Business responsibilities for climate change: U.S. Roundtable nods, U.N. sets a high bar

The U.S. Business Roundtable generated headlines and surprised reaction with the August 19th release of a new Statement of Purpose,  signed by 181 CEO’s of high-profile companies including Amazon, Walmart, Bank of America, Lockheed Martin, Morgan Stanley, UPS, and others. That statement redefines their shared, overarching corporate goal from “delivering value for shareholders” to  promoting “An Economy That Serves All Americans” – including by: “supporting the communities in which we work. We respect the people in our communities and protect the environment by embracing sustainable practices across our businesses.” …“Investing in our employees. This starts with compensating them fairly and providing important benefits. It also includes supporting them through training and education that help develop new skills for a rapidly changing world. We foster diversity and inclusion, dignity and respect.”

The full Business Roundtable Statement on the Purpose of a Corporation, with signatories, is here ;  case studies of member corporations’ social responsibility initiatives are outlined in Building Communities, Meeting Challenges .

A higher bar for business

In contrast to the Business Roundtable statement, scant attention was paid to an international call for human rights and climate justice, released in July. The Safe Climate Report  provides a guide to the obligations of States and the responsibilities of businesses under international agreements and law, regarding the rights to life, health, food, water and sanitation, rights of the child, right to a healthy environment, and rights of vulnerable populations.

The Safe Climate Report, as well as the June 2019 U.N. Report  on extreme poverty and climate change by Philip Alston, are the subject of a September 4 article in The Conversation Canadian edition, “Climate change, poverty and human rights: an emergency without precedent” . The authors state that “The Alston report suggests that the only way to address the human rights dimensions of climate crisis is for states to effectively regulate businesses and for those harmed by climate change to successfully sue responsible companies in court. ….  “the Safe Climate report goes further…”

Specifically, the Safe Climate Report states:

“Businesses must adopt human rights policies, conduct human rights due diligence, remedy human rights violations for which they are directly responsible, and work to influence other actors to respect human rights where relationships of leverage exist. As a first step, corporations should comply with the Guiding Principles on Business and Human Rights as they pertain to human rights and climate change…. The five main responsibilities of businesses specifically related to climate change are to reduce greenhouse gas emissions from their own activities and their subsidiaries; reduce greenhouse gas emissions from their products and services; minimize greenhouse gas emissions from their suppliers; publicly disclose their emissions, climate vulnerability and the risk of stranded assets; and ensure that people affected by business-related human rights violations have access to effective remedies.90 In addition, businesses should support, rather than oppose, public policies intended to effectively address climate change.”  (page 19/20).

Legal obligations of States:

The discussion in this report is also highly relevant to any litigation against states or companies regarding climate change, as well as for the rights of Indigenous peoples and children.  Boyd concludes:

“A failure to fulfill international climate change commitments is a prima facie violation of the State’s obligations to protect the human rights of its citizens. As global average temperatures rise, even more people’s rights will be violated, and the spectre of catastrophic runaway climate chaos increases. There is an immense gap between what is needed to seriously tackle the global climate emergency and what is being done.

A dramatic change of direction is needed. To comply with their human rights obligations, developed States and other large emitters must reduce their emissions at a rate consistent with their international commitments. To meet the Paris target of limiting warming to 1.5°C, States must submit ambitious nationally determined contributions by 2020 that will put the world on track to reducing greenhouse gas emissions by at least 45 per cent by 2030 (as calculated by the Intergovernmental Panel on Climate Change). All States should prepare rights-based deep decarbonization plans intended to achieve net zero carbon emissions by 2050, in accordance with article 4, paragraph 19, of the Paris Agreement. Four main categories of actions must be taken: addressing society’s addiction to fossil fuels; accelerating other mitigation actions; protecting vulnerable people from climate impacts; and providing unprecedented levels of financial support to least developed countries and small island developing States.”

