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Oil-Rich Norway Simply Exports its Carbon Emissions

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On the surface, Norway appears to be a global sustainability leader, a trend we have occasionally covered here on TriplePundit. Rich in oil reserves, Norway has invested billions in renewables including wind power. The country’s sovereign wealth fund, long heralded as a model for how countries can invest in the long-term social welfare for their citizens, is divesting from coal. Furthermore, Norway’s capital, Oslo, says it has a plan to slash its carbon emissions in half by the end of this decade.

But to critics, Norway’s progressive policies at home are at best a token effort as the Nordic country remains one of the world’s largest oil producers. By many accounts, Norway rounds out the world’s top 10 oil exporters, coming ahead of Venezuela, Mexico and Qatar while only ranking behind the usual hydrocarbon giants such as Saudi Arabia, Russia and the United Arab Emirates.

Indeed, the country's citizens have developed a strong affinity for electric cars and green building. Nevertheless, more global energy experts are quick to point out those efforts are a drop in the massive emissions bucket when one includes the total carbon footprint of Norway’s fossil fuels generated outside of the country’s borders. “The emissions of CO2 that occur within Norway's territory are dwarfed by the emissions that result from combustion of all the oil and gas Norway produces,” concluded the Center for International Climate Research last fall.

Similar assessments have been made of other oil exporting countries that say they have embarked on clean energy investments. Analysts have attributed Saudi Arabia’s push to boost solar power capacity to its desire to free up more oil for exports. The same has also been said for the UAE as it invests in renewable power projects such as the London Array offshore wind farm in the United Kingdom. “Every barrel they don't use they can sell at a vast profit to all of us,” wrote Andrew Winston in his assessment of Abu Dhabi’s strategy three years ago.

Norway’s predicament contributes to the argument over who exactly is responsible for the world’s carbon emissions, and who should take the lead in curtailing them. The debate is analogous to the controversy over the emissions generated by India and China – which are overwhelmingly the result of those countries’ economic development as they provide the goods and services used by much of the rest of the world.

One fundamental problem is the Paris Agreement, which global leaders say is critical to halting climate change this century. But each individual country’s progress is based on how much they reduce their own emissions within their borders – not by the impact their products have across the world in their entirety. In the case of Norway, its energy companies have no plans to curtail their production. And therein lies the dilemma, say Adrian Down and Peter Erickson of the Stockholm Environment Institute. “Norway has set out to be a global leader in climate action, yet continued expansion of oil and gas production could eclipse the benefits of Norway’s domestic emission reduction efforts,” they wrote in a recent brief.

Do not expect Norway to curb its oil production anytime soon. Since oil exploration in the North Sea first began in the 1960s, oil has become an important pillar of the country’s economy. And forty years after oil production accelerated during late 1970s, Norway’s hydrocarbons sector has grown substantially. While oil’s share of the economy has flat-lined in recent years, the country’s energy ministry estimates that oil revenues contribute 12 percent to Norway’s GDP and make up almost one-third the total value of its exports.

Opponents of Norway’s energy policy point out that while Norway touts sustainability at home, it is bullish on oil exploration away from its shores, including across the Arctic. Environmental organizations, however, are not keeping quiet. Greenpeace’s Norway chapter, along with the NGO Nature and Youth, have sued the Norwegian government, alleging that oil drilling in the Arctic violates the nation’s constitution. And they may very well have a case, as a 2014 amendment states:

“Every person has the right to an environment that is conducive to health and to a natural environment whose productivity and diversity are maintained. Natural resources shall be managed on the basis of comprehensive long-term considerations which will safeguard this right for future generations as well.”

Jabs at Norway’s environmental record are not just limited to environmentalists. “Norway always comes across as a moralizer on environmental matters but I think there’s a lot to criticize it about at home where it’s far from perfect,” a Swedish industrial company’s CEO told the Financial Times anonymously during an interview with the newspaper last year.

Image credit: Nicolas Holvoet/Flickr

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NASA Brings Gwyneth Paltrow’s ‘Healing Stickers’ Back to Earth

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Move over, coconut oil, aromatherapy and homeopathy. In the latest chapter of Gwyneth Paltrow’s amazing pseudo-science adventure, her lifestyle blog, Goop, recently touted “wearable stickers that promote healing.” The stickers, made by Body Vibes, are “smart stickers programmed to deliver natural bio-frequencies to optimize brain and body functions, restore missing cell communication, and accelerate the body’s natural ability to heal itself.”

With a variety pack costing as much as $120, these wearable stickers have been an “obsession” for their ability to “rebalance the energy frequency” in Goop staffers’ bodies. Whether you are in dire need to “chill,” have a hangover or maybe just need some beauty sleep, Body Vibes at one point claimed its stickers worked as it used “conductive carbon material” developed by NASA to line space suits.

