The China Energy Technology Program: a partnership for assessing a complete energy system
The China Energy Technology Program, devised by ABB and the Alliance for Global Sustainability, is an extensive partnership program that brings together a diversity of participants to assess the relative costs and environmental performance of different strategies for meeting power demands in China.
With over 1.2 billion inhabitants, China ranks second in the world after the United States in terms of total carbon dioxide (CO2) emissions, but it is catching up fast. Each year, China brings online new electricity-generating capacity equivalent to more than the entire output of Switzerland. Its economy is growing fast, and so is its use of energy. It is the world's largest producer and consumer of coal, which provides about three-quarters of all the commercial energy consumed.
The China Energy Technology Program (CETP), one of ABB's most ambitious partnership effort projects, is a cooperative program that is focused on developing and applying a methodology to evaluate sustainable electricity strategies for China. The project's aim is to develop a global methodology for assessing the "real" impact of electric power generation from cradle to grave, taking energy technologies and their environmental impacts into account. The overall goal is to identify the true costs of electrical power generation and use and develop cost-effective and efficient solutions for the future.
Undertaken in conjunction with the Alliance for Global Sustainability (AGS), it is a two-year program that started in May 1999. It involves a team of 75 scientists, academics and engineers on three continents, from business, utilities, universities, and research institutions, involving eleven organizations, in four countries in the project. ABB is contributing financially as well as with expertise, facilities and program management. CETP is also the prototype of a new cooperative mechanism between academia and industry. The program is managed by industry while the main participants are from academia. In addition, the involvement of stakeholders in the program has been strongly emphasized. "At intervals during the course of the project we have held meetings with all the stakeholders concerned to keep them informed of the aims, progress and interim results of the project and given them the opportunity to comment and provide feedback", said ABB's Dr. Baldur Eliasson - the CETP Program Manager. "In this way, the project moves forward in synchronism with the requirements and expectations of those who will benefit from its final results, to help ensure it will deliver usable and valuable results and contribute to the ultimate goal of achieving sustainable development in China", said Eliasson. In essence, the CETP program rests on three pillars: academia, industry and the stakeholders involved.
The project focuses on one province, Shandong, chosen principally because of its independent power grid and diversified energy supply. However, the methodology developed should be applicable for other locations. Hence, the China Energy Technology Program has the potential to bring significant environmental benefits, not just in China, but globally.
Source: Dr. Baldur Eliasson,
CETP Project Coordinator
ABB Corporate Research Center, Switzerland
E-mail: baldur.eliasson@ch.abb.com
1.Author WBCSD
Publication Date 01.03.2001
Document Type Case studies
Issue/Topic Electricity Utilities Energy & Climate
Region Asia
Country China
Company ABB Ltd.
adidas-Salomon: Supply-chain management
Situation
The adidas sporting goods brand is famous across the world and, like any household name, it could potentially become the target of protests and media pressure if its parent company's policies and practices fail to win public approval.
Using an external supply-chain has allowed adidas-Salomon to keep its costs down and remain competitive. However, the company's supply chain is long and complex, relying on about 570 factories around the world. In Asia alone, its suppliers operate in 18 different countries. Moreover, its cost-saving use of external suppliers is not without risks: in particular, the company has less control over workplace conditions at its suppliers' factories than it would have at company-owned sites.
Outsourcing therefore raises a broad range of issues and concerns for the company. Employment standards have to be evaluated throughout the supply-chain to ensure fairness and legal compliance on such matters as wages and benefits, working hours, freedom of association and disciplinary practices as well as on the even more serious issues such as forced labor, child labor and discrimination. Furthermore, health and safety issues, environmental requirements and community involvement also need to be considered.
Targets
Outsourcing supply should not mean outsourcing moral responsibility. Recognizing this, and having regard to the risks and responsibilities associated with managing a global supply-chain, adidas-Salomon has designed and implemented a comprehensive supply-chain management strategy.
That strategy is to source the company's supplies from the cheapest acceptable sources rather than from the cheapest possible. The company has its own so-called "standards of engagement" (SOE) and the level of acceptability is based on the values of the company itself. Contractors, sub-contractors, suppliers and others are therefore expected to conduct themselves in line with adidas-Salomon's SOE.
The strategy is based on a long-term vision of self-governance for suppliers - adidas does not wish to be forever in the position of looking over the shoulders of its suppliers.
Actions
The company has a 30-strong SOE team, most of whom are based in the countries where suppliers are located (Asia, Europe and the USA). They know the labor laws and safety regulations in their countries and are often able to interview workers in their own language.
Before a relationship is formed with any new supplier, an internal audit is carried out to ensure working conditions in that supplier meet adidas-Salomon's SOE criteria. All business partners sign an agreement committing them to comply with the SOE and to take responsibility for their subcontractors' performance on workplace conditions. The monitoring process is continuous as suppliers are audited at least once a year, and more often if serious problems are detected.
Training forms an even more important part of the process than monitoring because it goes beyond the policing role to one that will have a long-term impact. As of October 2001, some 200 SOE training sessions had been held for business partners during the course of the year, a significant increase on the 150 courses held the year before.
