New SEC Guidance on Climate Change Risk Disclosure – Part 3

In our last article, we examined the details and requirements of the new SEC guidance. In this article we will discuss the steps to assess and measure risk, potential benefits of a certification program, and also how climate change disclosures can be applicable to non-public companies.

Practical Steps to Assess and Measure Environmental Risk

What steps should a public issuer take to assess and measure its environmental compliance risk?

Some companies approach environmental compliance in an overly simplified manner: do what the law requires and nothing more. While this is not a bad starting place, it is not a complete answer and it does little to help public companies assess their risks for disclosure purposes.

In the same way that public companies adopted risk assessment methods for the assessment of control risks when making their certifications of internal control adequacy for Section 404 of the Sarbanes-Oxley Act, public companies should also adopt risk assessment methods for environmental risks. (While the assessment method may be the same as that adopted for Section 404 purposes, it does not necessarily have to be the same.)

An assessment method will identify the universe of compliance risks and, for each risk, assess its immediacy, its potential impact, and methods for controlling that risk. A rigorous control protocol will also track the design and implementation of controls for material risks and include a testing or audit regime to test both the design and the efficacy of those controls.

The COSO methodology adopted by most public companies for Sarbanes-Oxley Section 404 controls provides a convenient approach for developing environmental risk assessments and controls. In addition, an alternative environmental management system such as ISO 14001:2004 (International Standards Organization) may also apply.

ISO 14001:2004

The ISO 14001:2004 system was referenced in Executive Order 13423, which directed federal agencies to adopt systems for improving environmental compliance, reducing the consumption of natural resources and reducing air, water and waste emissions and improving overall environmental stewardship. As applied to federal agencies through subsequent government announcements, it requires federal agencies to implement plans to:

• Educate employees on environmental and sustainability issues;
• Implement procurement practices to reduce energy usage and improve sustainability;
• Reduce water consumption;
• Shift power consumption from fossil-intensive methods to green or renewable methods of power production;
• Reduce environmental impacts by shifting to more efficient buildings, production systems and transportation systems; and
• Reduce the environmental impact of the disposal of electronic devices by improving disposal methods and encouraging the use of electronic devices with minimal environmental impact upon disposal.

Through its rigorous method of identifying, assessing, controlling and managing risk, the ISO: 14001:2004 method (or equivalent) has been adopted by federal agencies for their compliance with Executive Order 13423. Likewise, public issuers might also adopt that same method.

An environmental assessment and management system under ISO 14001:2004 embraces the concept of Plan, Do Check and Act (PDCA), a system made popular by Dr. W. Edwards Deming, considered by many to be the father of modern quality control. Once Objectives, Roles, Resources, and Procedures are put in place, a GAP analysis is performed to identify areas of non-conformity or non-compliance. An Implementation phase is initiated, followed by monitoring and review to identify areas of opportunity for improvement. The system also calls for the establishment of a continuous improvement process.

ISO 14001 – Good for the Banking Industry?

ISO 14001:2004 is not industry specific and therefore lends itself for use by a myriad of industries and organizations, including banking. In 1999, UBS was the first international bank to obtain ISO 14001 certification for its worldwide environmental management system. Even local banks have seen the value in ISO 14001. Alpine Banks of Colorado has earned and re-certified in the ISO 14001 standard since 2006, and has won many awards for its sustainability initiatives, including the Green Leaf Award from Bank News. The time frame for the entire process, from start through certification can vary dramatically based upon a variety of factors including organization size, number and locations of branch operations, type of industry, management buy-in, and staff training. Organizations which currently have an established management system, such as ISO 9001:2008, already have an existing framework and understanding to more easily and quickly implement an ISO 14001:2004.

Typically, an organization should be ready to allocate at least 5 months and sometimes up to one year to reach certification status. Organizations have several options for implementation. The traditional method is to utilize the services of professional consultant/trainers. Additionally, with the growth of ISO 14001:2004, there are now a number of software programs which have been primarily developed to assist organizations in streamlining their record keeping and reporting responsibilities. Worldwide, as of 2007, over 154,000 certificates have been issued to organizations in 148 countries.

