This blog post was co-written by Ceres’ Anne Kelly and BSR’s Edward Cameron. As world leaders prepare to gather for the COP22 climate talks in Morocco, Ceres experts are blogging on low-carbon investor and company actions since the adoption of the Paris Climate Agreement and challenges that remain. Thanks to the immediacy recognized by so many countries concerning the need to address climate change, the Paris Climate Agreement entered into force much faster than anyone could have anticipated. For the first time, we have a global climate agreement that is unprecedented in terms of ambition, defining for the global economy, and immediate in terms of the impact on domestic policy and business action already gathering momentum. The strong and determined leadership of the United States has been and will continue to be vital for realizing the full potential of the Paris Agreement. The U.S. leadership attracted other major economies, such as China and Brazil, to assume courageous leadership positions of their own. Most recently, U.S. leadership was evident leading up to and during successful negotiations to address global hydrofluorocarbons (HFCs) through an amendment to the Montreal Protocol. Domestically, the Obama administration has done what it can, within its authority, to set the U.S. on a path towards decarbonization that is worthy of its diplomatic leadership. The U.S. Environmental Protection Agency’s Clean Power Plan, which has been tied up in courts but appeared to fare well in the latest hearings this September, is a critical early step. While efforts to enhance energy efficiency and to address emissions from the transportation sector are also crucially important, sufficient progress cannot truly be made without swift and decisive decarbonization of the electricity sector. The Clean Power Plan is critical for reducing carbon emissions in the U.S. —and major businesses recognize this as well. When 110 leading businesses commended the Paris Climate Agreement last spring, they also acknowledged the importance of swiftly implementing the Clean Power Plan to meet the United States’ ambitious climate commitment as outlined in the agreement. These businesses joined a group of 365 companies and investors who championed state implementation of the Clean Power Plan last summer as well as eight major companies—Adobe, Amazon, Apple, Blue Cross Blue Shield of MA, Google, IKEA, Mars Incorporated and Microsoft—who courageously filed legal briefs to make the case for the Clean Power Plan in court. These companies acknowledge that climate change affects their bottom lines and that smart, economically transformative policies like the Clean Power Plan are key for sending the right market signals that enable the transition to a low-carbon economy. It should be noted that these companies are leading not only with their words, but also with their actions. More than 650 companies and investors have made over 1,060 climate-related commitments, ranging from adopting science-based emissions reduction targets and committing to procuring 100 percent renewable power, to putting a price on carbon and reducing deforestation. These companies are also profiting from their climate action. Research conducted by CDP has revealed that 62 major global companies have decoupled emissions and growth. These companies saw an average 29-percent increase in revenue alongside a 26-percent drop in emissions. Those companies not decoupling saw revenue down by 6 percent alongside emissions increases of 6 percent. It turns out what is good for the planet is also good for profits. Continued leadership by lawmakers and businesses is vital if we are to hold rising temperatures to within two degrees Celsius and to meet the United States’ commitment to reduce emissions by 26-28 percent below 2005 levels by 2025. These two goals are inextricably interlinked: an inability of the United States to fulfill its commitment would have implications for the rest of the world. And while the Clean Power Plan is certainly a key component of the U.S. commitment, further policy mechanisms—such as clean transportation standards or an economy-wide price on carbon—will also be necessary to achieve the United States’ goals as outlined in the Paris Climate Agreement. No matter the outcome of the U.S. presidential elections, what remains clear is that the sustained, enhanced leadership of the United States will be essential for ensuring the successful implementation of the Paris Climate Agreement. Strong U.S. leadership should provide the clear policy signals needed to enable the private sector to embrace and unlock investments in the low-carbon economic future.
