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How effective are business efforts to go green?

Walmart says that 28 percent of domestic power at its stores comes from renewable sources. And 85 percent of companies in the S&P 500 are also reporting updates on sustainability in their annual reports for investors -- up from 11 percent in 2011. Paula DiPerna, special advisor to CDP, an organization that tracks environmental disclosures by companies, joins Hari Sreenivasan for more.

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  • HARI SREENIVASAN:

    For more on efforts by companies to voluntarily be more green, I recently spoke to Paula DiPerna, special adviser to CDP, an organization that helps track environmental disclosures by companies. The big question here as the United States pulls back on its commitments through the Paris Accords the Clean Power Plan — can corporations step up and fill that gap?

  • PAULA DIPERNA:

    Yes, the corporations of the world are stepping up and filling that gap. First of all, climate change. Addressing climate change is not a punishment, it's a phenomenal opportunity to create jobs and unleash innovation and kind of try to get the maximum efficiency out of energy, which is a real challenge and a very exciting challenge.

    So a lot of companies have understood that this is an opportunity and they have begun to step up and many, many companies at the rate of 150 a year since the agreement of the Paris accord have have agreed to take on a science based target. There's something like 450 companies that are now actually setting their targets in relationship to that scientific goal

  • HARI SREENIVASAN:

    Are these science based targets basically a form of regulation is it just that it's voluntary?

  • PAULA DIPERNA:

    Well it's voluntary in some jurisdictions like our own but increasingly around the world it is not voluntary. So if you're a major company, you need to be smoothing out your operational costs across your geographical boundaries.

  • HARI SREENIVASAN:

    It looks like companies are tackling this on two fronts — on their own emissions is one thing on how they do business and then also the products of the business themselves. Give us a couple of examples.

  • PAULA DIPERNA:

    Yeah so I mean you take for example L'Oreal or Walmart. I mean WalMart has a goal of reducing emissions by a staggering number of tons throughout its supply chain. And I think we all know as consumers that it's increasingly difficult to go and buy something where you're not confronted with the greenhouse gas potential or the carbon footprint. It's a little bit like when you buy sandwiches and it's suddenly telling you the calories, you know you kind of think twice. Do I really need both of those sandwiches or should I just have one.

  • HARI SREENIVASAN:

    There seems to be a necessary alignment here between three different stakeholders. You've got the management of a company, the investors in that company and then ultimately the consumers of the product who all have to have some level of value for a company to start to make these changes.

  • PAULA DIPERNA:

    Yeah well that's well put. I mean, if you think about a slot machine you know you want to get cherries all across. So the cherries all across in climate changes is lining up science policy and capital. So investors are increasingly looking at is a company organized well for this scientific imperative, which means reducing emissions. Reducing emissions as an operational and financial tool. It's a way of gauging as the company well managed — just the way we are now looking at whether a company has diversity on its board.

    BlackRock, one of the largest investors in the world, the chairman has called on all of the companies in which they invest, to to be addressing and come into coherence with the Paris Agreement. Voluntary environmental disclosure, which CDP pioneered is now increasingly going to become mandatory around the world through what is called the Task Force on Climate related disclosure. Which means that you have to tell your investors how you're managing climate change or suffer their anger and they may divest. They may sell their stock.

    And you know just an interesting factoid about two years ago, one in 12 dollars invested in the United States was screened for environmental or social impact or good governance. Today that number is one in five. And it means that investors are really looking to manage climate change. So on some level the economy's getting a lot greener than we think. It's just we have to do a tremendous amount more. We're talking about millions of tons that have to be either stopped from rising or removed from the atmosphere one way or another.

  • HARI SREENIVASAN:

    In the voluntary disclosures how do you trust but verify and make sure that this isn't essentially a marketing ploy to try and greenwash and improve their image that they're actually doing what they say they're going to do?

  • PAULA DIPERNA:

    There's a lot of skill within the companies to look at this and management manage it. There's a big industry again, opportunity jobs of consultants who help the companies. But the thing about green washing I think we might overstate the degree of green washing and a sense of outright lie but I think that there probably are a number of people who don't really fully get the the magnitude of the challenge in terms of the tonnage. But by the same token, if everyone's doing a little bit they are gradually unleashing that unlocking that potential to reveal do opportunities for efficiency of new products.

    You know, it's very exciting a little thing like a frost free membrane that doesn't sound glamorous but a frost free membrane in a refrigerator or freezer really reduces the energy demand of that product. Somebody is out there inventing that and somebody is out there trying to invent a better one. And you can go through every little unglamorous widget and it's a combination of engineering, imagination it's all very exciting. We have to retrofit, refit, redo, redesign just about everything in the world.

  • HARI SREENIVASAN:

    All right Paula DiPerna, thanks so much for joining us.

  • PAULA DIPERNA:

    Thank you very much.

Editor’s Note: Peril and Promise is an ongoing series of reports on the human impact of, and solutions for, Climate Change. Lead funding for Peril and Promise is provided by Dr. P. Roy Vagelos and Diana T. Vagelos. Major support is provided by Marc Haas Foundation.

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