When you live with 5 million other people on a relatively small island, finding ways to live more sustainably isn’t so much a luxury as a necessity.

That’s why Singapore—which has the third greatest population density of any sovereign state in the world—has become something of a pioneer in finding ways to live in a more sustainable manner.

Start with water. For years, Singapore has relied on imported water from Malaysia to provide 40 percent of its water supply.

To become more self sufficient, Singapore has invested billions of dollars in membrane filtration technologies that allow wastewater to be reclaimed, filtered, and transformed into high purity potable water called NEWater. This is in addition to heavy investments in desalination plants and rainwater-catching reservoirs that further reduce its reliance on imported water.

Another area where Singapore excels is building efficiency—an area with huge potential impact, given that an astounding 90 percent of the population lives in some form of high-rise condominium. Singapore has set an ambitious target of greening at least 80 percent of its buildings by 2030, including existing stock.

Clean technology advancements are also allowing Singapore to make great strides in transportation, particularly around the adoption of electric vehicles (EVs). Since roughly 85 percent of Singapore’s power supply comes from natural gas, EVs provide a cleaner solution compared with conventional oil burning vehicles.

And while EVs typically travel a shorter distance compared with conventional vehicles, that’s not really a concern on a 26-mile wide island.

Singapore-based clean tech company Greenlots is developing the best way to charge these EVs. Since 2008, the company has been committed to designing and delivering hardware and software to enable utilities, municipalities, electric vehicle manufacturers and distributors and other private businesses to install, own and operate their own EV charging network. Already, Greenlots has established charging stations in major parking lots in the city, including those at Bedok Point Shopping Centre and Kovan Residences.

By investing in clean technology innovations, Singapore is able to tackle multiple areas that impact its future. Its forward-thinking design solutions to environmental problems are sure to yield benefits both today and tomorrow.

Susan Gladwin leads the Autodesk Clean Tech Partner Program, which provides clean tech innovators powerful software and opportunities to help them develop solutions that address our most pressing environmental issues. In North America, Europe, Japan and Singapore, the Autodesk Clean Tech Partner Program offers $150,000 of Autodesk software for $50 (JPY 10,000 in Japan).

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Israel has earned a leadership status in the international water arena, but to stay at the forefront innovation must keep pushing forward. A joint project by Israel NewTech, the Neaman Institute and the Israeli Export Institute has been launched in order to map out the needs for new water technology innovations in the largest industries in the world. The preliminary results will be presented in the beginning of next month at a conference at the Israeli Export Institute.

“Israel’s water sector must be very cautious not to rest on its laurels, but to continue to act to cement its leadership,” said Dita Bronitzky, CEO of Ormat, a leader in geothermal energy, at a recent conference run by The Marker magazine on environment and industry.

Israel NewTech, The Israeli Export Institute and the Samuel Neaman Institute for national policy research, are also thinking about how Israel can further leverage its success in the water sector, that’s why they have joined together to work on improving the competitiveness of Israel’s water sector. One of their joint projects maps different industrial sectors with high water use, which need technological innovations to increase efficiency, and even to survive in their competitive markets.

This joint research project was launched in July 2011 and is meant to stretch out over a year, led by Dr. Gilead (Gili) Fortuna, head of the Center for Industrial Excellence, and a senior research fellow from the Neaman Institute. Fortuna brings with him rich experience in Israeli industry, having held senior management positions in the past at TEVA and Israeli Petrochemicals, and he is also one of the entrepreneurs behind the successful water purification company Aqwise. Aiding in the project is Shiri Freund Koren, his research assistant.

“We examine international industries which are heavy consumers of water and whose growth rates can be significantly impacted by improved innovative water technology,” explains Fortuna, “For example the gas and oil production industries. Today their need for vast amounts of water greatly impacts production. The deeper the well the more water they need to consume in order to produce the gas or oil. The world always turned to the cheaper sources for gas and oil production, but today the situation necessitates turning to the more expensive source. One of the main reasons for this high cost is the huge expenditure on water use and treatment that the process demands.”

The research outlines seven industrial sectors which are heavy consumers of water and in need of innovative water technologies to make their processes more efficient:
1. Gas and Oil
2. Mining
3. The pharmaceutical industry
4. Heavy metal processing
5. The semiconductor industry
6. Food Industry
7. Tourism industry (hotels, swimming pools, spas, sites that serve global tourism)

The project is meant to bring a deeper understanding of each sector’s needs, while pinpointing the challenges that require solutions. In other words, the objective is to map needs in different industries in order to create market-focused Israeli solutions, which will be in demand globally.