As world leaders prepare to gather for the COP22 climate talks in Morocco, Ceres experts are blogging on low-carbon investor and company actions since the adoption of the Paris Climate Agreement and challenges that remain. Today, the Paris Agreement – the first-ever global, legally binding framework to tackle climate change – becomes international law. The United States, China, India, Brazil, European Union and 89 other nations representing two-thirds of global emissions have formally joined the agreement, allowing it to go into effect today. Many international agreements take years to become law. Not this one. The Paris Agreement was just opened for signature in April 2016. Its entry into force in just six months represents one of the fastest in history for any global agreement and is a sign that governments are finally joining forces to seriously address climate change. For businesses and investors the Paris Agreement should be viewed as a clear market signal that the transition to a low-carbon global economy is underway and accelerating. The primary goals of the Paris Agreement are to hold the increase in the global average temperature to well below two-degrees Celsius, and achieve net zero greenhouse gas emissions in the second half of this century. To achieve these goals, governments and the private sector must act boldly and quickly on a range of fronts, including ratcheting down investment in fossil fuels and mobilizing an additional $1 trillion per year in clean energy from now through 2050. Last year, a record $348 billion was invested in clean energy according to Bloomberg data – far short of the Clean Trillion levels needed to avoid the worst impacts of climate change. Putting the Paris Agreement into action will create opportunities for many sectors of the economy. In the electric power sector alone, meeting the Paris Agreement’s central aim of limiting warming to well below two-degrees Celsius represents roughly $9.4 trillion in renewable energy opportunities over the next 25 years, according to a report released this year by Ceres and Bloomberg New Energy Finance. While the majority of this clean energy investment opportunity is expected to be available under existing policies and market trends, it is important to note that there is a $2.6 trillion gap between the level of renewable energy investments projected under current business-as-usual scenarios and the level that is actually needed to meet the Paris Agreement’s goals. New policies and approaches will be needed to bridge this gap. In a separate study, the International Energy Agency found that implementing the national climate plans of the Agreement would represent a $13.5 trillion investment opportunity over the next 15 years in efficiency and low-carbon technologies. Scaling up global investment to implement the Paris Agreement will be a top priority for the United Nations Climate Change Conference, known as COP22, in Marrakech, Morocco this month. My colleagues and I will be there with the Global Investor Coalition on Climate Change, the We Mean Business Coalition and other allies to encourage government, business and investor leaders to join forces to boost financing for low-carbon opportunities, including in emerging economies where the majority of investment is needed. While the Paris Agreement’s entry into force is a historic turning point, it is just the beginning. Accelerating and expanding global clean energy investment – at a pace and scale never before undertaken in any context – is essential to realizing its goals.
As world leaders prepare to gather for the COP22 climate talks in Morocco, Ceres experts are blogging on low-carbon investor and company actions since the adoption of the Paris Climate Agreement and challenges that remain. One year ago, dozens of companies announced significant climate and clean energy commitments in advance of the historic COP21 climate agreement forged in Paris last December. They were motivated by the desire to demonstrate to policymakers that they are ready for – and expect – government action to lower global carbon pollution. As we approach the next round of climate talks in Morocco, one question looms large; having reached a milestone agreement in Paris, and having surpassed the thresholds necessary for that agreement to enter into force, will the business community respond with decisive on-the-ground action to realize a low-carbon future? The answer is yes. Governments will of course play an essential role, but it’s the private sector, the business community, that must lead the way – and they are. Not willing to wait for the gears of politics to turn faster, and eager to capitalize on the economic opportunities that the transition offers, many iconic companies are moving now – and moving fast. I co-lead a program at Ceres that engages directly with a network of more than 50 companies, including two dozen listed on the Fortune 500 that are among those leaders. As advocates, we set a high bar when it comes to our expectations of companies in addressing climate risks and other critical sustainability challenges. Our 20 specific expectations are outlined in our recently revised Corporate Roadmap for Sustainability. And increasingly the companies in our network are meeting or exceeding those expectations – in fact, more than 80 percent have set specific greenhouse gas emission (GHG) reduction goals. And many are setting goals consistent with the aggressive reduction targets that climate scientists say are needed to avoid catastrophic climate warming. In the 11 months since the Paris Agreement was forged, we’ve seen impressive climate-related activity among our network companies that proves accelerated progress is not only possible, but also good for the bottom line. Apple, Bank of America, General Motors and Wells Fargo have all joined the RE100 initiative committing to obtain 100 percent of the electricity they need for their operations from renewable sources like wind and solar. Apple took it a step further by announcing that three of its key suppliers have also made comparable commitments to renewable energy. AMD, Bank of America and PepsiCo set or committed to set science-based GHG reduction goals, joining Best Buy, Coca-Cola, Dell and General Mills, which set science-based goals prior to Paris. While most Fortune 500 companies have, to their credit, set GHG goals, relatively few have taken the far bigger step of setting goals that the scientific community deem necessary to limit global temperature rise to two degrees Celsius or less. Of course, GHG and renewable