Well, that claim has since been scrubbed from Body Vibes’ site. The tech blog Gizmodo asked NASA directly about the stickers in question, and its writers received a curt reply from a NASA representative saying that the agency’s spaceships “do not have any conductive carbon material.”

NASA’s quick debunking of Goop’s claims should hardly be surprising. The lifestyle site has touted a pricey rice bran-derived supplement that has turned out to be full of arsenic. But not to worry, in case arsenic or any other toxin builds up inside you, Paltrow has promoted a bevy of detoxing cleanses, which conveniently overlook the scientific fact that one’s liver and kidneys do a pretty find job of detoxing the human body on their own. And forget about honey; Paltrow has also promoted apitherapy, bee-stinging therapy that “has been used for centuries.”

But it’s not just what you put into your body, though kale is a popular detox solution on Goop. Exercise regimens such as an “Ironman 2” workout after ingesting little more than a Think Thin Bar is one recent suggestion; and for those moments when you just don’t feel fresh, a mugwort vaginal steam is apparently a gift to oneself that keeps on giving.

Apparently realizing that Body Vibes has given the scientific and public health communities yet another eye-roll or aneurism at the mere thought of Paltrow, the company has since apologized, and said it regretted misleading Goop’s readers and not doing its “due diligence.”

Image credit: Goop

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How CSR Programs Benefit Employees

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A company with a strong corporate social responsibility has more engaged employees. Almost 60 percent of employees who are proud of their company’s CSR program are engaged at their jobs, according to Double the Donation.

A good CSR program must consider the needs of its employees. Most American employees want to work for a company that cares about them as individuals, a recent study by Cone Communications found. Given that Americans increasingly feel their work and personal life are becoming blended, companies need to really consider their employees needs.

What do employees want the companies they work for to provide for them? The majority of those polled by Cone want traditional benefits like health insurance (94 percent) and a competitive financial package (92 percent). However, they also want their employers to support the issues and causes that matter to them (64 percent). And most (78 percent) say they want to be able to actively participate in helping improve their companies CSR practices.

Volunteering is the traditional way for employees to participate in causes and issues that matter to them and it is still important to employees. Here’s what Cone found out about employees and volunteerism:


  • Many employees look to the companies they work for to provide main ways to volunteer through company wide days of service (67 percent) and company-led activities (67 percent).

  • Over half of employees are looking for more progressive volunteer models: 63 percent want micro-volunteerism, 61 percent want paid service leave, and 58 percent want to participate through after-hours opportunities.

  • Over half (53 percent) of employees want a mix of skills based and non-skills based activities.

A good CSR program can be used by a company to recruit and retain employees. Almost three-quarter (74 percent) of those polled by Cone say work is more fulfilling when their employers provide them with opportunities to work on social and environmental causes. Seven out of ten polled (70 percent) say they would be more loyal to a company that allows them to participate in important issues and causes.

When employees decide which job to take, over half consider a company’s CSR commitments. And over half (55 percent) say they would opt to work for a socially responsible company even if the salary was less, while 51 percent will not work for a company without strong CSR commitments. Once, they work for a company they want to be kept informed about the details about their company’s CSR program. The majority (75 percent) think it is important their company share its goals, progress and achievements with them.

Cone is not the only organization to find that CSR programs bring employee benefits. The Cube Group found that a good CSR program supports being an employer of choice and encourages professional and personal development. In other words, their results mirror those of Cone’s. Being a good employer is more than just providing a salary and traditional benefits. It is facilitating a way for employees to make a difference socially and environmentally.

Photo: Flickr/Scott Lewis

This piece was originally published on Just Means

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The future of energy is disruptive

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By Adam Woodhall — The aim of the recent event ‘Energy Live Future’ was to highlight the cutting edge innovation that is surging through the energy industry. The organisers, Energy Live News, certainly fulfilled that promise.
 
The 300 attendees to this futuristic part conference, part expo and part laboratory event had an astronomical £2 billion of energy spend between. The day was held at the National Space Centre in Leicester, and amongst the rockets and space suits we got to find out about everything from data scientists, to smart monitoring, to future tools of procurement and electric vehicle storage solutions.
 
The day was opened with throbbing beats and inter-galactic graphics projected onto the huge dome of the main theatre, which gave the opening panel something to live up to, but they were more than up to the task, aided by the incisive questioning of Sumit Bose.
 
