Posts Tagged: economics
Global CO2 targets for corporate goals: the right kind of arbitrary?
During the month of September, Sustainable Brands published a series of articles on evolving metrics for sustainable business. As I read through the adoption of context-based sustainability metrics by Cabot Creamery, Autodesk, BT, and EMC, I noticed a common thread: the usage of science-based global climate stabilization targets like WRE350 as the basis for corporate CO2 goals. I had an issue with this at first: those global climate stabilization targets are intended to be met by reductions in total CO2 emissions from humankind, not just reductions by any one company or group of companies. For that reason, a tie between global targets and corporate goals seemed arbitrary. But after thinking a bit, I asked myself: is this tie possibly the right kind of arbitrary — less arbitrary than other methods, and more likely to be supported broadly?
Context-based sustainability: what should my impact be?
On September 24th, the Sustainability Context Group (SCG) submitted a comment (warning: PDF) to the Global Reporting Initiative (GRI) asking for clarity on how to put organizational performance into the wider context of sustainability. Lack of guidance from GRI has led to many organizations making statements like, “we emitted 90,000 tons of CO2 last fiscal year — a 20% reduction from the year before,” without saying anything about whether that performance is sustainable or not. That’s a problem, because an organization reducing emissions, increasing recycled content, and so on is not necessarily becoming sustainable. Organizations have to ask themselves: in order to be sustainable, what should my impact be? The answer to that question is not at all easy to find.
The coming valuation wave.
Many observers of the Rio+20 summit found themselves disappointed, especially in governments, but a number of businesses participating in the summit broke new ground on agreements to value natural capital. I’m very happy to see that business leaders are focusing more attentively on valuing natural capital as a business imperative, and I agree with the old adage that you can’t manage what you can’t measure. Many others agree too, which says to me that the coming valuation wave will bring with it a wave of debate over just how to measure the value of natural capital, along with whether we should be monetizing natural capital at all. The Economics of Ecosystems and Biodiversity has one of the most well-known methodologies for valuation. Inspired by TEEB, PUMA made waves in 2011 for their environmental profit and loss statement, which used a different set of methodologies developed by PwC and Trucost that focused on CO2 and water valuation.
I’m looking forward to more companies doing similar activities, and I expect that people will start talking more and more about which company’s methodology is the best. My hope is that people don’t lose sight of a few basics:
- Ecosystems provide services to humanity even if we can’t agree on how to monetize those services.
- Putting a dollar value on ecosystem services isn’t the same as saying nature’s only value is in what it provides to people.
At some point there will be a “market shakeout,” and a few methodologies will survive. I don’t know what those methodologies will be, but I hope that on the journey to those methodologies, our awareness of the value of ecosystems continues to grow.
Photo “Waves”, by ahisgett, on Flickr.
The death of green marketing: a summary of comments.
Read the original “The death of green marketing” post here.
I’m not surprised that I’m just one of many people who have a thing or two to say about the death of green marketing. When brand strategist Marc Stoiber posted Joel Makower’s “Green Marketing is Over” to one of LinkedIn’s largest sustainability groups, he ignited a conversation so lively that even Joel himself stopped by to express his surprise. The conversation covered subjects from consumer benefits to greenwashing to systems approaches to the definition of green itself. As diverse as the discussion was, I still saw a few common themes.
The death of green marketing.
Read the followup post here.
I suppose I should forgive myself for getting stuck in a quagmire of “green cynicism” every now and again. Just the other day a copy of Forbes Magazine showed up in my mailbox. (I don’t think I’m the only one who gets random magazines I never ordered… and yeah, I checked my credit reports and bank accounts; they’re clean). The article about how China’s soaring demand for cheap energy is great for coal company Peabody Energy’s pocketbook — $7 billion in sales last year — really jumped out at me. “Hello anthracite,” indeed! Google’s recent $100 million investment in an Oregon wind farm drew major headlines — not just because it’s Google, but because $100 mil is still a ton of money for a single actor in wind. What could $7 billion do for wind power?
I know that the Almighty Dollar moves mountains (literally) at scale, because balance sheets matter. And there are two ways that we get big scale: a few market actors making large trades, or very many market actors making tiny trades. I’m especially curious about the second case. The impact of a single car on our climate is probably too small to measure. But almost a billion cars? That’s the number one source of climate warming. Some of that impact is really from trucks and buses, I know. But the question remains: how do we in our individual infinitesimal decisions get out of this large-scale mess?