energy goals are not the only answers for tackling climate change. General Motors, Ford Motor Company, and Pacific Gas & Electric have taken decisive steps to accelerate the growth of electric vehicles and electric vehicle infrastructure. General Motors is about to begin selling the Chevrolet Bolt, an all-electric passenger car with a range of well over 200 miles and a price of about $30,000 after rebates and tax credits. Ford announced plans to invest $4.5 billion in vehicle electrification and add 13 electric vehicles to its product line between now and 2020. And PG&E is in the final stages of approval for a bold plan that would add 7,600 electric vehicle charging stations in its northern California service territory. These examples are just the leading edge of what Ceres expects will be a continued emphasis on corporate investment in climate and clean energy solutions post-COP22. But we’re far from reaching the scale and pace of global low-carbon investment that is needed – what Ceres calls the Clean Trillion. As we continue to engage with companies in the Ceres network and beyond, our agenda will include: A continued emphasis on setting public goals, whether for greenhouse gas reductions, renewable energy sourcing or energy efficiency gains. Simply put, there’s nothing like a public commitment to drive corporate action and accountability. Greater emphasis on reducing GHG emissions in company supply chains, which typically have a total carbon footprint three to four times larger than direct operational emissions. Elevating corporate voices as part of legislative and regulatory efforts at the state and federal level aimed at reducing carbon pollution. More than ever, policymakers need to hear from businesses why strong climate and clean energy policies will benefit – not hinder – our economic future. Nearly 200 national governments made a powerful statement in Paris and the corporate community is responding. The upcoming COP22 meetings in Morocco will no doubt affirm these trends and the urgency for even stronger action. We hope and expect more companies will follow suit.
As world leaders prepare to gather for the COP22 climate talks in Morocco, Ceres experts are blogging on low-carbon investor and company actions since the adoption of the Paris Climate Agreement and challenges that remain. It is clearer than ever that the adoption of the Paris Climate Agreement was a major turning point for the global economy. The intense dedication and innovative thinking that led to that moment continues to gain momentum thanks to important actions from investors, businesses and policymakers. And later this week, the Paris Climate Agreement will go into effect early. Achieving the agreement’s target of limiting global average temperature rise to well below two-degrees requires nothing less than a transformation of our energy systems, markets and industry towards low-carbon energy and away from high-carbon fossil fuels. With that in mind, it is encouraging to see how much has changed – especially in the massive oil and gas sector – in the last year. Here are seven key actions taken since Paris by investors, businesses and policymakers focused on addressing the oil, gas and electric power sector’s tremendous exposure to climate and Carbon Asset Risk: A global coalition of investors worked together to push the world’s largest oil, gas and electric power companies to analyze and disclose how their business strategies fare against the two-degree scenario called for under the Paris Climate Agreement. Investors supported these efforts through unprecedented support for shareholder resolutions. Investors and asset managers representing more than $10 trillion in assets achieved record high voting support for resolutions filed with Exxon (38%) and Chevron (41%), calling on these oil and gas giants to perform two-degree scenario analysis. Despite strong opposition from management, half of Exxon’s 25 largest shareholders voted in favor of the resolution. The split between U.S. oil and gas companies and other global oil firms has continued to widen. Total and Suncor joined the ranks of other oil, gas, and mining majors heeding investor calls and endorsing the use of two-degree scenario analysis to adapt for low-carbon energy transition. After finishing its two-degree analysis, Total announced plans to exit the Arctic and shift 20 percent of its portfolio to renewable and clean energy investments by 2030. Leading investors and asset managers joined the Financial Stability Board’s Task Force on Climate-Related Financial Disclosures, which is moving towards finalizing recommendations for enhanced climate disclosures in the next few months. All three major ratings agencies – Moody’s, Standard & Poor’s and Fitch –now recognize that climate risk is a financial risk. Moody’s announced it will begin including climate scenario analysis in its ratings methodology. The U.S. Securities and Exchange Commission has opened an investigation into ExxonMobil’s reserves accounting practices and methods for valuing climate risk; less than a month after the investigation became public, Exxon announced that it may de-book (or writedown) as much as 4.6 billion barrels of oil sands reserves. Global oil and gas capital expenditures for new production are at their lowest levels since 2007, dropping from $690 billion in 2014 to an anticipated level of $410 billion in 2016. Spending is projected to go up, however, starting in 2017 and 2018. As we prepare for the upcoming COP22 climate negotiations in Morocco, it is essential to reflect on the progress of the past year, but it is also critical to recognize that this next year presents a unique moment in history. The oil and gas industry and its investors and financiers are at a key inflection point. Oil prices appear to have stabilized, and oil companies are developing strategies for ramping up their spending once again. This year could represent the moment that the energy industry shifts its capital and its strategy to thrive in the transition to a low-carbon economy, or it could represent the moment that it plowed capital into projects that may never see a return. Leading investors, regulators, and ratings agencies are increasingly warning of the risks, and this year investors will yet again make the case directly to the companies that now is the time to pivot away from the high-carbon fuels of the past and towards the low-carbon fuels of the future. The companies that listen will gain a competitive advantage while those that continue to focus on the past may well be relegated to it.