Results
About 800 audits were conducted at different levels in the supply-chain during 2000. This involved interviewing managers and workers, reviewing the documentation and inspecting facilities. Since then, the audit process has continued.
Using the information gained from these audits, presentations are made to the management of the supplier, outlining any problems found and the consequential action points. Clearly defined responsibilities and timelines are then agreed with the site managers. Where serious problems are detected, a follow-up visit may be conducted within one to three months. If the supplier is unwilling to make the necessary improvements, adidas-Salomon may withdraw its business. This course of action is a last resort; the company prefers to stay in partnership and to work from the inside to help encourage improvements.
In 2000, adidas-Salomon adopted a system of scoring and reporting on its suppliers' performance. This gave an overview of the supply-chain and highlighted the main issues and problem areas on a country-by-country basis, but an improved and extended system is now being developed. This will allow the company to publish even more detailed reports about the progress that it, as a company which manages large and complex supply-chains, has been able to make in the important areas of social and environmental performance.
2.Author WBCSD
Publication Date 01.02.2002
Document Type Case studies
Issue/Topic Acountability & Reporting Corporate Social Responsibility
Region (Global)
Company adidas-Salomon AG
Alcoa: Developing local capacities
Alcoa Aluminio in Brazil operates the largest Alumina refinery in South America and the second largest smelter on that continent. The Alumar plant, one of Alcoa most modern smelters and refineries, is situated in Sao Luis, in Northern Brazil.
Alcoa values, training and financial support were made available to Alumar in the early stages of development, along with technical assistance and experienced workers.
Due to the lack of industrial background in the region there very few specialized workers available initially; this was in fact the first heavy industry of its type in the area. During this stage Alcoa plant in Pos de Caldas supplied several staff to run the plant, and several technicians came from the USA to conduct and teach operational activities. Several technicians hired by Alumar in S Lu were also sent to other plants for training.
Over time the company developed extensive training programs that have enabled local people to form a dedicated, high performance workforce. Depending on their position, they received anything from an introductory course on safety and legal procedures, through to a complete College education. Career plans were developed to determine the appropriate training for each individual. This was a win-win for the employees, the company and the region - more skilled employees meant enhanced and more competitive outputs and consequently an improvement in the local industrial capability.
Great improvements have been recognized in the quality of the operations over time. Training and development programs have led to a highly skilled and qualified workforce. In particular, employees have been noted for developing a strong commitment to policies, cost awareness and a sense of ownership, as well as improved group work and responsibility for self-development. As a result of process efficiency and high management standards, Alumar was awarded both ISO 9002 and 14001 certifications by July 2000.
A labor force of about 13,000 people was employed at the peak of construction. More than 80% of those workers came from Maranh. Since the commencement of operations, Alumar has become an important regional economic center, offering more than 1,950 direct jobs and another 1,500 indirect jobs. Currently more than 98% of the employees come from the local region, even in the managing seats.
Alumar also work closely with Local and Federal Colleges and Research Institutes. In particular, a very close relationship has been maintained with the local university and a program has been designed to receive students for supplementary training. Partnerships with vocational institutes, colleges and universities have given many students a chance to enhance their education and apply their knowledge in a practical environment through internships. Alumar is also sponsoring community programs in environmental education.
Alumar is now recognized worldwide as one of the world抯 largest industrial complexes for production of alumina and aluminum. In the refinery the present production rate is around 1.27 million tonnes per year of alumina, and in the smelter the current capacity is 365,000 tonnes per year of metal. To support the eavy industry?a medium-heavy industry has developed in the region, mainly focused on fabrication workshops and industrial gas production. Due to the large amount of goods transaction within the S Lu area, dozens of local industries have developed since Alumar was installed.
To view the full case study* click on the attached document below
*This case study is part of a two-volume report that emerged from a joint research project between WBCSD and the United Nations Industrial Development Organisation (UNIDO). The reports examine ten case studies of private sector engagement in technology cooperation in developing countries
3.Author WBCSD
Publication Date 01.02.2002
Document Type Case studies
Issue/Topic Capacity Building Corporate Social Responsibility Sustainable Livelihoods
Region South America
Country Brazil
Company Alcoa
Aventis: Partnerships for health
Pharmaceutical company Aventis focuses on the discovery and development of products such as prescription drugs, vaccines, and therapeutic proteins through it's business units Aventis Pharma and Aventis Pasteur.
Aventis' products are increasingly becoming essential tools in dealing with the many emerging and re-emerging epidemics that threaten people the world over. However, in places where many of these epidemics are prevalent, the fight requires more than products. A lack of clinics and skilled personnel, insufficient supply chains, missing health insurance systems, and in some cases political unrest and violence, make provision of health products complex.
However, there are institutions such as the World Health Organization (WHO) that have the capabilities and regional knowledge required, and it makes sense for companies like Aventis to share competencies with such bodies. Thus Aventis teamed up with WHO and other groups to ensure that the products needed to tackle such epidemics reach those in need. Partnerships include the Global Alliance for Vaccines and Immunization (GAVI), the Global Polio Eradication Initiative, and the recently formed partnership to tackle African Sleeping Sickness.
