar panels, compact fluorescent light bulbs and green cleaning products.
Replaced harmful pesticides and herbicides with environmentally preferable alternatives before provincial legislation such as in Ontario required it.
Programs to educate employees and consumers on environmental products such as "Go Low Flow" toilets and "Mow Down Pollution" electric or people-powered lawnmowers and the "SLED" Christmas lights which exchanges conventional lights with LED.

Georgian College

As part of an aggressive paper use reduction program, has recycled old paper intro "Trashy Notes" sold in the campus bookstore with profits used to finance student greening initiatives.
Offers courses at the Centre for Sustainable Technologies for skilled trades and other programs.

Has new technologies which shut down to reduce phantom power use.

Ikea

Announced it would phase out incandescent bulbs selling only low energy bulbs.
Monitors suppliers of wood products to ensure sources are legal and not from intact natural forests. Aims to in the long term source only from certified Forest Stewardship Council certified sources.
Coffee is UTZ Certified intended to protect workplace health and safety, provide healthcase, housing and schools and reduced environmental impacts.

Loblaw

Building of 20 years of President's Choice Green products, added five new Green label products for a total of 44 green products.
Promotes local produce during July and August
Collects plastic flower pots and flats for recycling into pots and flats used in Loblaw garden centres.
Introduced new Fair Trade certified and a Sustainable Seafood Commitment.

Loyalty One

Iintroduced a line of environmental products "My Planet" brand which means customers can redeem Air Miles for 100 environmentally preferable products.

Mars Canada

Will source all its cacao from the Rainforest Alliance certified producers by 2020

New Flyer

Advocates for mass transit including new bus designs
Is working with a partner called Mini-Hybrid Thermal Cooling System for diesel and natural gas engines
Supplied hydrogen buses to the 2010 Olympics in Vancouver.

SAS Canada

Developed a Sustainability Management software to help clients track the triple bottom line: people, profit and the planet

Introduced green financial products including environmentally focussed investment fund, reduced rates for mortgages and lines of credit for qualified energy efficient homes and equipment and special MicroFIT financing for energy products eligible for the Ontario Power Authority programs.

Greenest Employers Recognize Employees

The Fairmont Hotels & Resorts recognizes individual employees who compete for "EnviroStar of the Year" for outstanding contribution to the company's sustainability goals.

At Toyota, if employees make environmental suggestions that are implemented, they get eco-points which become donations to the Toyota Nature Centre at the Shades Mill Conservation area.

The Environmental Excellence program at the Regional Municipality of Waterloo recognizes individual employees who reduce their environmental footprint at work; they receive a certificate showing that a tree has been planted in their name to a local conservation authority.

Paid subscribers see link to original documents and references here.

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EMPLOYERS: THE GREEN 30

Macleans magazine's The Green 30 is based on employee responses about their employers environmental efforts. The 2011 list compiled by Aon Hewitt includes:

Delta Hotels and Resorts
McDonald's Restaurants of Canada Ltd.
Stikeman Elliott, LLP
Whole Foods Markets

Paid subscribers see link to original documents and references here.

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NEWALTA: CONFERENCES AND RECOGNITION

In the 2011 Sustainability report, Newalta discusses participation in industry association conferences as a reputation builder. For example, participation in the Canadian Manufacturers and Exporters association conference on Sustainable Manufacturing Summit, sponsorship and organization assistance to the Canadian Institute of Planners' Climate Change + Communities event and presentation to the EI Hazardous Waste Digest Gathering in San Diego on industrial waste management.

Other recognitions include:

Outstanding Business Achievement Award (Sarnia Chamber of Commerce)

Services to local refinery and chemical industry customers to reclaim value from waste and reduce environmental impacts.

Rio Tinto Alcan launched the BRAVO awards in 2010. Newalta was one of six suppliers winning for helping the mining giant reduce hazardous waste sent to landfill.

Newalta Online Sustainability Report 2011 http://www.newaltasustainability.com

Conferences & Recognition | Newalta Online Sustainability Report 2011 http://www.newaltasustainability.com/2011/en/our-industry/conferences-recognition/

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SAP: IT GREEN AWARDS

SAP, the business software company headquartered in Germany with a presence in Canada with the largest number of employees in Vancouver, lists recognition of its Sustainability Performance with the following:

FTSE4Good (TSE is an independent company owned by the London Stock Exchange Group)

Dow Jones Sustainability Index

Global Challenges Index (1)

This is a Hannover Stock Exchange index. The seven global challenges of the GCX are:

combatting the causes and consequences of climate change
securing adequate provision of drinking water
stopping deforestation
preserving biodiversity
dealing with population development
combatting poverty
supporting responsible governance structures

Apparently GCX have increased value for investors more than some of the other German and European indexes.