[Pictured above: Sumit Bose, Gab Barbaro, Robert Llewellyn]
 
First to scan the horizon was Managing Director at British Gas Business, Gab Barbaro, who made three provocative statements. The first was that energy is transforming businesses, and gave as an example Tesla, which sells 80,000 cars a year and has a market capitalisation great than Ford, which sells two million.  Second was that the way energy is being bought and sold is fundamentally changing, with the illustration of net demand during the day being less than during the night. Finally, he recommended that large UK users, who spend £20bn of energy per year, could cut 10-15% of that cost by using technologies available today, many of which were highlighted in the exhibition outside.
 
Whilst the technology is clearly key, something the panel all agreed upon was the importance of the humans that mine the data.  As Alex Montgomery, Internet of Things (IoT) & Advanced Analytics Commercial Lead at Microsoft said, good data scientists should be able to uncover revenue opportunities for businesses but they are a very scarce source. Barbaro of British Gas concurred, observing that “we’re investing a lot in people who can look at the data”.
 
The well-known actor and broadcaster, Robert Llewellyn (sci-fi fans will know him as Kryten in Red Dwarf) provided an engaging perspective. As well as putting solar panels on his own roof, he knows a lot about electric vehicles (EVs), due to his show on YouTube about them, which has more than 170,000 subscribers. He made the fascinating observation that the UK reached ‘peak horse’ in 1922, with a rapid descent in their use afterwards, and suggested we could see a similar shift to EVs.  As one of the attendees, Jon Davies, commented; “Whilst the words had impact, the message was significantly more impactful: be wary, change happens slowly, then all at once.”
 
On the broader theme of fossil fuels, Stephen Church, Energy Market Leader at EY was optimistic that we are getting away from them through decentralisation and renewables, although he did counsel that fossil fuels will continue to be part of the energy mix for at least the next 20 years.
 
Church was stage again later as he and his EY colleagues discussed the disruptive opportunities of blockchain technology. He believes this trust mechanism will enable the energy market to become significantly more efficient and effective and suggested it has the potential to transform corporate reporting and finance systems. He emphasised that it could trigger a shift to a much simpler and cheaper energy market, with suppliers and buyers, who could be individuals or corporates, directly interacting, rather than through a centralised system.
 
Always keen to keep proceedings entertaining, the organisers also ran an ‘Energy Tinder’, where the attendees got to choose whether to swipe left or right on various technologies which lead to carbon reduction.  As it happened, it was mostly swipe right, as there is some truly sexy ground-breaking tech out there being built by small enterprises.
 
Closing the day was a fascinating session on “Far out energy”, which was ably chaired by Dan Lewis, CEO at Future Energy Strategies. It looked into the future, but not as far ahead you’d think, at numerous questions.  Appropriately for the venue, space-based solar power was one considered.  This sci-fi technology is potentially going to be beamed down to earth by microwaves or lasers, and could happen within a decade or two.  
 
Bringing us back down to earth was a great question about complexity posed from the stage by speaker Rick Greenough, Professor of Energy Systems at De Montfort University. Individuals want to know who they can trust to take away complexity and deliver future energy services to them. Will it be community energy, Big Six energy firms or even a car provider, such as Tesla?  Greenough suggested people are more likely to trust their parish council to deliver on a community basis than the Big Six.
 
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De Beers innovates to become carbon neutral

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By Brian Collett —  De Beers, the world’s leading diamond company, has begun research that could make some of its mines carbon-neutral within five years.
 
          The company, which is 85 per cent owned by the huge UK-based mining group Anglo American, aims to turn its mines in South Africa, Botswana, Namibia and Canada into carbon capture and storage centres.
 
          It would inject carbon gases within a fluid into waste kimberlite, the porous igneous rock left behind after diamonds are extracted. An alternative to this process would be to spread the kimberlite thinly enabling it to absorb carbon from the atmosphere.
 
          The operation, known as mineral carbonation, would be a response to accusations that mining brings environmental damage, including soil erosion, sinkholes, loss of biodiversity and contamination of soil, groundwater and surface water by chemicals used in the industry.
 
          The research has already been started at two mines, in South Africa and Canada.
 
          De Beers has hinted that it could license the carbonation technology if it succeeds and could apply it to the abundant kimberlite it has at its nickel and platinum excavations as well as its diamond mines.  
 
 
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NatWest Great British Entrepreneur Awards recognise the power of family businesses

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By Sangeeta Waldron — Some of the UK’s largest and most successful businesses are family-owned, including some of the country’s most recognisable and well-loved brands. Two thirds of businesses are family owned - three million in total, generating over a quarter of the country’s GDP, employing around nine and a half million people. In 2014 a PwC survey found that growth levels for UK family firms were noticeably higher than the global average. However, today, many are finding it tough to compete in the post-recession and now ‘the current BREXIT’ climate. They are aware of the need to keep pace with the speed of change in an increasingly fluid and disruptive environment where innovation is key and skills are scarce. Many are responding by professionalising the way they operate – from systems and processes, to corporate governance. But there another challenge - succession planning.
 