Concerned about the disparity between the quantity and types of vaccines supplied in developed countries and those made available in developing countries, Aventis has become a partner in GAVI, which includes others in the vaccine industry, WHO, Unicef, the World Bank, governments of developing countries, and many OECD governments. The alliance was founded on the belief that protecting the health of children through immunization is a fundamental cornerstone for economic development and global security. Its goals are to improve access to sustainable immunization services; expand the use of safe, cost-effective vaccines where needed; accelerate the development and introduction of new vaccines and technologies; accelerate research and development efforts for vaccines needed primarily in developing countries; and make immunization coverage a centerpiece of international development efforts.
''For Aventis Pasteur, industry participation in the alliance is necessary to help ensure supply for these markets - and to make vaccines available to the 40 million to 70 million children born each year who would otherwise not have access to this preventative intervention,'' says Jacques Berger, Aventis Pasteur's senior vice president for corporate public policy. He points out that the vaccine industry is the only one that supplies large volumes of products to the poorest segment of the population at highly discounted prices. ''This private-public alliance is a model for other basic-needs markets,'' he adds.
Aventis is also a partner in the Global Polio Eradication Initiative, launched in 1988 by WHO, Rotary International, the U.S. Centers for Disease Control, and Unicef, with the goal of eliminating polio worldwide. Aventis Pasteur has launched a Web site (www.polio-vaccine.com) devoted to polio eradication. The trilingual site (in French, English and Spanish) provides current information about the disease. Between 2000 and 2002, Aventis Pasteur will be donating 50 million doses of oral polio vaccine to Angola, Liberia, Sierra Leone, Somalia, and Southern Sudan. Since 1997, Aventis Pasteur has donated nearly 90 million doses of oral polio vaccine to African countries.
''As the largest historical producer of polio vaccines, we have an obligation to contribute to the final assault on polio,'' says Jean-Jacques Bertrand, chairman and chief executive officer of Aventis Pasteur. ''Today, when now more than ever polio eradication is within our reach, we believe that we must sustain this momentum and intensify our fight.''
There is a dramatic resurgence of African trypanosomiasis, more commonly known as sleeping sickness, in sub-Saharan Africa. The disease is spreading in some of the poorest Central African communities, threatening more than 60 million people in 36 countries. It has become one of the greatest causes of mortality, ahead of HIV/AIDS in some provinces.
Aventis and WHO, working with medical humanitarian organization Mecins sans Fronties (MSF), designed a large-scale program to combat the disease. "This partnership is an example of a public-private partnership wanting to find viable solutions for life-threatening diseases," said Richard J. Markham, CEO of Aventis Pharma.
Aventis Pharma has committed $25 million to support WHO's activities in the field of African trypanosomiasis over a five-year period. This is not a simple donation of products, but rather a structured partnership that involves three related efforts to tackle the epidemic. Key pharmaceuticals will be provided to WHO, to be distributed by MSF. Aventis will also finance the acceleration of disease surveillance, control activities, and support new research. For any undertaking to be successful, it is necessary to address the integrated considerations of drug manufacturing and provision, as well as the ongoing treatment and needs of patients.
Aventis could not have tackled such programs alone. The company lacks the experience of working with patients in such affected areas; neither does it posses the capabilities to conduct the necessary surveillance and control of activities. The administration of drugs in some cases is also very demanding on the provider. For example, those affected by sleeping sickness require treatment four times a day, at six-hour intervals for one month. WHO, however, possess the capacity and experience and know the affected regions. But they do not posses the capacity to manufacture the treatment drugs. Clearly then, partnerships that bring together these necessary skills, experience, and capacities are required.
4.Author WBCSD
Publication Date 01.02.2002
Document Type Case studies
Issue/Topic Capacity Building Corporate Social Responsibility
Region Africa
Company Aventis
BASF: Eco-efficiency life cycle tool
Situation
Company information
BASF is a key player in a wide range of industries through its activities in chemicals, plastics and fibers, colorants and finishing products, as well as in agricultural products and nutrition, and oil and gas. BASF maintains business relationships with customers in more than 170 countries and is a transnational company that operates production facilities in 39 countries. Its sales reaches 35.9 billion euros in 2000. BASF has approximately 100 000 employees worldwide.
Case background/context
BASF is committed to the interests of its customers, shareholders and employees and assume a responsibility towards society. Therefore, BASF requires that all of its activities pursue ongoing profitable performance in alignment with the principles of Sustainable Development.
Targets
The BASF goal is to offer competitive, environmenally friendly products with optimum benefit for customors. BASF believes that sustainable products are the products of the future and the company is now starting to ensure that they are among the leading companies of tomorrow.
To test whether or not its products are living up to today's economic and ecological demands, BASF set out to develop and implement a tool to measure the eco-efficiency of products and processes to better prepare themselves to make strategic business decisions.
Actions
An eco-efficiency life cycle tool was developed by BASF and consultanting firm Roland Berger und Partner. This tool makes it possible to compare economic and ecological advantages and disadvantages of various products and processes.
For the purpose of analysis, BASF steps out of their own shoes and adopts the viewpoint of customers and end-users who have the finished product in hand.
To do this, BASF compares same use applications rather than products.
The tool allows for both the environmental burden and the total economic costs to be plotet on a two-axis graph, known as eco-efficiency portfolio. This makes it easy to determine the product environmental efficiency.
