21 September 2011
Here's the latest in my Green Business Confidential podcast series. It's called "It's the Law" and it is all about our attitude to legislation.
Or, you can download it here and listen on your MP3 player:
You can get the whole podcast series here or subscribe on iTunes.
Podcast: Play in new window | Download
Tags: beyond compliance, legislation, opportunities, podcast
Posted by Gareth Kane no responses
17 August 2011
I still hear people trot out the old line that the sole responsibility of a business is to act in the best interests of its shareholders - by which they usually mean maximising short term profits at the expense of all else. Here in the UK, at least, this isn't exactly true. In the 2006 Companies Act, directors' duties are defined as:
S172 Duty to promote the success of the company
(1) A director of a company must act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members [ie shareholders] as a whole, and in doing so have regard (amongst other matters) to—
(a) the likely consequences of any decision in the long term,
(b) the interests of the company’s employees,
(c) the need to foster the company’s business relationships with suppliers, customers and others,
(d) the impact of the company’s operations on the community and the environment,
(e) the desirability of the company maintaining a reputation for high standards of business conduct, and
(f) the need to act fairly as between members of the company.[Emphases are mine]
In other words company directors are obliged by law to consider long term issues, employees' welfare, communities, the environment and the company's own reputation when making decisions.
So CSR isn't just a like to have, it's the law.
Tags: corporate social responsibility, csr, legislation
Posted by Gareth Kane no responses
8 August 2011
Most of us in the green business world are very gung ho about "going beyond compliance", but I've started adding a caveat to that - "but don't forget about compliance". In my business case for sustainability model, compliance is the base of the pyramid - lose sight of that and everything else collapses - just ask BP.
You should note that "beyond compliance" and "compliance" often converge over time as the latter does not stand still. More and more gets added to the statute book every year and much which is there tightens automatically. Here in the UK, environmental permits for 'dirty' industries require the use of "Best Available Technology (BAT)" to prevent pollution - so the bar rises as technologies improve. For other large organisations, the CRC Energy Efficiency scheme is designed to tighten the screw on carbon emissions as the years go on. So incremental improvements may simply keep the wolf from the door for a year or two - another good reason to focus on step changes.
Another interesting recent development is business calling for increased legislation to punish environmental laggards - such as airlines calling for air travel to come under the EU's Emissions Trading Scheme. Far better to set the agenda than react to it.
Tags: beyond compliance, compliance, legislation
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27 May 2011
I was at the North East Recycling Forum (NERF) yesterday - catching up with contacts and the latest in the waste industry. One of the interesting points coming out was that the new Waste (England & Wales) Regulations 2011 - to give them their full title - now enshrine the waste hierarchy. Whether this is a tick box exercise or not, what I always find interesting is that nobody ever subjects the waste hierarchy to the Toddler Test and asks "why?".
Let's get one thing straight. The waste hierarchy is simply a rule of thumb. It has no basis in science or economics whatsoever.
Some people look at me as if I have blasphemed when I say that.
Take nature. Nature is very inefficient - a birch tree releases 15-17 million seeds every year, but at best only a few saplings will result. What happens to all the millions of 'wasted' seeds? They are recycled as nutrients back into the system. The waste hierarchy says we should prioritise minimising waste over recycling, yet clearly nature does the opposite - preferring recycling over minimisation. And nature is sustainable, we're not.
I'm not just being a smart alec here - there are practical scenarios where religious adherence to the hierarchy will end up in a suboptimal result. Say you produce 11 tonnes of a particular waste a week and you can get any amount over 10 tonnes collected and put to good use by a recycling company, it makes no economic or environmental sense to invest in a new technology which only produces 9 tonnes if that 9 tonnes ends up being landfilled at a higher cost because no-one can afford to collect and recycle it. I have seen a similar situation happen in reality.
As with all rules of thumb, the waste hierarchy should always be used in conjunction with a dose of common sense. In fact the new legislation does have a caveat which allows companies to ignore the hierarchy if they can demonstrate good environmental reasons to do so. Very wise.