On the cusp of official “entry into force” of the groundbreaking Paris Agreement on climate change, it’s a great time to take a look at how the United States is positioned to drive the Agreement’s objectives forward. With a recently proposed Integrated Resource Plan from Dominion Resources in Virginia and an agreement struck by Xcel Energy in Minnesota, we have two salient examples to evaluate how U.S. power companies are aligning their strategies – or not – with the U.S. Environmental Protection Agency’s Clean Power Plan, a lynchpin of the U.S. commitment under the Paris Agreement. In its plan, Dominion compares different options for compliance with the Clean Power Plan using either rate-based or mass-based approaches. Rate-based approaches aim to reduce the carbon intensity of electricity (lbs/MWh), whereas mass-based approaches aim to reduce actual carbon emissions. Either approach technically is allowed under the Clean Power Plan, within certain bounds. The striking takeaway is that Dominion could comply with the Clean Power Plan using a rate-based approach, even while its actual carbon dioxide emissions could nearly double – an obvious concern in fulfilling U.S. goals under the Paris Agreement. The company would do this primarily by adding new natural gas power plants, which would lower its emissions rate (lbs/MwH), while increasing total carbon emissions from 27 million tons per year in 2012 to 49 million tons per year in 2041. Though it may technically be able to comply with the letter of the Clean Power Plan pursuant to this approach, the potential increase in Dominion’s carbon emissions would be contrary to the Plan’s objectives, creating obvious headwinds for meeting our decarbonization commitments under the Paris Agreement. The EPA needs to address these concerns by ensuring that these kinds of emissions loopholes do not exist, while still retaining flexibility to allow states and utilities to advance optimal decarbonization plans. Dominion’s problematic approach, which could lock in long-lived higher-carbon infrastructure that would undermine over-arching carbon pollution reduction objectives, also highlights the importance of companies ‘stress testing’ their long-term strategies against the Paris Agreement’s specific goal limiting average global temperature rise to two-degrees Celsius or less. This two-degree stress testing is only just beginning to happen. It’s important to keep in mind that Dominion does not lack for cleaner, more cost-effective options for advancing the Clean Power Plan’s objectives. Ceres’ recent Benchmarking Utility Clean Energy report showed that Dominion ranked 24th among the nation’s 30 largest utilities on delivering renewable energy and last, 30th, on energy efficiency. Dominion clearly can and should do more on both of these fronts. Meanwhile, Xcel Energy’s recent news stands in stark contrast to Dominion’s approach. Under a recent agreement in Minnesota, Xcel plans to achieve a 60 percent greenhouse gas emissions reduction by 2030 by retiring old coal plants. The company is also upping its investments in wind and solar, as well as energy efficiency. The plan represents a dramatic – and welcome – shift for a company that still generates about 60 percent of its electricity in all of its states from coal. While it isn’t yet entirely clear how Xcel’s plan aligns with the Paris accord, the company clearly is positioning itself well for the future. Other companies should take note, and pursue options that are calibrated for long-term resilience in a world newly committed to rapid decarbonization under the Paris Agreement.
