Sustainability and Climate Change : A Personal Challenge For Law Firms By Bill Blackburn, co-chair ABA Climate Change, Sustainable Development and Ecosystems Committee April 22, 2009 Climate Change, Business and the Law: What Business Lawyers Need to Know Now Ad Hoc Committee on Climate Change and Sustainability of the Business Law Section and the Environmental Law Section, State Bar of Michigan The Inn at St. John’s, Plymouth, MI William Blackburn Consulting, Ltd. Web: www.WBlackburnConsulting.com Email: WRB@WBlackburnConsulting.com Phone: 847.530.4014

What is sustainability??

General Definition of Sustainable Development UN Brundtland Commission (1987) “Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”

General Definition of Sustainability Triple Bottom Line (Elkington 1997) Meeting the bottom line of not just economic (financial) performance, but social and environmental performance as well.

General Definition of Sustainability 2R’s (Blackburn 2007) Respect: respect for people and other living things Resources: the wise use of economic and natural resources ---for the purpose of promoting the long-term well-being of the organization and society. Write this down:

Why are companies (even small ones) going Green??

Top Reasons For Increased Focus on Sustainability by Companies (Source: 2007 Conference Board study of 18 major corporations. ) Reputation, brand Stakeholder pressure (esp. customers) Reduce waste (and costs), increase productivity Employee morale, motivation and recruitment Peer pressure (competitors, high-visibility companies) WHY?

Sustainability Issues in Tough Economic Times Financial viability of the organization, its suppliers and key customers Waste/energy reduction (cost) Cost-efficient products Employee relations Safety Ethics Support for the unfortunate

Two Benefits for Organizations in Proactively Seeking Sustainability Long-term financial viability Loyalty of key stakeholders DuPont, Dow and 3M saved $1 billion from P2 GE $50 million from safety, Intel $30 mil from contractor safety programs. Baxter $800 million cumulative over 12 years Raytheon saved $10 mil in electricity costs in 2007 from energy reduction efforts

Business Needs the Loyalty of Key Stakeholders to Be Successful Other Companies Investors Our Company Government Communities Carbon Disclosure Project Customers Rating Groups Activists General Public

Building Stakeholder Loyalty Transparency Credibility Stakeholder Loyalty Stakeholder Engagement Strategic communications (reporting; engagement); no “greenwash” Working in the “discomfort zone” on the toughest issues “See ourselves as others see us” Econ, Env, Soc Performance

Some Observations About Sustainability Sustainability is not about one thing. The business case for sustainability is really the business case for a process that looks at sustainability trends and issues and prioritizes among the opportunities and threats to an organization to select those for action that contribute the most value.

Common Business Threats & Opportunities -Legal -Financial -Reputational -Competitive -Operational -Productivity, cost -Employee relations -Reputation -License to operate, community appeal -Sales, new markets, customer appeal -Innovation, new products and services

40% of the World Will Live in Water-Scarce Regions by 2025 Next 40 years ave supply of fresh water will be cut by 1/3 Threatens survival and food supply, hydro power Source: WRI, UNEP, WBCSD, Tomorrow’s Markets— Global Trends and Their Implications for Business, 2002; Jeff Seabright, Coca Cola Presentation, TCB, May 31, 2007. <0.5 0.5-1.0 1.0-1.7 1.7-4.0 4.0-10 >10 Extreme Scarcity Scarcity Stress Adequate Abundant Surplus Ocean/ Inland Water No Data 1000 m³/person/year

World’s Population (Billions of people)

Nearing Peak in World Oil Production

Climate Change Visible Polar ice is melting and sea levels are beginning to rise slightly due to global warming. Also by 2030, no glaciers in Glacier Nat’l Park Climate scientists say an unprecedented build-up of CO2 and other GHGs in atmosphere has caused an increase in ave global tempt of 1 degree over last 100 years, 5-7 degree in Alaska) Also expected to change weather patterns in various parts of the globe, increase sea level and shift habitat of plants and animals Tick-borne encephalitis