When assessing environmental impacts, 6 categories are examined: raw materials consumption, energy consumption, air and water emissions and disposal, potential toxicity, potential risks and land use.
Using the eco-efficiency life cycle tool
To demonstrate the use of this tool the example of styrene transportation will be documented:
BASF wants to find the cheapest and most environmentally friendly way to transport around 25,000 metric tons of styrene from Moerdijk to Arnheim (about 100 kilometers). In order to answer this question, BASF draws up an eco-efficiency analysis with its tool.
Results
Two methods of transportation were compared:
Rail transport for 115 km. This would require tank cars with a loading capacity of 60 metric tons.
Road tanker transport for 114 km. Tankers carry 33 metric tons each.
The analysis conducted gave the following picture:
The pure freight rates for transport by rail are lower than by truck, although additional rail-specific costs, such as shunting costs and car rental and handling, give a slight cost advantage to road.
However, the environmental pollution - caused by energy consumption, emissions and lower health risks to workers - is significantly lower by rail.
For example, the truck would need about 50,000 liters of diesel per year for this journey. As the railways are electrified, the rail journey consumes in total about 20 % less primary energy.
BASF decided that it is in its interest as a leading company and in the interest of the community and the environment to choose the more environmentally preferable transportation option. Although the costs for transport by rail are slighty higher, the environmental pollution was significantly lower and the overall package is in allignment with BASF's dedication to sustainable development. Since last year, BASF transports its styrene by rail between these two sites.
The results of eco-efficiency analysis help BASF to improve it's products and processes by showing exactly where the improvement would benefit the environment most and what its financial consequences would be. Where the analysis shows that the product is not eco-efficient and cannot be improved, the company looks for alternatives.The system also allows BASF to define and monitor research and development targets.
5.Author WBCSD
Publication Date 01.03.2002
Document Type Case studies
Issue/Topic Eco-Efficiency Mobility
Region Europe
Company BASF AG
Bayer CropScience: Integrated crop management capacity building projects
Bayer has designed an Integrated Crop Management (ICM) training program for farming families in Latin America. A pilot project began in May 1995 in Brazil, and was replication of the program was launched in Guatemala in June 2001, as a public/private partnership with German service company Gesellschaft f黵 Technische Zusammenarbeit (GTZ).
The overall campaign was based on the basic concepts of ICM. Special attention was given to Integrated Pest Management (IPM), which includes indirect measures of weed, pest, and disease prevention such as crop rotation and monitoring pest populations against threshold levels. Direct control of pests, through biological, biotechnological, mechanical, and chemical measures, and the correct and efficient handling of chemical crop protection products were all important aspect of the project.
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Particular importance was attached to finding appropriate methods for conveying information to the many beneficiaries that could not read or write. Visual material included stickers and a card game, containing pictograms on safety aspects. Other training material included documents, posters and overheads, as well an easily comprehensible, 14-minute educational film that summarized the core themes of the campaign. Also, by setting up a school photo competition, and by staging a play on the subject of farming and crop protection, the children and schools became highly motivated and interested in the subject.
In Brazil, 25,000 small-scale farming families were reached, including 1,300 teachers and 2,500 children. Positive results were recognized in relation to crop rotation and conservation tillage, the value of beneficial organisms, the effective use of crop protection products and the value of protective clothing. In Guatemala, about 3,000 people have attended the training sessions in the first 6-months and 40 external trainers attended the training sessions. New cultivation techniques have improved practices, as demonstrated by and increase in peanut production yields from 975 kg/ha to more than 3.500 kg/ha; net earnings increased from US$ 738/ha to US$ 1061/ha. In addition, the effectiveness of the program in Guatemala is helping to reduce the migration of farmers with previously marginal yields to the tropical rainforest areas in search of new lands?for agricultural purposes.
The project proved that farmers only adopt new technologies if they are given the appropriate incentives, knowledge, and practical skills. The project succeeded because it offered clear financial benefits and used earning by doing?participatory training techniques and local demonstration projects. Success also stemmed from providing the trainees with a sense of project ownership and through using the expertise of all participants: farmers, industry, local authorities, and the agricultural unions.
To view the full case study* download the document attached below
*This case study is part of a two-volume report that emerged from a joint research project between WBCSD and the United Nations Industrial Development Organisation (UNIDO). The reports examine ten case studies of private sector engagement in technology cooperation in developing countries
6.Author WBCSD
Publication Date 01.12.2000
Document Type Case studies
Issue/Topic Capacity Building Corporate Social Responsibility Sustainable Livelihoods
Region South America
Country Brazil
Company Bayer A.G.
BC Hydro e-points
Situation
BC Hydro generates about 50,000 gigawatt-hours of electricity annually, most of which it distributes to 1.6 million customers in the Canadian province of British Columbia, with some export within Western Canada and the Western United States. Domestic and trade revenues for the year ending March 31/01 were approximately CND$7.9 billion.
