Pepsi is a giant corporation - $40 billion in annual sales, 185,000 employees and is the 21^st largest US Company by Market Capitalization. Pepsi’s CEO Indra Nooyi has announced that the company will reduce electricity usage by 20% and fuel consumption by 25% before 2015 with specific examples of where this will occur. This is a company that is growing! Further, Pepsi is one of the largest purchasers of renewable energy!

Wal-Mart has $378 billion in annual sales, 2,100,000 employees and is the 2^nd largest US Company by Market Capitalization. “Wal-Mart is to be supplied 100% by renewable energy, and one of the ways we hope to achieve this is by establishing a Greenhouse Gas (GHG) Network to study and actively reduce our carbon footprint. Our GHG Network works to create business advantages from measuring, reducing and eliminating the use of fossil fuels in our stores, supply chain and by customers.”

How can the largest companies in the world focus on sustainability and carbon footprint reduction? Why would their shareholders support this action?

The true answer is it is smart business – Sustainability is the way to succeed.

Would you rather be:

    OR        ?

  OR ?

 OR?

It is a simple question with a simple answer, sustainability equals long-term success.

Tell Barack Obama that we have started on Cap and Trade and now need a centralized authority to bring it together.

As we discussed in the past, Ten Northeastern and Mid-Atlantic states will cap and then reduce CO2 emissions from the power sector 10% by 2018 through the Regional Greenhouse Gas Initiative.

The states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, and Vermont are signed the RGGI agreement. The reduction level is too little for our liking but definitely a start.

The Western Climate Initiative, launched in February 2007, is a collaboration of seven U.S. governors and four Canadian Premiers. These entities have issued their design recommendations to reduce their 2005 level of Carbon Emissions by 15% before 2020. Again a good beginning, but not nearly where we need to be.

Then there is the U.S. Mayors Climate Protection Agreement, which has 358 Mayors pledging to meet or beat Kyoto goals in their communities. One example is the City of Kansas City, Missouri, which committed to reducing greenhouse gas emissions from City government operations 30 percent below year 2000 levels by 2020 and reducing community-wide greenhouse gas emissions 30 percent below year 2000 levels by 2020.  

Even colleges are getting involved through “The American College & University Presidents Climate Commitment”

which represents over 551 College and University Presidents has agreed to set reduction targets for their institutions greenhouse gas reductions in 2009.

What this tells us is that forward thinking entities have accepted the need for reduction of greenhouse gases. The advantage to being late to the party is that we can learn the lessons of EU cap and trade. Unfortunately, if Washington does not step in to bring it all together we will have some painful steps to unify these actions.

Unless you run a manufacturing plant, you’ve probably never heard of “power factors.” Before compact fluorescent lights (CFLs) started selling in volume there was no reason for an average consumer to care. I’m going to attempt to explain what “power factor” means and why it’s important to the environment.

Different products like toasters, incandescent lights, computers and CFLs consume power differently depending on their power factor. A power factor of “one,” for example, is considered “real” power, which means the number of watts it draws from the power company is equal to what it actually uses. Products like incandescent lights, toasters and hair dryers all have a product factor of one and all use “resistive” circuits.

Products with lower power factors, such as most CFLs, actually draw more current than what is measured by the meters on most homes. You may be thinking, “Wow, cool, I’m not getting charged for energy that I’m using.” CFLs all use capacitors that are constantly recharging, which causes them to have a low power factor (LPF) of about .5. So a LPF 30 watt CFL is actually drawing 60 watts of power, but you only pay for 30. Weird, I know, but here’s the problem: Just because we don’t have to pay for the power doesn’t mean that coal, uranium or some other fossil or non-renewable fuel isn’t being used. Considering that lights make up 60% of the average household’s electricity usage, this is a big deal.

Is there a solution? Yes, there are a few forward looking companies, like PureSpectrum, that have created high power factor (HPF) CFLs. They use micro-technology that balances the “lagging” current from the CFL’s capacitor with a “leading” inductor, within each light. PureSpectrum is introducing a new HPF CFL in February, 2009. As a side benefit, their lights contain a lower amount of mercury (1.2 milligrams) and still come with an 80,000 hour warranty.

Are LPF CFLs bad? Far from it. As compared to incandescent lights (when measured in real power), even LPF CFLs are two times more efficient. But it’s important to note that HPF CFLs are four times more efficient.  

PLEASE make sure you don’t throw your old CFLs in the trash.  An online company called Conservation Mart offers different recycling options and a bunch of terrific energy-saving products.

There is definitely an arbitrage between the price of CCX offsets and RECs. Let’s first establish that we are talking about a commodity that rids the world of GHG. The common goal of RECs and offsets are to reduce CO2 and other GHG. After all, the elimination of a metric ton of CO2 has the same positive effect no matter where it comes from.

Here’s what I find amusing, RECs and certain sexy offsets are like wine. They seem to defy the economic models that say lower prices should raise demand. My old economics teacher loved to share the story of the wine merchant who raised his prices in order to increase the snob appeal and sell more wine. In the US voluntary market, RECs and Gold Standard offsets have more snob appeal and demand a higher price ($20+). At the same time the CCX market price for offsets is currently under $2.00.

The European market is exactly the opposite. Offsets on the European Climate Exchange averaged at around $29US in 2008 and are trading for about $20US currently. The current average price in the UK voluntary market is $16US a metric ton. This pricing scenario makes sense—make the offset price for big polluters high so they are encouraged to lower their emissions—and make the offset price available to volunteers lower to encourage more demand for C02-reducing projects.

Cap-and-trade is coming to the US and the folks that are dealing in RECs are going to experience a paradigm shift. Some say that offsets in the US will reach $40 or more. As an offset provider that’s currently selling voluntary offsets at $2.00, I look forward to that day.

Businesses, by virtue of their actions, set an example for the communities where they reside (whether they’re bricks and mortar or cyber) in the fight against climate change. We have been fortunate to work with companies that are leaders in their communities. Many of our clients are the first to become Carbon Neutral and they benefit their stakeholders: employees, customers and suppliers. They also pave the way and educate, which is a tremendous part of the process. The more people who understand and are aware of climate change the more we all benefit.

Especially in times of economic turmoil, it is important to remind others that climate change will not go away if ignored.

Often, a sustainable company wants to act locally. Local offset projects can be more relevant. Despite, the scientific equality to the environment, if a project closer to the business aids understanding and ownership of the offset–all the better. We appreciate the importance for local companies to find offsets that resonate with their stakeholders.

Verus only retires offsets that are registered on the Chicago Climate Exchange (CCX).  The CCX has projects in 31 States and additionally 14 countries outside the US. If a company wants to offset locally we should be able to find a local project to consider. CCX has projects that are agricultural, forestry, renewable energy, methane and others. A company should not have a problem finding an offset that suits their needs.

Please contact us to discuss.