Despite support from Gov. Tom Wolf, a federal plan for reducing carbon pollution from the state’s power plants is not having an easy time in the Pennsylvania General Assembly. Leading Pennsylvania businesses are backing the Environmental Protection Agency’s Clean Power Plan, however. They recognize that the transition to a cleaner, less carbon-intensive electricity system is underway and that states that move more quickly in this direction will benefit the most. Last week, major companies, including Philadelphia-based IKEA North America, the Adidas Group, Eileen Fisher, JLL, and Nestlé USA, sent letters to state lawmakers urging Pennsylvania to submit a timely strategy outlining how it will implement the Clean Power Plan. The letter outlined wide-ranging economic benefits for businesses and ratepayers, concluding that “planning now ensures the best outcome for Pennsylvania in the future.” They also described how Pennsylvania could get a jump-start on developing clean energy by taking advantage of early compliance credits offered by the Clean Energy Incentive Program. Last spring, after various attempts to derail implementation of the Clean Power Plan, the Pennsylvania General Assembly settled on—and ultimately passed—a bill that empowers the legislature to review, and accept or reject, the Pennsylvania Department of Environmental Protection’s compliance plan. Under this agreement, the General Assembly could, if it wanted to, postpone implementation of the Clean Power Plan in Pennsylvania by up to a year. However, Gov. Wolf has made it clear that he intends to keep moving forward in developing a compliance strategy. “We are encouraged by the [Wolf] Administration’s intent to keep planning and hope the Assembly will, in a timely fashion, allow the Department of Environmental Protection to do its job to protect the state’s economy and avail of the opportunity for Pennsylvania to transition to a low-carbon economy that is beneficial for all,” the companies concluded. The Pennsylvania General Assembly should heed the call of these businesses and tap the enormous potential of the Clean Power Plan to attract new clean energy investments and create additional economic development opportunities – as well as good paying jobs – for Pennsylvania. Diverse states such as Minnesota, California, Colorado and Massachusetts are already reaping such benefits by embracing the clean energy future and the Clean Power Plan. Pennsylvania should follow their lead.
This blog was coauthored by Lindsay Bass, Manager, Corporate Water Stewardship from the World Wildlife Fund The global food sector uses more than 70 percent of the world’s freshwater supply, largely for growing crops. Through their massive purchasing power, the companies that buy, process and sell the food that we eat have the power to raise the bar for sustainable water use in farming. Through the AgWater Challenge, Ceres and WWF have identified the five key ingredients of meaningful agricultural water stewardship by food and beverage companies. Here is the recipe: INGREDIENT #1: Assess water risks in key agricultural sourcing regions Agricultural supply chains are opaque and complicated. Risk assessments play a key role in helping companies identify which major agricultural inputs and sourcing regions are most exposed to water-related risks such as water scarcity, fertilizer run-off and climate change. Once these risks are understood, companies can then develop a more effective response to them. Example: General Mills, with support from key NGO partners WWF, Rainforest Alliance and The Nature Conservancy, mapped regions where the company’s priority ingredients faced the greatest threats from water shortages. The company then completed a global water risk assessment of all production facilities and growing regions to give a clear picture of the most at-risk watersheds within their supply chain. This work now allows the company to target the most material and at-risk watersheds where it can have significant impact. INGREDIENT #2: Set sustainable agriculture policies that address water risks Overarching policies outline expectations and aspirations for company sustainability performance and provide clear definitions for key terms like “sustainable sourcing” and “water stewardship.” Further, this guidance outlines key performance indicators for procurement staff, and sets fundamental requirements for suppliers and producers. Example: At Kellogg Company, suppliers are expected to support the company’s Corporate Social Responsibility commitments, including Kellogg’s Global Supplier Code of Conduct and Supplier Resource Guide. Responsible sourcing commitments are part of the annual incentive plan and performance against these commitments is part of category managers’ annual compensation. For suppliers, responsible sourcing is embedded in supplier scorecards and integrated into their sourcing events. INGREDIENT #3: Set time-bound goals to reduce water impacts of key crops Sustainable sourcing goals should cover ALL key agricultural inputs and include definitions that highlight water-related criteria and encourage better water stewardship as a way to drive continuous improvement in major commodity supply chains. Example: By 2025, PepsiCo pledges to improve the water-use efficiency of their direct agricultural supply chain by 15 percent in high water risk sourcing areas, using a 2015 baseline. The achievement of this goal will conserve a volume of water that is approximately equivalent to the entire water use of all PepsiCo direct operations. INGREDIENT #4: Support farmers to steward water resources Many farmers lack information, training or financial incentives that may be needed to adjust their farming practices in ways that