Global 100 (Corporate Knights Inc. and Innovest Strategic Value Advisors ranking)

NASDAQ OMX CRD Global Sustainability 50 Index

Oekom Prime Rating

Oekom rated 205 companies from the Information Technology (IT) sector against a range of environmental and social criteria.

GreenIT Best Practice AWARD 2010

2010 Greenbang Award for the best corporate responsibility project

Nomination for the German Sustainability Award in the category “Most sustainable strategy”

Inclusion in the Greenpeace Cool IT Leaderboard

Inclusion in the Ethibel PIONEER and Ethibel EXCELLENCE Investment Registers

Short-listed in the 2010 Ceres-ACCA Sustainability Reporting Awards

Note (1) Recently one of the companies was delisted due to be taken over by Warren Buffet and removed from the stock exchange. the Canadian National Railway became GCX listed.

Paid subscribers see link to original documents and references here.

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CANADIAN CHARTERED ACCOUNTANTS: REPORTING AWARDS

The CICA awards are by sector and then there are also special judging categories which have specific environmental features:

Suncor Energy Inc. was the 2011 winner in the Sustainable Development Reporting Award of Excellence and TELUS Corporation for the Sustainable Development Reporting Award Honourable Mention.

Paid subscribers see link to original documents and references here.

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CASCADES

Cascades has won a number of awards and been runner up or finalist in other contests some of which the company web site also mentioned. Founded in 1964, Cascades produces, converts and markets packaging and tissue products that are composed mainly of recycled fibres.

A few of these awards are:

The Corporate Social Responsibility Award for exemplary practices in social responsibility from Corporate and Community Social Responsibility conference held in November at Algonquin College. Respect for the environment is one of the features as well as relations to stakeholders.

A barometer of responsible consumption, ranking both brands and companies by the consumer group Protégez-Vous in the province of Quebec.. The companies are listed as:

1 Cascades

2 Hydro-Québec

3 Lavo (La Parisienne)

4 Loblaw (Le Choix du Président)

5 Desjardins

6 Canadian Tire

7 Walmart

8 Procter & Gamble

9 Metro

10 Vidéotron

Excellence in Corporate Responsibility Awards by Green Living Enterprises (see separate article)

Sustainable Supplier Award

Cascades announced its third Sustainable Supplier Award on January 31, 2012 that Henkel and BASF won the contest which acknowledges the commitment of suppliers towards sustainable development. The award recognizes both the efforts of suppliers for their positive impact on production methods and manufacturing and on the environmental, social and economic impact.

Recognition of suppliers is a growing trend although not so many of these type of awards are specific to the environment or sustainability.

Paid subscribers see link to original documents and references here.

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ENCANA: AN ENERGY COMPANY AWARD SUCCESS STORY

Canadian energy company Encana's web site lists awards and rankings over the last few years, some received one time and others annually. Moving up in rankings is mentioned to highlight progress.

Collaborative Research Award part of the Natural Resource Forum in BC

Encana supported a research project undertaken by the University of Northern British Columbia, Environmental Dynamics Inc., and Prophet River First Nation, to study and record information on traditional plants from the Prophet River First Nation elders and knowledge holders.

2012 Global 100 Most Sustainable Corporations list (Corporate Knights)

Best 50 Corporate Citizens (Corporate Knights)

Encana notes it was only one of two oil and gas companies to be in the top 20 rankings.

Responsible Canadian Energy (Canadian Association of Petroleum Producers)

The award was joint with Apache Canada for the first of its kind water treatment plant, the Debolt facility in northern BC; it treats non-potable water from an aquifer to reduce surface water use by the companies' fracking operation.

World's Most Ethical Companies (Ethisphere™ Institute)

Of the more than 100 companies on the list, Encana was one of only two Canadian companies to make this list. The company scored on: ethics and compliance; reputation, leadership and innovation; governance; and corporate citizenship and responsibility.

