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Digging the Arctic & India’s new CSR Law


Climate change is one of the most significant threats facing the world today. According to the American Meteorological Society, there is a 90 percent probability that global temperatures will rise by 3.5 to 7.4 degrees Celsius (6.3 to 13.3 degrees Fahrenheit) in less than one hundred years, with even greater increases over land and the poles. These seemingly minor shifts in temperature could trigger widespread disasters in the form of rising sea levels, violent and volatile weather patterns, desertification, famine, water shortages, and other secondary effects including conflict. (read more)

One day after the 66th Year of its formation, India gifted itself with one of the most profound laws in the World.

Friday, August 16, 2013:  With the aim of ensuring environmental sustainability, India becomes the first country to pass a Corporate Social Responsibility that proposes larger companies who have made a profit of at least $80 million over the past three years spend 2 per cent of each year’s profit on initiatives that will help in sustaining the environment.

With this law the Country could  have steped into the history of humankind as the Messiah. But a close look at the sentence …”who have made a profit of at least $80 million over the past three years spend 2 per cent of each year’s profit “…dashes all hope. A mere 2% of profit will not even save the Krills in the Arctic ocean,(click) without which the complete ecosystem would collapse as they are one of the principal factors of carbon capture.

With this single sentence, it joined the club of countries whose thoughts and actions don’t match.

It is a telling report on the moral bankruptcy of those whom we think would lead this modern civilization out of the mess we are already in. It also indicates how the ones who actually want to bring in change;  there are still many among our ever increasing corrupt politicians, who are clean & honest;  are sidelined by those who want to “keep the change” of silver coins in their coffers already spilling with blood money.

Yes! Blood money..because humans can’t even cook a decent meal or build a cottage without killing some life-form in the process. It is a sad commentary on those who consider “realpolitik” superior to statesmanship.

India joins Arctic Council May 16, 2013India’s bid for observer status in the Arctic Council was successful on Wednesday along with that of five other countries — China, Italy, Japan, South Korea and Singapore — at a meeting in Kiruna, Sweden.Ministry of External Affairs, New Delhi, welcomed India’s admission. An MEA spokesperson said India would contribute its scientific expertise, particularly its polar research capabilities, to the work of the Arctic Council to support its objectives.However, at the level of Realpolitik, India will be looking at the opportunities for hydrocarbon exploration offered in the Arctic circle by joining hands with one of the five countries gearing up for the purpose — the U.S., Canada, Norway, Russia and Denmark.From the point of view of geographical distance, Russia will be the most attractive partner. With the Arctic ice melting fast and opening up business opportunities in the region, India’s ministry of earth sciences has devised a strategy to get a share of the action. India recently became a member of the Arctic Council, a high table of eight countries, including big players such as the US, Canada, Norway, Russia, and Sweden. In May, India and China got permanent observer status in the council.

“We will strengthen our Arctic labs. Right now, we don’t keep them running round the year, but only for eight months. Now, we are thinking of keeping it working for 12 months. We may subsequently add one more station,” MoES secretary Shailesh Nayak told dna while detailing how India would improve its Arctic programme in the next two-three years.

Scientific studies have estimated the Arctic region would have ice-free summers within the next 10-15 years, opening opportunities such as vast, untapped oil and gas reserves, unexploited marine living resources and shorter commercial shipping routes. According to estimates, the region holds 13% of the world’s undiscovered oil reserves and 30% of undiscovered gas deposits.

But to exploit these opportunities, scientists say, countries first need to understand how the region would change when the ice melts.

When one commits a mistake, pardon is the best recourse. But when it is a deliberate and calculated act of omission with full knowledge of the consequences then the people of this Planet need to pause and question the direction of progress.  Through this article, the flip-flops of the government and the confusion prevailing in the world is highlighted. Progress can only be attained through progressive thought and moral conviction. Sadly we are progressing no more.

Dear colleagues,

On behalf of the consultation team, sharing the latest report by TEEB (The Economics of Ecosystems & Biodiversity).

Environmental Sustainability Post 2015 Consultation team.

