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November 01, 2001
Reducing Greenhouse Gases by Making Fizz
    by Mark Thomsen

An innovative venture enables a Shell subsidiary to sell excess carbon dioxide for soft drink manufacturing, but social investors should know that the company is still miles away from being socially responsible.

As the old saying goes, one man's trash is another man's treasure. Shell Chemicals Canada is proving the proverb can apply to industrial processes and materials as well. Earlier this year, the company's Scotford plant in Alberta, Canada began supplying waste carbon dioxide, or CO2, to a neighboring facility of the French company Air Liquide. Air Liquide is processing the gas and supplying it to companies that use it in making carbonated beverages.

The Scotford plant previously disposed of waste CO2 by simply venting it into the atmosphere. In the new venture, the plant eventually will provide 62,000 tons of CO2 per year to Air Liquide.

The emission of CO2 into the atmosphere is a problem because many scientists believe such emissions contribute to a "greenhouse effect," or a warming of the Earth's surface. Global warming potentially could have such disastrous effects as raising the level of the oceans and causing more violent and extreme weather conditions.

The arrangement with Air Liquide is notable because it also involves Shell's purchase of steam and electricity from Air Liquide's own cogeneration plant.

The health, safety, environment, and quality manager at Shell's Scotford plant, Karl Blonski, was effervescent about the arrangement. "It's real synergy - Air Liquide will eventually buy much of our CO2 and we are able to buy cheap, efficiently produced electricity from them, which we previously bought from the Alberta Grid."

The carbonization of soft drinks is one of the largest single markets for CO2, and this fact help bring Shell Chemicals and Air Liquide together. But this type of arrangement is not a first for Shell Chemicals. In the Netherlands, one of its plants in Moerdijk supplies 40,000 tons of CO2 a year to the Swiss company Omya for the production of calcium carbonate, which is used in the whitening of paper.

Royal Dutch Shell Group's actual CO2 emissions are about 100 million tons worldwide, which is down from 122 million tons in 1990. But while Shell Chemicals' parent company says it is committed to CO2 reductions and the promotion of renewable energy, its budgetary commitment tells a different story.

According to CorpWatch, a nonprofit that monitors corporate social and environmental practices, the parent company's 1997 allocation of $500 million to develop renewable energy over the next five years may seem substantial, but actually amounts to less than one percent of the company's overall budget for the same period.

Shell Chemicals' handling of a long-standing dispute with communities near its Norco, Louisiana facility is also less than socially responsible. For 15 years, the residents of Norco's Diamond district have been asking Shell to relocate their neighborhood because it is immediately adjacent to a Shell Chemicals facility and oil refinery.

According to CorpWatch, the community has proven that "hazardous chemicals are almost constantly in the air." CorpWatch says that the pollution has driven people away, and that Shell has been patiently taking advantage of falling property values by purchasing nearby properties at bargain prices.

Royal Dutch Shell's dealings with the people of Norco, Louisiana and the its real contribution to global CO2 production were partly behind CorpWatch's decision to give the company a "Greenwash Award" last year. According to CorpWatch, the award was in recognition of the company's deceptive advertising in its "Profits or Principles" campaign.

The Shell Chemicals-Air Liquide arrangement is a win-win-win venture; a win for the two companies and a win for the environment. But social investors should be wary of applying the value of one initiative to the whole of a company's operations. Another old saying comes to mind when considering corporate tales of good deeds: let the buyer beware.


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