Measuring Greenhouse Gas Emissions

As GHGe (Green House Gas Emissions) have become the accepted unit of measurement for reporting and regulatory purposes, ISO has incorporated these measurement and reporting tools within the ISO 14001 family. ISO 14064 parts 1, 2 and 3 are international greenhouse gas (GHG) accounting and verification standards which provide a set of clear and verifiable requirements to support organizations and proponents of GHG emission reduction projects. ISO 14065 complements ISO 14064 by specifying requirements to accredit or recognize organizational bodies that undertake GHG validation or verification using ISO 14064 or other relevant standards or specifications.

It would follow therefore, that properly initiated, an environmental management system would include all conceivable steps in assessing, measuring and mitigating risk. Reverting our focus back to the various disclosure requirements which were enumerated in part 2 of this series, now armed with real data, measurements and impact reduction objectives, an issuer could conceivably translate that to a more positive disclosure report.

Private Companies

While this series has focused on the SEC Guidance and its effect on public companies, there have been some regulatory actions proposed and adopted that could affect private companies. The EPA recently issued reporting requirements for 10,000 facilities in the U.S. At present, those reporting requirements are mostly applicable to mining, minerals production, wastewater treatment and carbon dioxide sequestration facilities, but the EPA has suggested that it intends to broaden the scope of its GHGe reporting requirements over time. The most recently adopted provisions, announced in late June 2010, will begin taking effect in 2011.
On the legislative front, the proposed Kerry-Lieberman Bill (American Power Act) sets up a framework for cap and trade: the buying and selling of carbon credits. Other bills have also proposed cap and trade arrangements. While there can be no guarantee legislation of this type will be adopted in the U.S., the European adoption of cap and trade following the Kyoto Climate Change Protocol, indicates that the cap and trade framework is one that will be on the horizon for some time to come if it is not adopted in 2010.

Regardless of whether environmental reporting is legally mandatory, companies that wish to take a leadership role in environmental stewardship can do so through their approach to reporting. By assessing, measuring, and controlling environmental impacts, and reporting on the results of those efforts, companies are able to lead in this effort by their own example.

About the authors:

Keith Winn is vice president of marketing and chief operating officer of GreenProfit Solutions Inc., a Ft. Lauderdale based sustainability consulting, certification and contracting firm. You may contact him at 800-358-2901 or kwinn@greenprofitsolutions.com.

Jonathan B. Wilson is a corporate and securities attorney at the Atlanta law firm of Taylor English Duma LLP. Mr. Wilson is also the founding chair of the Renewable Energy Committee of the American Bar Association’s Public Utility Section. You may contact him at 678-336-7185 or jwilson@taylorenglish.com.

New SEC Guidance on Climate Change Disclosure - Part 2

In our last article, we spent some time on the steps and actions leading up to the new SEC Climate Change Risk Disclosure guidance (hereinafter, the “Guidance”). In this article, we will examine the details and requirements of the new SEC guidance. In a following article we will discuss the potential benefits of a certification program, and also measure the relevance this action has on non-public companies.

What the Climate Change Guidance Really Means

The most important thing to realize about the Guidance is that it is not law, it is merely guidance. The requirements of public company disclosures, as set out in the Securities and Exchange Act of 1934 (the “1934 Act”) and Regulation S-K have not changed. The Guidance merely provides some gloss on how the SEC might interpret a disclosure issue if one arose. In addition, to the extent SEC staff provides comments on a public issuer’s financial report discloses, SEC staff are likely to refer to the Guidance when commenting.

The 1934 Act requires quarterly and annual financial reports (with quarterly reports on Form 10-Q and annual reports on Form 10-K) for companies with registered securities (defined in the regulations as “registrants”). The public disclosure requirements of the 1934 Act apply to all publicly-traded companies (i.e., those whose shares are traded on public exchanges like the NYSE and the NASDAQ) and those few companies who have so many shareholders that the public reporting requirements apply to them.