Family businesses are often considered incompatible with entrepreneurship because they are usually tradition-bound and multi- generational. However, for family firms to continually prosper, they need to ensure that they pass on the entrepreneurial mindset and capabilities to create new streams of wealth across future generations. Succession planning is also a big issue in business and, if handled well, can make a massive difference to the future viability of a company.
 
Acknowledging these family companies, the NatWest Great British Entrepreneur Awards year sees the introduction of a new category this year the “Family Business Entrepreneur of the Year,” which will be awarded to those leading and excelling within a family business. Passing on the business baton to the younger generation is a challenge and these awards want to celebrate those who have successfully managed that transition.
 
The NatWest Awards celebrates the hard work and inspiring stories of British entrepreneurs, not just their financial success. There are 11 categories to enter in each host city – Cardiff, Birmingham, Manchester, Edinburgh and London. This year, the Awards have attracted a number of high profile judges including James Caan CBE; Hayley Parsons, founder of Gocompare.com; Tony Mascolo, co-founder of TONI&GUY; and Jeff Lynn, co-founder of Seedrs.
 
In its five-year history, the NatWest Great British Entrepreneur Awards has celebrated some outstanding entrepreneurs who have gone on to become household names. Previous winners have been David Buttress, former CEO of Just Eat; Julie Deane, founder of The Cambridge Satchel Company; James Watt, founder of BrewDog; and Alexander Solomou, founder and CEO of TheLADBible Group. The Awards has expanded its reach across five cities, up from two in 2016, and has secured sponsorship from a number of leading brands. NatWest is the headline sponsor, while MINI has recently renewed its support for 2017 and is sponsoring the ‘Creative Entrepreneur of the Year’ award.
 
It is important that British entrepreneurs are championed, as entrepreneurs are the lifeblood of any country’s economy. Currently, there are more businesses in the UK than ever before and it is clear that entrepreneurial spirit is alive and well. NatWest bank believes it has a “duty to help grow this economy and support and develop this vibrant entrepreneurial community.”
 
Photo Credit: Nat Awards 
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Supply Chain Transparency: Making the Consumer Connection for Forest Responsibility

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Humans have always had an intimate, complicated relationship with forests.

We clear away trees to make room for development and agriculture, harvest them for paper, pulp, and palm oil and seek refuge in their remaining intact solitude. Human wellbeing depends on trees.

Forests suffer when opaque supply chains stretch across continents and oceans, isolating consumers, producers, and growers and hiding the shared stake each has in a stable resource. It is the challenge of globalization in a consumer-driven economy. So if healthy forests do so much for us, why do we continue to destroy them?

That's a rhetorical question with no easy answer.

Even as deforestation remains an issue in most parts of the world, especially in the tropics, there is a growing demand for "deforestation-free" wood and pulp products, traceable to their source. Crucial to this trend is strengthening partnerships between all stakeholders: industry, government, NGOs, and academia. But for companies looking to minimize risk from resource disruption, overly burdensome regulation, or public backlash, there is arguably no more important stakeholder alliance for companies than with their consumers and suppliers.

For a transparent, end-to-end supply chain, the triad of consumer-brand-supplier is where the rubber meets the road. 

Supply change


According to the Carbon Disclosure Project's 2016 Global Forests Report, as much as $906 billion of lost revenue is at risk from deforestation. "Supply chains are like rows of dominoes," says the report, "if unsustainable commodities enter the top of a supply chain, the effects will cascade throughout.

Failing to address deforestation will have knock-on reputational impacts, manifesting themselves as consumer boycotts, community opposition, and increased regulatory scrutiny. Business growth is at risk."


Deforestation, therefore, is a principle risk for commodity-based companies, as well as the planet. Nonetheless, overcoming business-as-usual short-termism is difficult and requires sustained effort. Seventy-seven percent of the companies reporting to the CDP identify at least one supply chain risk "with the potential to generate a substantive change in business operations, revenue or expenditure." However, only 42 percent of those companies have analyzed the availability or quality of their "forest-risk" commodity supply chains over the medium-term.

 

"Companies need to make sure they are planning for the long-term," the CDP report states, "to ensure the sustainable supply of these commodities in future."

In their 2016 report, Supply Change: Tracking Corporate Commitments to Deforestation-free Supply Chains, Forest Trends tracks 579 public commitments from 366 companies (Ed. note the 2017 report is now out, available here.) While the report applauds steady progress, it is "only the starting point." Transparency around these commitments remains lacking, the report emphasizes. Only one in three of the commitments tracked by Forest Trends provides public information on "tangible steps" for achieving stated goals.

"Corporate action is critical to achieving ambitious goals for ending commodity-driven deforestation," says the report.