In December 2000, BC Hydro's Board of Directors formally ratified sustainability as a driver for their future business direction. Under this directive, and the pressures of current supply restrictions in British Columbia and on the West Coast of North America, BC Hydro have been re-examining and expanding their successful Power Smart initiative, which promotes eco-efficiency within their customer groups. From this emerged the program e.points (energy points).
e.points was launched on 03 July 2001 to encourage BC Hydro's largest 366 customers to achieve significant electricity savings within their commercial accounts. These customers represent more than 75% of BC Hydro's commercial revenue.
This marketing approach both rewards an up-front commitment to energy efficiency and ensures the long-term sustainability of electricity savings through the redemption of e.points for hard-wired efficiency upgrades.
Targets
BC Hydro's primary objective is to achieve 1,475 GWh in total electricity savings over the 5-year duration of the e.points program. This objective supports the company's sustainability commitment of providing financial, environmental and social value by:
Targeting a reduction in electricity consumption and greenhouse gas emissions. (A total of approximately 780,000 tonnes of GHG emissions will be avoided over the 5-year duration of the e.points program. These savings have a value between $8.0 and $40.1 million. Reductions in local air pollutants [Nox, SO2, particulates] will also occur. The value of these savings will range from CND$1.4 million to CND$2.4 million)
Offsetting the need to generate new electricity
Decreasing BC Hydro's reliance on imported energy
Enhancing export opportunities in the energy market (BC Hydro has the unique ability to store electricity in the reservoirs that power their hydroelectric facilities. This creates an opportunity for BC Hydro to purchase [import] low-cost electricity during low-demand periods for domestic use. Coupled with sustainability programs like e.points that encourage customers to use less electricity, BC Hydro can maximize the sale [export] of "stored" electricity in their reservoir system during periods of high demand)
Increasing loyalty to the BC Hydro and Power Smart brands
Actions
The e.points program is founded on a "loyalty marketing" concept, whereby BC Hydro will reward customers for fast-tracking energy efficiency projects that capture electricity savings.
Energy efficiency projects can be "behavioral" or "hard-wired". Behavioral energy efficiency relates to education and training that promotes employee awareness and behavioral change (e.g., turning off lights and equipment), coupled with operations and maintenance changes by facility management personnel (e.g., instructions for setting the heating and cooling system). Hard-wired energy efficiency relates to capital investment in upgrades - products or technology (e.g., compact fluorescent lighting) that become a permanent fixture of the facility and deliver sustainable electricity savings.
A key element of the e.points program is timing - immediate action is a critical success factor to ensure that the value of achieved electricity savings is optimized. An aggressive marketing and communications campaign was developed to support an 11-week customer enrollment period, defined from 03 July to 15 September 2001. Customer communication materials included:
A direct mail piece letter and brochure in the BC Hydro Power Smart program folder, which was sent from BC Hydro's Vice President of Marketing and Sales and was targeted to the customer's senior executives (e.g., VP, Engineering)
A direct mail piece (letter and brochure in Power Smart folder), targeted to the customer's facility management staff, and sent from the customer's BC Hydro Account Manager
This communication was immediately followed by email and phone contact to the customer's facility management staff
Customers were invited to attend one of six breakfast information sessions held in the Lower Mainland, Victoria, Nanaimo and Courtenay
Personal customer visits by a BC Hydro Key Account Manager were scheduled for all delegates and qualified customers unable to attend the information sessions
Follow-up contact was conducted via phone, email and fax to encourage customers to enroll in the program
Additional support for the program is provided through an exclusive web site solution, which is being launched in two stages. The first stage, which focuses on information about e.points, summarizes the e.points program, including eligibility conditions, frequently asked questions and the ability to register for e.points breakfast presentations.
The second stage, scheduled for launch at the end of October, will be a "dynamic" account tracking solution that will provide enrolled customers with secure access to view their e.points accounts on-line. Customer billing data will be pulled from the BC Hydro account mainframe by the web site to provide real-time viewing of account information by billing cycle.
Results
Business case projections supported a Year 1 enrollment of 355 customers. The electricity savings target is 1,475 GWh over five years. The overall cost of the program is $18.1 million. The projected cumulative discounted shareholder value-added (SVA) for the program is $42.5 million.
In actual fact, forecasts for Year 1 have already been exceeded. As of October 29, 2001, 447 customers with an electricity base load of 3,778 GWh are enrolled. As a result of the excellent response to the program, potential savings for Year 1 look to be approximately 185 GWh, which represents CND$8.5 million in electricity savings, equivalent to 97,500 tonnes in avoided greenhouse gas (GHG) emissions.
A key objective of the e.points program is to mitigate the financial risk of shortfalls in electricity supply by encouraging customers to conserve electricity. The flow-on benefits of this conservation effort for BC Hydro include:
A reduction in GHG emissions
Deferral of new sources of electricity generation
Revenue enhancement through electricity export sales
The creation of customer loyalty
In rewarding customers for driving electricity savings in their key facilities e-points provides a number of beneficial outcomes to customers, such as:
Accelerated electricity savings
Reduced operating costs
Funded investment in approved Power Smart solutions
Increased competitiveness
Future of the program
The e.points program is a highly structured, low-risk, customer-focused energy efficiency marketing campaign that is "shelf-ready." If the e.points program is successful, there will be a compelling argument to drive energy conservation by offering the program to other commercial, industrial and residential customers; for instance, re-branding e.points as "e.points at home" for residential customers. Also if it is successful, BC Hydro will look at ways to offer a similar program, cost-effectively, to a larger group of commercial class customers.