In order to support the research endeavor the Samuel Neaman Institute is cooperating with Israeli academics, under the supervision of the noted water expert from the Technion (Israel’s leading technology university), Professor Raphael Semiat.

The first two chapters of the project, on the gas and oil production industries and the mining industry, will be presented to a list of “who’s who” in Israel’s water industry at a conference which will take place at the Israeli Export Institute on February 7th, under the title: Water Challenges in Industry – Leveraging your Technology. Dr. Fortuna emphasizes that his motivation to hold the conference now is to create an open ongoing dialogue with Israeli water companies and get their feedback and guidance. “This will make our work more business oriented to the industry’s real needs and its abilities to implement.”

In parallel to the research, practical steps have begun to be taken to implement the initial learnings, and thus Israel NewTech and The Israel Export Institute have begun to create connections and mediate with the mining industry. An Israeli delegation visited Chile recently, where there is a large mining industry which is in need of technological solutions (click here for the post on this visit).

In addition, the three bodies responsible for the research project are working on identifying local partners in the different target countries, in order to facilitate the penetration of Israeli water companies to those industries which were mapped out in the research as needing innovative technologies. Likewise, in each sector a consultant with practical experience on the ground is employed. For example, for the pharmaceutical industry Meirav Avigdor, who manages the ecological department at TEVA, will provide consulting. The project begins with research, but will result in successful business implementation.

Article by Israel NewTech.

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This is the second part of my blog on produced water (you can read the first part here) which will look at the market – the players and technologies – in some more detail.

Produced water is a term used to describe the wastewater that’s brought to the surface during the oil and gas production process. For conventional oil and gas (onshore and offshore), it refers to the water that already exists in the oil reservoir and the water that’s been injected to force more oil to the surface. In unconventional oil and gas projects, such as hydraulic fracturing (fracking), coal bed methane (CBM) and oil sands, it refers to the wastewater produced by the fracking process (flowback water) and the process water used to recover bitumen from the oil sands.

Produced water is a hazardous waste stream. Broadly, it’s highly saline and contains hydrocarbons and other chemicals and it must be managed in line with local regulations which can differ greatly between states and countries. But its exact nature differs depending on the type of oil and gas field it has come from.
Most produced water has typically been disposed of (after treatment) through reinjection into deep aquifers because that’s been the cheapest and easiest option. But a number of factors including technological innovation, water scarcity and rising costs of disposal (if the water needs to be disposed of offsite), mean that for many projects, it’s becoming increasingly cost effective to treat it to a level where it can be reused or recycled.

The treatment market can be categorized into three main sectors: primary, secondary and tertiary.
The technologies used in the primary stage separate the oil from the water. Those used in the second stage remove smaller droplets of oil. Tertiary filtration reduces the amount of oil in the water even further.
These first two markets are well established and, unsurprisingly, mostly dominated by a handful of big companies, such as Cameron, GLR/Exterran, Veolia and Siemens. (Processes used at these stages are not overly complex though so smaller, local players, particularly in emerging markets such as Brazil, are gaining traction.)

Where the real growth is forecast is in an emerging fourth category – advanced treatment and desalination.
By reducing salinity, the water can be reused in fracking fluid or customized to enhance oil recovery (EOR). Customizing it for EOR means creating a specially formulated water which is injected into a maturing well. The water peels oil away from the clay, further increasing the recovery rate. In both cases it reduces the amount of fresh water that needs to be taken from local sources. And it means this wastewater becomes a valuable resource to be recycled and reused, rather than disposed of.

Desalination is a highly energy intensive process though (and therefore expensive). To be viable, it must be competitive with costs of disposal. Technology providers need to deliver solutions which offer superior water recovery rates (little or no waste liquid), but at the lowest capital and operational cost. Leading technologies include reverse osmosis (RO), forward osmosis (FO), High Efficiency Reverse Osmosis (HERO™), Optimized Pretreatment and Separation (OPUS™), thermal distillation, crystallizers and brine concentrators,. Brine concentrators are used to concentrate the reject produced water following RO, FO or HERO™ (as OPUS produces very little reject water) treatment.