Commissioned by the TEEB for Business Coalition, the report “Natural Capital at Risk: The Top 100 Externalities of Business” identifies the world’s largest natural capital risks and opportunities for business and their investors. Authored by Trucost, the report quantifies environmental externalities such as damages from climate change, pollution, land conversion and depletion of natural resources, across business sectors and at a regional level. It demonstrates that the profits of high impact business sectors would be wiped out if the costs of environmental damage and unsustainable natural resource use are accounted for. This report highlights the urgent need for businesses to manage natural capital assets and reduce liabilities. Businesses and investors can take account of natural capital impacts in decision making to manage risk and gain competitive advantage.

 Headline findings are:

  • The primary production (agriculture, forestry, fisheries, mining, oil and gas exploration, utilities) and primary processing (cement, steel, pulp and paper, petrochemicals) sectors analyzed are estimated to have externality costs totaling US$7.3 trillion, which equates to 13% of global economic output in 2009. The value of the Top 100 externalities is estimated at US$4.7 trillion or 65% of the total primary sector impacts identified.
  • The majority of environmental externality costs are from greenhouse gas emissions (38%) followed by water use (25%); land use (24%); air pollution (7%), land and water pollution (5%) and waste (1%).

 Highest impact externalities are:

  • Coal-fired power in Eastern Asia and Northern America rank 1 and 3, respectively estimated at US$ 453 billion per annum and US$ 317 billion. These consist of the damage impacts of greenhouse gas emissions, and the health costs and other damage due to air pollution. In both instances, these social costs exceeded the production value of the sector.
  • The other highest impact sectors are agriculture, in areas of water scarcity, and where the level of production and therefore land use is also high. Cattle ranching in South America, at an estimated US$ 354 billion ranks second. Wheat and rice production in Southern Asia rank fourth and fifth respectively.

The report assessed more than 100 environmental impacts using the Trucost environmental model which condenses them into six Environmental Key Performance Indicators (eKPIs) to cover the categories: water use, greenhouse gas (GHG) emissions, waste, air pollution, water and land pollution, and land use.! These eKPIs were then quantified by region across over 500 business sectors.

Hope this stimulates further discussion.

Best regards,

Environmental Sustainability Post 2015 Consultation team.

The melting ice in the Arctic Ocean means that more ships are plying the northern sea route in the summer months than ever before. In 2012, over 46 vessels sailed the route, compared to 34 in 2011 and only four in 2010. Reports said Chinese scientists aboard a Ukrainian-built icebreaker, the Xuelong or Snow Dragon, completed the country’s first trans-Arctic ship voyage from Shanghai to Iceland.

Ocean Pollution: Global Shipping and the Cruise Industry(click to read)

16 ships create as much pollution as all the cars in the world: As ships get bigger, the pollution is getting worse. The most staggering statistic of all is that just 16 of the world’s largest ships can produce as much lung-clogging sulphur pollution as all the world’s cars.Because of their colossal engines, each as heavy as a small ship, these super-vessels use as much fuel as small power stations. But, unlike power stations or cars, they can burn the cheapest, filthiest, high-sulphur fuel: the thick residues left behind in refineries after the lighter liquids have been taken. The stuff nobody on land is allowed to use….There are now an estimated 100,000 ships on the seas, and the fleet is growing fast as goods are ferried in vast quantities from Asian industrial powerhouses to consumers in Europe and North America. (read more).

India Steps Up Climate Change Efforts (August 24, 2013): As international climate negotiations progress this week in Bangkok, Thailand, India has shown signs of more proactive engagement on climate change issues both internationally and at home.While the Indian government continues to emphasize poverty alleviation and economic development as the country’s highest priorities, recent stances on domestic emission reductions indicate that India is taking considerable steps to encourage more constructive global climate talks. India joins a growing contingent of developing countries that “are making very significant efforts to show what they are doing to address climate change and indicate what more they are willing to do,” according to U.N. climate chief Yvo de Boer.Until recently, India had repeatedly rejected calls to quantify its targets for reducing greenhouse gas emissions on the grounds that this would jeopardize national poverty alleviation goals.”India cannot and will not take emission reduction targets because poverty eradication and social and economic development are first and over-riding priorities,” Environment Minister Jairam Ramesh said in June. But two weeks ago, in a surprising reversal, India agreed to quantify its efforts to mitigate climate change. Ramesh said India would reduce emissions by “a broadly indicative number,” although the reductions would still not be bound by international law. At the Major Economies Forum on Energy and Climate in Italy in July, India joined 16 other countries in declaring that the increase in global average temperature above pre-industrial levels should not exceed 2 degrees Celsius. This goal remains somewhat controversial, however, as there is still no clear agreement on how countries will share the burden for reducing global emissions. (read more)

The Copenhagen Accord – Calls for “an assessment of the implementation of this Accord to be completed by 2015… This would include consideration of strengthening the long-term goal”, for example to limit temperature rises to 1.5 degrees.