We encourage all companies to update their stakeholders on their progress along the way and the hundreds of other companies that have not yet made a commitment to doing so.

Leveraging consumer demand


When the Rio Summit in 1992 failed to produce an agreement to stop deforestation, a coalition of business, environmental, and community leaders launched the Forest Stewardship Council. Now working out of 80 countries, FSC focuses on market-based solutions to deforestation, offering forest management and chain-of-custody certification through third-party verification.

 

Triple Pundit recently spoke with Brad Kahn, communication director for the Forest Stewardship Council in the U.S. about the central role consumers play in their work and for sustainable commercial forestry in general.

"At the end of the day," says Kahn, "in our economy the consumer is king (or queen). FSC’s top priority is building consumer awareness, so we can help influence decisions about products they use every day."

"Approximately 2/3 of the economic activity in the United States is driven by consumer purchases. Consumers are critical to the success of any market-based effort like FSC," Kahn says.

"We are a voluntary system that depends on demand for products from responsibly managed forests to drive improvements on the ground. However, to accomplish this goal we need to work with partners in the corporate and NGO sectors."


FSC has invested years working closely with businesses to build supply and to grow consumer demand for sustainably sourced forest products, "largely through the development of procurement policies and sourcing commitments," says Kahn. "Now with FSC certified products available at stores people shop at every day, we can begin to engage consumers directly."

 

One of their "most significant efforts to date" to engage consumers is the One Simple Action campaign. Part of the success of the campaign, says Kahn, is supported by some of biggest players in the corporate world, including Procter & Gamble, HP, and Patagonia.

These are the leaders in demonstrating the value of consumer engagement. "People want to make a difference," Kahn says.

The ROI of engaged consumers and caring employees


"Informed consumers are critical to the continued growth and uptake of FSC certified forests," says Kahn, citing market research supporting the need for such certification to help"differentiate products and increase consumer purchase intent."

"We know that consumers generally, and millennials specifically, care about the impact of their purchases."


Some laggards may still balk that there is measurable ROI for such efforts, but, as Kahn and others state, the ROI of sustainable forestry "is not just in terms of sales and price, but also brand value, risk mitigation and employee satisfaction."

 

"(Employee satisfaction) is often overlooked at first,' Kahn says.  "In our experience, employees want to feel like the work they do matters. and FSC is one way they can feel good about their work."

"Anecdotally, we have heard from many companies that FSC initiatives really matter to employees, who see them as a way to do good in their daily work."


But how to differentiate between real progress and "feel good" PR?

Green tall tales? Making sense of certification


"Sustainability" has joined other phrases, like "paradigm shift," in danger of being trod into insignificance by careless overuse. As mentioned previously, claims of "certification" often come with little transparency or verifiable data to back them up. Unfortunately, this doesn't make the task any easier for engaged consumers concerned about the impact of their consumption.

 

"There are so many sustainability claims being made today that it is critical to ask questions and dig deeper," says Kahn. "One way to evaluate a standard is to see who supports it."

"Claims made by businesses alone can have limited impact, but when consumers see businesses and environmental groups making claims together, there’s a lot more validity."


FSC, for example, is endorsed by many environmental groups, like WWF, Greenpeace, NRDC, Sierra Club, and The Nature Conservancy. Native communities, labor unions and many community development groups also support FSC's approach.

 

There are other programs, of course, among them the Sustainable Forestry Initiative with support from Terra Choice, the World Business Council for Sustainable Development, and World Resources Institute. SFI sets standards for forest management, fiber sourcing, and chain-of-custody. An independent board of directors oversees standards and verification.

The iSeal Alliance can help make sense out of the claims and standards across many sectors, including forestry and forestry products.

The point is that claims made by businesses are transparent and independently verifiable. As the Forest Trends report says, there is still a long way to go for the widespread adoption of these best practices, but leaders blazing the trail.

"Some companies like Procter & Gamble and Unilever," the report states, "are taking a leading approach of contracting third-party verifiers such as BDO and KPMG to conduct in-field verifications, but these are the exceptions rather than the norm."

See the forest for the trees


We’re all treehuggers. This characterization may be anathema for some, but none of us will get very far in this world without trees.

 

When Columbus first set foot in the Americas, the continent was thick with trees. "It's said that squirrels could travel from tree to tree from the Northeast to the Mississippi without ever having to touch the ground," says Chris Roddick, chief arborist at the Brooklyn Botanic Garden in New York, in a LiveScience blog post.

Europe had long ago cleared out much of its forests. Settling in the new world, Europeans encountered what must have appeared as an endless expanse of forest cover. As a result, trees were harvested much like cod were fished: as if the supply was inexhaustible.