As a less established market, there are no clear leaders yet. Several of the larger players, Veolia, GE Water and Siemens have entered the market through acquisition rather than organic growth. Smaller companies are developing and providing innovative and competitive solutions alongside the larger players. There’s not yet a one-stop shop provider of treatment services at all levels. And as a market that’s projected to grow at more than 20% annually, and with a host of new technologies on the market, it’s one of the most promising areas for investors and corporations operating in the oil services sector to expand their service offering and secure a piece of the action.

As far as the big players go in produced water treatment, Cameron is the largest as a result of an aggressive consolidation strategy, but it doesn’t have a lot to offer in tertiary and advanced treatment technologies.

Veolia and Siemens on the other hand are stronger in tertiary and advanced treatment with good technology portfolios but they offer little in the way of primary and secondary treatment services. Veolia is the developer of one of the leading desalination systems, OPUS. OPUS has low energy consumption, produces low waste volumes and can handle variations in feed water quality.

The main competing tech to OPUS is HERO, which is provided exclusively by GE Water outside the US, and mid market player, Aquatech, in the US. HERO is another highly efficient technology which can handle the nature of produced water much better than standard Reverse Osmosis. Though it is saline, produced water differs greatly from seawater. This is one of the reasons why companies with seawater desalination methods won’t always have an easy route into a new market such as produced water.

Heckmann Corporation is an industry consolidator with deep pockets looking to buy produced water disposal operations and reducing costs by introducing pipelines, recycling and reuse.

Nalco is a leader in water chemistry as well as oil field chemistry, Nalco is well positioned to take advantage of the growing volumes of produced water and the challenges of new, unconventional resources.
There are also a host of smaller private and quoted companies.

The aforementioned Aquatech, the exclusive holder of the HERO license in the massive North American market, also has other relevant thermal and membrane expertise and has made external tech investments of its own. It also has operations outside the US.

212 Resources uses a patented vapour compression flash evaporation systems to recover clean water and other valuable byproducts from produced water. The system is mobile and claims to be cost effective.

Filterboxx is a Canadian packaged water treatment company offering relevant technologies to oil sands operators on and equipment sale or rental/design-build-own-operate basis.

Aqua Pure, listed on the TSX venture exchange, owns Fountain Quail which has a strong technology and service portfolio. The company offers patented evaporator technology to recycle flowback and produced water into fresh water for re-use.

Hydration Technologies Inc manufactures forward osmosis membranes for produced water, desalination and industrial applications.

Water Standard Company is a start-up which is probably the only treatment specialist to have locked on to the opportunities in desalination for enhanced oil recovery.

Altela uses a new energy-reuse water desalination product that operates unattended in remote locations, such as oil and gas wells.

WaterTectonics uses a technology known as ‘electrocoagulation’. It passes pressurized water through a tank where electricity is applied, separating contaminants into a sludge that can be filtered away.
Fundamentally, water is crucial to the oil and gas industry and how it manages its water will be central to future production. These companies will be ones to watch as the market heats up.

Article by Tom Whitehouse. Tom is the Chairman of the London Environmental Investment Forum (LEIF), a conference platform which connects environmental innovation with capital, and the Founder and CEO of LEIF’s Initiating Partner, Carbon International, a corporate finance and investor communications consultancy for environmental and cleantech industries.

Thanks to our partner and industry expert Global Water Intelligence for providing us with its report on Produced Water. We will be holding our ‘Investing in Water’ conference on 25 May 2012 which will explore this topic in more depth through industry insight and discussions with leaders and innovators. If you’re interested in partnering with us for this event, please contact us. Find out more about LEIF at www.london-eif.com.

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• Investment Opportunities in Water: Produced Water – Part I
• Investment Opportunities in Water
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We all remember sights of people lined up for clean water in Haiti after the devastating earthquake in 2010, or in Japan last year after the great tsunami hit with horrific consequences. Large scale natural disasters will unfortunately continue to be a global threat. Beyond the initial loss of life and home, they also wreak havoc on basic infrastructures putting food, clean water, and electricity out of reach, for as long as months in their aftermath.

While preventing natural disasters is next to impossible, providing for populations in need following such disasters is most definitely not, and can mean the difference between a few casualties and thousands. One Israeli company, in particular, has developed a unique product ideal for such situations.

