The first article in the series titled “Power, Pollution and the Internet” largely exposes the energy demands and associated pollution responsible to maintain and deliver instant satisfaction in the electronic age.

A data center is a facility used to house computer systems, usually many computer servers.  The facilities are typically spread over a large area to accommodate cooling requirements needed to maintain operational temperatures within the facilities.  Data centers aim to be operational 100% of the time so as not to cause outages for customers.  As a result, the servers within data centers gobble up energy regardless of whether they are processing information or waiting on standby.  According to the article, worldwide data centers use about 30 billion watts of electricity, which is roughly equivalent to the output of 30 nuclear power plants.  They can also waste up to 90% or more of the electricity they pull off the grid, due to low utilization rates of the servers.

In addition, the article highlights the use of backup diesel generators that data centers rely upon in order to limit the amount of downtime from potential power failures or a lapse in grid energy.  The author states that at least a dozen major data centers have been cited for violations of air quality regulations in Virginia and Illinois alone.  Even if a data center does not need to rely on a generator for operational power, generators still have to be tested on a regular basis to ensure functionality. In the second article in the series, the author focuses on a data center in Washington State that has 40 diesel generators located near an elementary school.  The scale of the backup operation was enough to convince the school superintendent to install particulate monitors to observe emission readings.

Industry reaction to the series of articles has been loud and swift.  Some argue the author has an outdated perception of the Internet, and chose to focus on minor uses such as emailing pictures to friends, versus focusing on how it serves a larger good by powering businesses, schools, public works, and the media.  Another primary criticism of the series is the failure to recognize the gains in data center energy efficiency since their inception.  Efforts such as The Green Grid have worked to establish baseline information on the power usage effectiveness of data centers and the water footprint of cooling efforts.  In addition, the 2012 Carbon Disclosure Project directly asks about companies’ data center activities, including specific emissions, annual electricity consumption, and power usage effectiveness of company owned data centers.  In our view, data monitoring, increasing transparency, and industry knowledge sharing is key to improving the environmental profile of data centers.

When evaluating companies operating large data centers, we prefer companies that are members of The Green Grid, actively upgrade facilities to reduce energy demands, purchase renewable energy, and report on the combined power usage effectiveness of their data centers globally.  Finally, companies that share best practices with their peers will help improve the energy efficiency of data centers across sectors and countries.

Emily is a Senior Research Analyst with Portfolio 21 Investments.  She has 10 years of experience in the environmental field.

In early 2011, with 30% of Japan’s base energy no longer available, the nation was asked to conserve electricity by as much as 15%.  Power companies fired up old gas and oil powered stations and the country worked to secure imported fossil fuels.  Despite the country’s energy security challenges, and fears of increased energy prices and widespread blackouts, the citizens of Japan united and their demands for a nuclear-free Japan strengthened.

Japan recently announced its new energy policy entitled “Revolutionary Energy and Environment Strategy,” which seeks to phase out nuclear power by 2040. To accomplish this, the policy calls for Japan to seek cheaper sources of liquefied natural gas and other fossil fuels.  Additionally, the policy focuses on energy conservation, procurement of additional renewable energy sources, and energy saving measures, such as smart metering.  Unfortunately, the policy is not without caveats and loopholes and there is also potential for it to be rescinded by the country’s next political party.  But regardless of how Japan’s new energy policy is changed over the coming months the tone has been set: Japan’s future will no longer rely on nuclear energy.

It is encouraging to see countries around the world, including Italy, Switzerland, Germany, and now Japan, commit to weaning themselves off nuclear power.  At Portfolio 21 Investments we do not support the expansion of nuclear power because we consider the cost of new nuclear installations to be high relative to the environmental and health risks associated with nuclear reactors and waste.

Beth is a Senior Research Analyst with Portfolio 21 Investments.  She has 10 years of environmental and social investing research experience. 

Among the Global 500 group companies, representing the largest market capitalization, climate change is a growing concern and focus of their business planning—more than two-thirds identify climate change risks to their business operations, and more than one-third see these risks posing real and present dangers.  The impacts of recent extreme weather events have likely made an impression.  This acknowledgement of the current impacts of climate change has increased by 10% in the last two years among CDP respondents.

The CDP’s challenge at this year’s Forum indicates that although there is a growing corporate awareness and momentum toward emissions reductions, this will be only be part of the solution.   CDP Chairman Paul Dickinson framed the challenge:  “Most of the things that get done in the world get done by the world’s largest companies.  Governments need to step up and match the operational domain of the corporations.  That means international treaties.”  And further:  “The developed world has no moral authority to say that they can’t consume in the way that we do…if we don’t get leadership in your country, from the United States.”  We are seeing corporations demonstrate willingness, but there is a great degree of uncertainty about the future of energy—what will it cost and where will it come from?  Setting a price on carbon would likely help incentivize businesses to reduce pollution, and perhaps even compete with one another about who could do it most efficiently and in the shortest time period.  I hope that’s a race that we will one day see unfold.

Amanda is Portfolio 21 Investments' Communications Manager.  She has more than 10 years of research, communications, and interactive media experience in the financial industry.