"In the history of the human transformation of the earth, one of the key processes must be deforestation," writes Michael Williams in a paper published in the Journal of Historical GeographyHuman development tends toward a widening gap between consumer and resource.

We get after the trees and forget there is an entire forest. It's the difference between exploitation and management. Without a holistic, global strategy in place informed by an engaged by concerned consumers, it's hard to see the forest for the trees.

That's as true today as it was ever was, but there's a lot more at risk.

 

Image credit: Sergei Akulich, courtesy Unsplash

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Exxon "Most Exposed" Major Oil Company Under Paris Goal

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ExxonMobil expressed support for the Paris Agreement, but a new report from the respected Carbon Tracker think tank suggests that the company's business model is inconsistent with the Paris goal of limiting global warming to less than 2 degrees Centigrade above pre-industrial levels. The report covers 69 of the largest publicly traded oil companies plus Saudi Aramco, Saudi Arabia's national oil company, under the 2⁰C scenario. It finds that ExxonMobil is exposed to high risks from unneeded future projects -- and its risks are higher than any other major company.

The disconnect between ExxonMobil's public posture on the Paris Agreement and its future plans is even more pronounced considering the company's new role as a founding member of the the Climate Leadership Council. That group formed in February as a platform for lobbying in favor of a U.S. carbon tax.

Carbon Tracker sees clouds in ExxonMobil's future


The new Carbon Tracker report is titled 2 Degrees of Separation. It was produced in collaboration with the investment organization PRI and institutional investors.

The goal is to provide critical information to pension funds and other investors with broad fiduciary duties as the global economy transitions to a low carbon model:

Investors are through an unprecedented commitment taking steps to reduce the risk of stranded assets within the oil and gas industry. Lack of transparency at company level has, however, been a bottleneck to understanding how companies are responding to the considerable changes in the energy market...

Companies that fail to change their plans are facing a scenario in which their projects cannot compete with low carbon energy.

High cost oil and gas projects -- including oil sands, deepwater operations, U.S. and European gas, and liquified natural gas are the most likely doomed to unprofitability.

According to Carbon Tracker, ExxonMobil has allocated 40-50 percent capex (capital expenditures) to these and other "uneconomic" projects, based on "clear signs" that peak oil demand will occur some time early in the next decade.

In comparison, Shell,Chevron, Total and Eni all came in at the average of 30-40 percent exposure. BP performed slightly better than average at  20-30 percent.

Although these companies do come out looking a little more prepared than ExxonMobil for the transition to a low carbon economy, Carbon Tracker has a warning for all of them:

...companies need to start taking project options that would come onstream then off the table, and be transparent about how they are aligning with a low carbon future. Sticking with the growth-at-all-costs scenario just doesn’t add up for shareholder value when the policy and technology momentum is heading in the opposite direction.

Although the spotlight tends to focus on ExxonMobil and the larger companies, many small companies also face high risks. Carbon Tracker puts the exposure at up to 70 percent for 10 companies of various sizes.

The bottom line, according to Carbon Tracker, is that companies can't continue to pin their hopes on rising oil prices:

The oil price would need to average $100 a barrel over the long term for it to be profitable for companies to pursue projects that are not aligned with a 2⁰C world.

An opportunity for ExxonMobil to shift gears...


Carbon Tracker notes that as a group, energy companies are under increasing pressure from shareholders to disclose their climate change plans.

That kind of pressure is a familiar environment for ExxonMobil, which has been under withering criticism for years partly due to its role in funding climate change denial.

The company has also been under investigation by the Securities and Exchange Commission for allegedly failing to account for climate policy impacts and falling oil prices in financial projections.

Just last month several major ExxonMobil shareholders scored an important victory, leading a successful drive to approve a shareholder resolution in favor of requiring ExxonMobil to issue annual reports on its future plans under the 2⁰C scenario.

The vote provides ExxonMobil with an opportunity to start moving in a more transparent direction.

However, days after the May 30 vote Bloomberg reported that New York State Attorney General Eric Schneiderman accused the company in court of continuing to perpetuate climate fraud, with new evidence indicating that the company may have been keeping two sets of books:

"That evidence suggests not only that Exxon’s public statements about its risk management practices were false and misleading, but also that Exxon may still be in the midst of perpetrating an ongoing fraudulent scheme on investors and the public," Schneiderman said.

If Schneiderman's allegations bear out, the new shareholder resolution puts ExxonMobil in an extremely difficult position and undercuts the company's public support for a carbon tax.

...but it's complicated


Another complication for ExxonMobil is its role as a global company with a long history of business ties in Russia, a relationship that gains another layer of complexity now that former ExxonMobil CEO Rex Tillerson is U.S. Secretary of State in the Trump Administration.

