Hero: Asia Pulp and Paper
Asia Pulp and Paper (APP) was designated a Zero by Corporate Knights back in 2012, after a Greenpeace investigation uncovered damning evidence of illegal clear-cutting in portions of the Indonesian rainforest controlled by the company. The report and a subsequent Greenpeace pressure campaign led to over 130 global companies dropping APP as a paper supplier. Even prior to the Greenpeace report, APP had gained a reputation in the industry as an environmental pariah. British environmentalist George Monbiot once described APP as “one of the most destructive companies on the planet.”
Nearly three years after this article first appeared in our magazine, APP is well on its way to completing one of the fastest and most dramatic environmental turnarounds in recent decades. It began with the rollout of a Forest Conservation Policy (FCP) in February 2013, which placed an immediate moratorium on all natural forest clearance while independent assessments were conducted to determine which areas should receive special protection.
Greenpeace decided to suspend active campaigning against APP after the release of the FCP, while continuing to carefully monitor the adoption of conservation measures. “By working closely with multiple stakeholders, such as Greenpeace and The Forest Trust (TFT), we were able to understand how we could achieve both our business and sustainability goals – with the ultimate objective of achieving a zero deforestation business model,” says Ian Lifshitz, APP’s director of sustainability and stakeholder relations for North America.
The next step was a plan, also developed in collaboration with environmental groups, to protect and restore one million hectares of rainforest across Indonesia. The Rainforest Alliance is currently conducting an independent evaluation of APP’s overall progress.
“With key people in senior management genuinely committed to making it work, APP’s implementation of the FCP has been transparent and very largely successful to date,” says Shane Moffatt, a forest campaigner for Greenpeace. “To continue engaging the private sector in this landmark initiative, customers should in our view apply contractual conditions requiring continued progress and demonstrate to APP that these commitments are worth it.”
For Greenpeace, Asia Pulp and Paper’s turnaround is proof that targeted campaigns can get results.
Zero: Hyundai Motor Group
Kia Motors and Hyundai Motor Company agreed to a historic $350-million settlement in November with the U.S. Environmental Protection Agency (EPA) and the U.S. Department of Justice over violations of the Clean Air Act. The two automakers, both affiliates of South Korean conglomerate Hyundai Motor Group, agreed to collectively pay a $100 million fine, spend $50 million on equipment upgrades and forfeit $200 million worth of emissions credits for misrepresenting their gas mileage figures on 1.2 million cars sold throughout the United States.
It is the largest corporate penalty ever levied for violations of the Clean Air Act. “Businesses that play by the rules shouldn’t have to compete with those breaking the law,” said EPA Administrator Gina McCarthy in a statement. “This settlement upholds the integrity of the nation’s fuel economy and greenhouse gas programs and supports all Americans who want to save fuel costs and reduce their environmental impact.” A class-action lawsuit brought by customers was settled last year for close to $400 million, bringing the combined costs for Hyundai and Kia to over $750 million.
The EPA investigation began after routine testing in 2012 raised several red flags. While a number of other automakers have been cautioned by the EPA for small mileage discrepancies in recent years, the EPA eventually uncovered widespread miscalculations across a quarter of 2011 to 2013 Hyundai brand vehicles sold in America.
Kia, meanwhile, was found to have two models with inaccurate mileage standards. Both companies actively featured the increased fuel economy ratings in advertising campaigns run in 2011 and 2012, which included Hyundai repeatedly boasting about its most popular models achieving 40 miles per gallon in highway driving. The automakers have maintained that the discrepancies were the result of vague federal guidelines, and that they have been nothing but transparent throughout the entire process.
One of the main problems, according to the EPA, was that Kia and Hyundai were allegedly using the best test results as their mileage benchmark, when it is standard industry practice to use an average of all tests combined. As part of the settlement, Kia and Hyundai have agreed to reorganize their emissions certification group and revise test protocols in time for their 2017 models. In the meantime, both companies are required to audit their mileage standards to ensure reliability.
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