reduce water risks and impacts. Corporate buyers play a critical role—both directly and in partnership with supply chain partners, NGOs, government and academia—in channeling appropriate educational resources and financial incentives to growers that improve on-farm practices and mitigate their own risks. Example: Diageo has committed to equip suppliers with tools to protect water resources in the most water stressed locations by 2020. In Kenya, the company is mitigating risks with a strategy that focuses on several activities, such as: working with experts to assess climate change impacts on barley growing; investment in water storage capacity for farmers, along with implementation of WASH projects with farming communities; and convening a wide range of stakeholders, including NGOs, other businesses and government agencies, to form the Nairobi Water Roundtable, a collaboration among stakeholders on solutions to the water security issues in the area. INGREDIENT #5: Collaborate at the watershed level to protect resources in high-risk areas When there is water scarcity and poor water quality in a watershed, everyone is at risk, farmers, businesses and communities alike. While corporate efforts to mitigate water risks inside their own factory walls is vital, any efficiencies gained can be wiped away through poor management of collective water resources by other water users. Food companies must play a role in helping catalyze collective solutions to water challenges, including supporting public policies that lead to more sustainable water management. Example: General Mills and WhiteWave Foods are advocating for better water policy in specific agricultural sourcing regions with high water risks via water-centric policy platforms, including the Ceres Connect the Drops platform in California and the Colorado Basin’s Business for Water Stewardship effort. Ceres and WWF urge other food and beverage companies to take up the challenge and embrace water stewardship beyond their four walls, deep into their supply chains. It’s time for the sector as a whole to address freshwater, the precious resource that all agricultural supply chains hinge upon.
Access to safe drinking water is a colossal challenge globally and no place more than in Sub-Saharan Africa. Among the many problem areas is northern Ghana, a remote savannah dotted with small villages, tin-roofed mud huts and 800,000 people who drink bacteria-laden water. Most of the villages get their water from murky-brown surface water sources known as dugouts. Here in the village of Yepala, nobody likes dugout water. “Terrible,” said Awabu Mageed, standing outside her small hut, with goats and young children scampering around her. “Even when you boil it for tea, it isn’t good.” It’s also contaminated with fecal matter, which is why 15 to 20 percent of the children under 5 in this region suffer from diarrheal disease that can kill. When Kate Cincotta visited northern Ghana as an MIT engineering student, she saw a big opportunity for improving the drinking water. And it wouldn't require more costly engineering solutions like deepwater wells. Cincotta came up with a solution that is far simpler - provide local women with low-cost equipment and train them to use locally available products - chlorine and potassium alum powder - to treat the contaminated water and make it safe to drink. Eight years ago, Cincotta launched Saha Global a Boston-based nonprofit empowering local women in extremely poor villages like Yepala to treat the contaminated water - and make a little money in doing so. Here’s how it works: each of the participating women receives three free water drums, a bunch of smaller blue buckets and basic training on treating and selling the water. They also receive regular monitoring support from five local Saha Global staffers who travel from village to village every day on small motorcycles. Cincotta has been painstakingly careful in thinking through the concept, beginning with her choice of women - not men - to run the businesses. “Women are the water experts because they’re the ones who collect the water every day. They’ve been doing since they were 4 years old,” she said. She also recognized the importance of locating the water treatment centers near the dugouts, which women were visiting up to six times a day to get their water. This way, it wouldn’t require a big behavior change then to switch from dirty water to clean water. Today, 93 water businesses are up and running, serving 46,500 people. “Every operation we started is still running,” says Cincotta, who is providing about $800-$1500 of materials per village, which less than half the cost of drilling a well, which also requires maintenance. To be sure, nobody is getting rich. The women work about five hours a week, netting about $1 to $2 a week, nothing to sneeze at in an area where subsistence agriculture is about the only type of employment. Emboldened by her success in this region that has no electricity at all, Saha Global has more recently ventured into the household solar business. More than two-dozen businesses are now running small solar charging centers, which use small solar panels to provide green power that the villagers can use for a small fee. At one of the charging stations I visited, a half-dozen villagers were re-charging their cell phones and a few more were re-charging batteries for their solar lanterns. But clean water continues to be Cincotta’s primary focus. Just two weeks ago, in fact, her group received a $100,000 grant from the Mulago Foundation to expand the clean water project and ensure that the existing 93 businesses can be self-sustaining. Cincotta says a key priority right now is understanding her existing customers. “I’m