Statement by UNFCCC Executive Secretary on crossing of 400 ppm CO2 threshold(Bonn, 13 May 2013)
Reacting to the fact that the concentration of heat trapping carbon dioxide in the atmosphere last week passed the 400 parts per million mark at Mauna Loa, Hawaii, the Executive
Secretary of the UN Framework Convention on Climate Change Christiana Figueres on Monday called for a greatly stepped up response to climate change by all parts of society: “With 400 ppm CO2 in the atmosphere, we have crossed an historic threshold and entered a new danger zone. The world must wake up and take note of what this means for human security, human welfare and economic development. In the face of clear and present danger, we need a policy response which truly rises to the challenge. We still have a chance to stave off the worst effects of climate change, but this will require a greatly stepped up response across all three central pillars of action: action by the international community, by government at all levels, and by business and finance.”
While India’s CSR Law is a positive step in the right direction, unless the World wakes up to it and adds its share, the effort would be futile.
Excellence can not be achieved in isolation neither as a person nor as a Nation.
Just as an excellent dinning requires 56 dishes to accomplish with (chappan bhog) and 16 adornments are required to exemplify beauty (solah singar) of a woman – such will be the need for this planet attain its former pristine self. We need contribution from all sectors of business & industry of all Nations, in perfect synchronization to attain this feat.

 

 

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Green Business Ideas : Virtual World Design can save the real world losses.


In today’s News paper I read that a project conceived in 2003 in Mumbai has not been able to take off till date. The funding from World Bank has been suspended. The reasons are several, design issues, red-tape, encroachment etcetera. Going through the archives, I found several similar problems over diverse types of projects. I also recollected that there has been a few projects which we were supposed to do but the developer got cold feet due to lack of credible data, as to whether the project would be a success and what would work in the era post A.D 2008.

Could there be a hidden Green Business Idea in this ? Can one’s problem, be another’s opportunity? Rather could the opportunity of the other solve the problem of the former ? Its time our capitalistic opportunism mentality move towards, what I said in my previous article – Benefit Corporation. Presenting a very radical idea; which if polished to its potential would definitely create a green revolution, warming the hearts of UNFCCC honchos.

Large infrastructural projects, in India typically face problems. From conception to implementation, the variable being so many, the scope for “information asymmetry ” or ” leakage” ( plain speak – scope for corruption and wasteful expenditure ) is very high. To arrest these problems and prevent the situation from arising in the first place, a few diverse tools already existing could perhaps be combined.

Virtual world is nothing new to gamers and professionals using computer simulation as design tool.  And “Second Life”; “SIM City” are iconic. But it is the IT-industry which enabled its creation. What if they all were to combined ? What would be the benefits, lets discuss in brief-

Say for example in SIM city there is a game simulation called;  – Rio de Janeiro, 2047 – Coastal flooding resulted from global warming rages through the city. The mayor must control the problem and rebuild. …  With Climate change a reality, if this becomes the basic tool on which the Builders have to submit their plans for permissions to build; they along with the architects would have a near first hand experience of what  should not be attempted.   Thereby should lets hypothetically say – “Bangkok  floods”  again, the combined economic and human loss will be negligible.

Although, no person in her/his right senses would like to invite any disaster, be it the Tsunami that hit coastal India or Japan…that it will happen again because we are on the path to 3.5° C  global temperature rise, is almost certain; if you go by what the experts say.  Therefore the faster we bring all the ‘stake-holder’ into the  ‘game’ the better it would be for the World at large.