Sustainability Trends: Conditions and Responses Opposition to Globalization Extended Producer Responsibility Green Products Green Marketing/Labeling Green Product Certification Rise in Socially Responsible Investing Investor Concerns about Corporate Governance Increased Demands for Transparency/ Public Reporting Growing Power of NGOs/CSOs Increasing Global Terrorism Over-consumption of Resources Obesity; Poor Food Nutrition Fossil Fuel Depletion Climate Change Deforestation Threats to Biodiversity Fresh Water Depletion/Water Contamination Wetlands Destruction Fish Depletion Coral Reef Destruction Spread of Hazardous Pollutants Declining Soil Quality Ozone Depletion Declining Corporate Credibility Growth in Global Business Competition Speed of Communications/ Digital Divide Widening Prosperity Gap (Health, Income, Services) Population Growth Serious Disease Mental Health Problems Increased Immigration; Lower Fertility in Industrialized Nations Hunger and Malnutrition Child and Forced Labor Education Needs for the Disenfranchised Urbanization No of TNCs jumped 10x in 30 years 51 of world’s largest companies aren’t countries but companies 10% have access to internet; 50% haven’t used a phone Extended Producer Resp: proactively control risk; hazards info, responsible for harm; take back Light brings heat brings change; surge in reporting; stockholder resolutions 150% increase in International NGOs in 20 years

Sustainability Trends Drive Response of Organizations Climate Change Fossil Fuel Depletion Energy Conservation Carbon Footprinting Recycling Recycled Content Dematerialization Over Consumption of Resources Changing Population Profile Diversity Programs

Sustainability Trends Drive Response of Organizations Ethical Sourcing Supplier Assessments Child and Forced Labor Growing Concern about Toxics Contamination & Env. Problems Spread of Toxic Pollutants Toxics Elimination From Inks, Electronics, etc. Sustainability Reporting Green Labeling Rules Product Certifications Growing Mistrust of Business

What can law firms do?

ABA-EPA Office Climate Challenge (140+ endorsers) Adopt one of the following: Adopt two paper management practices (double-sided printing; buying recycled paper; recycling paper) Join EPA WasteWise program (reduce paper waste and quantify results) Join EPA Green Power Partnership (buy power from renewable sources) Join EPA Energy Star™ Program, with energy mgmt plan and goal (Energy Star equipment; good energy mgmt systems and practices; energy audit, etc.)

Policy Tool Development Process (12 Drafts) Conference Board corporate model policy CCSDE Working Team (approx 20 lawyers) 12 pilot firms; 2008 workshop ABA, state bar, and city implementation tools Other feedback from ABA & state bar groups, sustainability experts, et al.

Model Sustainability Policy for Law Organizations Vision: It is in the best interests of our law organization and society as a whole that our organization move along the path to sustainability. To that end, we will strive to achieve the following vision of performance, publicly communicate this commitment, and periodically report our progress and challenges in fulfilling it: Economic success: the wise use of financial resources Organization’s Economic Prosperity. Our organization is positioned to survive and prosper economically. b. Community’s Economic Prosperity. We help our community survive and prosper economically through the taxes, salaries, and suppliers we pay, and through our civic and philanthropic efforts.

2. Social responsibility: respect for people a. Respect for Employees. We treat our employees in a respectful, fair, non-exploitative way, especially with regard to compensation and benefits; promotion; training; open, constructive dialogue with management; involvement in decision-making; working conditions that are safe, healthy and non-coercive; right of privacy; employment-termination practices; and work-life balance. b. Diversity, Fair Hiring Practices. We promote diversity and use hiring practices that are fair, responsible, non-discriminatory, and non-exploitative for our employees, management board, and suppliers. c. Responsible Governance; Professional Courtesy. We manage our risks properly, use our economic power responsibly, and operate our organization in a way that is ethical and legal. We treat with due respect others who are involved with us in the discussion of legal issues and resolution of legal claims. d. Dealing With Clients. We acknowledge that our primary legal and ethical duty is to serve our clients honestly and effectively. We compete fairly for their business, respect their privacy and confidentiality, and provide them efficient and effective services under the conditions we promise. e. Awareness and Advice;. We help raise the awareness of our employees about sustainability issues in the primary fields of our legal practice, and include consideration of such issues in the advice we provide our clients. f. Well-being of Stakeholders. We work collaboratively with our communities and other stakeholders to enhance the well-being of others through pro bono services, philanthropy, and/or other ways.

