Environment – 3

To all Financial Institutions (Banks, Pension Funds and Insurance Companies)

‘Getting the Environment into Business!’

I, along with millions of others around the world, have come to realise the importance of the world’s environment, especially in the context of our health and economic well-being.  Many have taken small steps to help in reversing the many results of all of us ignoring the consequences of our way of life.  But, we need a new way of thinking in terms of taking action, as part of our journey together.  One way of bringing this change about is to encourage you, as ‘guardians’ of the public’s financial capital, to only invest and/or give loans to businesses which meet certain criteria with regard to the environment such as the following:

1. Management System

Social and environmental management systems (according to the complexity of the operation) must be in place so that your auditors can confirm that the business is operated in compliance with the Sustainable Environment standards (see below) and the laws of the countries it operates.   Such a system could be based on the ISO 14001 which is a voluntary international standard for environmental management systems – http://www.iso.org/iso/iso_14000_essentials .  As part of such a system, appropriately trained auditors are appointed either by yourselves or an external consultancy is used – see below.

2. Ecosystem Conservation

A business must conserve existing ecosystems and aid in the ecological restoration of critical areas. They can achieve this by taking steps that protect waterways, wetlands and soil from erosion and contamination, prohibit logging and other deforestation, maintain vegetation barriers, and prevent negative impacts on natural areas, where appropriate.

3. Wildlife Protection

Appropriate action must be taken so as to mitigate any effects on wildlife due to any developments undertaken by the said business. This is particularly important for endangered species and their habitats. This includes educating workers, prohibiting hunting and the removal of rare and/or protected plants and animals from their lands, protecting nesting places, and either releasing captive wildlife or registering animals with the proper authorities.

4. Treatment of Livestock

Businesses which do not take care of its animals through meeting stringent welfare requirements in living, abattoir, and transportation conditions should be turned down in any request for funding.

5. Water Conservation

The business must demonstrate that they are conserving water by keeping track of water sources and consumption. Its practices and equipment may need to be modified — or new technology installed — in order to reduce water consumption or to avoid contamination of springs and rivers on and near the property. The business should have the proper permits for water use; treat wastewater and monitoring of water quality.

6. Community Relations

An important part of any business is its relationship with local communities.  As part of that, it should inform surrounding communities and local interest groups about their activities and plans. And consulting with interested parties about the potential impacts of the business and demonstrate that it has taken into consideration and amended its plans accordingly, should there be any negative consequences of its operation, is essential.  As well as that, contributing to local development through sustainable employment (using local people where practical), training and public works, all helps in developing good relationships.  Any project will need to take into account how it will affect the way of life of local communities.

7. Use of chemicals

It is important that the business is working towards the elimination of chemical products that pose dangers to people and the environment, as an important part of its health, safety and well-being policies.  Those policies need to show how the business intends to do this and what evidence it will provide to auditors to show that appropriate action has taken place.

8. Energy Use

As part of an environmental audit, the business needs to show that it is increasing its use of sustainable renewable energy, based on the effective use of wind, solar, water, waste and recycled products (providing they themselves do not cause environmental problems) as well as other appropriate renewable materials, on a year-on-year basis.

9. Integrated Waste Management

The business has programmes for managing waste through recycling, reducing consumption and reuse, in a sustainable, environmental and safe way. Waste is segregated, treated and disposed of in ways that minimize environmental and health impacts. Workers are educated about properly managing waste, at work and in their communities.

10. Buildings and Equipment

All buildings and equipment used by the business to demonstrate that they meet the above criteria.  As well as that, buildings need to provide living spaces that enhance resident health by eliminating toxic materials and increasing the quality of air, through proper ventilation.  With new buildings, the materials used should meet the latest sustainable environmental building standards – see for example: http://www.breeam.org/

11. Financial Assistance

The financial criteria that you have in deciding whether to invest or to give a loan will also need to take into account that the business involved is committed to the long-term sustainability in all areas of its operation, and that you are also committed to it as a long-term partnership.  See – http://en.wikipedia.org/wiki/Corporate_sustainability

http://www.dsdni.gov.uk/finance_and_governance_for_vcu.pdf  (although this is for the voluntary and community sector, it is a good basic guide for businesses to remind themselves why they exist)

http://www.ifc.org/ifcext/gfm.nsf/AttachmentsByTitle/FMS-EO-Supplychain/$FILE/FMS-EO-Supplychain.pdf (this is just an example of making finance available in a sustainable way)

12. Co-operation with External Bodies

As an optional criteria, a business is encouraged to co-operate in partnership with non-governmental bodies and the United Nations in developing a Green Economy – see http://www.unep.org/greeneconomy/AboutGEI/WhatisGEI/tabid/29784/Default.aspx ; http://www.unepfi.org/about/index.html

http://en.wikipedia.org/wiki/List_of_environmental_organizations

13. Use of Auditors

Your auditors must be trained in environmental auditing and be independent, having no direct or indirect links with the business to be considered for an investment or loan.  See IEMA or similar bodies for examples of certification: http://www.iema.net/training/delegates/fciea .  A full report should be produced giving the reasons a business either meets all the criteria or not.  If it only meets some of the criteria, then a timetable should be suggested along with any available assistance, to aim for attaining all the criteria.  This report should also be publically available on its website and/or in printed form.