EZPack, formed in 2010 by Danny Cohen, Alex Harel and Ohad Zecharia, has created a unique way to transfer clean, drinkable water to disaster areas and other emergency zones, while still maintaining its quality and purity. The start-up makes use of innovative pillow bladder tanks which consist of a PVC outer layer, and “food-graded” material within. This dual-layer system creates a highly durable transportation apparatus while allowing the transferred water to remain clean, drinkable and uncontaminated for extensive periods of time.

While EZPack has not yet had the opportunity to put their product into action in disaster areas, it has already been deployed with great success for homes and remote locations (pillow bladder tanks serve as ideal low-space water storage for both homes and off-site projects such as oil rigs) and has been approved by the Israeli Water Authority for water distribution in emergency situations.

EZPack’s unique solution represents what is hopefully a growing trend in cleantech, an effort to use “green technology” to provide relief in emergency situations. As the world grows ever more connected, international crises, whether in Haiti, Japan, China, Chile, or elsewhere, must be responded to by global, technologically advanced solutions, and cleantech might be just the industry to create them.

Article appearing courtesy Israel NewTech.

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Valcent Products will build a super efficient 6,000 square-foot greenhouse in downtown Vancouver.

Valcent has revolutionized vertical farming with their hydroponic VertiCrop growing system. VertiCrop is a series of four-meter-high stacks of growing trays assembled on motorized conveyors. The conveyors move the plants through commercial greenhouses for maximum sun exposure.

The system also makes it easy to harvest. Like other hydroponic systems, VertiCrop is incredibly efficient, providing up to 20 times the yield of field agriculture and using less than a tenth of the water.

The upcoming Vancouver greenhouse will produce hydroponically the equivalent of about 16 acres of California field agriculture and can grow up to 20 different varieties of lettuces. Construction is planned to launch in January 2012 with the first crop harvest projected for April 2012.

Vancouver is striving to become the greenest city in the world by 2020. Utilizing an underused space in the city and growing food locally are important steps to creating a more sustainable city. A bicycle-based food delivery company is being discussed as a market option for the upcoming greenhouse product.

Article by Karen MacKay, appearing courtesy Crisp Green.

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Earlier this year Ontario’s Greater Peterborough Innovation Cluster (GPIC) signed a memorandum of understanding (MOU) with the Regional Development Agency East Netherlands to develop opportunities and advance research in the water technology field. Energy Refuge recently caught up with Lisa Saroli, from Ontario’s Ministry of Economic Development and Trade Investment Division, who spoke to us in the wake of International Water Week conference in the Netherlands, which took place in Amsterdam in early November.

ER: In terms of strategy, what can the partnership achieve?

LS: The purpose of the MOU is to share knowledge, experience and technologies in their respective jurisdictions to enhance our capabilities to address environmental issues in their respective jurisdictions. The MOU covers water issues such as source water protection and sustainable water use, as well as several other environmental issue of interest to both jurisdictions such as climate change, waste management, clean energy, urban planning and research and development.∙

ER: So far, what results has the partnership yielded?

LS: There has been a series of meetings between the Delta Program, the Netherlands Water Partnership (NWP) and Netherlands Consul-General and Ministers and senior officials from the Ontario government, the Ontario Clean Water Agency and WaterTAP for the purposes of information sharing. Besides, representatives from the Netherlands attended Ontario’s Global Water Leadership Summit in May 2011, and Ontario representatives attended Amsterdam Water Week in November 2011. Together, Ontario and the Netherlands have conducted pilot projects in brownfield remediation and soil washing in the Kingston area. The two regions will continue to discuss new areas for potential collaboration and exchanges.

As with any legislation, Ontario looked to leading jurisdictions such as the Netherlands, Singapore and Israel in order to develop the Water Opportunities and Water Conservation Act which builds on Ontario’s expertise in water protection services and technology and will make the province a world leader in water innovation to help address global water challenges. Activities undertaken by NWP will be useful models in the design of a business plan for the Ontario Water Technologies Acceleration Project (WaterTAP). WaterTAP is a technology hub bringing together industry, academics and government to develop Ontario’s water sector and promote it globally.

ER: Of the water technologies being developed, do any explore the water/energy nexus?