While many actors, including the United Nations Environment Program, called for a final agreement with specific targets, Rio + 20’s final agreement, called “The Future We Want,” is largely without teeth.   The agreement lacks enforceable commitments on all biodiversity, poverty elimination, and social equity issues.  For example, specific to oceans and seas, language from the agreement calls for “support to initiatives that address ocean acidification and the impacts of climate change on marine and coastal ecosystems and resources.  In this regard, we reiterate the need to work collectively to prevent further ocean acidification, as well as enhance the resilience of marine ecosystems .  . .We commit to intensify our efforts to meet the 2015 target as agreed to in the Johannesburg Plan of Implementation to maintain or restore stocks to levels that can produce maximum sustainable yield on an urgent basis.”  In effect, the nearly 50 page agreement lacks any firm sustainable development goals but resolves to establish an intergovernmental process to develop goals based on Agenda 21 and the Johannesburg Plan of Implementation.

Outside of formal political negotiations, there were numerous side agreements crafted and unveiled by the large corporate presence at the conference, as well as other partnerships.  Corporate promises earned much media attention, including Microsoft’s announcement that it would become carbon-neutral by 2013.  In another example, Femsa, a Latin American soft-drink bottler, said it would procure 85% of its energy needs in Mexico from renewable energy.  And a group of development banks, led by the Asian Development Bank, the World Bank, and others, will provide more than $175 billion to support sustainable transport in developing countries, including promoting public transportation and bicycle lanes over road and highway construction in the world’s largest cities.  Ban Ki-moon announced more than 100 commitments had been taken by governments and companies under his Sustainable Energy For All initiative.  Specifically, $50 billion was committed to objectives like doubling the share of renewable energy in the global energy mix by 2030.  In sum, the United Nations reported nearly 700 voluntary commitments by stakeholders represented at the conference.

While these commitments may be viewed as a silver lining to the Rio + 20 conference, overall the conference lacked global leadership to direct meaningful change that sets the world on a path of true sustainable development.  Greenpeace said the gathering was a “failure of epic proportions.”  David Suzuki, a geneticist and environmental activist, may have said it best in an interview with Democracy Now, “A meeting like this is doomed to fail because we haven’t left our vested interests outside the door and come together as a single species and agreed what the fundamental needs are for all of humanity. So we’re going to sacrifice the air, the water, the biodiversity all in the sake of human political and economic interest.”

Emily is a Senior Research Analyst with Portfolio 21 Investments. She has 9 years of experience in the environmental field.

Rio + 20 has two themes:  a green economy in the context of sustainable development and poverty eradication, and the institutional framework for sustainable development.  The conference is focused around these two themes under seven priority areas: jobs, energy, sustainable cities, food security, water, oceans, and disaster readiness.  The Earth Summit in 1992 closed with adoption of Agenda 21, a blueprint to rethink economic growth, advance social equity, and ensure environmental protection.  The expectation is that governments attending Rio + 20 adopt practical measures for implementing sustainable development.

In advance of the summit, the United Nations Environment Program (UNEP) published its fifth Global Environmental Outlook (GEO-5) report.  The report assesses what it considers the 90 most important international sustainability objectives.  GEO-5 indicates that only four have seen substantial progress: eliminating the production and use of ozone-depleting substances, removal of lead from fuel, improving access to clean water, and increasing research to reduce marine pollution.  Some progress was shown in 40 goals and little or no progress was detected for 24 goals, including climate change, fish stocks, desertification, and drought.  According to the UNEP, this is evidence that global treaties need to have quantifiable targets in order to succeed.  As a result, the agency is calling for specific targets at the Rio + 20 Conference.  As the UN Under-Secretary General and UNEP Executive Director Achim Steiner says, “GEO-5 reminds world leaders and nations meeting at Rio + 20 why a decisive and defining transition towards a low-carbon, resource-efficient, job-generating Green Economy is urgently needed.  The scientific evidence, built over decades, is overwhelming and leaves little room for doubt.”

While it is clear much work needs to be done to strengthen our global environment, political realities may impede significant progress.  In May, United Nations Secretary General Ban Ki-moon said that negotiations leading to the Rio + 20 conference had been “painfully slow.”  According to an article in The Guardian, it’s been difficult to engage world leaders.  With President Obama focused on his re-election and European leaders focused on the financial crisis, negotiations have been left to personnel without the political power to make decisions that would result in a breakthrough agreement.  According to the article, Ban Ki-moon said that negotiations were bogged down in narrow national interests, overshadowing the need to set the world on the right track for sustainable growth.  For some, this has painted the Rio + 20 conference with skepticism and it is questioned if significant progress can come of the meetings.

While political realities have the potential to overshadow the conference, there is in fact opportunity.  Governments, the private sector, and civil society have an opening to establish global targets recognizing the ecological limits of the planet and work to establish initiatives and incentives that operate within those boundaries.  Indeed, the long term health and viability of the planet is at stake and it will take true leadership to let go of myopia and create a path that looks beyond the next election cycle or annual earnings report.

Emily is a Senior Research Analyst with Portfolio 21 Investments. She has 9 years of experience in the environmental field.