Tags: legislation, recycling, toddler test, waste hierarchy
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18 May 2011
Two pieces of news caught my eye yesterday: the big news that UK Energy & Climate Change Minister Chris Huhne announced that the UK Government was committing to a 50% reduction in carbon emissions by 2027 - the toughest target set in the world - and some local news that an aluminium smelter and its coal fired power station - both about 15 miles from where I'm sitting - might close due to the Government's new carbon floor price.
There's a big problem here - the aluminium produced by the smelter (and associated carbon emissions) will still be produced somewhere in the world, just not here. The global climate doesn't care where the emissions come from, so there is a strong possibility that the Government's commitment will simply push more industry and emissions overseas. If you don't believe me, figures from Oxford University show that, despite the official Government line for many years, the UK has not been cutting its carbon emissions, but has simply leaked them to other countries while our overall carbon footprint has continued to grow.
If I was a right-wing commentator I would now start harrumphing about the idiocy of carbon emission restrictions, how they're destroying our Great British Industry and how we should drop the whole bally lot. But that's a stupid argument - first of all it ends with The Tragedy of the Commons (ie we all lose through selfishness) and, secondly, in a globalised economy it is our Western consumption levels that drive global emissions and we can't duck responsibility for that.
What we need to do instead is develop a smarter way of dealing with each country's emissions - considering emissions from our consumption as well as our production. A few years ago I explained this to both the then UK climate minister, David Miliband, and the current one, Chris Huhne. Both listened politely, did some mulling on it and acknowledged my point, but I suspect both filed it in the 'too difficult' tray.
Business is way ahead of Government here. About five years ago many, if not most, major companies only considered emissions from within their factory fence (plus those from power stations producing their electricity). Most have now faced up to the fact that their carbon footprint does include that of the suppliers - it was crazy when say Tesco, whose purchasing power is driven by £1 in every 8 we Brits spend, didn't acknowledge responsibility for supply chain emissions. Now Tesco and the other big retail sheds, along with major consumer goods manufacturers like P&G and Unilever, are actively decarbonising their supply chain wherever that supply chain may be - national boundaries are no restriction. Some are looking the other way along the supply chain too and 'choice editing' for the consumer, such as when B&Q stopped selling patio heaters. I suspect the massive buying power of such powerful companies could have more impact than any Government targets.
(For more, check out our Green Academy session on Greening the Supply Chain on 1st June)
Tags: carbon emissions, carbon floor price, legislation, politics, supply chain, sustainable production and consumption
Posted by Gareth Kane no responses
2 March 2011
Great news in the Guardian this morning that the EU is to end the incredibly wasteful practice of fish discards. This is the situation where fishermen could catch however many fish they want, but can only land a certain number, so the rest are thrown back - usually dead. This is worse than landing them where at least they would be put to good use - and would offset other food production.
The story illustrates a number of important points:
These are three potential pitfalls that all of us in the sustainability world come up against some time or other, whether in communities, organisations or in international policy. Watch out for them!
Tags: legislation, perverse incentives, sustainable production and consumption
Posted by Gareth Kane no responses
22 February 2010
I've long written, lectured and broadcast about the true cost of waste. Most businesses simply measure the cost of disposal, but to have something to throw away, you first need to have bought it, processed it and segregated it from non-waste - all of which costs. If it is waste product then you also need to factor in the cost of disruption to the production system to fulfill orders and the opportunity cost of not being able to sell it (or the cost of producing a replacement).
There are similar hidden costs to non-compliance with environmental legislation. The full cost can consist of many or all of:
1. Fines - for some companies these can go into 8 figures;
2. Remediation costs - then BP polluted groundwater in Leagrave, the remediation cost 40 times more than the fine;
3. PR/Brand damage - Union Carbide never recovered from the Bhopal disaster and DOW who bought the flailing company out still attracts flack from activists.
4. Disruption to business - Sony had a shipment of Playstations impounded by the Dutch authorities for having too high a level of cadmium. The resulting disruption has been estimated to be between $90-160m.
So, while I'm always urging clients to go way beyond compliance (which reduces the risk of non-compliance by removing hazards at source), I still emphasise - you'd better make sure you stay compliant too.