LS: Water utilities use a lot of energy during the pumping, storage and treatment processes. But there is often flexibility in exactly when and how much power is needed at any given moment. ENBALA (“energy balance”) smart grid technology allows water utility and power grid operators to work closely together on a second-by-second basis to manage grid demand spikes, maximize system efficiencies during off-peak times and minimize overall energy costs. Companies like Eco-Tec and Ecodyne specialize in the design of treatment systems boiler feed water and brine, and design and manufacture water treatment equipment and cooling towers for a variety of energy plants.

Elsewhere, Echologics is a leading technology company and a full solution provider in the development of acoustic technologies for the detection of leaks and pipe wall thickness in pressurized water pipes. The non-disruptive and non-invasive solution is proven to greatly reduce the energy traditionally required for leak detection.

Finally, there’s Anaergia, which develops and uses cutting-edge technologies to turn organic waste (including that from the wastewater treatment process) into biogas. It operates in a sector still in its infancy and the company is positioning itself to become the world leader. The company chose Ontario as the site for its global operations center. The $70 million facility, which is receiving $16 million from the Ontario government, will include the company’s head office, R&D and manufacturing plant.

Article by Antonio Pasolini, a Brazilian writer and video art curator based in London, UK. He holds a BA in journalism and an MA in film and television.

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Water is one of the most exciting sectors at the moment in terms of cleantech innovation. The industry has a huge variety of investment opportunities but at Carbon International we focus on identifying the areas that we believe are the most exciting within broad industries such as this, and uncover the companies and investors leading and innovating.

Two water sectors I’m particularly excited about, because I believe they’ll grow significantly over the next few years and beyond, are the produced water market, in the oil and gas industry, and wastewater from mining. These sectors might not be for purest cleantech investors but fossil fuels aren’t going away anytime soon. So we should focus on how to make them cleaner, cleaner in their use and in their extraction. The mining industry will always be with us. It’s worth remembering that much clean technology requires metals that must be mined, unless they are recovered from waste streams, thought this is not always doable. Companies that provide solutions to clean up these dirty industries will enjoy rapidly growing markets. Key for investors and corporations active in, or looking to enter, the sector, will be to seek out the most promising of these and we aim to provide some scope at least through our free London Environmental Investment Forum conferences.

‘Produced’ water market
‘Produced’ water is the term used to describe the water generated and used by the oil and gas industry. According to Global Water Intelligence, handling and treating this wastewater is an industry currently worth more than $5 billion a year in North America, and it’s growing fast. With conventional oil and gas – that is, onshore and offshore wells – having likely peaked in some regions, North America being one of them, energy companies are now focusing on ‘unconventional’ projects such as shale gas, oil sands and coal bed methane. Once too difficult and too expensive to exploit, widespread adoption of technological innovations such as hydraulic fracturing (‘fracking’) and horizontal drilling means these projects are now commercially viable – and they’re providing a real boost to supplies.

These ‘unconventional’ projects are highly water intensive however. On average, for every barrel of oil recovered, eight barrels of water are also generated. Over the next 15 years, this oil-to-water ratio is forecast to increase from 1:8 to 1:12. During this time, the size of the produced water market (in the US) is set double to $10 billion.

The main growth sector within this industry is advanced treatment. This refers to treating the produced water to a high level which allows it to be safely recycled or re-injected. Treating water to higher standards can relieve stress on local water supplies, reduce environmental concerns and improve oil recovery rates. The more that can be reused the better. Technologies include filtration, biological treatment and desalination. With the market for the latter projected to grow at more than 20% annually, this is a particularly promising area for investors and corporations operating in the oil services sector. Produced water is highly saline and if it’s to be reused onsite or sold for use offsite, the salinity needs to be reduced to a specific level. The winners will be providers of low cost solutions that offer superior water recovery rates.

Wastewater from mining

The mining industry is a huge consumer of water. As more mines are developed in water stressed regions, such as Australia, Chile and South Africa, the industry is under increasing cost, environmental and social pressures to secure water supplies in challenging environments and treat wastewater to higher levels. Mining projects with water issues are considered high risk investments and will struggle for finance.

This issue is creating a big opportunity for solution providers. The market for water services related to mining stands at $7.7 billion a year and if the industry continues to boom, this could double in the next three years. As mentioned above, one of the main reasons for this is the rising number of mines being developed in countries which already suffer from fresh water scarcity. Other drivers include more stringent government regulation and better corporate social responsibility practices which are leading companies to treat wastewater to higher standards. The mining and processing of great amounts of lower grade ore is also requiring bigger volumes of water.

