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. 17, No. 1, June 27, 2012

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ABOUT THIS ISSUE

Our theme for this issue is Tools for Sustainable Development. GallonLetter sometimes cringes at this use of the word 'tools'. After all we are not talking about screwdrivers, wrenches, or hammers, even though one sometimes wishes we could use such tools to build a more sustainable society! Tools for sustainability are usually spreadsheets, questionnaires, financial reports, or mechanisms for achieving education or social change, not the kind of thing that ordinary people would think of as 'tools'. However, use of the 'tools' jargon has become so common in sustainability circles that we will, somewhat hesitantly, abandon our objections and follow the crowd..

Many organizations around the world have developed and published all kinds of mechanisms to help organizations, companies, and even governments to make their operations and activities more sustainable. Globally, participation in the movement towards a more sustainable society is growing and many of the mechanisms that organizations are using are being made available in the public domain. In this issue we provide summaries of some of the more interesting 'tools'.

A senior federal Cabinet minister has criticized the National Round Table on the Environment and the Economy for recommending a carbon tax on multiple occasions. The daily media has pointed out that the criticism is unfounded. GallonLetter digs a little deeper, pointing out that the work on carbon that the NRTEE undertook was required by law. We also look at environmentally conscious approaches to product donations; a piece of art by by Kazimir Malevich in the Hermitage in St. Peterburg (you will have to read the article to see what that has to do with the environment!); the latest OECD economic survey for Canada; carbon pricing and government policy; recycling of glass; and a new Canadian opera called Laura's Cow. There's also an interesting survey on the attitudes of new Canadians from TD Friends of the Environment Foundation.

As mentioned in our Rio+20 editorial, the next issue of Gallon Environment Letter will focus on some of the advances in Sustainable Development thinking and action that have risen to the top in 2012. In the meanwhile we hope you find this issue interesting and useful. We welcome your comments, reactions, and suggestions for possible publication to editor@gallonletter.ca

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WAS RIO+20 SO BAD THAT THE EFFORT SHOULD BE SCRAPPED?

To hear some environmental spokespersons, both from environmental groups and from more environmentally progressive governments, the Rio+20 United Nations Conference on Sustainable Development was so bad that . . . . No one actually said that no more such conferences should be held but one certainly got the impression that some were thinking it. Indeed, Canada's Environment Minister Peter Kent was one of few high level participants who actually said he liked the outcome. 'Nuff said!

Apart from the event organizers and UN high level officials, who could hardly say that an event which attracted 45,000 people was a bust, another high level participant who praised the event was US Secretary of State Hilary Clinton. Clinton actually criticised world leaders for backing away from including women's reproductive rights in the document but she seemed to understand why these conferences are so useful when she said "It should be said of Rio that people left here thinking, as the late Steve Jobs put it, not just big, but different."

That's why the UNCSD conferences are so important. They do allow the real leaders to share their ideas and they show up the sustainability laggards for what they are: people who have little concern for the ability of earth to provide for the real needs of future generations. There is no way that we should be doing anything other than to meet the Millennium Development Goals, due in 2015, and the objectives of Rio+10 and Rio+20. Weak as they are, these globally agreed objectives are so much better than the alternative, further uncontrolled pillage of the Earth's resources and life support system, that we cannot afford to give up.

Even so, it may be, as Hillary Clinton hinted, that governments and the UN system will never be able to reach unanimity of a global strategy for Sustainable Development. Rio+20 may well have shown us that many national government leaders will be bystanders on the sidelines of a global crisis of human well-being. At Rio+20 many businesses and many in the ngo community showed that there are other parts to Sustainable Development. In the next issue of GallonLetter we will explore some of the intriguing presentations that were made on the sidelines of Rio+20 but which may become the mainstream for Rio+30.

Colin Isaacs

Editor

Remarks by Hillary Rodham Clinton at the UN Conference on Sustainable Development Plenary

http://www.state.gov/secretary/rm/2012/06/193910.htm

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THEME: TOOLS FOR SUSTAINABILITY

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SUPPLY CHAIN: UN GLOBAL COMPACT TOOL

Pushing sustainability up through the supply chain has, for some years, been seen as a useful mechanism for improving environmental and social responsibility performance through a larger number of industries. In simple terms, a company that is adopting a corporate social responsibility program asks, or demands, that its suppliers meet a similar performance standard. This makes sense. A manufacturer can control the social responsibility of its own production but if one of its key suppliers is not meeting a similar standard than the final product will be tainted by the inadequacies of the upstream supplier.

A UN Global Compact Quick Self-Assessment and Learning Tool, was launched at the Rio+20 Corporate Sustainability Forum. The Tool consists of half a dozen questions for companies to benchmark their supply chain practices on such topics as vision, objectives, and engaging with suppliers.. Each question asks the company to indicate where they are on the scale from no current practices, beginner practices, good practices, better practices, and best practices. Each level on the scale has a description of requirements to demonstrate the level. For example, for vision and objectives, best practices include "The company communicates about its supply chain sustainability objectives and plans on a regular basis, both internally and externally." Links to examples of companies with good to best practices are provided on the side as well as links to resources. What is particularly good is that small/medium enterprises are also given as examples.

GallonLetter notes that supply chain management for sustainability is not without its problems. For example, even with large buyers, suppliers can be reluctant to change their systems because they have no security of a long term relationship with the buyer. Sometimes the buyer needs the product and can't enforce requirements and ends up only encouraging more sustainable practices rather than requiring them.

Paid subscribers see link to original documents and references here.
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ENVIRONMENTAL ACCOUNTING: PPR/PUMA

In 2011, PUMA released an Environmental Profit and Loss Account report for 2010. PUMA owns the brands, PUMA, Cobra Golf and Tretorn making footwear, apparel and various accessories and is in turn part of the PPR Group, a company with over Eur 12 billion in sales and 47,000 employees in 120 countries. PPR divides its brands into Luxury and Sport & Lifestyle including Gucci, Yves Saint Laurent, and Stella McCartney.