Dow Jones Sustainability World Index

and in 2011 the Silver Class distinction in the 2011 Sustainability Yearbook issued by SAM Sustainable Asset Management (a DJ listing)

EPA Report on Fracking in Wyoming

The good news of awards for the reputation can be offset by other events and issues. At times the award itself becomes an issue: for both the company and the award giver e.g. when a company is sued for environmental damage or is found negligent in the death of one or more workers. Watch groups tend to use headlines such as Award winning company charged with pollution.

The U.S. Environmental Protection Agency released a report under Superfund late last year linking polluted drinking water at least partly due to Encana's hydraulic fracturing aka fracking in Wyoming. Encana has challenged the scientific basis of the draft study which is subject to peer review. Shale gas extraction is becoming a source of controversy giving natural gas a bad environmental name. Of the fossil fuels, natural gas has been said to be a cleaner fuel. The EPA research report is specific to Pavillion, Wyoming. The public comment on the draft report ends March 12, 2012.

Paid subscribers see link to original documents and references here.

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SELECTION OF OTHER AWARDS

Recycling Councils

A number of the provincially-based recycling councils have environment awards. For example, the Recycling Council of British Columbia will host the 38th Annual Zero Waste Conference and Exhibit in Whistler BC from May 23-25, 2012.

Paid subscribers see link to original documents and references here.

Municipally-based Awards

City of Toronto with Green Living Enterprises has categories which include a specific Green Business award as well as awards on themes such as local food, energy conservation, green design, environmental leadership and water efficiency.

Paid subscribers see link to original documents and references here.

Centre for Excellence in CSR

The Centre for Excellence in CSR is being developed by the Canadian Institute of Mining, Metallurgy and Petroleum CIM, a professional society, as part of “as one of the 4 pillars of the Canadian government's action plan on CSR, Building the Canadian Advantage, announced in March 2009.” Among its aims are to raise the bar for corporate responsibility for Canadian extractive companies. Lack of action on that front has been the source of criticism by the Opposition of the federal agency Extractive Sector Corporate Social Responsibility (CSR) Counsellor.

On its web site is a list of awards available and won by mining companies both general awards and specific to the mining sectors. For example, the Mining Association of Canada has a Sustainability Award. Links to the award web pages are also provided.

Paid subscribers see link to original documents and references here.

Industry Sector Specific Awards

Some awards are specific to a sector. The Pulp and Paper International Awards are sponsored by RISI an information provider for the global forest products industry. Domtar in Canada won for Environmental Strategy of the Year Award and the award Promotional Campaign of the Year - Environmental Message for its PAPERbecause marketing campaign.

Paid subscribers see link to original documents and references here.

Regionally Specific Awards

Atlantic Business magazine has awards for 50 CEOs and CSR. Its 2011 CSR award winners were announced in November 2011 in three categories: Philanthropy/Community Outreach, Human Resources and Sustainability. Organizations must have headquarters in Atlantic Canada or have a regional/provincial office which has significant decision-making autonomy. The awards are divided further by number of employees (26 to 100; 101 to 500 and over 500 employees). Each award tells "why they stand out".

Paid subscribers see link to original documents and references here.

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SUCCESS STORIES: OSTARA NUTRIENT RECOVERY TECHNOLOGIES INC.

Recognition can also happen via good stories about technical innovations created by the company. With the support of the National Research Council Industrial Research Assistance Program (NRC-IRAP), Ostara's technology was originally created at the University of British Columbia. It is a wastewater treatment system which removes phosphorus and nitrogen from municipal wastewater and makes a fertilizer for sale called Crystal Green ® . The NRC success story says this is "a process that is good for the planet, good for agriculture and saves money for municipalities. The company has seen growth of 50-10% per year for a number of years.

The company operated a pilot plant in Edmonton and built a full scale demonstration project at Edmonton's wastewater treatment plant in 2007. It also built nutrient recovery plants in three U.S. municipalities, will build the first Canadian commercial plant in Saskatoon and expects to begin construction on a facility in London, UK in 2012.

Excess nitrogen and phosphorus running into marine and lake environments deplete oxygen and kills fish at the same time that phosphorus is a non-renewable resource that is key to food production. The slow release feature of Crystal Green®) means that the nutrients fertilize the crops instead of running off.

Ostara has won some other awards including the Globe one previously mentioned:

Paid subscribers see link to original documents and references here.

