Investors, institutions battle global warming


Published: Sunday, January 2, 2005 at 6:01 a.m.
Last Modified: Saturday, January 1, 2005 at 11:43 p.m.
The Bush administration's rejection of the Kyoto plan to reduce global warming has put the U.S. in the crosshairs of international criticism that we are not doing our part to create a sustainable future.
However, in spite of Bush's inaction, positive trends from other sectors of our nation may signal a more optimistic view. American investors are helping make that happen.
In the business world for example, private investment is increasingly flowing to corporations that are realigning their operations towards sustainability.
In 1999, Dow Jones created a discrete index of "sustainability leaders" and has since licensed their trading to over 50 major investment houses and banks worldwide. Five years later they are outperforming the Dow Jones Global Index by a substantial margin.
On Wall Street, so-called "socially responsible investments" (SRI) are also doing very well. Firms included in these mutual funds must pass an array of "screens" ranging from no tobacco-related interests to no animal testing or child labor activities.
Many of these funds are outperforming the S&P 500. Even in down markets they don't lose as much. The non-profit Social Investment Forum now reports that one of every nine U.S. dollars under professional management, or $2.2 trillion, is in an SRI fund.
Attracting investors is one reason many corporations are increasingly adding social and environmental metrics to their annual financial reports.
This increased "transparency" also reduces risk by highlighting problems before they boil over, companies have reported.
To date, over 600 organizations like Ford, 3M, Intel, Pepsi, and Johnson & Johnson have published these sustainability reports. In five or ten years, most companies will do sustainability reporting, Investor's Business Daily predicts.
Like many U.S. businesses, Dupont's sustainability reports show significantly reduced greenhouse gas emissions, despite the federal government's official rejection of the Kyoto Protocol that will go into effect next year.
Companies like Dupont see financial opportunity in reducing global warming.
"I believe it's only a matter of time before we'll face (U.S. federal) regulatory mandates to reduce our emissions," Tom Jacobs, Dupont's senior global affairs advisor told the Inter Press Service. "It's a problem that needs a prudent response from industry."
Dupont is reading the tea leaves with great precision. Two states, New York and California, already have imposed some form of greenhouse gas regulatory system.
Indeed, Dupont has increased production 30% since 1990, while decreasing energy use 9% and greenhouse gas emissions a whopping 65 percent. That saved the company almost $2 billion.
Many global businesses are betting that substantial long term profits will come from selling their greenhouse gas reductions like a commodity.
Dupont is one of dozens of companies participating in a pilot greenhouse gas emissions trading program called the Chicago Climate Exchange.
This exchange allows clean business to sell "credits" to other business that exceeds Kyoto emissions targets. The value of those credits has already gone up about 50 percent since Russia announced it would join the Kyoto accord thus paving the way for global implementation of the pact.
More significantly for business, meeting Kyoto targets unlocks the door to global marketplaces. Dupont alone does a full third of its annual $26.9 billion in revenues in countries that have ratified the Kyoto Protocol.
Closer to home, local governments and communities across the U.S. are also working to reduce negative social, environmental, and fiscal impacts on current and future citizens.
For instance, over 400 U.S. local governments have joined the Cities for Climate Protection (CCP). Gainesville and Alachua County are among those local governments that have pledged to reduce greenhouse gas emissions according to a voluntary timetable.
Gainesville Regional Utilities is offering to reduce greenhouse gas emissions from its proposed new coal-fired power plant by paying for reduction projects in the local community.
Indeed, reinvesting capital in community projects is also a growth industry, one that can lead to a more sustainable local economy. A national effort by SRI investors has grown community investment from $5 billion to over $14 billion over the last three years. That makes community investing the fastest growing SRI sector in the U.S., creating new jobs, housing and social services domestically and abroad, according to a Social Investment Forum study.
Hundreds more U.S. communities have found another way to help assure that future social, economic, and environmental resources are preserved.
Healthier Communities Initiative (HCI) programs nationwide seek to balance healthy local economies with a healthy environment, a healthy social fabric, and, of course, personal health and fitness.
The Alachua County HCI program is currently working to identify measurable pathways toward making our community "the best place in the U.S. to raise a child." That program is bringing local community interests together in order to craft an action plan with broad standing.
The nation's colleges and universities are also rapidly integrating more sustainable practices and principles into daily life, and the University of Florida is no exception. This year, UF began evaluating how to implement 45 sweeping recommendations that would make it a global leader in sustainability.
Such things as the Athletic Association's pledge of "zero-waste" at the football stadium, an "eco-friendly" campus management plan certified by Audubon International, and a commitment to build high performance "green" buildings like Rinker Hall are among many UF initiatives in play.
In an innovative move, some UF fraternities will next year begin an aggressive energy conservation program by upgrading their systems and improving management; and channel the savings to help support local charities. These kinds of local sustainability initiatives go right to everyone's bottom line while helping the environment and people.
UF has gained a lot of positive attention for what it has accomplished thus far - and for the promise of future achievements. We will in January host a high-level group of planners, engineers, and project managers from NASA's Kennedy Space Center who want to see first hand what UF has been planning and doing.
NASA is just one of many federal facilities that are integrating sustainable operations into the business plan. The U.S. Army base at Fort Bragg is a model of sustainability for organizations in and out of government. They have cut solid waste to the landfill by 56 percent, now build nothing but green buildings, recycle their stormwater and wastewater, cut energy consumption drastically, begun fueling vehicles with alternative fuels, the list goes on.
The Army joins other federal facilities, state and local governments, communities, corporations, higher education, and a growing number of private American investors changing their approach to make a more sustainable future.
Clearly the Bush administration's rejection of Kyoto is a high profile and very unfortunate setback. Individual American lifestyles also continue to embrace wasteful practices. Indeed, Science magazine has published credible evidence that our consumption of global resources is now at a rate 20% greater than the Earth's carrying capacity. Even the Defense Department last spring released a report citing global warming as a threat to national security perhaps even more severe than terrorism.
We know we are at risk. Are we doing too little too late, many ask? Obviously, no one knows. Yet we may be just one scorching hot, dry, burning summer away from a full-scale national shift towards a sustainable operating system in our country.
In the meantime, American institutions will likely continue to change for the better.
The writer is Chair of the Community Indicators Project of the Alachua County Healthier Communities Initiative and Director of the Office of Sustainability in the University of Florida's College of Design, Construction and Planning.

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