Attorneys, accountants and business people accustomed to working on financial reports under the 1934 Act are familiar with the touchstone of disclosure in those reports: the company must disclose those material elements of its business that a reasonable investor would consider to be material. Nearly all of the other regulations and guidance concerning financial reports spring from this basic principle. Information is considered “material” for disclosure purposes if there is a substantial likelihood that a reasonable investor would consider it relevant in deciding how to vote or make an investment decision.

Item 101 of Regulation S-K requires that the registrant disclose the material effects of compliance with any laws that might apply to the registrant. The Guidance states what should be obvious, that Item 101 “requires disclosure of the material effects that compliance with environmental laws may have on capital expenditures, earnings or the competitive position of a company”.

So, by way of example, if a registrant operates facilities with significant air or water emissions, the registrant should disclose in its financial reports its cost of complying with the Clean Air Act, the Clean Water Act and other environmental laws and the potential financial impacts of non-compliance. In contrast, a public company with no material air or water emissions would not have a duty to disclose its hypothetical liability where there is not reasonable likelihood of that liability coming to pass.

With respect to climate change, the general rule of disclosure under Item 101 means that the registrant must also disclose its actual costs of legal compliance and the potential costs of non-compliance. For example, if legislation imposed a system of emissions cap and trade, companies whose emissions exceed the stated caps, will be forced to buy “credits” and perhaps pay fines. Conversely, companies with emissions under a stated level, will be able to “sell” their credits and potentially improve their financial position. In addition, countries around the globe have and are continuing to assess fines to companies they believe are inflicting environmental damage to their nations.

Importantly, a registrant is not required (and is, in fact, prohibited) from making disclosures that are speculative. Unless and until emissions cap and trade legislation becomes law, a disclosure about the potential benefits of a cap and trade system would generally be ill-advised. In the same way that the benefits of prospective legislation are too speculative to disclose, the cost and expense of potential future legislation would also be too speculative to disclose.
Public reporting companies disclose in their quarterly reports on Form 10-Q and their annual reports on Form 10-K pending legal proceedings. Item 103 of Regulation S-K contains specific requirements about the extent to which particular items of litigation must be disclosed. Again, in general, materiality is the touchstone of disclosure.

The Guidance states that litigation disclosures under Item 103 must include any environmental enforcement actions and orders material to the registrant. As the Guidance notes, there already have been enforcement actions (notably in the State of New York) with respect to the accuracy of environmental disclosures in financial reports. There are also several lawsuits pending in which private litigants have sued companies over alleged climate change resulting from the emissions of those companies. Public companies who are defendants to such suits would be required to disclose them, applying the same materiality standards applied to any other kind of litigation.

If national climate change legislation, including a cap and trade system, became law, disclosures of potential or hypothetical litigation might be appropriate under Item 103. Until such potential legislation becomes law, however, disclosures of hypothetical or potential contingencies under Item 103 are premature. Disclosures must include “such further material information, if any, as may be necessary to make the required statements, in light of the circumstances under which they are made, not misleading.” See 17 CFR 230.408 and 17 CFR 240.12b-20.

In quarterly and annual reports, public issuers provide a discussion of the issuer’s financial results and future prospects called “Management’s Discussion and Analysis” (or “MD&A”). Item 303 of Regulation S-K requires an issuer “to disclose known trends, events, obligations or uncertainties that will, or are reasonably likely to, materially affect the company’s liquidity, capital, resources or operations”. In addition, companies are also required to disclose any other information the company believes is necessary to an understanding of its financial conditions, changes in financial condition and results of operations.

Discussing “known trends, events, obligations or uncertainties” is a potential bottomless pit. While management will be aware of immediate and obvious trends (such as increasing or decreasing sales, or increasing or decreasing costs of goods sold) there is an infinite list of potential contingencies that might impact the issuer’s financial performance. In the MD&A, however, the issuer is not required to identify every possible contingency, but rather only those “known trends, events, obligations or uncertainties” that are “material” to a reasonable investor’s decision to invest or vote securities.