With that in mind, Carbon Tracker teases out one interesting detail about ExxonMobil's exposure to uneconomic assets:

Exxon, Total, Eni and Shell are all involved in the single biggest uneconomic asset, the $33.5 billion Kashagan Phase 2 in Kazakhstan which will need [oil] prices of at least $110 a barrel to break even.

Phase I of the offshore Caspian Sea project went online in 2016, after years of delays and cost overruns. That was partly due to the construction of artificial islands to accommodate unconventional drilling operations in the harsh environment.

The field has been developed with an eye to exporting production through existing rail and pipeline routes.

One of those pipelines is Russia's massive Transneft system, which already carries product from other Kazakh oil fields. Product from Kashagan Phase 1 began flowing into the system last fall.

That interdependency makes it difficult to foresee a scenario under which ExxonMobil would willingly abandon Kashagan Phase 2.

Further complicating matters, while OPEC and other oil companies struggle to boost prices by curtailing production, Kazakhstan is apparently sticking with its long term plans to ramp up production through the Kashagan field.

Even if ExxonMobil does change course on climate change -- and shows its commitment through action, not just words -- its progress will be like turning around the proverbial ocean liner: slowly, and perhaps not in time to avoid damage.

Image (screenshot): via Carbon Tracker.

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Missouri Third U.S. State to Sue Opioid Manufacturers

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Alleging that Purdue Pharma, Johnson & Johnson and Endo Health Solutions misrepresented the risks about the drugs they manufacture and sell, Missouri Attorney General Josh Hawley filed a lawsuit last week accusing the drug companies of fraud. Missouri is now the third state to file litigation against the three manufacturers, joining the attorneys general of Ohio and Mississippi in their quest for retribution for what they say has been these companies’ fueling of the drug epidemic.

According to the U.S. Centers for Disease Control (CDC), over 33,000 Americans died of opioid overdose deaths in 2015, and opioid overdoses have quadrupled since 1999. With cash-strapped municipalities and police departments finding themselves overwhelmed by the crisis, along with the perception that drug companies are doing little to stop the opioid epidemic, public officials’ latest chess move is to focus on Big Pharma’s marketing tactics.

“Our state faces an urgent public-health crisis brought on by fraud,” Hawley said in a public statement. “Today, we begin to fight to put an end to this crisis as we fight for the thousands of lives endangered and lost to the opioid epidemic.”

Hawley’s sentiment echoed Ohio Attorney General Mike DeWine when he filed a similar lawsuit in late May. “These drug manufacturers led prescribers to believe that opioids were not addictive, that addiction was an easy thing to overcome, or that addiction could actually be treated by taking even more opioids," DeWine said on May 31 when he announced his state’s litigation against these drug companies. "They knew they were wrong, but they did it anyway -- and they continue to do it.”

As of press time, none of the companies responded publicly to the lawsuits. In emails to several news organizations, a Purdue Pharma spokesperson denied the allegations, but said it “shared” Hawley’s concerns about the ongoing opioid crisis. Both Janssen Pharmaceuticals, the division of Johnson & Johnson that has been sued by the three states, and Endo, have emailed similar statements to reporters nationwide. Any public discussion about these companies’ opioid products, however, are difficult to find. Endo claims a “culture of compliance” within the corporate responsibility of its web site, but is silent about opioids other than reporting the result of clinical trials. Janssen does not mention its opioids targeted by the lawsuits within its site.

The one company that embroiled in this litigation that has claimed it is taking accountability is Purdue Pharma, which announced some new programs in the fallout of last year’s investigation by the Los Angeles Times. The newspaper had accused the company of misrepresenting the effectiveness of its sales representatives’ recommended dosage of OxyContin. Since that report, Purdue Pharma insists it is “learning from the past while focusing on the future,” and has launched several programs, including partnerships with law enforcement officials and funds to improve monitoring technologies of prescription data.

Nevertheless, to many analysts, these drug companies under question, along with their competitors, have largely walked away from taking responsibility for the crisis. Meanwhile, families have been shattered and local governments find themselves fronting the costs of the resulting social problems. One report last year suggested the social, health care and criminal justice system costs have cost society at least $78.5 billion.

Hawley’s announcement comes at a time when the political class has become increasingly vocal about opioids’ impact on their constituents. Earlier this year, Senator Claire McCaskill of Missouri demanded data from five of the top U.S. opioid manufacturers, saying an investigation was warranted for what has been at least 200,000 overdose deaths since 2000. Although companies including Purdue Pharma said they were reviewing requests, little has resulted from McCaskill’s inquiry.

