Archives For August 2009

Vote GraphicThey are hidden amongst the mail, often getting tossed aside for the Economist, Business Week or the new IKEA catalog. “Proxy Information Enclosed” often lays printed across the front as a faint reminder to the stock purchase that was made days to months ago. These often-ignored ballots of corporate policy could offer a new alternative to government intervention for spreading sustainability through the upper echelon of our corporate landscape.

For those like me, proxy statements often get a quick look at best. A glance almost always reveals that I have never heard of any of those running for board positions, nor know enough to vote for or against any of the resolutions. However, a new trend is forming that has investors of public companies using proxy resolutions to drive upper management towards sustainability planning. While this has been slowly happening over the course of the past few years, the change in the game is that it is starting to work.

A blog post by Marc Gunther points to a proxy vote for utility company IdaCorp, based in Boise, Idaho, where investors drew together a 51.2% majority in favor of the company adopting greenhouse gas emission targets—despite the resistance from the company’s management. The win could mark a new trend of American equity owners forcing sustainability up through individual companies.

Of the conservatives that I often pair words with, one of the greatest oppositions to the green lobby is not that they disagree with the need to address climate change, but that they dislike the method of using government intervention to “restrict choices” of citizens to only those considered to be more sustainable. Right-wingers would rather see a free market option that facilitates the opportunity to change lifestyle rather than mandating it. Gathering support for green-goal investing could create a new way to incite change within the framework of capitalism that our country has come to rely on so heavily.

Some could argue that individual investors would be muscled around by larger institutional investing groups, keeping them from achieving results—especially on larger companies that are responsible for more considerable portions of waste production, pollution and energy use. But IdaCorp’s example shows that individuals are joined by non-profits and new funds, adding strength to proxy movements.

Groups like Ceres help coordinate efforts to promote change within company policy. Ceres states its mission as “Integrating sustainability into capital markets for the health of the planet and its people” and operates as a network of environmental organizations, public interest groups and an investor network that collectively manage over $7 billion in assets. That is a number that can be a substantial presence in a larger range of companies. According to Ceres:

A record 68 climate-related shareholder resolutions were filed by investors this year, of which 31 were withdrawn after the companies agreed to positive climate-related commitments.

For conservatives, this should be a win-win. On one hand, it promotes Americans to reinvest their money back into our own businesses, helping to bolster an economy that is in dire need of it. It also acts on a case-by-case basis as the result of nothing more than investors exercising their rights as owners of a company—potentially downplaying the amount of effort needed from Capitol Hill. If the support for green efforts is as strong as polls like Zogby International’s recent inquiry is saying, then private investing dollars could help battle inefficiency and accountability from the private sector side.

Strength in the movement could not have happened at a better time. With many people believing that the worst of the recession is behind us, long term trends in the market are likely bullish, prompting more people to stay invested in companies that have a better chance of turning a profit. Conversely, if this kind of success had happened three years ago, the effort could have faced a devastating setback by numerous investors working to change companies only to see their assets cut in half.

Given the current economic landscape, the American Clean Energy and Security Act is likely getting a different reception than it would have three years ago. With unemployment still at a twenty-year high, preserving economic stability and preventing job losses is one of the more popular methods of targeting the bill for flaws. While opponents to the bill have claimed that the resulting rising costs of the legislation could add financial burden to families and sacrifice American jobs, the truth is that sustainability is the best source of economic rejuvenation that the country has and according to recent polling, the number of naysayers are dwindling.

Job Poll Graph

According to a  poll released by Zogby International, when likely voters were asked how climate efforts will affect American jobs, 51% believe that new job creation will result while an addition 17% believe it will have no positive or negative affect. More impressively, those who believe that American jobs would be sacrificed were in the minority in all age and income groups, speaking to a sentiment brewing uniformly throughout the population. Numbers like these make me wonder if the range of benefits that sustainability can bring is becoming clearer to more people in the U.S.. Wishful thinking perhaps, but it is a good place to start.

My own goals for helping to spread that kind of knowledge were bolstered in 2007, when I sat in a conference hall with 8,000 others listening to Bill Clinton give the keynote speech at the Greenbuild Expo in Chicago, hosted by the USGBC. The former President spoke at length about the progress made by the Clinton Climate Initiative and their future goals, but in speaking about sustainability’s affect on the economy, Mr. Clinton had a quote that has stayed with me:

“For all the skeptics, I think this is the greatest opportunity our country has had to generate broad-based prosperity since we mobilized for World War II.”

It struck me because it was the first time I had heard a politician asserting the latent job value in sustainability and what it could produce for our country. The result could be a reversal of the exodus of industrial jobs that has plagued America for decades and its opportunities for implementation are widespread leaving few pockets of the economy without a chance for benefit. New job prospects can emerge from three lines of national intervention: restoration, innovation and conversion—all equally necessary and co-supportive.

Restortation – As a society, we we have only recently begun to fully realize how interconnected the workings of the planet truly are, and as a result, the full effect that our actions impose on our surroundings. Naturally, such a realization brings some grim findings. 11 million people live within a mile of over 1,300 Superfund Sites in the U.S., catagorized by the Environmental Protection Agency as some of the worst toxic hazards sites in the country. A proactive, rather than cursory, approach to remedying our own mistakes could sprout a formative industry of trained, specialized workers. Everyday brings new environmental violations released by the EPA, so having supply problems for work in this arena is likely a ways off. The rewards for such efforts are far reaching. Beyond a more healthy natural landscape, the reduction in pollution-damaged land would parallel a reduction in health problems rising from contamination, especially our drinking water–effectively curbing our medical spending while increasingly our livelihood.

