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Sunday Telegraph: Greenwash: *Shell

EXTRACTS: When environmental campaigners speak of CSR campaigns with more “spin” than “substance”, Shell, BP and other oil giants are not far from their lips… Shell also puffs its £541m investment into solar and wind power over the past five years. Actually, that sum is worth just 1.1 per cent of the company’s total capital investment during that period. Then there is the heated topic of gas-flaring, the process by which excess gas emitted during oil exploration is burned off into the atmosphere. “The amount of natural gas from oil wells that we flare has been declining since 2001,” Shell’s annual report says. In fact, the company is expected to produce 7.9m tonnes of CO2 this year by flaring, compared with 7.3m tonnes last year. The review does not mention the alleged health effects to locals, which include child respiratory illnesses, asthma and cancer.

THE ARTICLE: Headline: Greenwash

(Filed: 08/10/2006)

Companies are lining up to boast new environmental credentials, but which are real and which are little more than hot air themselves? Robert Watts reports

Wander around the City of London or Canary Wharf at three o’clock in the morning and it’s only natural to question the sincerity of the eco-friendly talk pouring from the world’s biggest companies.

At the dead of night, the deserted offices of London’s Docklands are ablaze with light. At HSBC, the bank which prides itself on being the world’s first to go “carbon neutral” and employs 22 people in its “sustainable development” department, about a third of its lights appear to have been left on.

It’s hard to spot a light which isn’t shimmering in the multistorey blocks of Bank of America, Morgan Stanley or Credit Suisse First Boston, even though all three banks are signed up to the Equator Principles, a coalition which purports to provide a “benchmark for the financial industry to manage social and environmental issues”.

Two miles away at the City offices of Lloyds TSB, JP Morgan and Deutsche Bank, lights shine from almost every window.

“Power stations are burning coal just to keep those lights on. If a business is serious about cutting energy use, cutting CO2 emissions, the first thing you do is turn off the lights at night,” says Dr Garry Felgate, a director of the Carbon Trust, the Government agency which advises a range of businesses including M&S, J Sainsbury, Heinz, HBOS and the John Lewis Partnership on cutting energy use.

“Once you’re turning off the lights, you look at energy-efficient lighting and how you run your business,” Felgate insists. “But the first thing you do is get staff to flick the switch.”

Felgate remembers recently walking past a City trading floor at four in the morning and seeing hundreds of computers switched on.

“The screensavers said ‘please turn this computer off’,” he says. “And computers also produce heat, so one wonders if the air conditioning was grinding away to keep the room cool too.”

On the one hand, the world’s most powerful banks can launch the heavily marketed Equator Principles, which aim to stop signatories financing dams, power stations and other projects which damage the environment. On the other, the banks seem reluctant to take the simple step of installing motion-sensitive lighting. HSBC says it does have such lighting and that, as one of the world’s biggest banks, many of its staff do work late.

Banks aren’t alone, of course. Barely a day passes without a supermarket, airline, oil giant or other multi-national unveiling another way to slash carbon dioxide emissions or use less of the world’s resources.

But how robust are such policies? Is there real substance behind the green spin cooked up by ever-expanding corporate social responsibility?

“More and more companies are waking up to the potentially devastating impacts of climate change,” says Sarah-Jayne Clinton, a corporates campaigner at the environment group Friends of the Earth.

“They know that’s what customers want to hear. Many of their initiatives are making a real difference to their impact on the environment. But you can’t put them all in one bag: much of the corporate social responsibility stuff (CSR) is little more than PR.”

When environmental campaigners speak of CSR campaigns with more “spin” than “substance”, Shell, BP and other oil giants are not far from their lips.

Turn to Shell’s latest annual report and you will find five pages devoted to a “social and environment review”. It says: “The group scored highest in the industry for ‘environment responsibility’ for the fourth year in a row. A quarter of respondents from the general public ranked Shell as ‘the best’ or ‘one of the best in acting’ responsibly towards the environment.”

Shell also puffs its £541m investment into solar and wind power over the past five years. Actually, that sum is worth just 1.1 per cent of the company’s total capital investment during that period.