But Purdue Pharma symbolizes what the public perceives as the pharmaceutical industry’s meek response to the opioid crisis. These companies have all profited handsomely from the sales of these drugs, while cities and counties have borne the costs of the tolls drugs while too many parents have had to bury their kids. Purdue Pharma has constantly parroted the phrase, “OxyContin accounts for only 2 percent of the opioid analgesic prescriptions nationally, but we are an industry leader in the development of abuse-deterrent technology and advocating for the use of prescription drug monitoring programs.”

Repeating that statement, however, has done little to earn the reassurance and trust of families and public officials. It may be easy to ignore one of 100 loquacious U.S. senators, but as ExxonMobil is finding out, dodging the arsenal of states’ attorneys general and their staffs is a far more difficult task. If more states join Missouri, Ohio and Mississippi, these companies risk having even more of their dirty laundry aired, and will reap even more consumer backlash in the process.

Image credit: Adam from UK/Wiki Commons

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Burger King Promises Path to Sustainability - Eventually

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There are things that aren't easy to figure out when we're chomping down on that fast-food hamburger or chicken sandwich at lunch time. Like, where the meat comes from.

For example, a friend of mine is a huge fan of A&W Canada burgers (yes, there's a difference, apparently, from those sold in the U.S.). He likes the banner that is displayed outside the door that boasts the fact that no hormones are used in their beef. And best of all, he says, he likes the taste.

Of course what isn't brandished across the building is the fact that A&W Canada, which is owned by Unilever, is in hot water with Canadian beef producers. According to a number of ranch owners, in initiating its "Better Beef" initiative some years ago, it moved much of its beef procurement to other parts of the world.  Its website notes a number of small U.S. and Canada sources for its beef, but savvy burger eaters claim they've done the math: According to them, the amount they are able to procure doesn't add up to A&W's annual sales.

Be that as it may, fast-food consumers liked the think-out-of-the-box marketing concept, enough so that a year later, the brand announced it would also be transitioning its chicken and eggs to antibiotic-free sources.

And that got attention. According to one source, A&W was able to boost its same-store sales growth 8 percent just two years after launching its Better Beef campaign and one year after changing out its chicken supply chain.

That kind of financial win hasn't been lost on the parent corporation of U.S.-based Burger King, which last week announced it would be changing out its conventionally grown chicken for hormone-free sources. Restaurant Brands International has formed an agreement with shareholder advocacy group As You Sow, which submitted a resolution in 2016 calling for reduced use of antibiotics use in its supply chain.

As You Sow withdrew the resolution and RBI has agreed to set timelines as it winds down its use of conventionally raised chicken and fully implement the change by 2018.

But Burger King knows it has more work ahead of itself to really win over consumers in an ever-competitive market. While its website claims the company is "the world's third-largest fast-food company," that statistic doesn't really paint a full picture of the competition Burger King is up against in its daily sales. According to Statistica, the company ranked ninth in terms of the most valuable fast food brands globally, trailing behind niche brands like Starbucks and sandwich retailer Subway. Some, like Panera (which trails behind Burger King) and Chipotle Mexican Grill, Burger King points out, have already begun transitioning away from meat with antibiotics.

But the burger brand also has increasingly come under the scrutiny of environmental organizations, which say that Burger King's beef is connected with vast amounts of deforestation in Brazil and other South American nations. One source blames Burger King and other fast-food beef producers for the deforestation of more than 271 million acres  for beef and soy (a key source of food for beef cattle) production.

Burger King knows this is a sore spot with many consumers, so last week it upped the anti. RBI has announced in its sustainability report that it will cease deforestation practices by 2030. It's also promised to protect the land rights of local farmers in South American countries.

Scientists and environmentalists say the changes won't come fast enough for an area that has faced mass deforestation and land and labor disputes for decades. Union of Concerned Scientists weighed in immediately, calling RBI's announcement "embarassingly weak" and called on the corporation to set goals a decade sooner, in line with other companies' commitments.

"[More] than a dozen companies including McDonald’s, Dunkin’ Donuts, Unilever, Nestle, Carrefour and Walmart have stated their support for an immediate end to deforestation for soy, the major feed for livestock," the nonprofit environmental organization Mighty Earth reported. The environmental organization has zeroed in on Burger King recently for what Mighty Earth calls its "meat secret:" an unwillingness to share the origins of its products.

Unfortunately for Burger King, that accusation has ramped up an even greater appetite by advocacy organizations to get to the details that RBI's sustainability report doesn't disclose -- such as the origins and impact of its palm oil supply chain, another key issue when it comes to Burger King's supply chain.

If there is any bright side to the company's announced changes, it's exactly that: It's decided to make changes. Whether it will garner the increased sales by transitioning its chicken to antibiotic-free sources while taking more than a decade longer than most to stop its role in deforestation practices has yet to be seen. For many environmentalists and animal rights advocates the two issues are one and the same when it comes to protecting the environment and Mother Nature.

Flickr image: Mike Mozart

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