For more information, please contact Nadine Cahan.
7.Author WBCSD
Publication Date 07.01.2002
Document Type Case studies
Issue/Topic Advocacy & Communications Electricity Utilities Energy & Climate
Region North America
Country Canada
Company BC Hydro
BC Hydro: aboriginal relations programs
BC Hydro, one of the largest electric utilities in Canada, is a Crown corporation owned by the province of British Columbia, which is home to 197 First Nations bands (i.e. Aboriginal groups). BC Hydro has facilities on at least 168 of these band reserve lands. Consequently, building sustainable, mutually beneficial relationships with Aboriginal peoples is critical for BC Hydro.
In 1993, BC Hydro developed a comprehensive approach to managing Aboriginal issues. The main elements of BC Hydro approach are addressing the past, building for the future, and effectively managing its Aboriginal relations initiatives. Key components of the relationship building strategy are facilitating participation in resource management and development decisions, fostering economic development, supporting education for Aboriginal peoples, and contributing to community projects and events.
To increase economic development opportunities for First Nations, BC Hydro negotiates contracts for work on reserve lands and assists Aboriginal-owned businesses to improve their tendering practices. Start-up and expansion grants to Aboriginal-owned businesses are provided and in some cases joint ventures are explored. BC Hydro has also developed an Aboriginal Business Directory that is used throughout the corporation and is available to government and private sector companies as a source for products and services.
Within BC Hydro, education is a key component of the strategy. Cross-cultural training programs address historical facts, court decisions, and cultural issues. More than 4,700 BC Hydro employees have taken at least one half-day, cross-cultural, training course. Those who frequently interact with First Nations have taken more rigorous training. BC Hydro cross-cultural training, which has also been delivered to more than 100 outside organizations, received the 1999 Province of British Columbia Multiculturalism Award. Aboriginal education is also a priority, with education scholarships, Aboriginal language and culture preservation programs, and stay-in-school programs forming a part of the strategy.
The biggest challenges faced by BC Hydro in this field flow from the prevailing legal and political uncertainty both as to the outcomes of treaty negotiations and the nature and extent of Aboriginal rights and titles. BC Hydro addresses these uncertainties by seeking interest-based?rather than rights-based? solutions to problems, and by providing input into the treaty process. Open dialogue with First Nations is a key component of the strategy for managing this uncertainty.
In November 1997, BC Hydro commissioned the Ipsos Reid Group to conduct interviews with Aboriginal leaders across British Columbia. The First Nations opinion leaders told BC Hydro representatives that the company principles, which guide its relationship building activities, are the right ones.
The findings revealed that while relationships have improved over the past ten years, the company has a long way to go. The goals First Nations identified as most important in contributing to improved relationships were:
consulting with Aboriginal communities in the early stages of a project;
co-operating with Aboriginal peoples and education institutions to develop initiatives and programs;
encouraging Aboriginal people to take advantage of any economic social or other opportunities from BC Hydro projects;
and developing employment equity programs.
Those who thought that relations with Hydro were still poor cited a lack of respect towards Aboriginal peoples and insufficient communication as the main reasons.
Perhaps the most critical lesson that BC Hydro has learned in this area is that problems cannot be solved overnight or with simple, one-size-fits-all solutions. First Nations share the need for better business relationships, and they will work with BC Hydro when they see that the company抯 commitment is real and sustained.
8.Author WBCSD
Publication Date 01.01.2002
Document Type Case studies
Issue/Topic Capacity Building Corporate Social Responsibility
Region North America
Country Canada
Company BC Hydro
BC Hydro: collaboration through water use planning
Situation
Company information
BC Hydro, one of the largest electric utilities in Canada, is a Crown corporation owned by the province of British Columbia. BC Hydro generates about 50,000 gigawatt-hours of electricity annually, 90% of which is clean, renewable hydroelectricity. BC Hydro serves nearly 1.6 million BC customers, while the power subsidiary, Powerex, markets energy products and services in western Canada and the western United States.
Case background/context
In response to ever-increasing competing demands for the province's abundant water resources, Water Use Planning (WUP) was developed. This program is a joint initiative of BC Hydro, and the British Columbia (provincial) and Canadian (federal) governments, in consultation with First Nations and the public. The overall goal is to find a sustainable balance between competing water uses that are socially, environmentally and economically acceptable.
The dams and reservoirs used to store and regulate water at BC Hydro's 30 hydroelectric facilities affect fish and wildlife habitat, cultural resources, recreation activities, and water levels. In addition to power production, these facilities create other benefits such as domestic drinking water supply, flood management, and economic development.
A Water Use Plan (WUP) is a detailed set of operational instructions for a facility, focusing on the timing and amount of water releases through various dam release structures. Water Use Plan decisions at each hydro-electric facility are being made within an open, inclusive multi-stakeholder committee designed to consider economic, social and environmental values.
