Environmental sustainability

Big companies can leave big footprints

As an investor we can urge them to reduce their environmental impact. And because we speak from the position of shareholder they are obliged to listen us.

We can use our influence in a broader sense too. For example, asking the companies in which we invest to support us in lobbying the government on environmental issues. We also investigate areas that concern our customers, such as the wider environmental implications of unconventional fossil fuels, which was the focus of an extensive report in 2008.

Our policy statement on environmental sustainability

We will encourage businesses to reduce pollution and their environmental impact, and, in particular:

• reduce reliance on fossil fuels - which contribute to climate change - and increase their use of renewable energies and energy efficiency;
• end the production of chemicals that nature cannot easily break down and which build up and contaminate plants and animals;
• end the exploitation of nature - which results in the loss of plants and animals and their surroundings - and consider more sustainable natural products and services.

Our approach in practice

Over recent years we have held several meetings with Drax, the biggest coal-fired power plant in Europe is a natural target for campaigners who see carbon intensive 'King Coal' as a chief culprit in global warming. In ways, Drax is a model that other coal-fired power plants should aspire to. It is the most efficient of the UK's coal-fired stations, fully equipped with Flue Gas Desulphurisation and a commitment to biomass co-firing. However, Drax will remain out of sync with political and environmental agendas as climate change and fossil fuels receive such attention and economic Clean Coal Technology and Carbon Capture and Storage remain out of grasp. From 2012, Drax will have to pay for all its carbon pollution permits, which could get very expensive.  Drax's biggest problem is that it is just one (enormous) coal plant, so its room to diversify into lower carbon power is limited. For this reason, we divested from the company during 2008.

Biofuels: risks and opportunities of an emerging industry

Biofuels have been hailed as the answer to two major issues facing humanity: climate change and our reliance on fossil fuels. However, they may not be the panacea they have been made out to be. Although biofuels are in theory 'carbon neutral', the energy and chemicals needed to grow, transport and refine them can often mean they save very little greenhouse gas emissions and in some cases may even make climate change worse! The growth of some biofuel crops has led to rainforest destruction and in some places people may be forced from their land. We have been working with the biofuels industry, charities, government and the investment community to promote a more sustainable approach to biofuels.

Download the Biofuels booklet (opens as PDF - 2.0Mb)

For a copy of the full report on biofuels please contact: responsibleshareholding@cfs.coop