In November 2011, PPR announced that, as part of its sustainability initiative, it would implement an Environmental Profit & Loss Account across all global brands by 2015. The Group E P&L is said to be the "first monetary valuation of environmental impacts analysis throughout the business operations and supply chain. The approach has never before been applied across multiple global brands and will serve as a catalyst to develop a more sustainable business model for the Group."

In the foreword to the PUMA report on its E P & L, Jochem Zeitz described being inspired by The Economics of Ecosystems and Biodiversity report which describes the global economic benefits of biodiversity and values natural capital and said, "I realized that in becoming a truly sustainable business we must address the cost of our business to nature and value it accordingly ... I wanted to know how much we would need to pay for the services nature provides so that PUMA can produce, market and distribute footwear, apparel and accessories made of leather, cotton, rubber or plastic for the long run. I also wanted to know how much compensation we would have to provide if nature was asking to be paid for the impact done through PUMA’s manufacturing process and operations. While nature is much more to us as humans than a mere “business”, the simple question I put forward was - if our planet was a business, how much would it ask to be paid for the services it provides to a company in order to operate?"

PUMA's results for 2010 indicated that if the Earth was a service provider, PUMA would have to pay EUR 8 million to nature just for core operations such as PUMA offices, warehouses and stores. The supply chain would be charged EUR 137 million. The environmental impacts considered were water use, greenhouse gases, land use, other air pollution and waste. The greatest impacts were from the use of water and greenhouse gas emissions at EUR 47 million each with conversion of land for agriculture for raw materials such as leather, cotton and rubber at EUR 37 million. The supply chain has a much larger impact with just 15% (EUR 21 million) due to the company's own operations and direct suppliers. About 85% of the impact is outside the direct control of PUMA and instead in control of Tier 2 to Tier 4 suppliers. Tier 4, production of raw material, is 57% (EUR 83 million) and said to be most distant from the control of the company.

Footwear has the greatest environmental impacts due to materials and processes especially production of leather. Cattle farming is land, energy and water intensive. Leather tanning and finishing is also energy and water intensive. Most of the leather comes from Argentina, Canada and the US.

The report discusses the methodology including setting the scope and boundary of the E P & L. While some suppliers had data on operations, business travel and logistics, others had to collect primary data. Air emissions were calculated using fuel consumption collected in PUMA's environmental management system. Some data was collected and remaining data modelled. Some assumptions and averages had to be made. About 88% of the environmental drivers had to be modelled so the assumption was that the supplier was typical of their industrial sector with average economic and environmental performance for each unit of output. Other than for GHGs, the geographical location and context of the impacts are significant but in some cases only the national location of the supplier was known so the local level impacts are not accounted for. The report says, "We have taken a conservative approach to selecting the assumptions used in the methodology erring on the side of the environment, endeavouring not to underestimate our impacts."

This environmental valuation doesn't affect the net earnings but is said to be a wake-up call. The overall findings are said to serve as an informational tool to focus corporate strategy. Monetising environmental impacts allows different impacts to be compared. For example, because so much of the impacts are by indirect suppliers, the strategy is to develop opportunities to influence the environmental impacts of these more indirect suppliers and to work with direct suppliers on their sourcing practices.

The E P & L is also seen as a risk management tool as environmental impacts have been external to the business as usual model but evidences is that resource scarcity is increasing and the true value of environmental impacts are going to in the future have to be internalized whether through consumer demand, regulation, or changing supply and demand.

By innovating in design, production and marketing to achieve significantly lower environmental impact, the company sees opportunity in gaining competitive advantage.

GallonLetter notes that some don't agree with putting a price on nature; during the Rio+20 conference, Brazilian indigenous peoples protested the commodification of trees and land.

Paid subscribers see link to original documents and references here.

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WIKI: IISD ENTREPRENEUR'S TOOLKIT

A wiki website for social and environmental entrepreneurs is hosted by the International Institute for Sustainable Development IISD (Winnipeg, Manitoba) supported by Commission for Environmental Cooperation (Montreal, Quebec), Federal Ministry for the Environment, Nature Conservation, the SEED Initiative and also listed as a partner is GallonLetter's parent company CIAL Group.

Many of the cases and success stories are smaller enterprises in developing countries which could still provide ideas for Canadians. For example, Green Africa International (Nairobi, Kenya) works with 15 waste paper yards in Nairobi to source waste polyethylene collected by 200 community based organizations (CBOs) in various towns in Kenya. The enterprise then makes poles for fences, construction and staking, about 300 poles a day. Although some say that only clean polyethylene is recyclable, this enterprise uses dirty plastic. The poles replace timber which reduces deforestation and impacts of climate change.

GallonLetter often finds wikis difficult to assess because anybody and everybody posting means that there is a wide range of usefulness in the information. This one has access through categories, key resources, under Editor's support a list of recent changes, and a search box.

There are some useful tools. One of the categories called Performance indicators are links to:

Double Bottom Line Project Report: a catalogue of methods for assessing the social impacts of activities
The Global Reporting Initiative GRI
The International Standards Organization

The Double Bottom Line Project Report shows how different tools have different functionality, credibility and other characteristics. For example, among the methods are Balanced Scorecard, Poverty and Social Impact Analysis, and Social Return on Investment. The evaluation of the methods includes a number of observations such as how functional it is e.g. how it monitors effectiveness of outputs, variables or indicators to track operational processes and what the credibility risk factors are e.g. how credible the results are to third parties such as academics or public policy communities.