Committee members include federal and provincial government agencies, BC Hydro, First Nations, local citizens and other public interests. In developing a Water Use Plan, participants apply their values and interests to the evaluation of different operating alternatives, seek multi-party consensus on a preferred alternative, and make recommendations regarding water management at BC Hydro facilities.
Because effective, sustainable water use is fundamental to BC Hydro's success, the company is highly committed to the WUP process. Water Use Plans will provide clear and understandable boundaries within which to operate and to plan for future electricity supply. Senior government and the BC Comptroller of Water Rights will do final WUP reviews and consultations.
Targets
The main objectives of the WUP:
Support BC Hydro's corporate mission to provide integrated energy solutions to customers in an environmentally and socially responsible manner
Help meet BC Hydro's objective of building and maintaining public support by engaging external constituents, including other government agencies, the public, First Nations, our regulators and our shareholder, in a dialogue about options, tradeoffs and priorities in operating our hydroelectric facilities
Reduce or eliminate regulatory uncertainty by setting clear boundaries that take into account public values. This makes good business sense because it provides operational stability
Apply societal values into the use of water for multiple interests and objectives
Enable more informed decision-making that transparently incorporates public values into tradeoffs between water use interests, opportunities and impacts
Actions
A core group of representatives from BC Hydro and the provincial and federal governments developed the WUP framework over a two to three year period. This Inter-Agency Management Committee continues to guide and support the WUP program.
The WUP program has been underway since 1999, with 2 plans completed, 13 underway and the rest scheduled to begin within the next year. Each plan follows the 13 step WUP Guidelines. The key features are designed to:
Set interest-based objectives and related performance measures
Identify relevant information or research studies
Create alternative operating strategies
Make values-based tradeoffs
Monitor WUP outcomes
Review and document both the procedure and the decisions
Through the WUP process, stakeholders from different organizations and the public have been collaborating on new studies, interpreting data results and making science-based decisions that reflect a broad range of societal values.
Many WUPs will have an ongoing monitoring component, taking an adaptive management approach that blends scientific investigation and value-based decision-making to seek the sustainable balance between economic, social and environmental interests.
Over five years the BC Hydro WUP program's costs are approximately $26M CDN, with key provincial and federal partners supporting the program through staffing and other resources. As WUPs find a sustainable balance between economic, social and environmental interests, there is a likelihood that ongoing scientific monitoring and reduced operating flexibility will decrease the financial value of power generation. The provincial government, BC Hydro's sole shareholder, will recognise the costs of implementing Water Use Plans through reductions in water rental payments from BC Hydro to the province. The cost estimate for implementing Water Use Plans at the outset of the program was $50M CDN. Although rough, this estimate provided government with the comfort to approve and embark on the WUP process, with some sense of the magnitude of costs and a general idea of the benefits for non-power values.
The Challenges
The WUP program is faced with strict budgets and timelines within which it must carry out extensive public consultation for the 30 hydroelectric facilities. This has presented numerous challenges at times; such as limited money for new research, and competition for limited human and monetary resources between water use plans, by all participants. The WUP process has approached these challenges in several ways:
Solution- Develop expertise and learning in the decision analysis, environment and procedural areas that creates benefits for subsequent WUPs. Earlier WUPs had larger budgets and timeframes; later WUPs benefit from their predecessors' experiences, in planning, research and staff and participant experience
Solution- Adopt an "adaptive management" approach where key uncertainties in the science or the baseline data are addressed either through a comprehensive monitoring plan, or through an "active" water use plan that implements flow trials in an experimental design to study the impacts of different operating scenarios
Solution- Have different "levels of intensity" for different facilities. This allows larger budgets and more time where more science, debate and conflict are anticipated and a "slimmer" process for simpler facilities with fewer impacts and possible operating alternatives
Solution- Collaborate with other agency participants in the development of the WUP program schedule. This helps participants to schedule their own resources and priorities
WUPs are multi-disciplinary, multi-stakeholder decision processes that do not fit neatly into the current business-planning paradigm. The diversity of perspectives, areas of expertise and values within the company offer both challenges and opportunities within a multi-disciplinary program.
Solution- WUP project teams balance "WUP-dedicated" staff (environmental modeling, resource valuation and project management) with expert staff from facility operations, corporate planning and Aboriginal relations. This team structure allows the WUP program to develop and grow, while capitalizing on the existing planning and operations expertise in the public, values-based process to enable multi-directional learning.
Earning the trust and respect of both agencies and the public, and gaining a multi-year commitment of time, energy and resources, required BC Hydro to demonstrate its commitment to the WUP process.
Solution- Earlier projects were assigned larger budgets, ensuring time and flexibility to address participant needs. Both the process design and BC Hydro earned trust, through shared learning and exploring diverse values. BC Hydro now confidently leads the process, following the WUP Guidelines while benefiting from tools and learning from earlier WUPs.
Solution- Alongside WUPs, BC Hydro initiated the annual $1.5M CDN Bridge Coastal Restoration Program, supporting eligible fish and wildlife projects within these watersheds to address issues related to dam construction and as a predecessor to the WUP program. The Bridge Coastal program augments the existing Columbia and Peace Fish and Wildlife Compensation Programs (annual allotments $3.8M CDN and $1.5M CDN respectively).
