February 19th, 2010 by Michel Gelobter

I want to take a break from the details this week to talk about the big picture. Since the end of last summer, we’ve seen an ever accelerating set of activities by companies and by governments on the energy and global warming front. These have a lot to do with what I called “pincer actions” last week. 

Taking a step back, I want to make the case that, when it comes to America’s energy future, this particular quarter is likely to be the most important one for a decade in either direction.

Why? Take a look at a sampling of what’s going on in the US and the world:

• We’ve just concluded the first global warming summit where all the world’s major emitters came up with the first joint plan since the 1992 summit in Rio.
• Tens of billions of energy-oriented stimulus dollars are finally hitting the street in real dollars to real businesses and households.
• This is the first quarter of mandatory reporting under Federal clean air regulations for major carbon emitters.
• President Obama just released $8 billion in loan guarantees for new nuclear plants.
• There are at least three versions of Senate legislation aimed at curbing global warming and stimulating clean tech investments.
• The Securities and Exchange Commission just issued guidance that climate change really matters to investors.

And there’s much more to come in the next few weeks. 

There is bi-partisan consensus that America needs a new energy policy, and rumors that up to a dozen Republican senators are willing to consider climate change legislation.  At the same time, the Democrats no longer have a filibuster-proof majority and a number of bills and lawsuits have been filed to slow the EPA’s momentum in regulating carbon.  More than anything else, this twelve week period will be distinguished by the new rules of the road for energy and climate that will be laid down, or not. 

Two milestones will mark the end of this quarter – the 40^th anniversary of Earth Day, and the beginning of the silly-season of mid-term congressional elections. In the midst of great turmoil and great progress, which of these powerful forces will we remember ten years from now?

February 12th, 2010 by Michel Gelobter

Yes, there are national climate laws already…

The first of what I referred to last week as “pincer actions” are the EPA’s new climate regulations, some already in force and more even proposed.

How can the EPA regulate greenhouse gasses (GHGs) when the Congress has yet to pass a climate bill?  Well, in early 2007, the Supreme Court simply ruled that climate pollution met the threshold of the Clean Air Act, one of our country’s earliest and most powerful environmental laws.  This is the law that communities use to stop urban development when a region’s air quality is bad, and it underpins many, if not most, environmental impact challenges to new construction.

Effective January 1, 2010, EPA took the first of many steps under this ruling…EPA mandated reporting of GHGs from large facilities emitting 25,000 tons of greenhouse gases or more.  But it’s the next two steps that really count… EPA followed this new reporting rule with both an endangerment finding and a proposed rule regulating large emitters.

Of these two, the endangerment finding is most fundamental.  It lays the groundwork for a broad regulatory agenda based on the facts it establishes that greenhouse gasses are a threat to human health and welfare.

What does this all mean for your climate and energy agenda?

• If you’re one of the estimated 10-15,000 facilities that burn coal or emit more than 25,000 tons of CO2, start counting now.  You have to report your emissions for this year by March, 2011.
• If you depend for energy or supplies on one of these facilities, it’s worth considering that their price is going nowhere but up until we’ve stabilized global carbon emissions.
• If neither category above applies to you, now’s a great time to start taking stock of when and how your greenhouse gas profile is going to intersect with shareholder value and your broader organizational values.  Are you at a competitive advantage because you buy your power from a greener source?  Can you deepen your relationships with employees, customers, or investors by getting ahead of the regulatory curve on global warming? Many leading organizations are already taking action to manage carbon and energy in order to improve business efficiency (reduce cost), maximize brand and shareholder value, and manage risks.

The Supreme Court’s 2007 decision started the ball rolling inexorably towards greenhouse gas regulation.  The speed and direction of that regulation is still pretty uncertain, but for some it’s here already.  For the rest of us, it’s around the corner.

February 12th, 2010 by Joel Riciputi

Last week we had the pleasure to partner with Groom Energy Solutions and our customer News Corporation to deliver a webinar titled Energy and Environmental Management Across the Global Enterprise. From all indications the webinar was well received with participants coming from across industry and organization types including retail, high-tech, consumer packaged goods, travel, life sciences, energy and government agencies at all levels.

So what did it cover? News Corporation presented a powerful case study that helps cut through the noise that is prevalent around these issues today, hitting on a range of highly interesting information from the company’s current global energy initiatives to their longer-term plans across the entire organization of more than 1,000 locations. The slide that may have grabbed the most immediate attention was on their making the hit show 24 carbon neutral, featuring an arms crossed, stern faced, Kiefer Sutherland staring out at the audience.

As a leading industry analyst, Groom spoke to the key drivers for why companies are implementing energy and environmental management solutions. And that takes us to the premise of this post and what you may find of most interest. During the course of the event we ran a quick poll asking the attendees to rank what they saw as the top drivers. With hundreds of responses, here’s how it fell out:

1. Cost Saving: 49%
2. Company brand/image: 26%
3. Request From Customers: 12%
4. GHG Regulation: 11%
5. Investor Pressure: 2%

As you can see, cost savings was far and away the number one driver. That certainly backs up what we’re seeing with our customers as they seek to grow and profit while reducing their environmental impact. Given, it’s just one snapshot in time and external factors such as the recent SEC guidance may start to play a bigger role. But as more and more businesses seek to effectively manage what we call their organizational metabolism (the sum of the collective resources consumed and expended), it always comes back to the bottom line.

February 4th, 2010 by Michel Gelobter

Last week I was excited to write about new SEC guidance on how every company should disclose the risks and opportunities from climate change to their bottom line. But this is just one strategy that the Federal Government can and will be taking to promote climate action and reduce energy use whether or not Congress passes legislation.

It turns out that, if you believe the science of climate change, the Federal  Government (and anybody running it) can claim a mandate to take action under existing laws. The National Environmental Policy Act pushes every agency to include important environmental impacts in their decisions and activities. The Supreme Court ruled in 2007 that greenhouse gasses were a pollutant under the Clean Air Act, and therefore could be regulated aggressively. Late last week, the President signed an Executive Order mandating that federal operations reduce their carbon footprint by 28% by 2020.

The Obama Administration appears to be serious about getting greenhouse gasses under control, and they don’t appear to be shy about using all the legal tools in their arsenal to do so. There is widespread consensus that a climate-specific law would be the best way to achieve deep change, but until the political climate for that is ripe, we can expect aggressive use of all the tools at the Executive Branch’s disposal.

I like to call these steps “pincer actions” because, rather than taking climate head-on, they represent a multitude of angles (SEC disclosure, health risks, procurement, etc…) for closing in on a policy. And, like military pincer actions, they evoke a sense of inevitability and sometimes panic. Perhaps Senators Graham and Kerry said it best in a New York Times op-ed piece a few months back…

“The message to those who have stalled for years is clear: killing a Senate bill is not success; indeed, given the threat of agency regulation, those who have been content to make the legislative process grind to a halt would later come running to Congress in a panic to secure the kinds of incentives and investments we can pass today.” (Read more)

So what’s a company to do? First, don’t panic. Hara’s solution can help any company get on top of voluntary and non-voluntary disclosure requirements.

Second, thrive. Hara goes far beyond measurement and accounting to empower you to plan and innovate your way to big savings and increases in productivity.

Third, stay tuned to this blog. Over the next few weeks, I’ll be covering the elements of the Administration’s pincer strategy on climate one by one and explaining what they may mean for you or your supply chain. There’s a lot going on and we’ll be making sense of it right here.