For a growing number of companies, implementing smart environmental aids compliance with the law and promotes competitiveness. Gone are the days when the only company concerned environmental laws lethargy manufacturers. Recent developments in both government and private corporate sectors have ushered in a new era of business sustainability, which complies with environmental regulations is to move from recommendation mandate for a wide range of companies. Just as organizations need to develop and enforce policies on administrative, employment and security, many companies and government agencies now need to monitor and report sustainability measurements to ensure compliance with the law. Moreover, many progressive companies are already implementing environmental policies to be competitive, even though it is not yet a legal requirement. The house should be expected to be aware of new requirements for business sustainability and proposals to advise organizations on how to develop policies, avoid responsibility and succeed in the new green economy.
Although 2010 began without a comprehensive US climate law or legally binding international agreement, regulations, and negotiations are ongoing. Despite the failure of the United Nations Climate Change Conference in Denmark in December to produce any binding greenhouse gas (“GHG”) reduction law, nations will continue to work on international climate. In the US, a bi-partisan bill sponsored by Senator John Kerry (D-Mass.) Failed to bring the parties together and eventually get a new climate law passed.
In the meantime, companies can not afford to sit back and wait for the final law in this area, where the new federal Executive Order have EPA regulations, the SEC guidance and private sector programs go into effect that should a number of businesses and institutions. All agencies under these new requirements should be integrated into the organization and take steps to ensure compliance.
I. Executive Order 13514
On October 5, 2009, President Obama signed Executive Order 13514, called the Federal Leadership in environmental, energy and economic performance. This Executive Order requires all federal agencies to file their emissions, set targets to reduce their emissions by 2020, and develop a plan to meet a wide range of goals to improve sustainability, such as increasing energy and water efficiency, waste reduction , reduce fleet petroleum consumption, supporting sustainable communities, developing and maintaining high performance buildings, and leveraging Federal purchasing power to promote environmentally responsible products and technologies.
Other environmental goals in order include a 30% reduction in fleet fuel consumption and a 26% boost in water efficiency by 2020, and 50% recycling and diversion rate in 2015. The 2030 net-zero-energy building requirement should also be implemented under the order. Each institution shall designate a senior sustainability responsible to fulfill the order. Chairman of the Council of the Environment will notify the agency objectives and results directly to the President.
“As the largest consumer of energy in the US economy, the Federal government can and should lead by example when it comes to creating new ways to reduce greenhouse gas emissions, increase energy efficiency, conserve water, reduce waste , and use environmentally responsible products and technologies, “President Obama said in a statement.
The Executive Order was intended to jumpstart the transition to a clean energy economy that climate change legislation working its way through Congress, saving taxpayers money in the process. The order will have a significant impact given the sheer size of the federal government :. It occupies nearly 500,000 buildings and operates over 600,000 vehicles
Another key component of the Executive Order is green procurement policy requiring 95% of new federal contracts and acquisitions to meet sustainability requirements that promote environmentally friendly products and technologies. It also carries a lot of weight due to huge buyers of government, which exceeds more than $ 500 billion spent on goods and services per year. The Executive Order charges General Services Administration (“GSA”) to explore the feasibility of tracking vendor emissions. Proposals may require manufacturers to register with the voluntary emissions registry and publish their efforts to reduce emissions. Options or other incentives could be given for “products that are produced using methods that reduce greenhouse gas emissions.”
the purchase of electronic products and services, Executive Order requires GSA to ensure that 95% of new functions contract, task orders and delivery orders for products and services (excluding weapons systems) are energy efficient (ENERGY Star® or FEMP specified), water efficient, bio-based, environmentally preferable (Electronic Product Environmental Assessment Tool (EPEAT) certified), not depleting, contain recycled content or are non-toxic or less toxic alternatives, where such products and services meet agency performance.
The GSA announced the end of January 2010 that it had already agreed energy service contracts with 18 companies to reduce consumption of energy audits, monitoring and use of renewable energy.The GSA also took steps to make the federal fleet more efficient with the purchase of thousands of new vehicles last year with $ 210 million in stimulus funds. Approximately 6500 vehicles – a mix of hybrids, flex-fuel four cylinder – earmarked for the US Postal Service, which operates the country’s largest fleet of alternative fuel vehicles.In 2008 GSA estimated its purchase of 15,000 seats of power management software would save all to $ 750,000 a year.
Finally, all federal procurement will incorporate the measurement of greenhouse gas contract claim. The first step, which is part of Executive Order 13514, is the creation of a voluntary greenhouse gas reporting system for government contractors and vendors. Contractors (and subcontractors) the ability to measure and reduce greenhouse gas emissions and providing energy efficient products and services will be an important factor in winning government contracts.
