Opinion

Felix Salmon

Climate Desk Bleg 2

By Felix Salmon
March 17, 2010

Thanks partly to SXSW and partly to my own atrophied reporting muscles, my climate desk piece is going very slowly. And so I’m going to try another bleg here.

The basic situation is little changed from my last update: most of the companies I’m hearing about are either working on greenhouse gas emissions — which isn’t really the story I’m looking for — or else are just getting started on the work needed to comply with the new SEC reporting requirements. But I have heard, second-hand, of a few stories which are much closer to the mark, and if anybody can help me out in terms of finding me companies or websites which talk about these kind of things, I’d be very grateful.

First, there’s the banks. I heard of one Brazilian bank — I’m not sure which one — which was asked for a 20-year loan to fund a major agricultural project in the Amazon, and which responded by asking for an environmental audit. They don’t want to lend money to a coffee project, say, if the land is not going to be arable for coffee in 20 years’ time. Has anybody heard tales of environmental models playing a role in banks’ loan underwriting?

Secondly, there’s the hospitality industry, especially the parts of it which have a lot of assets on islands and beaches and the like. Are any of these companies doing environmental studies on coastal erosion and sea-level rise, and if so, how are they managing those risks? This isn’t a question of insuring against a disastrous event happening in the next year or two — that can be done by writing a check. It’s more a question of positioning the company so that it wouldn’t be devastated by the inability to insure against a disastrous event in the future, if insurers decide the risks are too big.

Finally there’s companies like ADM or Heinz, which are creating new crops designed to cope well with low-water conditions or large swings in temperatures. This is the point at which risk mitigation becomes profitable in and of itself: once you’ve mitigated risks by creating those crops, you can cash in on demand for those crops if and when climate change causes demand for them to rise.

Overall, though, I’m having difficulty finding big companies which are happy to spend a lot of money and effort on mitigating the effects of something as inherently nebulous and unpredictable as climate change. And maybe that’s rational. After all, if you prepare for X and then get blindsided by Y, you might as well have done nothing at all. And no one has any real idea of exactly what things are likely enough to worry about and what things aren’t.

Comments
6 comments so far | RSS Comments RSS

For bank loan underwriting, look at the Equator Principles. http://www.equator-principles.com/

Posted by will1 | Report as abusive
 

Rabobank, the Dutch cooperative bank which is just about the only AAA rated bank left, may be what you’re looking for. They incorporate CSR assessments into their loan approval process, and environmental sustainability forms a big part of their CSR policy. Now, having a policy and actually taking it seriously are two different things, and I don’t have first hand knowledge of how rigorous their underwriting process is in this regard, but they seem to be well regarded by people who care about this sort of thing. They have also signed up to the Equator Principles mentioned above.

Posted by GingerYellow | Report as abusive
 

Rabobank invests in cycling. This investment is not limited to sponsoring professional teams, but also extends to promoting and supporting recreational cycling in its broadest sense throughout the Netherlands. All these activities are carried out under the auspices of the ‘Rabo Cycling Plan’.

too bad michael rasmusen in the 2007 Tour de France, Rasmussen, while in the yellow jersey, had his contract terminated by the Rabobank team and was removed from the Tour. The team cited internal code violations of doping. He served a two-year ban from July 2007 to July 2009, when he returned to the sport.

Posted by velobabe | Report as abusive
 

Try http://lowbagger.org/

You’ll find lots of examples of companies converting their PR greenwashing activity profile over to some nebulous ‘climate’ awareness stance, diverting from issues of flagrant everyday pollution – the latter being that for which they are irrefutably responsible. Corporations can, by Nature, be outright foes of environmental responsibility, no matter what you call the impact.

Other recommended reading would include ‘The Legacy of Conquest’ by Patricia Nelson Limerick. When it comes to screwing up the environment, American History really does repeat itself.

Re cultural climate change at SXSW: too bad about Alex Chilton. Still, try and get your bad self over to Domy Books, soak up a bit of KXLU. And rock on!

Posted by HBC | Report as abusive
 

Check out the US and international publications here – the project is trying to quantify exactly the types of questions you seem to be asking.

http://www.rff.org/News/ClimateAdaptatio n/Pages/domestic_publications.aspx

Posted by Bharvirkar | Report as abusive
 

Thought this may provide some data on this topic.

I enjoy your blog. Thanks for the good work.

http://siran.org/projects_s_and_p_report ing_comparison.php

Posted by CrookedShank | Report as abusive
 

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