Innovation – Our country still operates as a world-renowned center for technological excellence, though perhaps not as uncontested as we once were. Meeting the future’s needs for renewable energy, water purification, recycling, building technology, waste treatment and transportation will take nothing less than technological excellence. In the end, it will get done—the only question is whether we will do it, or pay someone else to do it. Amidst its seemingly endless string of needless opposition, the Cape Wind Project and its resulting turbine factory was slated to create between 600 and 1000 pre-operational jobs and 150 permanent jobs during operation for 420 megawatts of wind energy. We need closer to 200 gigawatts and just as much solar. Creating a new source of American jobs while weening ourselves off of oil and coal offers fewer violated ecosystems, cleaner air, cleaner water and  increased national security.

Global Warming GraphConversion – Numerous parts of our infrastructure are reaching the crest of their lifecycle curve, marking the transition from an asset to a liability for the economy. Power generation, roads and railways, power conveyance and water systems all comprise lingering costs that will eventually become outmoded. Creating a new life for these pieces of infrastructure can allow us to draw out new kinds of latent value from systems that we have already paid for. This is perhaps one of the largest sources of environmental resistance. What are we going to do with all the oil and coal jobs in the country? We will turn them into something else that will evolve into a new staple of the American economy. One 54-year-old plant on the Ohio River is being converted to burn grass and wood cubes to produce 312 megawatts of power, leaving it as one of the largest biomass plants in the country. The retooling of the plant will purportedly turn 105 local (coal) jobs, into green jobs.

Serious Materials became the most recent epitome of scanning the landscape for conversion opportunities before wasting time, money and energy building new facilities. The California-based company produces high efficiency building products like high performance windows and doors as well as insulating drywall. They represent the transition into the next generation of the building industry which new standards will be crafted around. Their search found a recently closed window factories in Chicago, Illinois and Vandergrift, Pennsylvania and purchased their facilities, hiring back workers that would have otherwise remained laid off. Retooled and retrofitted, the plants continue to function producing better products and sustaining employment.

To date, the climate bill is the fastest way to begin the transition to an economy supported by an Environmental Industry base. Environmental commentator Joe Romm recently said that although he gives the bill a “B-“ as an emissions bill, he gives it an “solid A” as a renewable energy bill. The Zogby poll claimed that 71% supported ACES Act passed by the House of Representatives. 22% believed that Congress is doing an adequate amount to address climate change, with 45% saying they are doing too little. Less than a third of respondants (28%) believe that Congress is doing too much.  We will see if growing public sentiment seeps its way into the Senate.

us capitolThe conservative lobby struggling to derail the American Clean Energy and Security Act has recently been accumulating roadblocks to their progress. The bill, which now remains on the floor of the Senate, passed in the House by a slim margin and stands as the most aggressive piece of climate legislation in the country’s history. Opponents to the bill have argued that the goal of regulating carbon–either through a carbon tax or a cap-and-trade system–would place an undo stress on the economy, adding thousands of dollars to utility bills. Naysayers also claim that there is a large portion of dissenting public vote for the bill. As it seems now, those two lines of critique are waning.

A new report by the Energy Information Administration (EIA) has determined that the bill would indeed raise costs of electricity and gasoline in the country, but the change would be minimal. The estimated increase for the cost of power over the next 11 years was between 3 to 4 percent, far below the claims of middle class power bills being thrust into the stratosphere. Gas prices are estimates to rise 23 cents (only due to the bill, not fluctuations in oil prices) and given that we pay less for gas than most of the world, the addition is negligible.  The EIA becomes the third administration after the Environmental Protection Agency and the Congressional Budget Office to affirm the low public cost of this bill which seeks to lower emissions 17% by 2020 and nearly 80% by 2050 from 2005 levels.

The other gut shot that sank into opponents of Waxman-Markey was the uncovering of forged letters written to congressmen to urge them not to vote for the bill in the House. With the guise of minority, public interest groups, the letters took on the form of copied letterheads and phantom signatures to stir opposition for the bill. Kate Galbraith notes that apparently the letters originated from D.C. lobby consulting firm Bonner and Associates who was in turn working for another firm called the Hawthorn Group. The kicker comes from the final client, the American Coalition for Clean Coal Electricity, and suddenly the whole thing makes all too much sense. Of course, blame is claimed by no one, but placed on the lone acts of a purported temporary employee at Bonner who has since been released from duty. Regardless of whose fault it actually is, at worst the event was blatantly dishonest and crippling to the credibility of the lobby. At best, it is an embarrassing scar on the face of the camp.

In this case, I think the damage actually goes beyond the factual events. If the contra-lobby to environmental legislation finds itself in need of lying and fabricating faulty evidence then it must mean that they are short on real reasons for why climate legislation is not a good idea (not that this is altogether surprising.) For those trying to find their way to an opinion about the Climate Bill, think about the danger of a position that needs to use more than the truth to win your vote, and is willing to do it.

Photo Credit: Flickr Truly_U