3. Environmental responsibility: respect for life; the wise management and use of natural resources a. Resource and Energy Conservation. We conserve our use of natural resources and energy to the extent practicable. b. Waste and Pollution Prevention and Management. We reduce to the extent practicable the quantity and degree of hazard of the wastes we generate from our operations, and handle them in a safe, legal, and responsible way to minimize their environmental effects. We also reduce to the extent practicable the direct and indirect emissions of greenhouse gases and other harmful air pollutants from our operations and travel. c. Reduction of Supply Chain Impacts. We work with others in our supply chain to help assure adverse environmental impacts and risks associated with our operations are reduced and properly controlled, and environmental benefits optimized.

2Rs/Triple Bottom Line in Practice Conference Board study Corporate sustainability reports (2700 companies) and Global Reporting Initiative UN Global Compact (5500 corporate endorsers) Draft ISO 26000 SR standard (2010) (all organizations) STAR Community Index (2010) of ICLEI- Local Governments for Sustainability (1000+ cities) STARS standard of Association for Advancement of Sustainability in Higher Education (600+ institutions) Sustainability Tracking, Assessment, and Rating System (STARS) US Green Building Council

Why Firms Want a Model Policy? Personal values of partners, employees Progressive management planning structure (e.g., Levenfeld Pearlstein, LLC) Save money; improve productivity Elevate “brand” with clients, recruits, public, using an approach from a respected third party (ABA) Align with clients Client public reporting and standards (corporate, city, university) Product standards (sustainable agriculture, fisheries, forestry, etc.) Socially responsible investing WHY?

Contents of Model Policy Tool See http://www. abanet FAQs, background, rationale Model policy (TBL: economic, social, environmental) Implementation guidelines (suggested processes) Practices ideas Shared Ideas List (includes Climate Challenge) References (includes state bar and city-developed lists of practices and other tools)

Action by State and Local Bars California bar: Lawyers Eco-Pledge and Green Guidelines (practices) Massachusetts bar: Lawyers Eco-Challenge and Green Guidelines (practices) Oregon Lawyers for a Sustainable Future: Misc. law office environmental tools Michigan, Texas and NY City bars: looking at sustainability ABA: Multi-state Law Sustainability Practices Forum

Policy Pilot Firms/Endorsers Ballard Spahr Andrews & Ingersoll, LLP Berg Hill Greenleaf & Ruscitti LLP Giarmarco, Mullins & Horton Holland + Knight Levenfeld Pearlstein, LLC Manko, Gold, Katcher & Fox, LLP McMahon DeGulis, LLP Robinson & Cole LLP Porter Wright Morris & Arthur LLP Schwabe Williamson & Wyatt Sonnenschein Nath & Rosenthal, LLP Nixon Peabody LLP

Supporting ABA Groups Climate Change, Sustainable Development & Ecosystems Committee of SEER (leader) Key supporters: SEER Council Standing Committee on Environmental Law Law Practices Management Section Preliminary supporters: Pro bono legal services Diversity Women in the profession Professional responsibility/ethics Labor Business Young lawyers Law Students

How to become an ABA-listed endorser? Supporter: Declare support for policy in principle Leader: Adopt comparable TBL policy Evaluate current status (see References tools and Shared Ideas List ) Develop action plan Periodically report progress Publicize on ABA SEER website