Consequently, providers of flexible solutions for the supply of desalinated water from ground sources of from the sea, or those that can treat the highly saline wastewater so that it may be reused on or even offsite, look set to benefit. The growing desalination market is also creating opportunities for the disposal of waste brine.

Another interesting growth area is in the recovery of metals from mine tailings. Tailings or ‘slurry’ refers to the leftover ore and wastewater after the metal has been extracted during the processing stage. This waste material, which still contains quantities of valuable metals, is typically left to settle in large dams or tailings ponds before being disposed of. An opportunity exists here for solutions that can selectively recover metals from this waste stream, reducing its volume and providing additional revenue streams for miners.

Article by Tom Whitehouse. Tom is the Chairman of the London Environmental Investment Forum (LEIF), a conference platform which connects environmental innovation with capital, and the Founder and CEO of LEIF’s Initiating Partner, Carbon International, which provides corporate finance services to companies and investment firms operating in environmental and cleantech industries. The next LEIF conference is ‘Investing in water’, on March 16 at the London Stock Exchange. LEIF conferences are free for professional investors, corporations and entrepreneurs.

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A student at Australia’s Swinburne University last week received the James Dyson Award for a device he says is capable of harvesting moisture from the air for use in irrigation, even in the world’s driest places.

Developed by Edward Linnacre, the Airdrop is a wind- or solar-powered device that sucks air underground through a coiled metal pipe, where the cooler temperature of the surrounding soil slowly causes it to condense.

The device ultimately collects the water in an underground tank before it is pumped back to the roots of nearby crops via a sub-surface drip irrigation system. According to Linnacre, a prototype that he developed in his mother’s backyard was able to produce about one liter of water per day. He hopes the technology can be used for agriculture in even the driest conditions.

“There are water-harvesting technologies out there, but there’s very few low-tech solutions,” he said. “A low-tech solution is perfect for rural farmers, something that they can install, something that they can maintain themselves.”

Article appearing courtesy Yale Environment 360.

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As the number of companies compiling sustainability reports grows, the content of those reports is evolving to include more focus on water impacts and supply chain information, according to corporate sustainability officials and consultants.

More companies are including information about environmental performance in their annual financial reports, partly due to pressure from institutional investors who want more disclosure of non-financial risks.

Sustainability reporting provides corporate disclosure on environmental, social, and governance performance and management, including strategies and goals.

95 Percent of Largest Companies Report

Ninety five percent of the world’s 250 largest companies report on their environmental and social performance, up from 80 percent in 2008, auditing firm KPMG said in report a released Nov. 7.

A total of 83 percent of the top 100 U.S. companies by revenue report on corporate responsibility, up from 74 percent in 2008, according to the KPMG International Survey of Corporate Responsibility Reporting, which looked at corporate responsibility reporting at 3,400 companies worldwide.

Corporate responsibility reporting “seems to have become virtually mandatory for most multinational companies,” the report said.

Reputation and brand consideration were the major drivers for reporting for two-thirds of the top 250 companies in Fortune magazine’s global rankings, while ethical considerations were cited by 58 percent, KPMG said.

Global Reporting Initiative is Gold Standard

The leading model for preparing sustainability reports is offered by the Amsterdam-based Global Reporting Initiative.

GRI guidelines cover a variety of environmental performance indicators, including water and energy consumption, greenhouse gas emissions, and waste generation and disposal. Other indicators apply to labor issues, including rates of worker injury, percentage of women on boards of directors, and incidents of discrimination.

“GRI is by far the standard,” said Jeff Erikson, senior vice president of SustainAbility, a corporate sustainability think tank and consultancy group based in London.

More than 1,800 companies worldwide prepared reports using the GRI framework in 2010, up 22 percent from 2009, according to GRI data.

For the United States, the 2010 total was 184 companies, up 31 percent from the previous year, according to Marjella Alma, manager of report services at GRI.

The United States was the global leader for the number of companies that followed GRI guidelines in their 2010 reports, representing 10 percent of the total.

GRI expects at least 2,200 companies worldwide to prepare GRI-based reports in 2011.

