EPA Takes Cross-Country Road Trips for New Climate Rules Targeting Coal-fired Power Plants

Ms. Gina McCarthy, Environmental Protection Agency (EPA) administrator and chief architect and emissary to President Obama’s plan to fight climate change, has recently taken to the road to pitch new climate change regulations.

While these EPA regulations set limits on carbon emissions from coal-fired power plants and are meant to decrease greenhouse gas emissions in the U.S., the rules could also be so strict that they result in a large number of plants being shut down and mining jobs lost.

The EPA is set to roll out the two new rules by the end of Mr. Obama’s presidency. This past September the EPA announced the draft of the first rule, which would limit carbon pollution from future power plants, and this upcoming June 2014 the EPA will release the draft of the second rule, which is said to require emission cuts at existing coal-fired power plants. Final versions of both rules are expected by June 2015, and states will have until mid-2016 to submit compliance plans.

While the EPA will establish a federal standard for reducing carbon emissions, individual states will be in charge of carrying out these new rules. This is meant to give each state the flexibility to configure its own plan. However, this creates the possibility that states who oppose these new rules may attempt to refuse or delay them from taking effect.

These trips to various U.S. states are a new ploy for the EPA and Ms. McCarthy, who is well aware of how cutting-edge these set of rules are and the intense scrutiny that they face. The rules will impose additional cost to the coal industry in order to stay in compliance and will require better information management and reporting tools.

Exxon Mobil to Report on Asset Risks Due to Evolving Climate Policy

Exxon Mobil just became the first oil and gas company to agree to publish information about the risks that stricter limits on carbon emissions would place on their business. According to the New York Times, this decision stems from increasing pressure from shareholder activists to warn investors of the possible consequences. The energy giant has agreed to publish this information by the end of the month.

The agreement comes from an effort by Ceres, a coalition of investors and environmentalists interested in making companies more environmentally responsive. The Ceres campaign started with a letter that was sent to ask 45 of the top fossil fuel companies if they were addressing the risks posed by the changing climate policy. What gave this letter such influence is the fact that it was sent by shareholders representing $3 trillion in assets to these companies.

These risks come from a growing realization that the changing policies on global warming and the value of fossil fuel assets may not by synced with one another. For instance, if carbon emissions are reduced by 80 percent, a goal stated by President Obama, then extracting oil reserves in certain areas where it is more expensive will become uneconomical. The concept that the two goals of extracting reserves and reducing carbon emissions are in direct conflict is undoubtedly coming to light.

Exxon Mobil has also agreed to project how further carbon emission restrictions would affect its future projects, and explain why new fossil fuel reserves that it invests in are not at risk of decreasing in value. Overall Exxon Mobil’s reporting agreement should provide for a better stewardship of sustainability and will help other companies come forward with their reporting.

Accounting for carbon emissions will put more focus on environmental software companies that can scale and provide solid platforms for an integrated approach to not only carbon management but all of their other environmental and sustainability risk management activities such as water quality and air emissions.

A Planet of Environmental Data

Today, every discussion about changes in environment must begin with data. In its exponentially increasing volume, velocity and variety, environmental data is becoming a new corporate and natural resource. It promises to be for the 21st century what steam power was for the 18th, electricity for the 19th and hydrocarbons for the 20th. This is what we mean when we say environmental data management.

Thanks to a proliferation of measurement devices, lower detection limits,  and the infusion of technology into all things and processes, the environmental industry is now generating huge amounts of data and 80 percent of it is “unstructured”—everything from images, video and audio to social media and rivers of data from embedded sensors and distributed devices. Managing these data in databases built only 10 years ago is either not possible or is very expensive.

Managing this data at enterprise level is our core business. To capture this growth potential, we have built the world’s broadest and deepest capabilities in environmental and sustainability Big Data and analytics—both technology and domain expertise. Two-thirds of Locus Research’s work is now devoted to environmental data, analytics and automated reporting. Locus provides the full array of capabilities our clients need to extract the value of Big Data. They can mine multiple structured and unstructured data sets across their business. They can apply a range of analytics—from descriptive to predictive to prescriptive. And importantly, they can capture the time value of data. This matters, because the battle for competitive advantage in this new world can be lost or won in fractions of a second.

Our data and analytics portfolio today is the deepest in the industry. It includes decision management, content analytics, planning and forecasting, discovery and exploration, business intelligence, predictive analytics, data and content management, stream computing, data warehousing, information integration and governance.  “Traditional computing systems, which only do what they are programmed to do, simply cannot keep up with Big Data in constant motion.” For that reason late last year we launched the all new Locus EERP platform. In the process, we believe Locus will change the nature of environmental management and reporting.

At the same time that industries and professions are being remade by data, the information technology infrastructure of the world is being transformed by the emergence of cloud computing—that is, the delivery of IT and business processes as digital services. It is estimated that by 2016, more than one-fourth of the world’s applications will be available in the cloud, and 85 percent of new software is now being built for cloud. Locus pioneered cloud computing in environmental industry since its inception in 1997. No other company has a track record of 15 years of managing enterprise environmental and sustainability data in the cloud with no down time.

New sustainability & environmental reporting standards for banks

Under recently published accounting standards, banks will now be called upon to report on their social and environmental impact. These new Sustainability Accounting Standards are backed by large investors, including the California state teachers’ pension fund, Calstrs, and were drawn up after negotiations with shareholders, accountants, and banks including Deutsche Bank, TD Bank, and Goldman Sachs.

According to the Financial Times, the new standards require “reporting of measures such as the greenhouse gas emissions of companies in which banks have investments, as well as the number of complaints handled by their compliance departments.”

Author of these new standards, the Sustainability Accounting Standards Board (SASB), is backed by non-profit donors and was launched in 2012 to create standards for reporting on non-financial data. The SASB writes standards industry by industry- last year it was for pharmaceuticals companies, and next month standards are due for the technology and communications industry.

The Financial Times states that further details on the financial services standards include “measures of the companies’ possible losses on insurance or mortgage lending from weather-related events, the number of data breaches involving customers’ information, and details of the results of stress tests under adverse economic scenarios.”

Chief executive of Calstrs, Jack Ehnes, recognized that there may be some initial hesitation about the new standards, but believed they would eventually come to be accepted. “There is a market need for these data, and as soon as investors start talking about them and looking at them… then I think we will move to that,” he said.