II. SEC Guidance on Climate Change Notes
The US Securities and Exchange Commission (“SEC”) issued an interpretive Release No. 33-9106 February 2, 2010 in order to provide guidance to public companies claim the agency disclosure regarding climate change. The guidelines, which took effect immediately, applies to all public companies.
emissions not create new disclosure requirements or modify existing disclosure requirements, but was released for clarification purposes. Specifically, the guidance covers four areas that may trigger disclosure under applicable SEC rules
(1) whether the impact of proposed or existing climate change regulations in the US and other countries may materially affect the company’s financial condition or operations;
(2) whether international conventions or agreements, climate change will affect its business;
(3) whether the company is likely to face indirect opportunities or risks arising out of the legal, technological, political and scientific climate change (such as changes in demand for the company’s products / services, increased competition, or reputational damage) ; and
(4) whether the company faces potential physical impacts of climate change on their activities (such as disruption of operations due to weather or supply disruption, increased insurance, or water scarcity and quality).
The SEC guidance provides that these climate change information may be required under the description of the company (section 101), litigation (103) Management’s Discussion and Analysis (303), and risk (503 (c)) parts filings of the companies under Regulation SK.
The SEC noted concern that some companies have already been providing climate change on its own initiative to a third party, and it wanted to ensure that similar information was in the SEC filings that may be required under SEC rules . Independent organizations such as the climate change file and Carbon Disclosure Project keep corporate data climate change, but most of the established rules for reporting are the Global Reporting Initiative (GRI). Launched in 1997 with the aim to “improve the quality, rigor and utility of sustainability reporting,” the GRI develops criteria that could eventually serve as the basis for the generally accepted standards of sustainability reporting. From 2008, more than 1,000 companies from more than 60 countries registered with the GRI and were issuing corporate sustainability reports by reporting framework.
The SEC specifically stated in the notes to the guidance that it will be focusing on climate change information in the examination of company filings. As a practical matter, the public company well advised to treat this guidelines binding; if they have not disclosed the risks of climate in the past, they need to start putting disclosure rules for all future filings affected by these measures roadmap.
III. EPA Mandatory Greenhouse Gas Reporting Rule
From 1 January 2010, required EPA rule took effect, which requires that all major GHG emitters monitor and report their emissions data under the new system. The new rule applies to industries or facilities that emit over 25,000 tonnes of carbon dioxide per year, of which there are now about 10,000 US Most emitters need to install new monitoring equipment, or at least to develop new protocols GHG measurement. Recognizing that not all organizations would be able to comply by 1 January 2010, the rule allows them to use their “best available monitoring methods” until 1 April 2010.
concerned parties also need to have written GHG Monitoring Plan, which will deal with the methods used to collect emissions data indicate quality assurance, maintenance and repair procedures for emissions monitoring equipment, and assigned roles for facility staff to collect data. In addition, the rule mandates the implementation of emission control training and documentation procedures in accordance with the record keeping requirements. Although the facilities need not submit plans for monitoring of the EPA that they need to maintain the program at their facility and make it available should EPA request to review it.
This new EPA regulation is just one of many international, state, and regional programs already installed or waits to address the greenhouse gas emissions. While there is still uncertainty about climate change issues and sustainability consistent, it is not a question of whether most companies will eventually be legally required to monitor, report and reduce their greenhouse gas emissions – it’s just a matter of when and how.
IV. Private Sector Sustainability Programs
In the industry, despite the lack of uniform laws and regulations, have in recent years seen a lot of climate change momentum. In October 2009, major companies including Apple, Pacific Gas & Electric and Exelon left the US Chamber of Commerce over its strong position against the US emissions regulations. Microsoft co-founder and chairman Bill Gates has recently been calling for climate change priorities, and advocates a global effort to reduce carbon emissions to zero by 2050 to avoid the adverse effects of climate change.
More companies are now voluntarily launched new efforts to reduce the impact of their heat. Continuous increase in corporate action towards energy efficiency, renewable energy investments, carbon neutrality and technological innovation stands in stark contrast to the stalled political action on climate change.
Perhaps the most important corporate initiatives climate change and sustainability is Walmart, the world’s largest retailer. The company recently put into practice “Walmart Sustainability Index”, which assesses all suppliers worldwide of its Life Cycle analysis and environmental impact of their products. Over 100,000 suppliers are now highly incentivized to increase the sustainability of their efforts to maintain a successful business relationship with Walmart and remain competitive in the marketplace.
Working closely with Environment Defense Fund (“EDF”), Walmart has also committed to reduce 20 million tons of carbon emissions from the lifecycle and supply chain of their products’ at the end of 2015. This is equivalent to the annual emissions from 3.8 million cars -. significant impact
Because of the sheer size, Walmart is in a unique position to cut carbon emissions worldwide. New commitments are bold because
* supply chain Walmart is huge, so these measures will have a broader impact. New Index Walmart encourages suppliers to reduce their emissions – which they might not otherwise do – resulting in positive measures energy efficiency of tens of thousands of companies worldwide.
* Walmart is prioritize products that most carbon emissions over their life span and top-selling products, with a focus on those first.
* The results are immediate, and not subject to any specific government agencies to act, or any specific laws or regulations, which may be appealed or amended.