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Environment – 2

A letter I recently wrote to a number of European Union Commissioners:

‘Getting the Environment into Business!’

I recently e-mailed the Chief Executive Officers of a number of international companies from the energy, extractive mining and financial institutions asking them to take action with regard to their impact on the environment and their long-term future.  I only had one reply and that was from a British bank.  In their corporate social and environmental policy, they mentioned that they, along with a number of other financial institutions subscribe to a thing called the ‘Equator Principles’ when it comes to investing in various projects around the world.  Having looked at these principles and found them ‘wanting’, it led me to think that if we could persuade financial companies to only allow their money to be invested in projects if they met strict environmental criteria, then that would force businesses and governments to act responsibly.

So, may I encourage you and your fellow Commissioners to encourage the European Parliament to approve a Directive, which will help financial institutions meet their and their customers’ obligations with regard to the environment and social cohesion, based on the following points:

A)     ASSESSMENT TOOL

–          Develop a tool for financial companies to use to determine the environmental impact of any project;

–          This tool to also include whether they meet the BREEM building standards in their own or rented buildings, as well as that the projects concerned (if appropriate);

–          And also its impact on reducing poverty in terms of improving sustainable and fair employment for local people as well as the infrastructure, appropriate to the country;

–          The EPI of Yale University may be a starting point.

–          Any tool needs to take into account not only CO2 emissions, but also that of other harmful gases, eg methane;

–          It also needs to consider the effect on the local resident population of any said project;

–          Assessments to be carried out by an independent ‘auditor’, with no links to the company in question.

B)      RESEARCH

–          Carry out research to determine which international financial companies have a strict environmental policy which is enforced and encourage those that don’t to do so, and publish the results;

–          Identify ways of recognising companies who have met the requirements of the tool to be used in marketing and media campaigns which benefit both the companies and the campaign;

–          Assess the impact of current schemes, like the one run by the Rainforest Alliance, as to how effective they are, using standards from the ISO, and compare them with the tool developed by the EU.

C)      ACTION

–          Seek to persuade the European and American banking regulatory bodies to legislate that all companies covered by their remit have an enforceable environmental impact policy, including on their overseas operations;

–          Abolish tax heavens and to seek the lifting of Switzerland’s secrecy banking laws so as improve accountability and reduce money laundering (it would also reduce access to money for doubtful environmental projects);

–          Insist on financial companies publishing on their website the independent report of any environmental impact of a project they intend to invest in so as to obtain constructive feedback from the people it will affect the most;

–          Create an EU Directive to insist that all governments enshrine legislation to put these actions and points into practice as soon as possible.

As governments worldwide find it difficult to agree on what action to take with regard to the environment, especially on Climate Change, then this is a way forward in dealing with the problems.

Thanks.

Environment – 1

With the issue of reducing the amount of carbon dioxide in the environment having reached a stalemate on the world stage, it is time for drastic action.  A key supplier of carbon dioxide comes in the form of transport, whether it be cars, buses, or areoplanes, as well as from dwellings, such as houses, factories, buildingss and offices.  One way to improve things is to set a challenge to the manufacturers of vehicles, house builders as well as the oil companies, to come up with a plan to develop energy systems which will result in zero carbon dioxide emissions, within five years.  As an encouragement, the government is to provide finance for research and initial manufacture.  If this challenge is not met, then the government is to ‘fine’ the organisations, through a ‘tax’ and also through losing the licence to carry out their business.

With regard to current buildings and transport, the manufacturers would also need to design adaptions which would be sold to businesses and the public at a discounted rate (through a government subsidy).  Businesses and the public would have two years to put these adaptions into use, so that within seven years, there should be no forms of transport or buildings emitting carbon dioxide (with a few exceptions).

Another way is to encourage all financial institutions to only lend money to businesses that meet certain environmental and sustainability criteria, and this would also include investing on behalf on clients.  If there is not much movement by financial institutions in this matter, then legislation would be necessary.  It would also important to encourage the rest of the European Union to do the same, so that institutions don’t simply move countries.  This requirement would apply to any business that does operate in the UK.