What can you do? Endorse the Climate Challenge Endorse the Model Policy tool (supporter or leader) MI Bar provide rep to Multi-state Forum MI Bar co-sponsor ABA resolution on Model Policy tool Continue to promote sustainability practices Develop own tools as needed

William Blackburn Consulting, Ltd. Web: www.WBlackburnConsulting.com Email: WRB@WBlackburnConsulting.com Phone: 847.530.4014 The Sustainability Handbook— The Complete Management Guide to Achieving Social, Economic and Environmental Responsibility (See Web site)

Climate Change: US International Negotiations No real scientific debate on need to act Obama now committed to cap-and-trade Domestic legislation moving fast; will affect international negotiations Major Economies Forum on Energy and Climate (April in DC, July in Italy) 16 countries (includes China & India) and EU US: Cut 14% from 2005 levels by 2020; cut 80% by 2050 For UN discussions in Copenhagen Dec 09 (for 2012 post Kyoto) Auction prices could be $20-$100 per ton; 14% = flat to 1990 levels; EU is at 20% reduction from those levels UN Framework on Climate Change –Poznan, Poland Dec 08 EU Parliament 20/20/20: by 2020, 20% reduction from 1990 levels; 20 % renewables; 20$ increase in efficiency

Climate Change: Congress Draft Waxman-Markey cap-and-trade bill (ACES) to floor by end of May. 12% GHG reduction 2005-2012; 20% by 2020; 83% by 2050; exempts operations emitting less than 25,000 tons per year No position on auction vs allocation or use of auction funds Tighter standards for cars (2010 +), fuels (2014 +) Standards for coal-fired power plants (including carbon capture & storage) Electricity sector standards on efficiency, renewables (6% by 2012, 25% by 2025), smart grids Rep Waxman (Chair, House Energy & Commerce. Comm) and Markey (Chair, Energy & Env. Subcomm.) American Clean Energy and Security Act of 2009

Climate Change: Congress 16 senators in Moderate Dems Working Group; will need 60 votes for legislation $60 B in Stimulus Bill for renewable energy and building energy efficiency, transit and rail; +$150 bil. In budget for 2009-19 ($3.1 bil. to state energy programs; $3.2 bil. to cities & counties) Rep Waxman (Chair, House Energy & Commerce. Comm) and Markey (Chair, Energy & Env. Subcomm.) American Clean Energy and Security Act of 2009

Climate Change: EPA Endangerment Decision CA Auto Stds Decided GHGs endanger public health & welfare and auto emissions contribute to that (under the CAA per Mass vs. EPA) Precursor for emission stds if Congress doesn’t act CA Auto Stds EPA re-considering waiver of preemption for CA GHG auto stds Would open door for 17 other states Mandatory GHG Reporting Would cover 13,000 reporters EPA holding hearings Advanced Notice of proposed rulemaking by EPA on Endangerment decision 7/11/08 CA 2002 law: reduce auto GHG emissions 30% by 2016

Climate Change: States State are active: 31 states have climate plans; 25 will have mandatory GHG regs by 2015 Cap and trade/ tax; emissions standards Energy efficiency (products, buildings, utilities) Renewables Financial incentives; technical assistance Regional programs The Climate Registry (39 states, D.C., all Canadian provinces & 6 Mexican states) www.theclimateregistry.org Western Climate Initiative (WCI- 7 states, 4 Canadian provinces) www.westernclimateinitiative.org Regional GHG Initiative (RGGI- 10 Eastern states), www.rggi.org Midwestern GHG Reduction Accord (6 states, 1 province) http://www.midwesterngovernors.org/resolutions/GHGAccord.pdf RGGI-2 auctions; $3-4 per ton Registry—reporting WCI –cap and rrade at 15% reduction 2005-2020; not adopted yet, although CARB’s CA AB32 (effective 2012) has set a cap at 1990 levels by 2020 Midwest GHG RI similar to WCI