Climate Change Policy & Sustainability Update
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NOVEMBER, 2011 Climate Change Policy & Sustainability Update Did you know… Anchoring Sustainability into Corporate CultureCompanies with engaged employees achieved 26% higher revenue per Institutionalizing sustainability into organizational culture is becoming increasingly employee. (WorkUSA) and 82% of relevant as corporations begin to enhance on their sustainability strategies and employees felt a deeper commitment practices. Corporate sustainability has grown away from a compartmentalized business unit into a more integrated and diverse medium for delivering on business to their organization following a strategy and value. The Network for Business Sustainability recently completed a company-sponsored day of comprehensive review of information on organizational culture and sustainability and community volunteering. (Gavin compiled the information to produce a framework detailing how to implement a Walker, Business First Online) culture of sustainability within any organization. This framework takes a broad ‘portfolio approach’ that includes four main categories: 1. Foster Employee Engagement and Commitment: By creating support for employees who are integrating sustainability into their lives, they will feel more Contents committed to supporting corporate efforts. Key Words: Engage, Model Behaviour, Allocate Resources, Anchoring Sustainability into Communicate, Manage Talent, and Reinforce Good Behaviour. Corporate Culture 1 2. Clarify Expectations and Process: Clarifying expectations into more formal Alberta Water License Trading practices/processes will help guide the organization and its people towards Revamp Approaches 2 developing a culture of sustainability. The development of policies, the assignment of senior staff accountability and the creation of sustainability roles Insuring Climate Change: For the Insurers and the Insured 2 throughout the organization can empower employees to lead their company in a structured way towards becoming more sustainable. Looking to the Sky: The Key Words: Create Policy, Integrate, Assign Accountability, Train, Sustainable Move to Cloud Incent, Assess, Verify/Audit. Computing 2 3. Build Momentum for Change: It is important to support a culture of innovation by creating the space for employees to develop new ideas that will bring the Utility of Cap-and-trade Called into Question 3 corporation closer to its sustainability goals. Key Words: Raise Awareness, Develop Champions, Invite Expertise Canadian Firm Announced as (internally / externally), Experiment, Re-envision, Share Knowledge. Finalist in Virgin Earth Challenge 3 4. Instil Capacity for Change: Finally, Did you know… Updates in Brief 4 organizations should create structures that Companies with engaged allow the organization to evolve over time. employees achieved 26% higher This means developing the rules and revenue per employee procedures that lead to innovation. (WorkUSA) and 82% of Key Words: Learn (benchmark, employees felt a deeper scan best practice. pilot, commitment to their continuous improvement), Develop organization following a (New Process, Products, Services). company-sponsored day of By guest author Caitlyn Collyer, community volunteering (Gavin [email protected] & Steven Pacifico, Walker, Business First Online). [email protected] 2 Alberta Water License Trading Revamp Approaches As the first province trading water-use In May, 2011 the Premier’s Council for licenses, Alberta is a valuable resource Economic Strategy recommended the for other areas facing water restrictions. creation of an Alberta Water Authority However, recent proclamations by (AWA) as an independent organization to newly-appointed Environment and govern the province’s water Water Minister, Diana McQueen, suggest management. The AWA would also the system is facing an imminent facilitate the buying and selling of water overhaul. licenses. While an AWA has not been created, Minister McQueen announced Water in Alberta is governed by a in November that public consultations century-old ‘first-come, first-serve’ and an education campaign on water are principle, though new licenses have an among her top priorities. McQueen has expiry date. Under Alberta Environment reiterated support for the existing water and Water, the water transfers rights system, but intends to improve the themselves can be temporary or mechanism for accessing Albertan water permanent, and are subject to review by supplies. the government. Keep up with climate change and sustainability news and updates at www.delphi.ca or follow us on Twitter @delphi_group Insuring Climate Change: For the Insurers Looking to the Sky: The and the Insured Sustainable Move to Climate change is widely accepted as posing many risks to