The Little Green Lies of Environmentally “Friendly” Business Ben Elgin Investigative reporter BusinessWeek

IPCC conclusions of 2007 “Warming of the climate system is unequivocal.” Increase in temperatures “very likely” due to man-made emissions. CO2 levels in 2005 exceeds natural range of last 650,000 years.

Business to the rescue? Climate Savers: Twelve companies are on pace to eliminate 10 million tons of CO2 emissions by “We can reduce the climate change footprint of our companies and grow as businesses at the same time.” -- Climate Savers statement

Lafarge claims A “commitment to sustainable development dates back many years.” A “proactive and radical policy to reduce greenhouse gas emissions.”

Lafarge reality Emissions: 1990 = 79.6 million tonnes 2006 = 96.4 million tonnes 2007 = 98.9 million tonnes

State of Green Business 2009 “Despite a growing chorus of corporate commitments and actions, we’re less optimistic that these activities…are addressing planetary problems at sufficient scale and speed.” -- Greener World Media

Key Questions: What is greenwash? What is the harm in it? Why do businesses typically fall short in their green efforts? Where might skeptical media look next?

Greenwash: “sustainability?” Duke Energy: “A way of business that is good for people, the planet and profits.” “Sustainability is a journey, not a destination.”

Greenwash: “sustainability”? Sustainability is “a business approach that creates long-term shareholder value by embracing opportunities and managing risks deriving from economic, environmental and social developments.” – Dow Jones Sustainability Index

Greenwash: “sustainability”? Merriam-Webster: “A method of harvesting or using a resource so that the resource is not depleted or permanently damaged.”

Greenwash: “sustainability”? Brundtland Commission: “Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”

What is greenwash?

Environmental claims that present a misleading picture for consumers and citizens.

What’s the harm in greenwash? Over 28 ski resorts claim to be wind powered: Vail Resorts: “100% powered by wind” Sugar Bowl: “Powered 100% by Green Electricity!” Park City Mountain Resort: “Offsetting 100% of power used”

Value of RECs? Supposed to provide economic incentive for new wind development Cheap, often as little as $2 per MWh Many developers say RECs don’t influence their decisions to build more renewables

Jiminy Peak 386-foot turbine Generates 1/3 of resort’s power Cost $4 million to build Saves $200,000 on power costs

What impedes green progress? Impatience to make marketing claims Finite availability of capital inside businesses

Seattle City Light 200,000 tons of greenhouse gas emissions/year 2000 Earth Day resolution: “Net zero” greenhouse gas emissions by 2005

Seattle City Light Biodiesel conversion of city trucks: 700-1,400 tons of offsets per year Cost as much as $220 per ton of reduced CO2

Seattle City Light DuPont’s Louisville plant: 300,000 tons of offsets per year Cost $1.95 per ton of reduced CO2

Seattle City Light “Our approach initially was very strict. The project would only happen if the check came in the mail from us.” But, “we wanted offsets quickly, not offsets coming 10 or 20 years in the future.” -- Corinne Grande, strategic advisor to Seattle City Light

FedEx Operates over 51,500 ground transport vehicles Operates over 675 planes Greenhouse gas emissions total more than 15 million tons per year 2008 profit: $1.1 billion

FedEx Proclaims to be a green leader: “We have integrated responsible environmental practices into our daily operations.” Launched a new ad campaign to show FedEx is “doing our part to reduce carbon emissions…”

FedEx Slow adoption of hybrid vehicles: In 2004: “This program has the potential to replace the company’s 30,000 medium-duty trucks over the next 10 years.” In 2009: 172 hybrids deployed, or 0.5% of its fleet

FedEx With 42% savings on fuel that is expected to pay for higher up-front costs, why won’t FedEx invest more heavily in hybrids? “We do have a fiduciary responsibility to our shareholders,” – Mitch Jackson, environmental director at FedEx.

Future skepticism Environmental claims with little data or transparency Intensity-based targets

Big claims, little data FedEx: “doing our part to reduce carbon emissions” Google: “carbon neutral” Hasbro: 43% reduction in emissions since 2000

Problem with intensity data U.S. GHG per real dollar of GDP: 1990 – – – 625 (metric tons of CO2 equivalent per million chained dollars) Total U.S. GHG emissions: 1990 – 6, – 7, – 7,180 (millions of metric tons)

A dose of reality “At Aspen/Snowmass we’re trying our best to be green, but we’re not delusional. Our business has huge environmental impacts.” -- from Aspen/Snowmass environmental commitment

Questions? Ben Elgin (415)