really focused on behavior change, what it will take to make sure people drink our clean water all the time,” she said. The challenge was made clear during my visit to Yepala. It had rained the past couple of days, so rather than walking 10 minutes to get their clean water, several families had opted to save 10 pesetas by using the rainwater they captured from their tin roofs. I also asked Cincotta if she’s considered changing her business model, which is premised on donating materials to the villages up front. Even as more NGOs are shifting to micro-financing models, she says she has no plans to change her strategy. “People cannot afford to purchase water at a price where the women would be able to pay back the cost of the tanks,” she said. “We want to provide clean water to the poorest of the poor and, unfortunately, there is a huge market failure when it comes to water for this population.” Read the post at Huffington Post All images courtesy of Saha Global www.sahaglobal.org
What image does the term “water infrastructure” conjure up for you? Likely something engineered, such as a pipe carrying water, a reservoir storing drinking water or a treatment plant purifying wastewater. But the definition should actually be broadened to include natural water infrastructure that was moving and treating water long before pipelines and anaerobic digesters even existed. California has started down this “new” (old) way of thinking – and it’s welcome news. A law enacted late last month rethinks our state’s traditional approach to water infrastructure. Assembly Bill 2480, authored by assembly member Richard Bloom and sponsored by the Pacific Forest Trust, cements as statewide policy a recognition that watersheds are fundamentally important to California’s water infrastructure – just as important as dams, reservoirs, canals, pumps and pipes. With AB 2480 coming into law, five watersheds in Northern California – which together supply 25 million people with drinking water, irrigate 8 million acres of farmland and provide 85 percent of the water that flows into San Francisco Bay – can now access the same financing tools that we use to maintain and improve “gray” infrastructure. The law is an important step in reversing the tide of poor land management around these watersheds, and it will allow the state to better finance watershed conservation and restoration. This infrastructure approach has enormous potential to improve the quality and reliability of the state’s water flows, and it’s a mindset that we urgently need to apply to other water challenges in California. A case in point is the California Water Commission’s (CWC) draft regulations for water storage projects, currently in the final stages of development. As the Water System Investment Program (WSIP) takes shape, we have an opportunity to show how ground and surface storage can work together to increase our water system’s resilience by providing equal footing for both options to be eligible for $2.7 billion in funding made possible by Proposition 1’s passage in 2014. This means our overdrawn groundwater basins, which have triple the storage space of all of our surface reservoirs combined, could do what they do best – store water. Ceres and nine of our company partners, including Driscoll’s Berries and Fetzer Vineyards, engaged with policymakers last spring to help shape these regulations. We urged the CWC to ensure that the regulations set a framework that provides an equal funding opportunity to smart, cost-effective groundwater recharge storage projects. Groundwater projects are often more cost effective than surface water projects. We were encouraged by the response at CWC hearings and by a subsequent draft of the WSIP, particularly in terms of offering technical and financial assistance to support smaller projects. Unfortunately, the most recent draft of WSIP regulations released last month will make these smaller, innovative groundwater projects difficult if not impossible to receive funding. The latest draft regulations require an extremely complex project analysis in order to submit a proposal seeking funding. And because CWC staff is proposing only one funding round for the entire pot of $2.7 billion in 2017, many innovative smaller-scale projects will not have the time to develop project proposals. A number of environmental groups fighting for smarter water policies have detailed how this proposed process and timeline will inhibit California from moving forward on groundwater storage. A letter these groups submitted on October 3 explains how a two-step pre-application process – which was removed from the latest WSIP draft – gives proponents of smaller projects a better chance to determine if their project might be eligible and if the public benefits are sufficient to justify pursuing the full application process. The groups also argue that the latest draft minimizes the impacts of climate change on water supplies, which serves to downplay the greater resilience of groundwater storage over surface water storage. Moreover, the latest regulations underplay cost-effectiveness in determining which projects receive funding. Groundwater projects are often more cost-effective than surface water projects, so this change in criteria further hinders groundwater projects’ approval prospects. Groundwater projects are often more cost-effective than surface water projects. Final comments on the WSIP regulations were due last week, and there will be a public hearing on October 18 about the comments and the current state of the regulations. There is still an opportunity for the California Water Commission to craft the regulations in a way that will give equal consideration to groundwater and surface-water projects. As evidenced by the passage of AB 2480, the legislature has recognized the enormous value of the nature-based infrastructure to the state’s water future. Hopefully the CWC will show the same wisdom. Read the post at Water Deeply