Plastics recycling in Kenya: a case story of a winning partnership

http://www.entrepreneurstoolkit.org/index.php?title=Plastics_recycling_in_Kenya%3A_a_case_story_of_a_winning_partnership

International Institute for Sustainable Development. Entrepreneur's Toolkit.

http://www.entrepreneurstoolkit.org/index.php?title=Main_Page

and

category: Performance Indicators http://www.entrepreneurstoolkit.org/index.php?title=Performance_Indicators

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SECTOR PROJECTS: CEMENT SUSTAINABILITY INITIATIVE

The Cement Sustainability Initiative is a sector project of the World Business Council for Sustainable Development and was on the agenda for the major business side event at Rio+20. The CSI recently released a Sectoral Market Mechanism brochure to support reductions of greenhouse gas emissions at a national or regional level. While a global climate agreement is needed, the CSI suggests that considerable reductions can be achieved at the regional or country level. Consistent measurement, reporting and verification (MRV) is needed which can later be upscaled to the global level.

CSI has expressed willingness to work with governments on the development of a sector specific scheme and appropriate carbon commitments. Among the tools CSI has developed for such schemes include:

a common MRV methodology called The Cement CO2 and Energy Protocol already in use by major cement companies.
a global database on CO2 and energy performance which is the best data available in the world for a specific sector with 80% of the data having been third party verified. This data can be used to set a benchmark for emissions and energy use.
a global technology roadmap for the cement sector to 2050 with technical feasibility of the various means to reduce cement emissions. The International Energy Agency was a partner.

The Cement Sustainability Initiative (CSI) is a global effort by 24 cement producers with operations in more than 100 countries, accounting for about 30% of the world's cement production. Some smaller local producers are members. All CSI members report publicly on the Key Performance Indicators annually. The company logos on the CSI website are linked to each of the member's latest reports.

The Cement Association of Canada in its 2010 Sustainability Report listed six member companies as belonging to CSI: Ciment Québec, Essroc Italcementi, Holcim Canada, Lafarge Canada, Lehigh Hanson Canada and St Marys Cement.

Paid subscribers see link to original documents and references here.

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WATER TOOLS: WATER FOOTPRINT AND LIFE CYCLE ASSESSMENT

Freshwater is essential for ecosystem and human activities. About a third of the world's population face water scarcity which is threatening to become an even bigger problem due to pollution, population growth, climate change, urbanization and changing lifestyles. Water is a limiting factor in many regions for agriculture, industry and environmental demands. According to a recent paper led by Donna Jefferies of Unilever, "collecting and disseminating meaningful water-related information is a complicated and difficult undertaking, since corporate water accounting methods are still under development and require further refinement." Because water consumption in consumer products is due mostly due to water resources in the supply chain, the tools used must take a life-cycle perspective. Two approaches discussed are the Water Footprint and Life Cycle Assessment, both of which should identify "hot spots" in the lifecycle of the product which contribute significantly to the overall environmental impacts of the product. Different calculations take different impacts into account, for example:

definition of types of water e.g. surface or ground water or water in the soil used to grow crops, definitions of consumption of water e.g. due to evaporation, content in product or transfer of water to another watershed or to the ocean.
water quality such as acidification, aquatic toxicity, eutrophication
calculations for water inputs e.g. directly used by a company in making a product itself, water used in operations such as drinking water and toilets in offices, water used in aligned operations such as packaging, water needed by the consumer to use the product e.g. consuming tea requires the addition of water.

Whatever tool is used, the methodology should make clear what the assumptions and definitions are. Data collected or compared is usually based on a functional unit e.g. a certain weight or volume of product or a container of a certain size and content. Very important is what is called in life cycle analysis, the system boundary. For example for a study greenhouse gas emissions of bioenergy compared to fossil fuels, the system boundary might include (as in an IEA study), "all processes along the value chain with significant GHG emissions, including, where relevant, upstream processes of extraction or biomass production, and end-of-life processes." The system boundary includes such concepts as cradle to grave (from raw materials to end-of-life) and cradle to gate (to the point the product leaves the production facility). GallonLetter notes that it is not unknown for those using LCAs to compare products to fudge deliberately or unawares by setting the system boundary to exclude impacts significant for their products e.g. biofuel/fossil fuel LCAs may fail to include changes in carbon stocks in biomass, soil and landfill.

Paid subscribers see link to original documents and references here.

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WATER: GLOBAL WATER TOOL

The World Business Council on Sustainable Development has developed a water tool to help companies know more about the water situation at the points of use and discharge, to assess water-related risks, and make better decisions. The web site on the tool states, "Impacts of water use are currently complex to assess as they depend on many factors linked to geographical location. Allocating impacts to a specific action taking place within a watershed is even more challenging. ...The regular updates of the Global Water Tool (GWT) aim to include always better datasets not only related to the status of the resource but also to the physical, economic and demographic environments that add context to the use of water at a specific place. As a key principle of the GWT is to integrate only the most reliable available data from the most credible global sources." Just measuring the total volume of water used by a company "does not accurately reflect water-related impacts or risks. A more realistic picture is painted when water consumption data is compared with water availability and consumption information at the local level." Versions of the Global Water Tool specific to the oil and gas as well as for utilities have also been developed.

In addition there are supplementary datasets which are not in the tool but provide data from various sources including depletion rate of aquifers, quantity of treated waste water reused; waste water produced ie quantity of wastewater which has been polluted either through residential use such as sanitation or industrial and water stress indicators such as water poverty index, climate vulnerability, national water footprinting, and blue water scarcity indicator.

Other Tools

WBCSD has lots of other tools including an eco-efficiency learning module, guide to Corporate Ecosystem Validation, capacity building, procurement of wood and paper-based products, inclusive business meeting the needs of low income populations, a measuring impact framework, and more.

Paid subscribers see link to original documents and references here.