Then there is the heated topic of gas-flaring, the process by which excess gas emitted during oil exploration is burned off into the atmosphere.

“The amount of natural gas from oil wells that we flare has been declining since 2001,” Shell’s annual report says.

In fact, the company is expected to produce 7.9m tonnes of CO2 this year by flaring, compared with 7.3m tonnes last year. The review does not mention the alleged health effects to locals, which include child respiratory illnesses, asthma and cancer.

Shell’s environmental review also suggests that oil spills will fall sharply this year, although there are no details of how comprehensively these spills are cleared.

Shell is, of course, not alone. BP, famed for its Beyond Petroleum PR campaign, is currently constructing a pipeline from Azerbaijan to Turkey. FoE calculates that every year fuel carried by the line will be responsible for CO2 emissions equivalent to that of the whole of the UK in a year.

Tension between business and the green agenda is almost certainly inevitable. Economic growth usually comes at a cost to the environment; protecting the environment will often come at a cost to business.

There’s also a subtle tension to do with perception: businessmen make unlikely eco-warriors. So, for instance, when Sir Richard Branson last week unveiled plans to spend £1.6bn over the next 10 years on green power sources the proposal was greeted with some cynicism.

Is it simply a plan to head-off government regulation on climate change, or a genuine attempt to lead by example?

Airline rivals were certainly piqued to be told by Branson to cut their CO2 emissions by a quarter through simple moves, such as towing aeroplanes to runways and gliding them into land. “Much of this is just a fad,” said one rival chief executive.

In the recent months, Britain’s supermarkets have also been embroiled in a battle to see who can be the most green.

Much has focused on the humble plastic bag. Tesco has introduced biodegradable bags. Most of them unfortunately, end up in landfill sites.

But there are schemes of real substance. Tesco is also aiming to use half as much energy in 2010 and is did in 2000. The UK’s biggest supermarket slashed its energy use by 15 per cent in 2005-06.

The problem facing businesses is that the initiatives which do most for the environment – turning off the lights or reconditioning boilers – are unlikely to attract glowing headlines.

Marks & Spencer is now producing 120,000 less tonnes of carbon dioxide by turning off lights at night, using green energy and other such measures. BMW lowered its energy consumption by 15 per cent due to a variety of technology modifications at its plant near Birmingham.

The Carbon Trust says motors are now available which use half the energy of conventional ones.

“They are more expensive,” says Felgate. “But they usually pay for themselves through lower energy use.”

DuPont, the chemicals company, says it has saved $3bn (£1.6bn) in energy costs during the past 15 years since harnessing methane emitted from landfill sites to power boilers.

Wal-Mart claims it saves $25m a year and produces 100,000 fewer tonnes of CO2 a year by tweaking its lorries’ engines.

But the problem for investors and consumers remains: how is it possible to sift the truly green initiatives from canny PR campaigns? One answer touted by a coalition of charities – including FoE, Action Aid, Greenpeace, Christian Aid and Amnesty International – is to beef up companies’ obligations.

The Companies Bill, currently making its way through Parliament, will oblige quoted companies to provide a far more detailed and balanced report of their impact on the environment. But the coalition wants this report to be far more comprehensive and audited independently, in the same way company accounts are.

A second issue this group, known as the Corporate Responsibility Coalition or Core, is calling for is statutory responsibilities for directors. This would allow investors, members of the public, customers and suppliers to sue individual directors if a company’s policies excessively damage the environment.

“The Government must create a level playing field for those companies that are genuinely trying to move forward on this, but risk being undercut by their competitors who aren’t,” says Clinton.

“Relying on voluntary action by companies and pressure from consumers and investors is not going to be enough to tackle climate change.”

Nevertheless, the Carbon Trust is optimistic. “In the past 18 months we have seen a step change. Companies are thinking about their impact in a way they never did before,” says Felgate.

“Now, part of that is because finance directors are worried about increasing energy bills, or because HR directors are worried about what staff think.

“Often it’s because marketing directors fear the damage to their brand’s reputation. “But if these initiatives are good for the environment that’s what counts. So far business has made a good start – but there is still a lot, lot more to do.”
 
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/10/08/ccgreen08.xml

*added by ShellNews.net
 

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