Still, there is plenty of room for growth since there are an estimated 45,000 publicly listed companies worldwide, said Sandy Nessing, managing director of sustainability at American Electric Power (AEP). The Columbus, Ohio-based utility, among the nation’s largest generators and transmitters of electricity, won one of the top awards for sustainability reporting from the investment advocacy group Ceres and the Association of Chartered Certified Accountants in May.

No U.S. Law for Sustainability Reports

The United States has no laws requiring sustainability reporting, although the Securities and Exchange Commission requires companies to disclose climate-related material risks.

Nessing said SEC’s February 2010 publication of interpretive guidance on applying climate-related risks to existing disclosure rules has prompted more companies to integrate non-financial information into their annual 10-K reports, which provide an overview of the company’s business and financial condition (17 DEN A-1, 1/28/10).

In addition to the SEC guidance, President Obama in October 2009 signed Executive Order 13514 on “Federal Leadership in Environmental, Energy, and Economic Performance.”

The executive order seeks to make sustainability an integrated strategy for federal agencies, and, with some exceptions, requires 95 percent of new federal contracts for products and services to be energy or water efficient, non-ozone depleting, or have non-toxic or less toxic alternatives, among other criteria (191 DEN A-7, 10/6/09).

Sustainability Rules in 30 Other Countries

Thirty other countries have regulations addressing sustainability reporting, according to a June 2010 report by KPMG, GRI, and two other organizations.

South Africa began requiring companies listed on the Johannesburg Stock Exchange to submit annual sustainability reports in 2003.

Denmark started requiring large companies to list policies related to the environment as well as human rights and other societal concerns in their annual financial reports in January 2009.

Meanwhile, France has plans to implement sustainability reporting requirements in 2012, according to Mike Wallace, U.S. network director for GRI.

Corporate sustainability officials say this global regulatory trend may eventually reach the United States, though it is not expected to happen soon. “I don’t know that we are going to get there very fast in this country,” Nessing said.

Investors Driving Reporting

Instead, investor groups such as the Principles for Responsible Investment, the Investor Network on Climate Risk, and the Carbon Disclosure Project are helping to drive increased reporting in the United States.

Investors look to sustainability reports to see how companies are prepared to manage risks, Nessing said. “In the wake of the BP disaster [in the Gulf of Mexico], there was a lot of push on companies to be transparent,” she said.

The KPMG report also found that companies were preparing reports due to investor interest.

“While corporate responsibility reporting was broadly considered an ‘optional’ activity only a few years ago, more organizations are generating CR reports to meet rising stakeholder demands for greater accountability, transparency and accuracy in assessing parts of the business that are not necessarily financial, but which contribute to the overall value of the company,” John Hickox, KPMG’s Americas leader for climate change and sustainability, said in a statement Nov. 7.

‘Water Is the New Climate Change.’

One growing area of focus for reporting is water, including its availability, use, release as wastewater, and the impact of company operations on surface water and groundwater.

The United Kingdom-based Carbon Disclosure Project, which represents 551 institutional investors and more than $70 trillion in investment capital, has shown increasing interest in corporate disclosures of water use and related risks.

The organization surveyed more than 400 companies in February 2011 on their water use, exposure to water stress in company operations and their supply chain, and water management plans. It plans to release the survey results by December.

“Water is the new climate change,” said SustainAbility’s Erikson. “Climate change was recognized 10 years ago as both a risk and an opportunity,” he said. “Water poses a risk to companies. Facilities could be shut down or go into limited production due to lack of water.”

Alma of GRI said the potential for rising energy costs also is among top issues for sustainability reports. “Many organizations find indicators related to energy and GHG emissions to be material,” she said.

Wallace agreed. “If energy gets more expensive, investors want to know how you are going to deal with it,” he said.

Supply Chain Concerns Grow

Investors also have shown increasing interest in transparency up and down the supply chain, Nessing said.

Erikson said, “Companies have recognized that supply chain risk is their risk,.” A company must consider not only supplier reliability, but also whether the supplier’s environmental footprint is good or bad for the company’s brand, he said.

For instance, Microsoft announced Oct. 13 that it would start requiring suppliers to report on their compliance with the company’s environmental protection, labor, human rights, and other standards in 2013.

The company said it will summarize supplier information in its annual sustainability report. Microsoft is pursuing the initiative in response to a shareholder proposal.

In 2009, Wal-Mart said its suppliers will have to answer a questionnaire about the environmental impact of goods sold in Wal-Mart stores, the first step in a larger attempt by the company to track the environmental impact of its products (141 DEN A-14, 7/27/09).