National Research Council. Success Stories: A Rising Star. Ostara Nutrient Recovery Technologies Inc. Vancouver, BC: January 19, 2012. http://www.nrc-cnrc.gc.ca/eng/news/irap/2012/01/19/ostara-nutrient-recovery-technologies-inc-crystal-green.html

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PUBLIC EYE: (IN)FAMOUS AWARDS

Not all awards recognize responsibility. Greenpeace International and World Development recognize what they consider they consider the worst examples of corporate irresponsibility of companies which are members of the World Economic Forum.

Barclays bank was named for being "the fastest-growing food speculator in the world" accused of driving up food prices so that millions of people who must spend a large portion of their income on food are pushed into extreme poverty.

The Public Eye People's Award is web-based. The most votes (over 25,000 votes) went to Vale, the world's second largest mining company based in Brazil and which in Canada took over Inco. A recent reason for the vote was given as the construction of the Belo Monte Dam in the Amazon which is said to harm indigeneous populations as well as plants and animals.

The press release calls for countries, particularly Switzerland where the World Economic Forum is held, to legally require companies from that country to comply with human rights and environmental standards.

The World Economic Forum

World political leaders attend the Davos business conference and even sometimes reach agreements on international issues but essentially The World Economic Forum is a group of businesses. Nothing wrong with that except if people lose sight of that fact. The foundation which runs the conference says it aims for non-partisanship but that is an unlikely scenario as its members are 1000 companies who become members by invitation only and for the most part evidently have to have revenues of over 5 billion. Membership fees are commensurate.

One newspaper account of Davos described the plethora of Audis and armoured limousines the elite of the world attend in while discussing how to combat poverty and inequality. Many of the meetings aren't public. Protests of the World Economic Forum try to attract attention to the movers and shakers getting ready access without the bother of registering as lobbyists to the political leaders but the valley where Davos is nestled has tight security so protests are often held elsewhere such as in Geneva.

Paid subscribers see link to original documents and references here.

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LETTERS TO EDITOR

Subject: Ontario Federation of Agriculture Vol. 16 No. 9 January 23, 2012

Dear Colin

Concerning the environmental record of the general farming associations: The Ontario Federation of Agriculture is not the only agricultural group though better publicised. I cannot speak for the Christian Farmers but the National Farmers Union takes stewardship of the land seriously and contains large numbers of organic farmers. The NFU is also consulting with the urban vegetable gardeners, ground and rooftop, concerning joining the union.

best

Jessie Davidson

GallonLetter notes: In Ontario, to be a legal farm entity, farms must gross $7,000 in sales, have a valid Farm Registration Number and pay a membership fee to one of the three General Farm Organizations. This gives farm businesses reduced farmland property taxes at 25% of the municipal residential tax rates and provides access to loans, grants, farm income stability programs and other government programs.

******

Subject: Collective Cooking

Thanks for all the good info about food in your new issue. We published this book on the topic a few months ago: http://www.naturallifebooks.com/books/Food_and_Fellowship.htm

Regards,

Wendy

Wendy Priesnitz, Editor

Life Media

Publishers of The Alternate Press Books,

Natural Life Magazine,

Natural Child Magazine, and

Life Learning Magazine

www.LifeMedia.ca

www.WendyPriesnitz.com

www.NaturalLifeGeneralStore.com

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EUEC: INSURANCE POLICY

A number of sessions at the EUEC 2012, Energy, Utility and Environment Conference held in Phoenix, Arizona. January 30-February 1, 2012.were on risk management. The track was Operations and Management with the focus on benchmarking hazard communication, spill prevention, hazardous materials handling and safety measures that secure a power plant.

One of the topics was "Issues to Consider in Your 2012 Insurance Renewal", a presentation by Vivek Chopra, Partner in the Washington, DC law firm Perkins Coie LLP who represents utilities, pharmaceutical companies and others against insurance companies. While the talk related to US insurance and environmental law, the advice was pertinent to other industry and business sectors. Some of the issues mentioned include:

Value insurance policies as assets which temper a loss. Use the approaching renewal as a time to reevaluate all aspects of the insurance including changed circumstances such as new acquisitions, risks and assets to ensure the policy still meets the company's needs. Chopra suggested this is as akin to checking the batteries of the smoke alarms at dates of changes of daylight saving time. If the company suffers a catastrophic loss, assume that the insurer will do everything to avoid paying.
Set a records management policy which excludes old insurance policies from the shredder. The policy could be years old and still provide coverage.
Maintain your insurance
Track claims and claim amounts on all the policies over the years.
Don't assume the insurance policy doesn't cover a loss. Chopra mentioned a court case in which the court had decided a US Environmental Protection Agency order to retrofit a facility due to accedences in emissions, not usually considered damages, was covered by the company's insurance policy.