The Safe Climate Report  (formally titled The Report of the Special Rapporteur on the issue of human rights obligations relating to the enjoyment of a safe, clean, healthy and sustainable environment)  was submitted to the U.N. General Assembly,  written by Canadian human rights scholar and U.N. Special Rapporteur David R. Boyd, whose 2012 book, The Environmental Rights Revolution: A Global Study of Constitutions, Human Rights and the Environment,  stands as a landmark study in environmental law.  The Special Rapporteur’s Report was informed by a consultation period in 2019 in which States and organizations were invited to participate – the few which did are posted here . (Neither  Canada nor the U.S. were among the countries which submitted).  Two noteworthy organizational submissions available are from Canada’s Ecojustice, and Our Children’s Trust (U.S.)  on the issue of intergenerational responsibility and youth. A separate report by Special Rapporteur John Knox discussed The Children’s Rights and the Environment in 2018, and it may be significant the  concluding sentence of the Safe Climate Report uses Greta Thunberg’s famous words,  “I want you to act as if our house is on fire. Because it is.”

FTQ shareholder resolution calls for GHG targets aligned with the Paris Agreement; corporations respond with a charge of “micromanagement”

As part of its stated Action Plan for Engaging in a Just Energy Transition , the Fonds de Solidarité des Travailleurs du Québec  (FTQ) (an investment fund controlled by Quebec trade unions) put forward the following shareholder’s resolution  at the Cenovus Energy Annual Meeting in Calgary in April.  (The text of the resolution appears on page 51, as Appendix A in the company’s Information Circular):

Resolved: That Cenovus Energy Inc. (“Cenovus”) set and publish science-based greenhouse gas (GHG) emissions reduction targets that are aligned with the goal of the Paris Agreement to limit global average temperature increase to well below 2 degrees Celsius relative to pre-industrial levels. These targets should cover the direct and indirect methane and other GHG emissions of Cenovus’ operations over medium and long-term time horizons. Such targets should be quantitative, subject to regular review, and progress against such targets should be reported to shareholders on an annual basis.

The Board’s written response and recommendation  states “…..Cenovus has always and will continue to assess our approach to climate change risk management with a view to maximizing shareholder value. ….Achieving the level of commitment contemplated by the Paris Agreement requires an integrated plan at a national and global level, with policies to guide the actions of governments, individuals and corporations to collectively work together toward the desired outcome. Our view is that it is an overly demanding request, and contrary to the best interests of shareholder value, to require an individual company to unilaterally set targets….   As such, we recommend voting against the proposal.”  And sure enough, as expected, the FTQ proposal was defeated by an  89% vote against. The news is summarized  and in The Energy Mix  and  by the CBC  .

The  Fonds de Solidarité des Travailleurs du Québec (FTQ), along with the Canadian shareholders’ non-profit  SHARE, was also part of the recent resolution to Exxon . That resolution, filed in the U.S.  by a group of investors led by the New York State Common Retirement Fund and the Church Commissioners for England, proposed that the company develop “short-, medium- and long-term greenhouse gas targets aligned with the goals established by the Paris Climate Agreement to keep the increase in global average temperature to well below 2°C and to pursue efforts to limit the increase to 1.5°C.”  In response,  ExxonMobil   applied for and received permission from the  U.S. Securities Exchange Commission (SEC), allowing it to exclude the resolution from its Proxy Circular.  In retaliation, SHARE states in a blog, Why we’ll vote against Exxon’s entire board of directors, that it is “recommending to our proxy voting clients that they withhold their support for all Exxon directors at the upcoming annual general meeting on May 29th.”

The “Micromanaging” argument:  “Investors Worried About Climate Change Run Into New SEC Roadblocks” from Inside Climate News (May 3), in addition to providing a good overview of shareholder actions, explains: “The term “micromanage” has become the linchpin to objections by companies seeking to block these resolutions. The precedent was set last year when the SEC agreed with EOG Resources, a Texas-based oil and gas exploration company, that a resolution asking the company to adopt emissions goals had sought to “micromanage” the company.”  More in  “Exxon Shareholders want action on climate change: SEC calls it micromanagement”  in the Washington Post (May 8). According to the CBC report about the FTQ resolution at  Cenovus, the corporate CEO called the proposal “overly demanding”, and said  “we had challenges with the prescriptive nature of the proposal”,  echoing the industry’s language and strategy.

To stay up to date: The U.S. non-profit As you Sow  monitors corporate environmental and social responsibility, including climate change and the energy transition  – through  press releases  , reports, and an up-to-date database of resolutions .

GM Oshawa investment will save 300 jobs; Toyota announces new production in Cambridge

GM May 2019On May 8, General Motors Canada and Unifor held a joint press conference and  issued a statement  announcing that GM will invest $170 million to save approximately 300 of the 2,600 union jobs at the Oshawa Ontario manufacturing facility, slated for closure by the end of 2019 as part of  the North American restructuring announced in November 2018.