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PEPSI: WATER AWARD AND CRITICISM

The Council of Canadians and the US-based Food and Water Watch issued a press release in June criticizing the 2012 Stockholm Industry Water Award given to PepsiCo by the Stockholm International Water Institute. The groups see this and the influence of large multinationals at the Rio+20 and similar conferences as part of a dangerous trends, converting resources held in common to sell them to private interests, "There are some resources that simply shouldn't be bottled, traded or sacrificed to the market, and that is especially true of water. While multinational corporations lobby for an unfair share of our natural resources, no respectable institution should award them for their greedy, destructive behaviour." The release ends with "We must not allow corporations to influence and benefit from the vital negotiations in Rio. Rio+20 must adopt principles for a true green economy, not a greenwashed economy that further privatizes nature for profit."

PepsiCo is a global food and beverage leader with net revenues of more than $65 billion. Products include brands such as Quaker, Tropicana, Gatorade, Frito-Lay and Pepsi-Cola. The company has a commitment called Performance with Purpose: which it says is a promise to minimize environmental impacts as well as meet social needs such as investing in local communities where it operates.

The Stockholm Industry Water Award was established in 2000 by the Stockholm Water Foundation in collaboration with the Royal Swedish Academy of Engineering Sciences and the World Business Council for Sustainable Development. In 2009, the industry award was given to the Canadian company Trojan Technologies (London, Ontario) which makes a UV disinfection technology which is an environmentally sound alternative to traditional chlorine-based water treatment.

Positive Water Balance

In 2010, PepsiCo released a statement of claim that it had achieved a "positive water balance" in India with assurances by Deloitte based on an audit of 2009 figures ( see web page below for details for the update in 2010.)

An NGO India Research Centre wrote a critique of the claim which appeared on the company's bottled water "Giving back MORE WATER Then We Take." The criticism is that the claim does not stand up to scrutiny Among the criticisms are:

PepsiCo has made this claim in one of the world's most water stressed areas (India) but not in more water-rich areas such as Canada, Norway and the US. A significant number of the plants are in areas classed by the Indian government as water stressed. Also summertime is the time of the most water stress and that is the time when company plants used the most water. The NGO says that water intensive operations such as bottling and food processing plant should not be operating in water stressed areas.
PepsiCo claims to have used about 5 billion litres of water in 2009, counting water usage in manufacturing (bottling and snacks) only. The NGO says the measure is inadequate because the calculation doesn't account for the water use of the inputs. For example, it is thought that the company uses billions of litres in the agricultural supply chain e.g. by processing tens of thousands of tonnes of such food as potatoes (water use of potatoes is said to be 291 litres of water per one kilogram in India and sugar 2,374 litres of water for 1 kilogram in India). The NGO says PepsiCo must add these amounts and other water used in inputs such as oats and oranges to its debit side.
PepsiCo claims water saved by others is water is saved by PepsiCo. Most of the total water saved is due to direct seeding by farmers in rice paddy fields rather than transplanting seedlings grown in a nursery. The company paid for the seeds, the seeding machines and the consultancy. If PepsiCo doesn't account on the debit side for agricultural use of water, it cannot take credit either and especially not if the farmers aren't suppliers. Either PepsiCo has to declare only the water saved in its factories or if it extends the calculation to the agricultural supply chain, has to include all the water used for the inputs supplied by the chain.
Watershed issues are local. Only a very small percentage of the water credits were achieved by PepsiCo due to rain harvesting. For a credit of 6 billion litres of water, an insignificant amount was achieved in the facility with most of the water credits outside the watershed. Just over half of the plants in India has have rainwater harvesting, said to be an indicator of a commitment to local water stewardship. This cheap but simple water conservation is seen to be an essential practice
Water quality is ignored and is an important as quantity.

In its 2012 report with the Nature Conservancy, Pepsi continued to say it had achieved "positive water balance" in India, "Our business units are very active in addressing water challenges. For example, in 2009 PepsiCo India achieved a “positive water balance”—giving back more water to the community than our facilities consumed, which was verified externally by Deloitte LLP. In 2010, the balance became more positive as the volume of water saved and returned exceeded the volume consumed by a greater margin." The report in describing pilot initiatives in other countries says the company is "striving for Positive Water Impact" in water-stressed areas: "Positive Water Impact, as this report describes, is a natural evolution of positive water balance. Its focus is local, at the watershed level. It recognizes that beyond simply having enough water, people need to have water that’s clean and safe to use.”

As discussed in the water tools section, corporate water use calculations are still in infancy. GallonLetter wonders what meaning reasonable people might take from that claim "Positive Water Balance". Certainly one image is that the operation of their plants is not adding to water stress in India, an unlikely scenario. On the other hand, the idea that water-intensive companies ought to focus on water is a step forward. While the calculations to make the claim are too simplistic, the company's report indicate other activities in all parts of the world such as improving natural vegetation and infiltration capacity at a plant site to reduce runoff and direct more water to aquifer recharge, helping surrounding villages deepen their ponds which have silted over to return them to their original capacity, installing check dams (small barriers which slow the runoff) at a vulnerable village to refill wells, installing a pipeline and water tanks to supply drinking water to three poor villages, use of reverse osmosis to allow the wastewater to be reused in the plant reducing demand for municipal water and even extracting the water from potatoes at a Walker potato chip plant for use as a water source, perhaps in future enough to get off the watermains.

Paid subscribers see link to original documents and references here.

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ENVIRONMENTAL MATERIALITY: UNEP FI

It was 2003 when the United Nations Environment Programme Finance Initiative invited 50 major stock brokerage firms globally "to identify specific environmental and social criteria likely to be material for company competitiveness and reputation" in specific industry sectors. No North American firms responded. Over the years, the FI issued succeeding studies including one on climate change.

