Is US Federal GHG Regulation Still 5 Years Away?

Is US Federal GHG Regulation Still 5 Years Away?

Passage and implementation of a US cap-n-trade bill is perhaps 5 years out. At the EPA Climate Leaders meeting last week, Ralph Izzo, CEO of PSEG, Yale Professor Dan Esty, and others confirmed a similar time frame. Congressional timing and political resolve are significantly impacted by other pending bills (health care, jobs, finance reform), the deficit, Climategate, and the 2010 and 2012 elections.

Experts are split on whether direct regulation by the EPA through its endangerment finding will pass legal challenges. Experts tell us that lawsuits against the EPA are highly likely and the key question is whether a federal judge would issue an injunction to halt any direct EPA regulation.

It's our view that regulation gyrations will continue to be newsworthy through 2010, but actual regulation won't be passed and implemented for years. Large companies will push aggressively to stop the EPA from regulating directly without Congresionally-passed GHG laws. Meanwhile revenue-hungry states like CA and other countries will push forward with their own regulations.

What is your view on this? Email me and let me know.


Concerns Grow About WRI Scope 3 Working Draft

WRI recently released for comments drafts from the working groups on Scope 3. Two drafts were released: one for Product Life Cycle accounting and one for Corporate Scope 3. Scope 3 emissions often make up the largest part of an organization's footprint, and many organizations want to report and reduce these emissions. The Corporate Scope 3 reporting draft break emissions into 18 categories, including generated waste, business travel, distribution of products, and disposal of sold products.

A number of large companies and consultants at the EPA Climate Leaders meeting expressed concern about the complexity of these 100+ page protocols and the ability to financially justify the data gathering. Two large retailers and a global computer company told me the protocols are becoming needlessly complex, unaffordable to implement and less relevant because of lack of comparability across periods and companies. I did not find anyone supportive of the current drafts, but some were hopeful about future drafts.

Scope 3 is clearly an important area. Hopefully, WRI will continue to hone this standard and define one that is implementable and as widely accepted and respected as the Scope 1 and 2 standards.

Don't expect any increase in public scope 3 reporting by companies until WRI finalizes the standard, which could take 1-2 years.

Pricing Trends for GHG/ECA Software - Take our Survey

Are you considering purchasing GHG/Enterprise Carbon Accounting (ECA) software in the next 6 months? Groom Energy published a report reviewing 51 software vendors and identified 7 Emerging Leaders.

If you are with a large company (sorry, no consultants or software vendors), then consider taking our 10 minute online survey about key features and pricing. In return, we'll provide you a summary of what we learn about key features, the business justification and pricing. This is a free survey and is a time effective way for you to learn about the latest purchasing trends. Email Paul Baier at pbaier@groomenergy.com for the online survey link.

Notes from Day 1 at EPA Climate Leaders Partners Meeting

This week I attended the EPA Climate Leaders (CL) Partners meeting in National Harbor, MD (near Washington DC). EPA Climate Leaders is a very well respected GHG voluntary reporting program run by the EPA with over 200 Fortune 500 companies participating. Over 250 people attended the event, many from large companies such as GE, Staples, Genzyme, Boise, UTC, Sun Microsystems, Sprint, Anheuser-Busch and many others.
My Day 1 notes:

The EPA CL Program continues to grow, but changes to program
- EPA Climate Leaders program continues to grow (67 new partners this year – 17 large companies, 50 small companies)
-EPA is currently accepting feedback on program changes (changes are expected to be announced in January). Proposed changes include move to use absolute reduction goals only (drop intensity goals), public publishing of reports, more programs for small business, and incorporation of scope 3 (when guidance is finalized from WRI). Lots of discussion and debate about pros and cons of absolute vs. intensity/relative goals

Federal cap-n-trade is _at least_ 3 years away from implementation in the States
- This is based on Q&A with speakers, hallway discussions, etc.

Scope 3 work at WRI is getting more complex, skepticism increasing
- I spoke with 3 people who attended the WRI scope 3 working group meeting this week. The concern is that the effort continues to get more complex (current draft is apparently 125 pages) and dominated by LCA purists. One person mentioned concerned that a poorly received and implemented Scope 3 effort hurt the well received scope 1 and 2 efforts by WRI

Numerous companies are actively looking at Enterprise Carbon Accounting software and considering investments in Q4 or Q1.