After a vigorous and high profile union campaign against the closure, an “Oshawa Transformation Agreement” has been reached, including:

  • A $170 million investment by GM to convert the plant from vehicle assembly to stamping, related sub-assembly, and “other miscellaneous activities for GM and other auto industry customers.”
  • Part of the Oshawa Plant property will be converted into a test track for autonomous and advanced technology vehicles, to  support GM Canada’s existing  Canadian Technical Centre , in particular its Oshawa and Markham campuses where the company  develops software and hardware for Autonomous Vehicle Systems, Embedded Controls, Active Safety Systems and Infotainment.
  • The company will also donate the three-acre Fenelon Park and the 87-acre McLaughlin Bay wildlife preserve to the City of Oshawa “for the permanent benefit of all its citizens.”

But what about the workers?

A separate Jobs Transition Backgrounder states:

  • GM Canada will offer special relocations to Oshawa employees for jobs at the St. Catharines propulsion plant or the Woodstock Distribution Centre;
  • GM will offer enhanced retirement packages to retirement-eligible Oshawa Assembly employees “including vouchers toward the purchase of new GM vehicles, a benefit that will support both retiring employees and GM dealerships in Durham Region and surrounding areas.”
  • In June 2019, GM Canada, Unifor and the Ontario government will open a Jobs Action Centre in Oshawa, offering  personalized transition counselling, a skills / jobs matching database and “other supports.” Durham College, the local community college,  will support the Job Action Centre with a dedicated jobs portal and several job fairs planned for 2019.
  • Durham College, Centennial College, and Trent University Durham will offer training tailored to regional and GTA-based partner employers.
  • “GM Canada will offer training support for qualified Oshawa Assembly hourly employees.” (no further details stated in the public release).

Unifor Local 222 , which represents the workers at the Oshawa plant, have called a meeting on May 9 to inform the membership about the resolution of their grievance against the company, which sought to increase incentives and severance packages.

In better news for Ontario’s auto industry:   Starting in 2022, Toyota will begin to produce the luxury  Lexus NX at its Cambridge plant, in both gasoline and hybrid versions . ( Cambridge currently produces of the mid-size luxury Lexus RX and RX hybrid). According to a report in the  Hamilton Spectator : “Prime Minister Justin Trudeau, Deputy Ontario Premier Christine Elliott, and a host of local mayors and dignitaries were at the Fountain Street facility Monday afternoon to announce the plant had secured the right to make the company’s Lexus NX gas and hybrid compact SUVs starting in 2022. The news came almost a year after the federal government partnered with the province — at the time led by Kathleen Wynne and the Liberals — to each invest $110 million in the company as part of an overall investment of $1.4 billion by Toyota.”

Amazon employees use their power as shareholders to request corporate policies on climate change

Amazon employees logoIn  what a New York Times article characterizes as “ the largest employee-driven movement on climate change to take place in the influential tech industry”, almost 7,000 employees of tech giant Amazon have now signed their names to an Open Letter to Jeff Bezos and the Amazon Board of Directors, released on April 10.  The Letter states: “we ask that you adopt the climate plan shareholder resolution and release a company-wide climate plan that incorporates the principles outlined in this letter.” It then outlines a thorough list of desired actions, including:  a complete transition away from fossil fuels rather than relying on carbon offsets; prioritization of climate impact when making business decisions; prioritizing the most vulnerable communities in pollution reduction initiatives related to Amazon locations; and “fair treatment of all employees during climate disruptions and extreme weather events. Unsafe or inaccessible workplaces should not be a reason to withhold pay, terminate, or otherwise penalize employees — including hourly and contract workers.”  Amazon Employees for Climate Justice provides updates at their Twitter account here.

According to an article in Gizmodo : “Employees from seemingly every background and department have signed on, from UX designers to biz dev managers to systems development engineers and beyond. A number of senior employees are on board, too—in addition to the VP, at the time of writing, I counted at least eight directors on the list. It’s part of a growing trend towards worker advocacy in the tech industry, coming on the heels of the Google Walkout for Change and the We Won’t Build It effort, also at Amazon.”  The culture of empowerment behind the Open Letter is evident in an  interview published in Gizmodo, “One of the Amazon Workers Behind the Push to Get Jeff Bezos to Address Climate Change Speaks Out”  .  Wired also describes the culture of shareholder activism in “Amazon Employees Try A New Form Of Activism, As Shareholders” .