The legislation establishes a high-level climate change commission, a climate fund, and mandatory emissions reporting and registry.  The bill aims for a 30% reduction in emissions growth measured against a “business as usual” pathway by 2020, and 50% by 2050 (below 2000 levels).  These goals will not reduce absolute emissions but instead reduce the rate at which emissions rise.  To achieve these goals, the bill also requests the country’s energy ministers to develop a system of incentives by 2020 that favors the use of renewable energy.  In addition, it establishes goals for increasing electricity generation from renewable sources, including an aspirational target of 35% of electricity generation to come from renewable sources by 2024.

The General Law on Climate Change also phases out fossil fuel subsidies and as the sixth largest oil exporter in the world, cutting fossil fuel subsidies may have been a concern for some.  However, state-owned Petrõleos Mexicanos is the sole oil producer in Mexico and according to the 2011 World Energy Outlook, Mexico’s oil production has declined over the last decade and is projected to continue to decline due to the slow pace of new developments.  Some legislators see promise in the opportunity for reducing development and reliance on fossil fuels.  As quoted by the BBC, Porfirio Munoz Ledo of the center-left Democratic Revolution Party and chair of the Foreign Affairs Commission said, “Mexico is aware this is the end of the oil era, so we need to implement this fiscal reform – and if we go through it, we’ll be able to do without this oil.”

Finally, the bill requires international financial support to deliver its goals, as is mandated in the United Nations climate convention.  The Cancun summit agreed to establish an international Green Climate Fund that is supposed to provide much of that support.  However, details of the Fund have yet to be finalized and it is a long way from receiving the promised funds.  Certainly the limited growth of the global economy has reduced the coffers of all nations, likely making them less willing to submit promised monies to such funds.  Whether Mexico would get the financial support it plans on is questionable.  Beyond financial support, some worry that enforcing the bill may prove to be difficult.

While all laws face implementation challenges, the fact that Mexican legislators created the political will to pass comprehensive climate change legislation is both encouraging and a model the U.S. will hopefully follow in the short term.

Emily is a Senior Research Analyst with Portfolio 21 Investments. She has 9 years of experience in the environmental field.

The corporation came to us from the monarchies of medieval times.  Monarchs were the conscience of the corporation and could revoke a corporate charter. The oldest existing corporation is Stora Enso, a Scandinavian basic materials company, started in 1288. Corporations were a catalyst to the expansion of European colonialism from the 1400s to 1700s. At one time the Hudson’s Bay Company controlled 15% of the North American landmass.

In the 18^th century, the authority to charter corporations was passed from monarchies to legislative and administrative bodies. However, a corporate charter could still be revoked if the corporation failed to meet the needs of the sovereign.

The United States inherited the concept of a corporation in 1776. The authors of our Constitution feared the power of corporations. Corporate law was designed to protect the public interest rather than the interests of shareholders. At that time corporate charters were closely regulated by the states and were seen as the external conscience of corporations. Beginning in the 19^th century, the states’ ability to revoke charters was limited, which granted corporations more power. Limited liability for officers, directors, and shareholders was adopted. The business of corporations became to maximize wealth for shareholders through unlimited growth. As we continually see today, this objective often comes at the expense of employees, community, and the environment.

Today there are new choices in corporate governance from benefit corporations to an L3C which is a hybrid for profit/non profit. To learn more about these innovative new corporate structures, see “The Rise of the Charitable For-Profit Entity” by Evangeline Gomez in the January issue of Forbes.

Carsten is Portfolio 21 Investments' founder and Chief Executive Officer. He has more than 25 years of experience in socially and environmentally responsible investing.

Last month, the Environmental Protection Agency (EPA) issued its first ever rule on carbon dioxide emissions from new power plants, which was met with applause and some skepticism.   Currently the U.S. has no limits on the amount of carbon pollution that future power plants can emit.  The new rule states that any new power plant will be allowed to emit no more than 1000 pounds of carbon dioxide per megawatt-hour.  To offer some perspective on this number--natural gas plants currently average 800 pounds per megawatt-hour, while coal plants can average upward of 1800.  This makes it impossible for any new U.S.-based coal fired power plants to be built unless they capture and store their own carbon emissions, which is a technology that is currently not commercially viable.  With the low cost of natural gas, increased consumer awareness on climate change, preference for low carbon alternatives, declining costs of renewables, and now the new EPA ruling, many consider coal outdated and uneconomical.  From an environmental perspective, this rule is positive.  It also provides assurance to investors and businesses alike that we will not be returning to coal.

The EPA is also crafting carbon regulations for oil refineries and other stationary pollution sources.  According to the World Resources Institute, when the EPA’s carbon rules are fully deployed they could cover approximately three-quarters of the country’s greenhouse gas sources and could reduce U.S. carbon emissions anywhere from 5% to 12% by 2020 (using 2005 as a baseline).  We encourage the EPA to continue its regulatory work and we believe investors would be well served by comprehensive climate legislation.

Beth is a Senior Research Analyst with Portfolio 21 Investments.  She has 8 years of environmental and social investing research experience.