* In connection with the Sustainability Index and other measures, it clearly communicates a strong message from Walmart to its international network of suppliers that they have to reduce carbon emissions.
Other major international companies are taking aggressive action in the area of sustainability and climate change are Hewlett Packard, IBM, Ikea, Johnson & Johnson, Nike, Intel, Dell and Weyerhaeuser. Given the hundreds of thousands of employees, suppliers and customers around the world, these companies have the ability to be very influential in the development of green business.
Between the federal government with more than half a trillion dollars of its procurement budget, but many companies subject to SEC climate disclosure rules and / or EPA emissions control requirements and private business projects as index Walmart that in practice responsibility wishes to suppliers who strategically sustainable, businesses and organizations of all sizes, across almost all sectors, will soon be faced with the need to increase sustainability efforts.
Moreover, these developments suggest that sustainability goals, the only option will soon be instructed in both the private and public sector. Apart from legal compliance requirements, from the perspective of corporate sustainability development policy now provides a competitive advantage in the market and reduced costs.
V. Developing sustainable compliance program
Companies should therefore carefully assess legal threats and the growth opportunities presented by sustainability initiatives. This assessment must consider the qualitative and quantitative information, both strategic issues and corporate emissions driving climate change related to the identification of risks and opportunities. For example, some of the issues mentioned in SEC guidance, such as legal, technological, political, and scientific, can alter the competitive market by creating a new division or threatening existing ones, thereby triggering the need for disclosure in the management discussion of business and. Analysis
depends on the specific business area organization and operations, companies should consider taking some or all of the following steps, with the goal of sustainability part of the whole culture
* Establish criteria for the environmental performance of the company. This is an important step in establishing goals and developing a comprehensive sustainability program.
* If your company produces or supplies goods evaluate the product life cycle impact. This can be done by completing or outsourcing life cycle analysis (LCA). LCA will be an important tool to help make the necessary changes to the product or service and reduce the environmental impact and overall costs.
* Hire or designate corporate sustainability officer. Federal government agencies are now mandated to fulfill this job, and savvy private companies are doing the same. Please if you appoint a sustainability officer with little knowledge in this area, they should get training or advice from experienced and credible institution (eg, Institute of Green Professionals).
* Establish a cross-functional team to develop sustainable programs for business. Pulling data from benchmark data should be used to assist the team in setting realistic and achievable goals.
* Set first sustainability targets to immediate results such as waste reduction and recycling. This will build momentum for the program and generate savings that can go to a more difficult and long-term projects.
* Providing sustainability training to those who need it in your business as it relates to the specific features of their work.
* disseminate information about sustainability program for shareholders, employees, customers and suppliers.
There are a number of systems available to help companies assess climate change is related risks and opportunities, calculate statistical release of information, inform them of the likelihood of the potential costs of regulation, as well as highlight the potential benefits, such as profits from the sale of carbon credits and opportunities for energy efficiency cost savings. Participation in the voluntary reporting program such as the Climate Registry or Carbon Disclosure Project is one way companies can begin to collect information about their carbon footprint and get a better overview of emissions come in their activities. Companies may also be able to use the information they collect for these programs to assist them to create other products including 10K filings. The Carbon Disclosure Project questionnaire or GRI reporting system, can be used as a framework to start internal evaluation of the operational items creating climate change risks or opportunities.
Companies can expect to see carbon management grow in importance as national and international regulatory activities continued in 2010. In line with this trend, the number of products and services developed to help organizations measure and manage their environmental impact will increase from startup gifts to complex enterprise solutions from industry leaders such as SAP, IBM and Microsoft. Enterprise carbon accounting software and sustainability consulting sales will grow as companies look for accurate, real-time information on the impact of climate.
In addition, companies can get support sustainable compliance by institutions that have been established to share environmental technology and solutions. The Eco-Patent Commons was launched in 2008 by IBM, Nokia, Pitney Bowes and Sony-associated with the World Business Council for Sustainable Development to promote environmental patented public. Its role is to protect the environment and make cooperation between the companies promoting new innovations. There are now 100 eco-friendly patents pledged to the public through this project.
The GreenXchange was created to enable companies to share intellectual property rights for green product design, packaging, production and other uses. Founded by Nike and other companies, the group is a Web-based marketplace where organizations can collaborate and share intellectual property, with the aim to develop new models of sustainability business development and innovation.
Similarly, last year launched the EDF Innovation Exchange to encourage companies to share strategies related to energy, water, climate and a host of other issues. As Eco-Patent Commons and GreenXchange, it hopes to raise awareness of new technologies and best practices. EDF content on innovation houses that it developed over 20 years of experience working with Fortune 500 companies including Walmart, FedEx and McDonalds.
Business advice should familiarize themselves with the new project business sustainability been implemented by many of the world’s largest companies, as well as tools and resources to help companies develop their own environmental policies and procedures. Soon, Legal regular visitor to counsel management on how to deal with current and future statutory business sustainability requirements will not only help businesses avoid responsibility but also to improve their business and reduce environmental impact.