Introduction

Welcome to another review of energy and environmental events and developments from both here in New Zealand and around the world. As always, we hope you find our collection of stories to be of interest in what continues to be a rapidly evolving area.

Our first article cites Mary Robinson, the UN Secretary General’s special envoy on climate change, urging an end to the ‘business as usual’ approach to climate change. As Robinson argues “We have to change course, this is a serious moment – we must have funds to build a new kind of economy.” She added that what she termed the ‘business as usual’ model of development “has resulted in dangerous levels of pollution, caused climate change and biodiversity loss, and has failed to eradicate poverty and inequality”.

Her comments could well have been directed at the fossil fuel companies as our next article discusses, as they for one, appear to want to continue on this ‘business as usual’ path. Furthermore, they are taking a defiant stance against leaving fossil fuels in the ground, with Peabody Energy, the world’s largest private coal company, claiming that global warming was “an environmental crisis predicted by flawed computer models”. They also appear confident that governments will fail to implement measures to cut carbon emissions, which is bold given how China is already rapidly moving from fossil fuels and into renewables.

Even previous fossil fuel company executives such as James Smith, ex Chair of Shell UK, are arguing that oil industries can be part of the climate solution, but only if they adopt a more proactive approach to changing the energy sector. In the article by James Murray, Smith calls on the oil companies to play to their strengths and integrate clean technologies in their business. With mounting pressure on the oil industry to demonstrate viability of their current business model, Smith argues that the oil industry can have a future if they acknowledge that they have to make their business model more sustainable.

There are a growing number of success stories showing sustainability to be profitable. For example, Dow Chemicals expects to achieve $1bn cost savings by accounting for natural capital in their activities. A previous set of goals for 2005 helped achieve $5bn in savings, with Dow aiming to achieve these additional savings by engaging with government, not for profit organisations, employees and other industry leaders.

This integrated approach by Dow is further underpinned by our next article, where Margo Mosher states that true integration of sustainability requires material issues to be seen as critical for business viability. With the term ‘materiality’ resting at the core of Integrated Reporting and GRI G4 this is far more than semantics. Companies are increasingly realising that issues of sustainability are linked to material risk, and as such, the role of the CFO is seen to now include accounting for sustainability. Sustainability has to be integrated and regularly reported at all levels.

With energy management being core to the adoption of an effective sustainability regime, ISO 50001 provides a good roadmap into how to establish an effective system. It offers a useful framework that consists of four steps: 1) Plan. 2) Do. 3) Check. 4) Act and is a continuous improvement model that promotes incremental change. We carry an example from DuPont where commitment to improving energy efficiency has saved them $6bn since 1990. The ISO however doesn’t set targets and it is up to the organisations themselves to challenge what they want to see achieved.

Supply chain sustainability is another area where just getting certified is not enough. In our next article, Sumit Kumar, head of sustainability research at Pure Research Private Limited, explains how organisations need to continually assess their suppliers and work with them to iron out supply chain risks. Also, organisations need to proactively share best practices with other suppliers as a way to achieve the proverbial win-win solutions.

Packaging is one of those areas where the tradition has not deliberately accounted for environmental impacts. In our next article Michael Wilson explains how distribution is changing by adopting sustainability as a criteria for suppliers. An example given is the Unilever 5 R’s program which reduces costs and environmental footprints for both the supplier and purchaser.

We also discuss how lifecycle design can be used to minimise the environmental impact of packaging. While reducing, reusing or recycling packaging can be a win-win solution for suppliers and purchasers, there is a need to consider the supply chain for packaging as a whole. Again this requires engaging at the supplier and the consumer level so as to achieve maximum value for the materials used.

Our next series of articles examines some of the science behind climate change, and how the impacts of a warming world may be evidenced. We start by looking at some models suggesting that global warming may actually proceed faster than expected due to previously overlooked feedback loops.

Clouds, it turns out, are a key to determining the earth’s climate sensitivity. There have been several recent studies finding that the global climate models that most accurately simulate observed changes in clouds and humidity over the past 10–15 years are also the models that are the most sensitive to the increased greenhouse effect.

Observations appear to be sufficiently strong to imply a climate sensitivity of more than 3 degrees for a doubling of carbon dioxide. This is significantly higher than the currently accepted lower limit of 1.5 degrees. Perhaps these are the flawed environment models that Peabody Energy has elected to rubbish and ignore…

Another area that is subject to feedback loops is permafrost, an area of ground that stays frozen all year round. And there’s a lot of it, as it covers 24% of the surface of the Northern Hemisphere. It’s been built up over thousands of years and composes a mass of dead, but frozen, vegetation. As it thaws bacteria is able to decompose this vegetation and in the process release either carbon dioxide or methane. Think of permafrost as a large freezer, if it becomes faulty and stops working there is no way to refreeze it. 1,700 to 1,850 Gigatons (a Gigaton is a billion metric tons) of carbon added in to an atmosphere with concentrations of CO2 already over 400 PPM is not desirable.

And it is not just the atmosphere. Climate related disruption of marine ecosystems, could only take decades to destroy but millennia to recover. A new study reports that marine ecosystems can take thousands, rather than hundreds, of years to recover from climate-related upheavals. More than 5,400 invertebrate fossils, from sea urchins to clams were analysed during the study. We ignore our natural world at our peril.

Thanks for taking the time to read this issue and we look forward to catching up with you again. If you have any items of interest you would like to submit, then please feel free to forward them.