A couple of years ago, an FI report addressed materiality relating to biodiversity. The introduction suggested that the economic crisis shows that the movers and shakers are a bit weak in regard to financial materiality as they failed to understand the risks of various loan and investment products. While some still tend to dismiss non-financial materiality and in some cases even claim they are not legally allowed to consider these, there is a growing awareness of environmental risks. Biodiversity and ecosystem services loss, climate change, water scarcity and other environmental risks are often not well integrated into risk assessment. Among effects of these risks are:

some governments taking steps to protect the ecosystems such as the EU Habitats Directive.
disruptions to the supply chain in such areas as fisheries, forestry and agriculture.
increased attention by media, local citizens and communities, non-governmental organizations and purchase decisions of international consumers, to environmental, social and governance.
liability for direct or indirect damage to the aquatic environment, species, land or natural habitats as well as contamination affecting human health.

Among the tools to make biodiversity and ecosystem services operational include:

environmental and social risk analysis modelled on the World Bank model
credit policies for BES sensitive industries
exclusion of certain unacceptable BES impact
engagement and report on BES in investment management agreements
assess BES materiality across products, lines of insurance and services.
report on meeting biodiversity targets e.g. Global Reporting Initiative
engage with policy makers, corporate clients and NGOs

Examples of Initiatives

Rabobank, a global food and agribusiness bank has developed Food and Agribusiness Principles, one of which is responsible natural resource management. Measures related to this principle include: preventing land degradation and soil erosion, minimising pollution of ground and surface water, preventing overfishing, minimizing harm to marine life and preserving high-conservation value areas and diversity. The principle is used to define supply-chain policies, animal welfare and genetically modified organisms.

Credit Suisse has sustainability policies and guidelines. Sensitive industries are asked to move towards best management practices and belong to relevant organizations such as Forest Stewardship Council and the Roundtable on Sustainable Palm Oil.

VicSuper: A large Australian pension fund considers BES in its investments by selecting investments for sustainability performance such as sustainable agriculture, by signing on to collaborative engagement initiatives such as the Forest Footprint Disclosure, Carbon Disclosure Project, CDP Water Project and the Investor Group on Climate Change Australia/New Zealand.

HSBC Insurance Brazil provides a Green Insurance for home and auto which allows clients to offset carbon emissions by conserving native forest in proportion of the average carbon emissions of a vehicle or home in partnership with an NGO. Between 2007 and 2010, Green Insurance preserved 27 million m2 of forest.

Paid subscribers see link to original documents and references here.

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FORD: STAKEHOLDER CONCERNS AND ENVIRONMENTAL IMPACT: MATERIALITY ANALYSIS

The Ford Motor Company conducts a materiality analysis every two years to identify issues for the sustainability strategy. The analysis is reviewed by Ceres, a US-based group which has for the last couple decades been involved in enhancing sustainable strategies and practices in corporations. (1)

Ford's materiality matrix lists items by levels of impact and stakeholder (e.g. investors) concern. Each issue also has links to more information such as Ford's Goals, Commitments and Status, Climate Change Risks and Opportunities, Migration to Alternative Fuels and Powertrains, etc. The issues are listed under categories such as Ford Financial Health, Public Policy, Water, Climate Change, Vehicle Safety and others.

In the high impact, high concern box are 14 material issues including:

Low carbon strategy. Ford's strategy has elements to reduce carbon emissions from products and operations, goals and targets and to use renewable energy and offsets. This is "strongly related to other material issues; of increasing interest to government and investors."
Vehicle GHG emissions. Ford has targets for its products in terms of CO2. This material issue is "increasingly driven by regulatory requirements as well as Ford's voluntary product CO2 goal."
Sustainability mobility. Ford is looking to meet challenges of urban mobility, congestion, urbanization and mega-cities, as well as rural mobility and economic opportunity. This issue has been reorganized as it used to be a stand-alone issue but is now under Ford's Future Competitiveness strategy.

Paid subscribers see link to original documents and references here.

(1) Ceres, which launched the Global Reporting Initiative GRI now used globally as a reporting standard, outlines in its 2020 Roadmap 20 steps companies should make to integrate sustainability across capital markets and economy. One of the expectations is: "Companies will systematically identify a diverse group of stakeholders and regularly engage with them on sustainability risks and opportunities, including materiality analysis."

Ceres and Sustainalytics. The 21st Century Corporation: The Ceres Roadmap for sustainability. Boston, Massachusetts: 2010. https://www.ceres.org/resources/reports/ceres-roadmap-to-sustainability-2010

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COLLABORATIVE LEARNING: SUSTAINABLE HAMILTON

Sustainable Hamilton is a new Ontario, non-profit corporation modelled on Sustainable Waterloo in the Region of Waterloo. The new group says its Board has experts on sustainability from McMaster University and University of Waterloo as well as local business and community leaders. The aim is to achieve lasting prosperity by integrating environmental values with social and economic values.

The four pillars of Sustainable Hamilton are:

1. Collaborative learning

2. Networking and peer support

3. Supporting action through measurement and reporting

4. Credible public recognition

Not only businesses but also institutions and non-profit organizations are encouraged to participate "to discover opportunities to grow and prosper by reducing their environmental impact and providing greater social value. Their good work will spread throughout the city of Hamilton, creating a ripple effect that leads to greater sustainability and prosperity for Hamilton as a whole."

Among the tools and topics for learning the group intends to explore are:

Quarterly Learning Forums and Technical Workshops with experts from government, industry, NGO and others to provide best practices in sustainability
The business case for sustainability
How to create a sustainability strategy
Sustainability reporting
Building employee engagement in sustainability
How to reduce energy consumption
Measuring and managing your ecological footprint
Measuring and managing water footprint
Waste reduction strategies
Greening the supply chain
Creating win/win collaborations
Designing sustainable products and services
Sustainability marketing communications
Industry-specific case studies (e.g. healthcare, Information Technology)
Regular sector-specific, peer-to-peer, small group networking opportunities.
celebration of successes through annual Evening of Recognition. Annual progress on the website and media releases to local and regional media.
logo to identify companies making progress on sustainability.