Using AI ( artificial intelligence ) based on data collected on the demography of a place, behaviour of the populace over time on Urban planning can be mapped. While having a 100% accuracy would take time, even with a 40% predictability of how the  populace of certain culture / social background would behave over say a 5 year period, could help immensely both Public and Private entities to take measures. Such measures can reduce the impact to the economy and create better infrastructure which is more able to meet up to the challenges of the future, which could not have been predicted otherwise.

Sure there are many institution and think tanks doing exactly the same. But if we still are facing the problems which they are predicting, what good does that do? By bringing the tool to the desktop of common persons – architects, developers and local administration. Taking their inputs form the data they create, a more inclusive people to people development program can be mooted which over time would be successful.

Now having understood through simulation of what should not be done, to conform with the overall Sustainable Town-planning, the Developer and his architect would face the question on ‘ what would work ‘.  Architects are by class – service providers. And more often than not, they need to depend on the commission they would get from investors – ie; home owners, builders or industrialist who have the money to have something built for them. Therefore it is much easier for them to design what their client want rather than impose her / his ideas. And with huge sums of money riding on the project, investors don’t really like to take chances. Therefore good designs most of the time gets sacrificed to popular perception. This overtime leads to wrong Urban planning.

This can be arrested by applying the “second life” concept. Say the architect creates a design and does a 3-D rendering. Then gives it to some company like Second Life, which has mapped the exact town / location  in virtual reality before-hand and allows it to be ‘built’ there ? The builder /developer pays for it off-course. Then he could pay to the advertisers both electronic and print to ask prospective customers to visit the ‘town and live in the residential building, built there’. A virtual assistant could walk along with the “avatar” of the client within the virtual world and explain all the features. Once the client likes a particular property, booking can be made and legal terms set. And once the real building comes up, everything is exactly like it was experienced in the Virtual World.

Changes to the design, remodelling a particular flat post finishing to suit the taste of a discerning client, who wants something different, all could be done within the walls of virtual reality, at nominal cost and without waste of precious materials in the process. Moreover the developer/ architect can ‘exhibit’ any modern thought,  different from the mundane and check for real response with minimal risk.

Authorities too can maintain a vigil by visiting many a ‘site’ to see if the designs are adhering to norms and guidelines. Imagine the building inspectors – civil, fire and safety, structural and the municipal architect together sitting in municipal  office  which is equipped with simulators. There they all sit in front of a console with wrap-around 3-D simulator glasses and then join up with ‘avatar’ clients or other experts to inspect a ‘site’. The details are loaded up into the computer by the developer who carries them on a portable hard-drive. Every detail from the PHE / MEP to the design norms can be discussed and recorded. Changes suggested and a revisit organised to see that the building has come as per the sanctioned norms.

All this without a single ‘make & break’ routine the building industry routinely follows. Sometime due to changes in market dynamics which necessitates changes to the built space mid-way or due to misinterpretation of certain by-laws enshrined in the building code of the state. One must remember that 40% of GHG is building related and 60% of waste too comes from building related activities. So when almost all parameters of the building is completely understood before hand, chances of error could be minimized to a great extent. Thus creating an Environment which truly aims to be zero-emission.

Before I end, one may ask why I mentioned the IT industry in the beginning of the article.That  is because, all the tools mentioned are already existing but not all common persons / builders can afford or operate such hi-tech solutions.The Indian IT is the best place for out-sourcing. Cheaper and more efficient than most, our boys would never be out of jobs, which ever way the market plays. All that is needed is to adapt and adopt Sustainable living.

 

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Climate change – the most significant emerging risks facing the world today


Climate change

Climate change—often referred to as “global warming”—is one of the most significant emerging risks facing the world today, presenting tremendous challenges to the environment, to the world economy, and to individual businesses. It is also one of the most difficult risks to mitigate. This is a complex global issue at the intersection of science, risk, and public policy.