Securing and supporting the widespread participation of First Nations in WUPs was recognized from the outset as both a key to success, and a potential challenge. First Nations governments and communities in British Columbia have varying levels of expertise and interest in participating in a WUP process. Furthermore First Nations are participating in a great number of decision-making processes that further tax their resources and create competing priorities.
Solution- The First Nations (FN) WUP Committee has a representative on the Inter-agency WUP Management Committee, as well as on the other program development activities. First Nations participants in WUP can access the FN WUP Committee for assistance in WUP participation, including scientific and legal advice concerning aboriginal rights to resources.
Solution- The multi-attribute tradeoff process offers an effective and equitable tool for incorporating traditional ecological knowledge (TEK) into "western" decision-making. Cross-cultural learning is a valuable objective of all WUPs.
Results
As an effective route to interest-based negotiation and structured decision-making,the WUP process is widely supported and accepted because it offers superior results to all participants, including BC Hydro, over traditional positional or litigative dispute resolution
Explicit learning about values and interests of all participants.BC has been a leader in multi-stakeholder land-use planning, and participants at WUP tables understand and embrace the benefits of interest-based, multi-party decision making. Participants tend to move from black and white thinking toward a greater understanding about the interplay between economics, social and environmental interests. The complexities of BC Hydro's integrated operations are becoming better understood, while BC Hydro learns about the intricacies of fisheries and habitat management and social values. The end result is more informed decisions and shared responsibility for outcomes
Inter-agency and inter-personal relationships are builtthrough the WUP process, between government agencies, First Nations, the public and BC Hydro. This will be an ongoing legacy of WUPs, making collaboration and negotiation a preferable alternative to adversarial conflict and litigation. BC Hydro's future operations will occur with support and cooperation from agencies, rather than the opposition and conservative environmental management that are often sought when the science and effects are unknown or uncertain
The scientific database, methodologies and transferable knowledge are built through investment in sound scientific investigation into the operational effects on fish, environment, recreation and First Nations' values. A WUP may refine, remove or add operating restrictions as scientific investigation leads to better knowledge about habitat requirements and operational effects. Scientific modeling and methods will have ongoing value and benefit to BC Hydro and other hydroelectric facilities
The completed Stave Water Use Plan achieved incredible results. Recommendations for change were made through the WUP process and once adopted, these changes met with improvements across all objectives, including economic, social and environmental objectives. This type of win - win situation clearly demonstrates that collaboration can lead to sustainable decision-making for all players
New hydro-operations will reflect social and environmental costs. Program costs will be assessed in several ways: traditional calculation of economic losses due to restricted power generation will be balanced against reduced litigative costs, and gains in economic welfare and economic efficiency by internalizing environmental and social impacts
Lessons learned
BC Hydro's Water Use Planning process in ongoing. Many of the lessons learned at early WUP tables are being applied to the next round of tables.
Inclusive representation in the WUP process that allows for a broad range of public interests. This ensures credibility, exposure to the full range of ideas and options, wide spread support for the process and an effective and efficient WUP program
Explicit and transparent sharing of information, interests and values is essential to completing a successful WUP, and to ensuring participants contribute in good faith through to the end
Creative exploration of alternatives has led to participants seeking ways to achieve mutual benefits, rather than positions that exclude or compete with other interests
Focus time and the process on the learning and creative steps. Large group processes can run the risk of using up "precious time" on procedural issues - effective facilitation through all of the WUP steps enables participants to spend time actively working and learning in the steps they care about
Further documentation
The BC Hydro website at www.bchydro.com/wup contains up-to-date information on the Water Use Planning program, including links to individual Water Use Plan projects and a "quick facts" section. As of August 1, 2001 2 WUP tables are completed, 13 are in progress and the final 7 are scheduled to start in the next year.
· Principles of Water Use Planning
· Financing of Water Use Plans
· Full version of the provincial Water Use Planning Guidelines
· Further information on the First Nations WUP Committees is available at: www.bcafc.org/FNWUPC/
·The Bridge Coastal Restoration Program overview is available at: www.bchydro.com/bcrp/
·The Columbia and Peace Compensation Programs are available at: www.bchydro.com/environment/initiatives/compensation.html
9.Author WBCSD
Publication Date 01.05.2000
Document Type Case studies
Issue/Topic Urban Water Services
Region North America
Country Canada
Company BC Hydro
Grupo Minetti: cement kiln technology in the disposal of industrial wastes
The Argentine company ECOBLEND, part of the Minetti Group of cement companies, was created in 1994 to select, collect, transport, and dispose of industrial wastes. The company has developed a technology to use this refuse as a fuel in cement kilns.
This alternative fuel process has several benefits. It conserves fossil fuels such as gas or diesel. It saves companies the chore of disposing of some of their own wastes, and it removes wastes from the environment, with no leftover material such as ash, which is often the case with other technologies.
The process also contributes to the reduction of carbon dioxide, sulfur, and nitrogen oxide emissions. The use of these waste products in cement kilns avoids emissions that would be generated through incineration.
Since 1997, the use of industrial refuse as an alternative fuel in cement kilns in Argentina has saved 49,350 m3 of fossil fuels, and a total of 122,500 tonnes of industrial waste has been saved from landfill.