businesses, including physical risk, Cloud Computing regulatory risk, reputational risk, structural risk and liability risk. The acuity of each risk varies across sectors, with the insurance industry expecting physical risk to be its biggest challenge. Shifting how we think of and The issue of assessing risk was the topic of a November, 2011 panel at the International interact with digital information, Emissions Trading Association (IETA) Fall Symposium on Climate Change and Business Risk. In cloud computing is more visible in addition to discussing general climate risks, panellists probed an interesting and inconspicuous our online activities and the media. aspect of climate change risk. In the insurance industry, companies manage their own risks It is also a valuable resource for and through the insurance market, negotiate the price of the risks clients chose to insure companies looking for sustainable against. In turn, insurance providers and the insured face direct climate risk to their operations IT solutions, with cloud services as well as the indirect risk associated with insurance packages. providing an expected 85 million tonnes of annual net CO2 savings In a first-of-its-kind report, sustainability-focused think tank Ceres found broad consensus from (and US$241 billion in total insurers that climate change will affect extreme weather events. However, the sector has revenue) by 2020 for US businesses largely not adopted formal policies. Only one in eight companies have a climate risk alone. management structure, even though natural catastrophe losses in 2011 were 40% higher at the time of publication than in 2010. When storing information on site, dedicated IT hardware is owned The study’s author, Sharlene Leurig, suggests that the industry is looking “backward” when pricing climate change risk, using historic models that do not capture how risks are changing. and operated by a single company. Subsequent risk assessments threaten the balance sheets of the companies themselves and In the cloud, IT resources are shareholder value. Leurig recommends insurance companies work to develop forward-facing located off-site with another scenarios as well as exploring insurance-linked securities, catastrophe bonds and adapted company providing a data-storage capital allocation. service. In addition to CO2 reductions, this structure can Small-scale, formalized climate change insurance is an emerging business with some reputable increase process efficiency and participants. For example, the World Bank’s Multilateral Investment Guarantee Agency organizational flexibility. An provides insurance coverage for greenhouse gas reduction schemes for Clean Development additional financial benefit comes Mechanism (CDM) projects. Coverage accounts for the risk of non-delivery of CDM credits. The from economy-wide energy savings. model can be extended to cover the risk associated with non-delivery of credits or offsets in other carbon pricing systems (Alberta’s Specified Gas Emitters Regulation, the upcoming Western Climate Initiative). Innovative climate insurance solutions offer vanguard opportunities for insurance providers, and risk management tools for insurance clients. 3 3 Canadian Firm Announced as Finalist in Virgin Earth Challenge Carbon Engineering, a Calgary- based industrial-scale air capture company has been named as a finalist for the US$25 million Virgin Earth Challenge, spearheaded by Sir Utility of Cap-and-trade Called into Question Richard Branson and Al Gore. The 10-employee company is led by As the number of jurisdictions committed to cap-and-trade in North America slides, David Keith (President), a former the commitment of remaining participants is gaining strength. This evolution comes University of Calgary and current in the wake of last year’s dissolution of the Midwestern Greenhouse Gas Reduction Harvard University professor. The Accord, a proposed but abandoned regional cap-and-trade system. company is also backed financially by Bill Gates and Murray Edwards. Regional Greenhouse Gas Initiative (RGGI): Nine northeast states participate in the regional CO2 cap-and-trade program. The system is limited to the power sector, The Virgin Earth Challenge is a where it is mandatory. RGGI has been under stress recently. New Hampshire competition to find commercially narrowly maintained its participation when the state’s House of Representatives viable designs to permanently passed a bill repealing involvement which was subsequently vetoed by the Governor. remove greenhouse gases (GHGs) Maine established its participation as contingent on a minimum threshold of other from the atmosphere. The participants. New Jersey’s Governor has announced that the state will withdraw at competition, announced in 2007, the end of 2011. received more than 2600 applications.