Ceres which directs the Investor Network on Climate Risk, a group of 78 institutional investors from the U.S., Europe, and Canada who collectively manage over $7 trillion in assets. In an annual report has noted that, despite the financial crisis, a growing number of political, financial and business leaders are calling for immediate action to drastically reduce global warming pollution. Climate change related catastrophic losses in 2008 to the economy were the third highest ever , exceeding $200 billion globally in 2008, including $40 billion in losses from Hurricanes Ike and Gustav in the U.S. alone, according to global insurer Munich Re. Climate trends are creating risks on both sides of the insurance house—underwriting and investment. But these trends also create vast opportunities, from product innovation to investment alpha, for insurers to be part of the global warming solution. For the first time, fighting climate change is seen not just as a long-term imperative but also as a short-term stimulus for a struggling economy. Property insurance companies are driving the majority of the activity (home owner, commercial, and auto)For the first time, two insurers, Zurich and Liberty Mutual, have introduced directors and officers’ coverage specifically tailored to address liability risks associated with climate change.

◆ Almost all of the climate-related innovations in liability insurance for directors and officers, political risk, professional liability, and environmental liability have appeared in the past year. Both Zurich and Liberty Mutual launched products specifically designed to cover boards of directors in the event of climate change litigation, a significant development given pending lawsuits that could allocate significant costs to major emitters of greenhouse gases.

The business risks from climate change include:
• the strong threat of increasingly volatile weather conditions,
• rising sea levels, and new health impacts;
• resulting impacts on insurance markets, business resources,
• personnel, and corporate preparedness;
• increasing legal and regulatory pressures; and
• mounting public and shareholder activism.

Therefore Climate change—and how to respond to it—is not “yet another” issue for insurers. It is, rather, bound up in the very fabric of the industry and its business environment, namely:
◆ Loss-model accuracy
Regulation
◆ Balance sheet strength, risk-based capital, and solvency
◆ Competitiveness
Emerging markets
◆ Reputation & trust
◆ Customer retention
◆Corporate governance, investor relations, and disclosure

Litigation Risks from climate change include:
With a growing perception among the public, government officials, and businesses that climate change causes damage, the likelihood increases that lawsuits may be filed against those believed to contribute to the buildup of GHGs. Companies could find themselves embroiled in courtroom battles on a number of fronts.

Reputation Risks:
Health risks: Climate change also poses a threat through potential impacts on the spread of diseases. A recent study by Harvard Medical School, for example, concluded that rising temperatures and extreme weather affect the breeding and spread of disease vectors such as mosquitoes that carry malaria and ticks that carry Lyme disease. Rising temperatures may also increase the growth of ragweed pollen and cause a rise in the incidence of asthma, according to the 2005 study. Air pollution could also worsen in some areas, with a related rise in respiratory illnesses. The economic consequences in terms of cost to company and government health plans could be significant.
Although most consumers do not currently consider climate change to be a front-burner issue, it is likely to become a mainstream consumer concern by 2010, according to Brand Value at Risk From Climate Change, a study conducted by the Carbon Trust with Lippincott Mercer, a Marsh sister company. In part, climate change will gain visibility among consumers in the coming years through the impacts of media reports on severe weather, increased regulations, political debate, and an increase in products marketed as climate-friendly. A number of companies from a range of industries are already promoting themselves as environmentally friendly and, specifically, climate change-friendly.

Regulatory Risk from Climate change:
As government agencies and world bodies put regulations in place limiting emissions, enforcement action can be expected against companies found not to be in compliance.
Such companies may then face significant costs from fines or from fighting against the regulations—or against allegations of having violated them—in court.

Risk from Shareholders:
Lawsuits from shareholders could centre on whether a company suffered financially due to a lack of planning for climate risks by directors. For example, it’s conceivable that a power company may choose to do nothing to limit emissions, and then the federal government could pass legislation requiring CO2 limits. Companies that had not prepared for the possibility could find themselves at a disadvantage to competitors that did prepare.

Competitiveness Risks:
A company that manages the above risks—physical, regulatory, shareholder, litigation, and reputation—more effectively than others in its industry may gain a competitive advantage. For example, if a manufacturing firm undertakes a comprehensive effort to reduce its energy consumption, it may significantly reduce energy costs, discover ways to streamline its processes, exceed shareholder expectations, and project a positive environmental image. Many companies are now aggressively developing new products as part of environmentally friendly strategies.

Corporate need to;
• understand and assess their exposures to natural hazards;
• analyze infrastructure damage;
• identify the need for upgrades to buildings and business practices; and
• obtain advice on risk-reduction measures.

Note: The article has been condensed from various prestigious publications & condensed for easy reading.

 

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