Chopra also discussed pitfalls in other areas including companies buying insurance under what are called Bermuda policies, getting faulty additional insured certificates when working with contractors who in turn work with subcontractors, not realizing that common insurance terms such as "property damage caused by an occurrence" fails to cover faulty workmanship, and common exclusions of damage such as of land structures such as retaining walls and of secondary impacts e.g. the collapsing water tank may be insured but the damage it causes when it falls may not be.

GallonLetter's editor was the co-chair and presenter at one of the sessions, Sustainability Reporting, on the Sustainability Track. We'll report more on EUEC next issue.

EUEC 2012, Energy, Utility and Environment Conference. http://www.euec.com/index.aspx

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STEPHAN SCMIDHEINY: ETERNIT

The decision in Turin, Italy on February 13, 2012 which sentenced Stephan Schmidheiny and Jean-Louis de Cartier de Marchienne to prison for their role in exposure of Italian victims to asbestos may seem monumental to the victims but by the time the defendants wend their way through appeals may change. The fact that the court was so definitive about the criminal charges may make civil suits more viable. Whether the case should give hope to those seeking to have Canada stop the sale of asbestos to poor countries isn't clear but the decision does help to frame some thoughts about what crime is: that injuring and killing people over their lifetime is a crime.

GallonLetter has written previously about Schmidheiny and some of the growing critics of the asbestos industry, Eternit his company, and him in particular. He was an early proponent of greening corporations yet sold a harmful product. Knowledge of the damage asbestos can cause has been known for more than 50 years. Asbestos made him and his family extremely rich. Forbes magazine estimated his wealth to be $3.2 billion in 2006. As happens so often in the history of devastating pollution, companies win by long delays before their product is restricted or banned. (see SCHMIDHEINY: CHANGING COURSE GL Vol. 13, No. 5, June 9, 2008)

Paid subscribers see link to original documents and references here.

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ROM: MAYA EXHIBIT

The Maya Exhibit at the Royal Ontario Museum (Toronto, Ontario) raises questions about how civilizations survive for a long time although the answers about sustainability aren't all that clear. City states such as Palenque at the foot of highlands in Chiapas, Mexico lasted over a thousand years with a peak population of under 7,000. However, as many as five million farmers were spread through the countrysides around the cities.

Whether there actually was a Mayan Collapse is unknown but the last glyphs (a combination of art and hieroglyphics) found on artifacts in the city were dated January, 909 CE (The ROM uses Common Era to describe the same period as AD). When the first European visited Palenque in 1567, the city with its stone temples, palaces and ball courts was taken over by jungle and even today only a small percentage has been excavated.

In the exhibit video about the end of the Classic Mayan era, one interpreter said reasons for "collapse" included the erosion of the king's power. The king spent a lot of effort legitimizing his claim to god-like status and was supposed to intervene with the gods on behalf of humans but a long term drought may have undermined the faith of the largely agrarian society in their sun king.

The city was entirely reliant on peasants who lived outside the city and developed various farming systems beyond slash and burn combined with hunting and gathering. They had no big meat animals but had domesticated dogs, turkeys, muscovy ducks, and stingless bees for honey with fields growing both annual and perennials plants including fruit trees, chili peppers, tomatoes and yams.

The increase in demand of the nobles who lived in the city with the king increased the resource demand so this might have been an early example of the 1% demanding too large a share from the 99% who produced their goods/food for them, according to the interpreter, who suggested that perhaps the peasants supplying the food walked away. Coastal Mayan cities such as Chichen Itza thrived into the 10th and 11th centuries. The trade routes had changed as ships began to trade in coastal areas. The Mayans had no draught animals, no wheels for carts and no sails, only dugout canoes for water transport. Gold became a valuable trade item; the Mayans had obsidian (a volcanic glass-like rock), but no metals.