Frustration with numerous NGOs was expressed privately (“pay to play”, bullying, etc.). This is a growing trend that the NGOs need to get ahead of if they want to keep their credibility (especially in light of the credibility hit scientists took with the leaded climate emails)

Headed to EPA Climate Leaders Partner Meeting

I'm headed to EPA Climate Leaders Partners meeting in MD. Topics of interests
- what are company investment priorities in 2010, and are these above 2009 levels
- which firms are considering buying GHG/Enterprise Carbon Accounting software in 1H '10
- info on new CL program (absolute goals only?)
- trends and investments in Employee Engagement and Green Supply Chain
- trends/interests/business case for purchasing offsets/REC
- trends in combining carbon with energy management internally (to give energy spend more visibility and to give allow sustainability to leverage ROI from energy spend

Walmart Publishes Weighting for Supplier Assessments

Weights for Walmart's Supplier Sustainability Assessment (SSA)

Walmart has implemented a numerical sustainability assessment of its suppliers based on 15 questions. Suppliers receive a sustainability assessment score between 1-100. Walmart recently published the details of the scoring here, and a summary of weighting for the different evaluation areas shows where Walmart is placing its emphasis:

* 30% for GHG footprint and GHG reduction goals
* 30% for packaging, solid waste and water reduction
* 20% purchasing policy and product certifications
* 20% social compliance and community

Walmart has demonstrated impressive leadership with the transparency and breadth of this program. If you supply to Walmart you obviously need to be familiar with this material, but it is also a very useful model for other companies considering measuring their suppliers (especially tier 1 suppliers) on sustainability. A number of companies are considering a similar approach. Email us if you have questions in this area.

Pricing Trends for GHG/ECA Software - Take our Survey

Pricing Trends for GHG/ECA Software - Take our Survey

Are you considering purchasing GHG/Enterprise Carbon Accounting (ECA) software in the next 6 months? Groom Energy published a report reviewing 51 software vendors for Greenhouse Gas (GHG) or Enterprise Carbon Accounting software and identified 7 Emerging Leaders.

If you are with a large company (sorry,no consultants or software vendors), then consider taking our 10 minute online survey about key features and pricing. In return, we'll provide you a summary of what we learn about key features, the business justification and pricing. This is a free survey and is a time effective way for you to learn about the latest purchasing trends. Email Paul Baier at pbaier@groomenergy.com for the online survey link.

IHS Continues Acquisition Efforts with ESS: Strengths Offerings for Heavy/Medium Emitters

We recently had a briefing with a number of executives from IHS about their recent acquisition of ESS. IHS has acquired a number of environmentally-related firms in the last few years (ESP, Dolphin, EnvironMax) and is one of the Early Leaders in Enterprise Carbon Accounting software for tracking and managing carbon data. ESS is the latest and deepens a robust set of offerings for heavy and medium emitters of carbon, and IHS told us they continue to look for promising acquisitions.

We had numerous questions about the integration of ESS, especially for companies which don’t currently have any IHS products. For these prospects, IHS will conduct a needs assessment as part of the sales process to determine which of its environmental and Greenhouse/Enterprise Carbon Accounting offerings make the most sense. Sales reps will carry all products. From a development standpoint, the ESS and other IHS products are all Microsoft-based and IHS will continue to maintain product roadmaps for each product and build integration elements. Deployment options remain varied from on-premise, to dedicated hosted, to SaaS hosting.

IHS continues to build upon a strong offering for heavy emitters (organizations with a large scope 1 emissions) and heavy EHS requirements. Firms which are scope 2 centric (i.e. mostly office buildings, assembly shops, warehouses, and possibly fleets) will need to evaluate their EHS needs in light of the deep air and compliance depth offered by IHS. Firms concerned about the financial viability of software vendors will find solace in the financial strength of IHS ($1B in revenue, $110m in cash on hand).

CDP Accrediation for GHG/ECA Software; PE and CA

Carbon Disclosure Project (CDP) started a program for software accreditation for Enterprise Carbon Accounting or Greenhouse Management software. The program is very new and few details are available. It is unclear what is tested, what assurances the accreditation offers companies considering investments in software, and the cost to vendors. Two vendors have completed accreditation; PE International and CA.