The Board and Executive are:

President/CEO and Founder: Sandi Stride, a business strategy, branding and sustainability consultant

Blair Feltmate, Professor and Director, Sustainability Practice, Faculty of Environment, University of Waterloo

Neil Freeman, Vice-President, Business Development, Horizon Utilities Corporation, Hamilton

Glenn Marshall, MBA, President, Greening Marketing, McMaster Innovation Park, Hamilton

Liz Nield, CEO, Lura Consulting, Hamilton

Ashish Pujari, Associate Professor, DeGroote School of Business, McMaster University, Hamilton

Boot Camp

On June 20, Sustainable Hamilton held a forum to talk about implementing sustainability. GallonLetter's editor was one of the speakers (see next article) speaking on sustainability plans.

Other topics were

tips on reducing energy bills by David Arkell, President of 360 Energy
engaging employees by Kathryn Cooper, founder of the Sustainability Learning Centre
Keynote speaker was Tim Faveri, Director of Sustainability at Tim Horton's who discussed the company's framework called "Making a True Difference"

Sustainable Hamilton. How we help.

http://www.sustainablehamilton.ca/about/how-we-help/

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BOOT CAMP: THE SUSTAINABILITY PLAN

GallonLetter's editor was one of the presenters at the Smart Business Sustainability Boot Camp held June 20 by the above-mentioned Sustainable Hamilton on the topic: "Getting started: Creating a Sustainability Plan".

The talk addressed the why of adopting Sustainable Development, how a Sustainability Plan is helpful and the elements of a Sustainability Plan. In regard to the topic of this GallonLetter it also listed some newer tools in environmental governance such as:

performance based regulations
ecosystem approaches such a regulations for water, air and sewage sheds
increased role for municipalities
more civil suits and private prosecutions
emissions trading and economic instruments
Life Cycle Analysis
Advanced environmental management systems.

Examples of Environmental Management Systems include:

Keidanren Global Environment Charter
International Network for Environmental Management
Business Council on National Issues Principles for a Sustainable and Competitive Future
International Institute for Sustainable Development. IISD’s book “Business Strategy for Sustainable Development” Leadership and Accountability for the 90s” may be a couple of decades old but is still a good guide.
British Standard 7750
International Chamber of Commerce Charter for Sustainable Development
Total Quality Environmental Management
ISO 14000 series
Natural Step

The generic Sustainability process is the same as all corporate strategy planning:

Adopt goals in the context of overall corporate strategy
Plan to achieve goals
Implement the plan
Measure degree of success
Plan continuous improvement

The talk outlined more details on the CIAL Group (the parent of the publisher of the GallonLetter) Ten Steps for Managing for Sustainability. Almost everybody has an opinion on certain environmental issues; some opinions are poorly founded; a good plan can help ensure that the organization makes progress instead of achieving a net zero or even negative result. Many companies have frameworks or blueprints which give insight into the plan as well as codes of practice, vision statements, principles, specific issue/country/project guidelines, targets, and other tools to supplement, communicate, instruct about, and measure the progress of the plan.

Isaacs, Colin. Getting Started: Creating a Sustainability Plan. A presentation to the Sustainable Hamilton Smart Business Sustainability Boot Camp. Hamilton, Ontario: June 20, 2012.

Sustainable Hamilton. Smart Business Sustainability Boot Camp.

http://www.sustainablehamilton.ca/participate/attend/

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COMMUNITY GHG PROTOCOL

C40 Cities Climate Change Leadership (a group of the world's largest cities) and ICLEI - Local Governments for Sustainability released a pilot version of the Global Protocol for Community-scale Greenhouse Gas Emissions in May, 2012. The protocol is expected to help cities of all sizes in all parts of the world engage in measurable, reportable, verifiable local action. Measures include GHG emissions from residential buildings, energy generation, on-road transportation, railway, water-borne navigation, solid waste disposal, agriculture, forestry and land use, wastewater treatment and discharge and others.

The city protocol has three components:

guiding principles and a policy framework to link community with regional and national efforts
an Accounting and Reporting Standard with guidance and templates
a roadmap for a process for updating the Standard

The future updates are said to include a Full Value Chain standard for cities planned for 2013 to account for both direct and indirect emissions.

The pilot is being tested in cities in China, India and Brazil.

Paid subscribers see link to original documents and references here.

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PRODUCT RESPONSIBILITY: PRODUCT DONATION PROGRAM

Lots of companies donate products as a gift-in-kind often for promotional value. It is impossible to attend a local event here in Haldimand County without winning a door prize. GallonLetter's editor views this with disfavour because it seems impolite to refuse but sometimes one doesn't need things like a t-shirt with a dog food company name and logo on it. However, donations of products can have more environmental benefit if they are used as a way of reducing waste and promoting reuse.

Second Harvest

Second Harvest collects fresh, frozen and non-perishable food from donors in the Greater Toronto Area in refrigerated trucks and delivers to 200 social service agencies. Enough food is delivered for 18,000 meals a day to those in need. The Ontario Donation of Food Act protects donors from liability for donations made in good will. Some types of food are unacceptable such as food that has been plated or served, prepared food with meat, egg or milk that has been at room temperature for over 2 hours, food or drink with alcohol or medicinal ingredients, open packaged or broken seal food, expired/ past code unless the manufacturers assures that food is still safe. Minimum donations are 100 lbs although arrangements can be made for under that amount.

