The Green Gauge: CF Industries told to clean up

August 24, 2010

Christopher Greenwald

— Christopher Greenwald is director of data content at ASSET4, a Thomson Reuters business that provides investment research on the environmental, social and governance performance of major global corporations. —

It never looks good when the EPA raps you on the knuckles for failing to take care of your surroundings. Such was the case last week for CF Industries, a fertilizer-maker now facing a price tag of more than $12 million to improve conditions at a facility in Florida.

Here are the highlights of companies in the news from August 8 to 23. Selections of companies were made by Christopher Greenwald, director of data content at ASSET4. These ratings are not recommendations to buy or sell.

bot25 CF Industries

CF Industries, a manufacturer of nitrogen and phosphate fertilizers reached a settlement with the Environmental Protection Agency to spend $12 million in order to properly manage waste at a fertilizer manufacturing facility in Plant City, Florida.  The settlement also requires the company to pay a fine of $700,000 for violations of the Resource Conservation and Recovery Act.  In addition the company is required to guarantee an amount of $163.5 million to ensure the proper care for the facility once it is closed in the future, an amount representing 155 percent of the company’s 2010 fiscal year net profit.

A copy of the EPA’s Consent degree is available here:

bot25 Tesoro and Valero Energy

A report issued by the Ella Baker Center for Human Rights and the California Environmental Justice Alliance reveals that Texas-based Tesoro and Valery Energy, which are seeking to overturn California’s commitment to reduce greenhouse gas emissions, are also two of the most significant polluters in the state.  The report claims that Valero and Tesoro own facilities that are the 4th and 8th largest producers of toxic chemicals in California respectively and that both companies have been cited for violations of pollution laws in the state.  Separately, Valero has also recently been fined $1.9 million for over 200 pollution violations during the past decade at one of its refineries in Delaware City.

bot25 American Electric Power, Duke Energy Corp., Southern Co. and Xcel Energy Inc.

American Electric Power, Duke Energy, Southern Co. and Xcel Energy have appealed a case on greenhouse gas emissions to the Supreme Court after a federal appeals court unanimously argued that the case may proceed.  Connecticut vs. American Electric Power, which was filed by eight state attorney generals as well as the City of New York, argues that global warming is a public nuisance and that therefore greenhouse gases should be limited by a court order.  The defendants argue that such regulations are political in nature and should be determined by legislatures.  A ruling on the case would likely help clarify the extent to which legal decisions can serve as a means of limiting CO2 emissions.

bot25 Goldcorp

Entremares, a wholly owned subsidiary of Goldcorp is facing criminal charges in Honduras, which were filed last week after the Catholic Agency for Overseas Development in the UK revealed dangerously high levels of acid and metal concentrations near the company’s San Martin gold mine.  The lawsuit claims that the company violated Honduras’ criminal code, and two senior executives could potentially face up to six years in prison if found guilty in the case.

bot25 BHP Billiton, Ltd.

The world’s largest mining company, BHP Billiton, which recently announced ambitious plans to enter the fertilizer business through its $39 billion hostile takeover bid for Potash Corp. of Saskatchewan, has recently been cited as causing excessive toxic levels of saline emissions in the Georges River South of Sydney, Australia.  The environmental license of the company’s mine, operated by subsidiary Endeavour Coal, does not regulate saline discharges, and the company has been required to submit a proposal for how to reduce saline emissions by June of next year.

top25 Pepsico, Wal-Mart

Frito Lay (Canada), a subsidiary of Pepsico, has introduced a fully compostable packaging for all of its Sun Chips sold in Canada.  Frito Lay will manufacture 17 million of these packages per year, which are made of 90 percent plant-based materials and will fully decompose in compost in 14 weeks of disposal.  The initiative is part of the ShareGreen Sustainability challenge organized by Wal-Mart Canada in order to motivate manufacturers and suppliers to incorporate innovations into their products to make them more environmentally sustainable.  The various corporate initiatives resulting from the challenge are available online here.

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