Whether the collapse/decline was due to climate change (cooling), overpopulation, war (the Mayans could mostly only fight with neighbours they could walk or paddle to), environmental degradation, drought, shifting trade routes, diseases and parasites common in lowland regions, or rejection of the long held belief system is speculation but it gives one pause to reflect. Aside from thinking about our own civilization when speculating about the disappearance of past ones, the Mayan people then survived under very tricky conditions for a long time with very little technology and little variety of materials, which most of us now would think impossible for a sophisticated and creative civilization. The city states may have disappeared but the millions of Mayan people of today are featured at the conclusion under the banner, "We are not myths of the past, ruins in jungles or zoos. We are people."

The ROM curators are particularly skilled at selecting the number of artifacts just short of overwhelming and placing them with explanations, touching of replicas, models of city architecture and videos in context to allow the visitor to gain maximum understanding. Fantastic exhibit. And if you go, the exhibit explains what the Mayan calendar really says about 2012 as the end of days.

Royal Ontario Museum. Maya: Secrets of their ancient world. A mighty civilization, a mysterious people, a mythical past. Until April 9, 2012. http://www.rom.on.ca/maya/visit/

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GRAND CANYON NATIONAL PARK: STOPS SELLING DISPOSABLE BOTTLED WATER

The Grand Canyon National Park in Colorado announced on February 6, 2012 that the in-park sale of water packaged in individual disposable containers less than one gallon including bottles and boxes will be eliminated.

The park press release says there has been increased litter not only along the rim of the Grand Canyon but also within the mile (1.6 km) deep canyon where "adventurous and hardy persons" like hikers, rafters and mule riders walk/climb/ride and paddle. Packing water is essential to survival. During the summer, the temperatures are so high in the Grand Canyon, that it is recommended that hikers avoid the trails between 10 am and 4pm.

Disposable plastic bottles comprise 20% of the Grand Canyon's waste and 30% of the park's recyclables. The information doesn't specify how many of the plastic bottles littered are water bottles as opposed to soft drink bottles nor do the statistics specify how many of the bottles are ones sold by the park concessions as opposed to those brought in from elsewhere.

Many of the five million people who view this spectacle of nature do so from their cars on the south rim although some areas are only accessible by parking the car and taking shuttle buses to more crowded places. In the heat of the summer, it would be inadvisable to travel through deserts in this areas without carrying sufficient liquids. Years ago, before GallonLetter's editor learned this lesson, he almost ran out of fuel in the middle of a lot of sand and cactus in this part of the world; except for a pair of binoculars which showed the correct direction to turn towards civilization and gas, he would have found out just how inadvisable travelling without water here was.

Of course, the water carried could be in a reusable container but many people are just as likely to be bringing beverages in disposable containers and for reasons which we here at GallonLetter can never understand, feel free to throw the empty bottles out the car window while they are marvelling at what is truly one of the wonders of the world.

The concessions will sell Grand Canyon souvenir reusable water bottles. for $1.99 as well as soft drinks in disposable containers. GallonLetter wonders how many more sales there will be of soft drinks and of drinks which resemble water resulting in a continuing litter of plastic bottles and other waste.(1)

National Park Service Priority: Recycling

The National Park Service Director sent a memo in December 2011 promoting sustainability in the National Park Service. under the Green Parks Plan. The memo encouraged reduction and recycling of disposable plastic water bottles with a priority on recycling . Ample and well-designed and marked recycling facilities are the top priority because, "banning the sale of water bottles in national parks has great symbolism but runs counter to our health food initiative as it eliminated the healthiest choice for bottled drinks, leaving sugary drinks as a primary alternative. A ban could pose challenges for diabetics and others with health issues who come to a park expecting bottled water to be readily available."

The memo, however, does allow park superintendents to halt the sale of drinking water bottles if they complete a rigorous impact analysis including an assessment of the effects on visitor health and safety and obtain the approval of their Regional Director. The memo outlines what is required in an assessment including availability of water refill stations and impact on concessions operating in the park.

(1) The Bottled Water Guide in Chicago where separate taxes apply to both bottled water and soft drinks, the following are a partial list of beverages some of which we might consider water but are exempt from the bottled water tax:

"1. Any beverage that qualifies as a “Soft Drink” per the Chicago Soft Drink Tax ordinance.

2. Pedialyte

3. Gatorade

4. Vitamin Water

5. Sobe Life Water

6. Propel Fitness Water

7. Water Joe

8. Perrier, Seltzer Water, Club Soda or Tonic Water

9. Mineral water (as defined by the FDA)

10. Distilled water

11. Other products similar to those listed above due to carbonation and/or other features such as

flavoring, vitamins, caffeine, or nutritional additives.

