BE Blogs: A Voice for Responsible Business
As part of our sustainability pledge to discuss best practices openly and honestly, we share insights that allow others to effect change in their community. While companies have responsibility to drive change internally, we believe they also can add to their insights and impact by sharing their experience with others.
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I read a figure from Ernst & Young last week that shocked me. In a recent survey, nearly 40% of tax department respondents inside of companies that have a sustainability strategy were completely unaware of any green tax incentives that may be available to them. To me, this says two major things:
One: sustainability departments are insufficiently aware of the many federal, state, and local tax incentives that are available to them.
And two: sustainability is good business, even without tax savings, for many companies.
To address that first point, I encourage you to take a look at the following resources, which may help you find incentives that are relevant to your business:
- Energy.gov – a federal listing of energy savings incentives
- DSIRE – The Database of State Incentives for Renewables and Efficiency
- EPA Funding Opportunities – though not directly tax-related, this is a list of resources for getting funding for green facilities projects
Additionally, there are far too many local incentives to list, but you should look to see what is available in your own city.
And on that second point, I’m somewhat encouraged that such a large group of companies realize that sustainability is a vital key to their success, even without governmental help. Though I hope that more businesses take advantage of what is available so that they will continue to grow.
What incentives does your company enjoy? And do you know of any more resources to help other businesses find them? If so, please share with us in the comment section below.
Are you having trouble getting executive buy-in for corporate social responsibility (CSR)? Converting doubters to believers is difficult, even more so with analytically-minded CFOs. However, the strong financial leadership of a CFO will spread the impact and support of your CSR project throughout the company and community.
CFOs on CSR: Discover the Root of Their Doubts
The key to gaining CSR converts is uncovering the root cause of their doubts. In today’s post, we’ll look at three objections a CFO might have and suggest some ways you can help them overcome their resistance. In future posts, we’ll take a look at issues that your colleagues in other job functions may have.
If a paradigm shifts in corporate reporting, would your company or shareholders notice? On January 27, 2010, the Securities and Exchange Commission (SEC) issued guidelines to encourage public companies to disclose climate-related issues facing their business.
BusinessEarth has long believed that significant and sustainable changes will only occur when environmental and social impacts are reflected in a company’s bottom line. With the SEC’s guidelines, we are one step closer to seeing if this is the case.
The SEC has always required companies to evaluate the impact that financial and legal risks have on their liquidity, capital resources, or results of operations, and disclose the risks if material. Until recently, climate risk was viewed as either too remote or too uncertain to disclose. With the new guidelines issued, we should begin to see climate risk being discussed in more SEC filings.
What is Climate Risk for Companies?
Specifically, the SEC’s interpretative guidance highlights the following areas as examples of where climate change may trigger disclosure requirements:
- Impact of Legislation and Regulation: Will climate related laws and regulations such as the Waxman-Markey energy/climate bill impact your business in a material way?
- Impact of International Accords: Are there international laws, such as the Kyoto Protocol, that will materially affect your operations?
- Indirect Consequences of Regulation or Business Trends: Will failure to lower your emissions reduce customer demand for your product?
- Physical Impacts of Climate Change: Will the effects of climate change limit your ability to source raw materials, invest in infrastructure, etc…?
What Gets Measured Gets Managed
The relevance of climate risk has expanded from investors with moral or policy interest to investors with a financial interest. A company’s financial condition could depend upon its ability to avoid climate risk and to capitalize on new business opportunities by responding to the changing physical and regulatory environment.
King Coal and Climate Regulations
The coal industry demonstrates the risks and impact companies can face from emerging and expected climate regulations. On July 25, 2007, a front page Wall Street Journal article Coal’s Doubters Block New Wave of Power Plants spotlighted the increasing difficulty of building coal-fired generation. The article pointed to proposals for new coal-fired power plants in Texas, Florida, North Carolina, Oregon and Minnesota that have been cancelled because
“States have concluded that conventional coal plants are too dirty to build.” The article reported that “the rapid shift away from coal shows how quickly and powerfully environmental concerns, and the costs associated with eradicating them, have changed matters for the power industry”.
In a search of SEC 10K filings over the past year (May 2009 – May 2010), we were shocked to find that only six companies mentioned the phrase “Climate Risk”. With the April 2010 BP oil spill in the Gulf of Mexico on everyone’s minds, it makes us wonder, what will BP and other oil companies disclose in upcoming SEC filings? Do you think that companies will provide more disclosures or will companies ignore the issued guidelines? After the dramatic drop in BP stock, shareholders may leave public companies no choice but to disclose more of the climate and social risk inherent in their operations.