Ceres is launching a new Q&A series as part of its Clean Trillion campaign aimed at elevating clean energy investments globally by an additional $1 trillion a year in order to minimize damaging climate change impacts. The series will focus on investment thought leaders who are paving the way in this fast-growing space. Today’s interview is with Monika Freyman, director of Investor Initiatives, Ceres’ Water Program about the launch of a new ‘green’ standard for water bonds. While the Clean Trillion has focused primarily on clean energy investing, there is also a pressing need for bigger investment in climate resilient water infrastructure. Ceres: First, can you tell us what is a water-related green bond? Monika Freyman: Green bonds generally are a tool for raising capital for projects that deliver environmental benefits. A water-related green bond specifically could finance sustainable water infrastructure projects that are resilient to climate change. For example a water-related bond could help water utilities build infrastructure (i.e. catchment and delivery systems) to cope with more extreme and unpredictable weather patterns, or help companies implement water efficiency measures. Currently, there is an enormous supply and demand gap for financing water-related projects and infrastructure in the U.S.: $1 trillion dollars over the next 25 years, according to the American Water Works Association. So there is a big need to invest in water projects, but also ensure that these investments are sustainable and climate ready. Hundreds of water infrastructure projects and billions of dollars are at risk of being stranded or impaired due to water and climate related risks. Keith Schneider has an excellent article in Circle of Bluesummarizing what’s at stake. The key here is that water-related green bonds are used to finance projects that are adaptable and resilient to growing climate impacts we’re seeing, such as last week’s deadly flooding from Hurricane Matthew in North Carolina. C: Why a certification standard for green bond water projects? F: Nearly 10 percent of the green bonds issued to date are focused on water projects. So a standard that ensures these water projects are indeed credibly ‘green,’ using science-based criteria, is essential to promote the growth of this market. In addition to helping investors deploy capital more rapidly towards water infrastructure, it also raises awareness with issuers, whether corporations or municipalities, that this type of financing is available. I’d like to think the standard connects these various parties in a more a credible and scalable way. In other words, certified green bonds for water provide assurance to investors that projects have undergone rigorous climate resilience planning and could potentially attract new financial flows to help fill the trillion dollar supply and demand gap. C: Who created the standard? F: The standard was created through a rigorous science based process led by the Climate Bonds Initiative in conjunction with the Alliance for Global Water Adaptation, (AGWA) CDP, Ceres and the World Resources Institute (WRI). The process involved dozens of global water experts working together for over a year and ultimately the standard had to be approved by CBI’s board. C: Have you any seen any examples where a certified green bond has been issued successfully for water projects and can serve as a model for more activity? F: The San Francisco Public Utility Commission is a noteworthy example of what we hope to see in the future. Proceeds from the $240 million Wastewater Revenue bond will fund sustainable stormwater management and wastewater projects. The research and analysis firm Sustainalytics provided third-party verification. The certification reassured investors that their money would go toward climate ready and resilient projects. That meant making sure that mechanisms such as climate readiness, planning and good water stewardship were in place. Ceres and its consortium partners developed a Verifiers and Issuers Guide using the SF PUC’s bond as an example of how green bonds can be certified. We hope this guide will help smooth the way for other water utilities follow San Francisco’s lead. C: What are the next steps? We will be encouraging cities, utilities and companies to use the standard when they issue green bonds for water-related projects. Ceres and consortium partners will be educating potential issuers and investors on the benefits and ease of verification. In addition we are contributing to the development of a certification standard related to nature-based water projects, which will eventually be layered onto the existing standard. We’d like to see more companies use the standard for water projects within their operations. We just saw Apple use a green bond recently to raise $1.5 billion to finance renewable energy. Corporations could also be using green bonds for water efficiency. That would be really great. C: Are green bonds gaining momentum? F: There is strong momentum and interest in green bond issuances generally. The market is growing rapidly, albeit from a nascent low base. About $100 billion of green bonds are expected to be issued this year, up from $40-odd billion last year. It’s still a fledgling market. It’s not out of the nest, yet. But it has the ability to scale very rapidly, once there’s more assurance and credibility in the market. I am optimistic that this market will continue to evolve quickly. Read the post at Forbes Sustainable Capitalism Blog