And in October this year, the World Resources Institute and World Business Council on Sustainable Development released standards to help companies measure, report, and manage carbon emissions along their supply chains and throughout their products’ life cycle through the Greenhouse Gas Protocol (212 DEN A-4, 11/2/11).

Move Toward Integrated Reporting

Investors also have driven more companies to prepare reports that combine financial details with non-financial information, including environmental performance.

“Institutional investors are interested in integrated reporting and there is a trend towards that,” said Michal Pelzig, manager of reporting at the Hess Corporation, a global energy company based in New York.

The 2011 KPMG report found that 27 percent of the 250 largest global companies and 20 percent of the top 100 companies in 34 countries included environmental and social information in their annual reports. Of those, 63 percent did so in a separate chapter, rather than integrating it throughout the report, according to KPMG.

KPMG’s 2008 study found that only 3 percent of companies worldwide were preparing integrated reports.

Nessing said AEP started preparing integrated reports after it noticed that the company’s investor relations team was taking copies of the sustainability report to meetings with investors.

Investors were interested in information related to climate policy and environmental performance that was not included in the financial or annual report, she said.

Framework for Integrated Reporting

The International Integrated Reporting Committee, a group of corporate, investment, accounting, and regulatory leaders, is currently developing a framework for integrated reporting.

The guidelines would unite standards for financial reporting, such as the International Financial Reporting Standards and the U.S. Generally Accepted Accounting Principles, with standards for sustainability reporting, like those developed by GRI.

The committee launched a pilot for the program in October, in which 40 companies will apply the draft IIRC standards for a year. Participating companies include the Coca-Cola Co., Microsoft Corp., AB Volvo, Deloitte LLP, and HSBC.

Cassandra Garber, senior manager of corporate external affairs at Coca-Cola, said the IIRC standards will help drive increased transparency among global businesses. For Coca-Cola, Garber said, preparing an integrated report “will allow us to demonstrate the idea of shared value, which is more than communicating profits and projects. It’s about linking the success of our business to the strength of the communities in which we operate,” she told BNA Nov. 7.

Companies listed on the Johannesburg Stock Exchange have been required to prepare integrated reports since June 2010.

Erikson said there are pros and cons to integrated reporting.

While integrated reports expose a larger number of investors to a company’s sustainability performance, they may not go into the same level of detail as a separate report. And integrated reports tend to focus more heavily on financial performance than on other aspects of operations, Erikson said, providing less of an opportunity to convey the full picture of sustainability efforts at a company.

Payoff for Companies: Internal Improvements

While sustainability reports are important to investors, their biggest value lies in increasing the efficiency of company operations, according to Erikson.

“Sixty to 70 percent of the value in sustainability reporting is internal improvements,” he said.

Nearly half, or 47 percent, of the Global 250 and one-third of the top 100 countries by revenue in 34 countries say their corporate reporting has led to financial gains, according to KPMG.

AEP started metering energy use at more than 400 of its office buildings when it started reporting and was able to reduce internal energy consumption by 17 percent, according to Nessing.

Corporate sustainability reports also can be used as a hiring tool.

“The majority of college grads consider corporate responsibility important when looking for jobs,” Erikson said.

Sustainability reports also help companies respond in a uniform way to outside questions about sustainability performance, Erikson said.

Article by Avery Fellow, appearing courtesy 3BL Media.

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Four water districts in the western U.S. are working with Mexican officials to develop two huge desalination plants in Playas de Rosarito, a coastal city located in the Mexican state of Baja California, as communities on both sides of the border look to wean themselves from the drought-prone Colorado River.

One group — including the water agencies that provide water to much of Southern California, Phoenix, Las Vegas, and Tijuana — is now studying the costs of a plant that would provide about 50 million gallons daily, while a second project would provide nearly 100 million gallons daily to the U.S. via a new pipeline, with operation set to begin in 2014.

While some environmental groups have expressed concerns about the proposals, including charges that American water agencies are targeting Mexico to avoid stricter U.S. review, proponents say the plants could provide a freshwater alternative to the Colorado River, which for decades has been the lifeblood for seven U.S. states and northwest Mexico but has been running increasingly low in recent years as a result of rising demand.

photo: Wolfgang Staudt

Article appearing courtesy Yale Environment 360

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