Indigo

In late 2009, Indigo developed its Book Donation Program where unsold books are donated to seven literacy and charitable partners. The donations reduce waste at Indigo by keeping the books away from landfill while also helping those in need. Since the program began, Indigo has donated more than 80,000 books and notebooks worth approximately $200,000. One of the partners is Frontier College which operates a variety of literacy programs in locations across Canada. Since 2010, Indigo donated over 21,000 notebooks and pads as well as 300 electronic dictionaries to Frontier College. Indigo states that "the average book, through all stages of production, retail, and publishing activities, emits about 8 lbs of carbon."

Paid subscribers see link to original documents and references here.

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DARK MATTERS

One of GallonLetter's associates was watching the television show Museum Secrets which featured the history of a small white-framed black square in St. Peterburg's The Hermitage. The show was on around the time Canadian environmental groups and supporters were planning the Black Out/Speak Out day when web sites were to be blacked out to protest this government's definition of environmental activism as money laundering from foreign interests and as enemies of the people of Canada. It seemed apropos that the full political spectrums, in dictatorships and democracies, seek power through control of social expressions. The little Black Square in the museum is by Kazimir Malevich. He was a Russian avant-garde artist with many credits who painted his first black square with a white background in 1915 and several other versions after that.

In 1932, the Communists under Joseph Stalin decided that art must be reconstructed and under the control of the Communist Party. The only correct art was to be Social Realism reflecting workers in the spirit of socialism. Abstract artists were demonized as counter revolutionary, collaborating with foreign powers, and bourgeois causing harm to the economy (economic production quotas and work done on the factory floor was so important that art became an instrument of the state to educate workers to support the economic imperative.) The non-conforming artists were subject to Stalin's Great Purges (art institutes were closed, abstract artists were thrown out of work, many were destitute and sometimes subject to more extreme punishments such as imprisonment or murder.) Malevich also spent two months in jail on political grounds due to his art. He signed some of his last paintings with a small black square.

Non-conformism in art was restricted well into the 1970s and 1980s as well so it was not possible to exhibit Malevich's paintings in Russia from the 1930s to the 1980s. One version was eventually sold to the Hermitage for the equivalent of a million dollars. GallonLetter hopes that expressions supporting environmental protection in Canada won’t be regarded as non-conforming for anything like that length of time.

BlackOutSpeakOut. http://www.blackoutspeakout.ca/

The State Hermitage Museum: Exhibitions Archive: Kasimir Malevich. Black Square 20 June, 2002 - 30 June, 2003 http://www.hermitagemuseum.org/html_En/04/b2003/hm4_1_30.html

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OECD: ECONOMIC SURVEY FOR CANADA

The latest OECD economic survey for Canada discusses a number of items which build on previous surveys and recommendation. Among the recommendations on energy and environmental policies the survey are:

continue to make more use of market instruments. Consider introduction of a federal GHG emissions tax. Lower levels of governmental could also implement more green taxes and congestion charges.
regularly review water pricing and rights to ensure efficient use. Check on Alberta's process to ensure conservation while minimizing effects on oil sands developments.
monitor emissions in the transport sector. Introduce a (carbon) fuel tax in addition to standards.

The report suggests the move from industry which increases returns (manufacturing) to industry with diminishing returns (exhaustible resources) isn't a good trend especially as the move towards extracting fossil fuels leads to environmental degradations. Manufacturing tends to have a higher R & D leading to innovation. Even though there are many subsidy programs for innovative products directed to small and medium business at both the federal and provincial level, the cumulative sum is very small scale and uncoordinated. IRAP, while still small on an international scale, even with its funding doubled in the 2012 budget, is somewhat larger. The report suggests other policies are needed to foster demand for innovation. For example, innovation-oriented public procurement and taxes and subsidies, especially in the environmental area to correct for externalities, are comparatively underdeveloped in Canada. Public procurement tenders often have so many technical specifications that they exclude innovation from SMEs which could win contracts if the tenders specified needs to be met or problems to be solved. The banking sector is not involved in early stage seed capital funding making SME financing more problematic in Canada than in the US.

The 34 member countries of the OECD pay an assessed contribution based on the relative size of their economies of the Part 1 Budget (EUR 185 million in 2012). Canada pays 3.59%, which we calculate to be about $6.6 million. Countries contribute to special activities of Part II as they participate. The total OECD 2012 budget is EUR 347 million.

If Canada's Prime Minister is true to his statement of not using taxpayer money to fund those who oppose the Canadian government policy, the OECD with its logo "Better Policies for Better Lives" may be next for the axe as its reports promote a low carbon and greener economy while seeking to identify both the strengths and weaknesses of the member country's policies.

Paid subscribers see link to original documents and references here.

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CARBON PRICING AND GOVERNMENT POLICY

Prime Minister Harper recently said, “If it’s the case that we’re spending on organizations that are doing things contrary to government policy, I think that is an inappropriate use of taxpayers’ money and we’ll look to eliminate it.” Some say that he is a smart man but it seems to GallonLetter that such a statement from a government leader is weak on rationality. This is an expression of one humdinger of a belief system for an elected leader although not surprising to those observers who have seen this belief put into action before it being thus articulated. As shown by court decisions (something else that this Prime Minister has expressed an interest in restraining), government is so complex that even its own agencies are in contravention of Canada's laws now and again.

Two of his ministers can't even agree about what the "policy" was that led to the decision to cut funding to the National Round Table on the Environment and the Economy, a $5 million a year budget item. Key Canadian government spokesperson John Baird, now Minister of Foreign Affairs, who in response to a question in the House of Commons from Interim Liberal Leader Bob Rae on May 14, 2012 replied, " The member opposite talks about the National Round Table on the Environment and the Economy. It has tabled more than 10 reports encouraging a carbon tax. Now we know why the Liberal Party holds that organization so dear: because the Liberals truly want to bring in a carbon tax on every family in this country. Well, those of us on this side of the House will not let them do it." Environment Minister Peter Kent said that the NRTEE was cut because the advisory group has served its purpose and that his cabinet colleague was entitled to his opinion. The fact that two cabinet ministers don't know what the policy is about such a recent decision suggests that the Prime Minister's expectation of restricting speech and writing by critics of government policy will be more than challenging to implement.