12. Water provided by home or business water delivery services, where the water is delivered in a reusable container that is not sold with the water. The list above is not considered all inclusive.

Paid subscribers see link to original documents and references here.
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KAHNEMAN: THINKING, FAST AND SLOW

One of the essential ideas of capitalism is that people make decisions based on the "utility" of their choice, implying that people make rational decisions such as paying higher prices for something they put at higher value.. In conventional economic theory, utility means everybody wins through an efficient market where the companies supplying the demands are successful and those paying are happy. This is also the basis of libertarian philosophy: where government are seen as interfering with what anybody is free to choose. GallonLetter notes that this freedom to choose includes degrading the planet so such a degree that future generation may have relatively less freedom to make choices for their own wellbeing.

In the book, Thinking, Fast and Slow, psychologist Daniel Kahneman talks about the many mistakes people make with their choices in the context of uncertainty, mistakes that will be detrimental to their future wellbeing. The freedom to choose turns out in many cases to be the freedom to suffer, to be poorer, to get ripped off or to vote on policy which the voters might not have supported if the issue were framed differently or if they weren't primed. For example, experiment participants primed by messages about crime also tended to favour more authoritarian policy. Libertarians and economist theorists may be happy with that but Kahneman writes, "Freedom is not a contested value...But life is more complex for behavioural economists than for true believers in human rationality."

Kahneman has been Eugene Higgins Professor of Psychology and professor of public affairs in the Woodrow Wilson School of Public and International Affairs at Princeton University since 1993 (and even spent some time at the University of British Columbia.)

He details how humans take shortcuts which result in choices which ignore basic statistical probability. This combination of psychology and economics won him the 2002 Noble Prize for Economics for the theory called prospect theory which identifies the many illusions and delusions with which people deceive themselves (and others).

Humans are said to have two approaches to thinking, System 1 is fast or intuitive thinking. System 2 is slower, both monitors and is influenced by System 1 and tries to control but has limited resources. Human evolution means that System 1 is always on duty while activating System 2 to override the first fast thought is difficult work for the mind. For many activities in daily life, driving on automatic so to speak results in fine results but the top-of-mind reaction can also lead to costly, painful, and even deadly mistakes due to lack of more careful consideration of the facts of reality and the evidence. Some experts (but it seems not as many as think they are experts) can reach the right conclusion using intuition e.g. chess masters.

Try this question to test your Systems:

1. A bat and ball cost $1.10

2. The bat costs one dollar more than the ball.

3.How much does the ball cost? (1)

There are many illusions, fallacies, and biases described. Participants in experiments see losing as more adverse than winning. To avoid the feeling of loss, people will make a choice which looks like a win even though it leaves them worse off. People focus on one specific factor ignoring many other factors which might have even more impact. The mistake in focus is further elaborated as the erroneous belief of WYSIAT (What you see is all there is). The focussing illusion ignores time as one of the important factor so it creates a bias for a short period of intense joy rather than a choice for a long time of moderate happiness. This is said to favour consumption such as buying a new car over regular social gatherings or learning the cello which require more effort. Kahneman has made a study of these issues and still says "As I know, System 1 is not readily educable...My inquisitive thinking is just as prone to overconfidence, extreme predictions, and the planning fallacy."(2)

Chapter 24: the Engine of Capitalism

Among the observations Kahneman makes in this chapter include some business delusions.:

Optimistic Bias: Most of us view the world as more benign that it really is. We tend to see our own attributes in a more positive light than they are, for example, 90% of drivers think they are better than the average, a statistical impossibility and our goals as more achievable than they really are. As a mild delusion, optimistic bias which is basically an emotional response can be positive because the optimist will make more effort to succeed or as the saying goes, “They can because they think they can.”

However, optimism also leads people to make the wrong decisions. Although the chance of a small business surviving for five years in the U.S. is about 35%, in a survey, 81% said their personal odds for success were 70% and 33% said their chance of failure was zero. Misplaced optimism leads to increased losses, "The evidence suggests that optimism is widespread, stubborn and costly."

Companies with overconfident CEOs elevated by the awards to celebrity status often get increased compensation underperform possibly because the CEO spends more time giving interviews, writing books, sitting on outside boards. There are many overconfident CFOs as well. Organizations tend to penalize executives who admit that their forecasting of markets is severely limited.