Amazon has more than 65,000 corporate and tech employees in the United States, who are awarded shares as part of their compensation program.  In late November and early December, 2018, 16 current and former Amazon employees exercised their rights as shareholders by tabling  a shareholder resolution – which has been seen as the trigger for Amazon’s  Shipment Zero initiative,  a vision to make all Amazon shipments net-zero carbon, with 50 percent of all shipments net zero by 2030. Amazon’s response to the latest Open Letter is partly reproduced in the Gizmodo article, and states:  “We have a long history of commitment to sustainability through innovative programs such as Frustration Free PackagingShip in Own Container, our network of solar and wind farms, solar on our fulfillment center rooftopsinvestments in the circular economy with the Closed Loop Fund, and numerous other initiatives happening every day by teams across Amazon. In operations alone, we have over 200 scientists, engineers, and product designers dedicated exclusively to inventing new ways to leverage our scale for the good of customers and the planet. We have a long term commitment to powering our global infrastructure using 100% renewable energy.” Amazon’s corporate website details all its sustainability efforts   – and  on April 8th, just before the Open Letter was published, a press release announced 3 new wind energy projects, to augment the current level of 50% renewable energy power for the Automated Web Services part of the business.

Business looks at climate change: Davos publications include auto manufacturing, electronic waste

The overall theme of the World Economic Forum meetings in Davos Switzerland in 2019 was the 4th Industrial Revolution. Climate change issues were top of mind in discussions, as the annual  Global Risks Report for 2019  had ranked the top global risks to the world as  extreme weather and climate-change policy failures.  Discussions, speeches, blogs and reports are compiled on the themes of The Future of the Environment and Natural Resource Security and Climate Change   .  Highlights include : “6 things we learned about the Environment at Davos” , an overview which highlights Japan’s pledge to  use its G20 Presidency to reduce plastic ocean pollution; the launch of a new organization called Voice for the Planet  to showcase the youth climate activist movement: and  a pledge by 10 global companies have to take back the electronic waste from their products.  Also of interest, the speech by Greta Thunberg, who is at the centre of the new youth climate activism – “Our House is on Fire” ; and “Why income inequality is bad for the climate”,  a blog by the President of the Swedish Trade Union Confederation.

WEF Reports of interest: Improving Traceability in Food Value Chains through Technology Innovations, which offers technology as a means to make the current industrial food system safer (and possibly more sustainable).   Shaping the Sustainability of Production Systems: Fourth Industrial Revolution technologies for competitiveness and sustainable growth  discusses the coming world of manufacturing, focussing on the electronics and automotive industries of  Andhra Pradesh, India and the automotive industry in Michigan U.S.A., including a discussion of Cobotics 2.0 (collaborative robots) , Metal 3D printing, and “augmented workforce”.

new circular vision for electronics - 2019 reportThe circular economy was also discussed, with a spotlight on electronic waste, which is estimated at 50 million tonnes of produced each year currently.   A New Circular Vision for Electronics Time for a Global Reboot  was released by the E-waste Coalition, which includes  the International Telecommunication Union (a UN organization), the International Labour Organization (ILO), the United Nations Environment Programme (UNEP) and others.  The report, summarized here,  is an overview of  e-waste production and recycling, and includes a brief discussion of labour conditions, calling for upgrading and formalization of the recycling industry as a “major opportunity”. It states:  “the total number of people working informally in the global e-waste sector is unknown. However, as an indication, according to the ILO in Nigeria up 100,000 people are thought to be working in the informal e-waste sector, while in China that number is thought to be 690,000.” As for the dangers… “using basic recycling techniques to burn the plastic from electronic goods leaving the valuable metals (melting down lead in open pots, or dissolving circuit boards in acid) lead to adult and child workers, as well as their families, exposed to many toxic substances. In many countries, women and children make up to 30% of the workforce in informal, crude e-waste processing and are therefore particularly vulnerable.”  According to the report, the International Labour Organization is scheduled to release a new report in March 2019, to be titled  Decent work in the management of electrical and electronic waste.