Tags: beyond compliance, legislation, risk
Posted by Gareth Kane 2 responses
22 June 2009
If you are a UK-based large organisation and you haven't checked whether you will come under the Carbon Reduction Commitment (CRC) yet, then you'd better get moving. In this presentation, Jane Dennett-Thorpe of The Department of Energy and Climate Change (DECC) explains some of the latest developments as the consultation on the CRC comes to an end (source: edie).
Tags: carbon reduction commitment, crc, decc, legislation
Posted by Gareth Kane no responses
14 March 2008
The UK government has published more information on the carbon reduction commitment (CRC) - a proposed mandatory emissions trading scheme for large organisations like supermarkets, hotels, water companies, government departments and local authorities.
The scheme is due to begin in 2010, and will apply to around 5,000 large, non-energy intensive organisations that have half-hourly electricity meters and use more than 6,000 kWhr of electricity per year. Roughly speaking if you have a bill over £500k you'll be hit.
If so you will have to buy allowances from the government to cover all of their emissions - not just electricity. They are expected to cost around £12/tCO2. For the first 3 years there will be no restriction on the number of allowances, then a new Committee on Climate Change will set caps for 5 year phases. Organisations will then have to trade between themselves.
All the more reason to start cutting those carbon emissions back now. You may be able to profit from your tardy peers.
Tags: carbon emissions, carbon reduction commitment, legislation
Posted by Gareth Kane no responses
7 March 2008
This week I've dealt with my second large company, another major household name, who hasn't fully understood their responsibilities under the Waste Electrical & Electronic Equipment (WEEE) Directive. The Directive has been developed to ensure that those who produce or sell electronic and electrical equipment make a financial contribution to its recycling.
But the Directive also requires all businesses to ensure that their own WEEE (ie computers, fluorescent tubes) is collected and disposed of properly. The two companies have been so focussed on getting the producer responsibility side of their commitment right, they haven't realised this further requirement applies to their own waste.
Be warned...
Tags: legislation, weee
Posted by Gareth Kane no responses
5 October 2007
This year's NetRegs survey of UK Small and Medium Enterprises has shown a sudden jump in awareness of environmental issues and legislation - but the overall result is still poor. Only one in four small business owners can name one piece of environmental legislation that applies to them - despite the fact that all businesses have a duty of care for their waste and all are expected to recycle their Waste Electrical and Electronic Equipment (WEEE). The only good news is that this is up from one in seven last year.
Something I have come across this year is unscrupulous companies trying use this lack of awareness to scare people into accepting their services. One lady, who ran a jewellers' shop, had been told by a waste company that the Landfill Directive now meant that all waste had to be pre-treated before it is landfilled - the implication being only this company could provide a legal landfill service. Pre-treatment is indeed required, but the Environment Agency expects the waste management industry to deal with this requirement - not small businesses and retailers.
So there is a double imperative to understand environmental legislation - to make sure your business is neither hauled up in court by the Environment Agency nor ripped off by the sharks.
Tags: environment agency, landfill directive, legislation, SMEs, weee
Posted by Gareth Kane no responses
27 June 2007
It is a busy time on the legislation front with the Registration, Evaluation and Authorisation of Chemicals (REACH) directive coming into force on 1st June and the Waste Electrical and Electronic Equipment (WEEE) directive's latter stages coming into force in the UK on 1st July.
I've been pretty impressed with the businesses I have visited over the last few months - most of them have understood the implications of both and have action plans in motion. I did however speak to one major highstreet retail chain who had an unrelated query about some electrical devices. The end of the conversation went:
Me: "You do realise they come under the WEEE directive."
Client: "Ah, but, we're not selling them."
Me: "Doesn't matter, you still need to dispose of them via an approved facility."
Client: (long silence) "Oh."
I'm not surprised he hadn't grasped this as most of the focus on the legislation has been on domestic WEEE and it is more difficult to find information on industrial WEEE. The moral of the story is to make sure you do understand exactly what the implications are for your business. Trade bodies are a good source of information and your regulator can help (certainly in England & Wales, the Environment Agency tries to be a coach as well as a policeman).
UK businesses can also contact Envirowise on any environmental issue relating to your business - the phone number is 0800 585794. The NetRegs website is also good, but seems to have become a little harder to navigate in the last couple of years.
Tags: legislation, reach, weee
Posted by Gareth Kane no responses
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