Competition Neglect: Businesses tend to overestimate the contribution their skill makes to success and underestimate luck; they have an illusion of control. They tend to make their plans without much consideration of what others have in the way of skill and what others are planning and doing. The focus is on what they know, not on what they don't know. Kahneman found that when founders of companies were asked, "To what extent will the outcome of your effort depend on what you do in your firm?", the answer was invariably greater than 80%. The answer is usually wrong because the achievements if its competitors and the changes in the market are very important.

GallonLetter has called this the Fan Shop phenomenon: at one time there was a huge number of shops dedicated to selling ceiling fans. What happened was one shop opened selling ceiling fans which must have sold very well, more competitors entered the market until there are so many fan shops that nobody made any money and fan shops disappeared. However, a new market has been signalled, so a competitor e.g building supply stores started selling ceiling fans. The book describes the bankrupt firms as "optimistic martyrs - good for the economy but bad for their investors." GallonLetter also notes a fair number of optimistic green product providers who are super enthusiastic about their product with no idea or interest to know what is already available in the market.

Premortem

Only partial remedies may be available to deal with overconfidence because the overconfidence is based on the subjective story which one tells oneself not the evidence ie the quality and amount of information supporting the choices. One approach is the premorten, conducted when the company has nearly come to a decision but hasn't committed to it yet. Individuals knowledgeable about the decision are asked to respond to the question, "Imagine that we are a year in the future. We implemented the plan as it now exists. The outcome was a disaster. Please take 5 to 10 minutes to write a brief history of the disaster." At this stage, those who have objections don't risk as much in expressing doubt about the wisdom of the plan as they would if the leader signalled a decision had been made in which case only supporters of the decision are likely to voice their views. Kahneman says there still may be nasty surprises on the plan but this method encourages even supporters to think about repercussions.

Organizations: Role to Improve Decision-making

Organizations have the ability to think more slowly and use orderly procedures such as checklists, framing of problems to include broader factors, exercises such as review and to maintain routine quality control on judgements and the decision product. using vocabulary to encourage "a culture in which people watch out for one another as they approach minefields." He concludes: "There is much to be done to improve decision-making. " GallonLetter notes that the Chartered Accountants of Canada recently issued a good example of how to go about this with a bulletin on the topic of professional scepticism.

Although this book is particularly engaging when it asks the reader to answer the same questions that the participants in experiments are asked and showing how often these answers are wrong due to participants failing to check, there are so many types of jumping to conclusions even on what are relatively simple concepts that the book adds to GallonLetter's feelings of depression that humanity might not have the ability to get its collective mind around solving some of the very big environmental problems we are facing. On the other hand, the book also shows ways in which we can become more aware of minefields so as to make better decisions. A singularly important point made: "You should not let yourself believe whatever comes to your mind." It is certainly a good sign that it has been on non-fiction bestseller lists such as Macleans and the New York Times for a number of months. There is room for optimism yet.

Notes: (1) More than 50% of students tested at Harvard and Princeton got the answer wrong. At other universities, the wrong answer was given by more than 80% of of the student participants in experiments. The wrong answer is .10 cents. If the ball were .10 cents than the bat would be $1.00 more than the ball so the bat would have to be $1.10 making the total $1.20 not $1.10. The correct answer is the ball costs .05 cents; bat costs $1.05 making the total $1.10.

(2) The planning fallacy is an optimistic illusion which predicts that plans are going to succeed based on the mindset that the outcome is unrealistically close to best case scenarios. The decisions affected by planning fallacy can be improved by looking at statistics of similar cases. Errors are not always innocent e.g. cost overruns are often due to deliberate underestimation of costs to get the plan approved and then later escalating the costs which should have been any realistic plan in the first place.

Kahneman, Daniel. Thinking fast and slow: Doubleday Canada, 2011. http://www.randomhouse.ca/catalog/display.pperl?9780385676519

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READING GALLONDAILY

If you enjoy Gallon Environment Letter or find it useful for your work or interests, may we recommend the GallonDaily report. Found at http://www.gallondaily.com, GallonDaily provides short articles and reports on topics of particular interest to green businesses and individuals interested in green business. One article appears almost every day Monday to Friday - we recommend visiting at least once a week. Real enthusiasts can also sign up for email notification as new articles are posted.