Until Bill-C38 (the Omnibus Bill) receives royal assent and repeals the Kyoto Implementation Act, the Kyoto Implementation Act is still the law of Canada. The Kyoto Implementation Act is binding on government and cannot be ignored until repealed; surely, therefore, it is for the time being the policy of the government of Canada even if not the policy of the Prime Minister or of the Conservative Party caucus. The Kyoto Implementation Act required the NRTEE to review the federal Climate Change Plan and to::

"(a) undertake research and gather information and analyses on the Plan or statement in the context of sustainable development; and

(b) advise the Minister on issues that are within its purpose, as set out in section 4 of the National Round Table on the Environment and the Economy Act, including the following, to the extent that they are within that purpose:

(I) the likelihood that each of the proposed measures or regulations will achieve the emission reductions projected in the Plan or statement,

(ii) the likelihood that the proposed measures or regulations will enable Canada to meet its obligations under Article 3, paragraph 1, of the Kyoto Protocol, and

(iii) any other matters that the Round Table considers relevant."

Carbon pricing is recognized internationally as part of the move to the low carbon society in order to meet greenhouse gas reduction goals to which Canada committed in international agreements. NRTEE was required by law to provide the kind of analyses that would include carbon pricing among a number of other options, whether the government wanted to hear it or not, by order of Parliament. To suggest that NRTEE's advice in identifying carbon pricing including carbon tax as an option for Canada's Climate Change Plan is off-base or even maliciously Liberal is totally unfounded.

Paid subscribers see link to original documents and references here.

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CANADIAN CHILDREN'S OPERA: LAURA'S COW

The federal government is being criticized for allocating $28 million dollars to promote the historical value of the War of 1812. GallonLetter doesn't know how that money is allocated but thinks that the Canadian Children's Opera Company should get some of that money for its production of Laura's Cow: The Legend of Laura Secord. The world premiere, called a musical extravaganza celebrating the bicentennial of the War of 1812, was held during the Toronto Luminato festival June 7-10, 2012. Showcasing both young and adult opera singers, it is a story based only loosely on facts, an imaginative piece featuring a cow, first introduced as a full size Holstein wood figure out of which pops Marta Herman, dressed in similar black and white, who cavorts around the stage, sings so every word is understandable and adds many touches of humour such as claiming bovine superiority when Laura meets some deer among other animals bears, beavers and coyotes in the woods. The reason Laura is in the woods is that she is running from her home in Lundy's Lane in Niagara to Queenston (32 km away) to tell the British garrison about the American invasion plans she overheard from the billeted American soldiers.

The Opera conveys how much life and the environment has changed through scenes such as all that wildlife, quilting bees, homestead farming (ok - this is a work of art - the farm animals talk and celebrate a Speakeasy), barn dances and giant posters of Lundy's Lane today: a cemented over mall with a doughnut shop compared to the same area then: a country road surrounded by trees.

Executive Artistic Director and Conductor Ann Cooper Gay, her team and a large cast of youth and very young children, orchestra and singers both mature and emerging talent turned an imaginative and artistic production into an understanding of a history of ordinary folks stepping up to do what their conscience advises.

Sarah Hall: Architecture and Solar Energy

The Enwave Theatre at the Toronto waterfront where the opera was presented is an old industrial building built in 1926 as an ice house in days when ice cut from the Lake Ontario was stored to be used into the summer for cooling freight. When the facade needed replacing, architectural glass artist, Sarah Hall, previously mentioned in GallonLetter, created a piece called Waterglass: glass panels with water themes, hand painted fired glass of blue waves, spray and mist as well as screen printed images of Lake Ontario. The art contains 10 photovoltaic panels called building integrated photovoltaic (BIPV) because the solar cells are embedded between two layers of glass which is then installed as part of the glass envelope of the building. It was great to see it.

Canadian Children's Opera Company. 2011 – 2012 Season.

http://www.canadianchildrensopera.com/Performances/performances.html

Harbourfront Centre is Prepared to Shine. Toronto Focus. Spring 2012.

http://www.sarahhallstudio.com/news_items/TO_FOCUS_Waterglass_CaGBC.pdf

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SOME CITIES NO LONGER RECYCLE GLASS

One of the features of glass has always been that it can be easily recycled. If the practices of some communities that are no longer collecting glass becomes a trend, claims of recyclability for glass in Canada may become false. For example, Alberni-Clayoquot Regional District in British Columbia bans glass from the blue box. The Fredericton Regional Solid Waste Commission in New Brunswick gives reasons for not collecting glass as:

Glass is inert and poses no risk to soil or water because there is no leachate.
Glass is only 4% of the waste stream, with only about 2% collected in from residential recycling..
Broken glass contaminates recyclable paper, plastic and metals which represent 50% of the waste stream.
Due to the small amounts, it costs excessively to handle such a small volume.
FRSWC sorts by hand so broken glass is a safety concern.

The Fundy Region Solid Waste Commission also in New Brunswick says glass is no longer collected for recycling:

"Why can’t I recycle glass?

Glass is no longer recycled because there was no market for recycled glass. In addition, more and more packaging was being made from plastic and less from glass. Thus, the amount of glass received was very low, and the amount of plastic bags and rigid plastic has continued to grow."

Paid subscribers see link to original documents and references here.

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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. One article appears almost every day Monday to Friday - we recommend visiting at least once a week. Our real enthusiasts can also sign up for email notification as new articles are posted.