Item 503(c) of Regulation S-K helps issuers draw the line between “known trends” and mere speculation by providing that the issuer must disclose "the most significant factors that make the offering speculative or risky" (emphasis added).

By way of example, an actual lawsuit that is pending is more significant than a threatened lawsuit that has not been filed. A threatened lawsuit is more significant than the risk of a possible future lawsuit that has not yet been threatened.

Put into this context, the disclosure of climate change impacts should be ranked against the issuers other known trends and contingencies. If the issuer reasonably believes that certain environmental or climate change impacts are more significant than other contingencies, that belief should guide its disclosure.

By way of example, if an issuer had facilities in low-lying coastal areas that might be threatened by an increase in sea level brought about by an increase in global temperatures, that might be a contingency with the potential to impact the issuer’s financial statements. Whether that risk is one that should be disclosed in a financial report, however, will depend on the relative immediacy and potential impact of that risk in comparison to other risks that the issuer faces. Ultimately, while the Guidance discusses these types of disclosures and provides some color on how issuers should consider them the Guidance does not change the law regarding disclosures and does not necessarily require issuers to disclose new or different kinds of risks.

The practical impact of the Guidance, however, is to raise the awareness of public issuers regarding environmental and climate change risks and costs. In light of the Guidance, public issuers should not reasonably be able to claim surprise if future enforcement actions challenge the adequacy of disclosures of these kinds of risks.
Because the disclosure of contingencies, however, requires a weighing of immediacy and impact against other potential risks, a well-advised issuer will adopt a consistent theoretical construct for considering and weighing the immediacy and impact of risks for disclosure purposes. Part of that theoretical construct, many issuers may conclude, is a process for assessing and measuring the potential impact of environmental and climate change risk. It is to this end that we will address some practical steps issuers may take to perhaps mitigate their environmental and climate change risks in Part 3 of this article series.

About the authors:
Keith Winn is vice president of marketing and chief operating officer of GreenProfit Solutions Inc., a Ft. Lauderdale based sustainability consulting, certification and contracting firm. You may contact him at 800-358-2901 or kwinn@greenprofitsolutions.com.

Jonathan B. Wilson is a corporate and securities attorney at the Atlanta law firm of Taylor English Duma LLP. Mr. Wilson is also the founding chair of the Renewable Energy Committee of the American Bar Association’s Public Utility Section. You may contact him at 678-336-7185 or jwilson@taylorenglish.com.

Cutting Costs with Green Tax Incentives - Part 1

The Energy Policy Act of 2005 (EPACT) is one of the most comprehensive and sweeping energy legislation packages ever passed. Signed into law by President George W. Bush on August 8th, 2005, the bill authorized massive tax benefits, reductions and deductions, plus loan guarantees in an effort to spur action on a new energy policy.

Buried among these voluminous new initiatives now part of the IRS Tax Code, was the new Deduction of Energy Efficient Buildings granted under Title 26, now known simply as Section 179D. Specifically, Section 179D offers substantial tax benefits to commercial property owners to upgrade their buildings and make them more energy efficient. The legislation was targeted to expire in 2008, however, the American Reinvestment and Recovery Act of 2009 extended the benefits of this bill through 2013. Perhaps due to the enormity of the legislative package, or a lack of understanding, the IRS reports that less than 2% of all commercial property owners have taken advantage of this tax saving opportunity.

There are special rules for government owned buildings, wherein the tax benefits may be transferred to a project manager or architect, but for purposes of this article, we will focus on how banks, as building owners and leaseholders, can leverage these benefits.

About the Actual Deduction

Under Section 179D, deductions are based on areas of energy savings and total square footage of a building. The regulation provides commercial building owners and leaseholders with a deduction for implementing energy-efficient commercial building property in their buildings between December 31, 2005, and January 1, 2013. The deduction is available whether the respective space is new construction or already existing and applies to the year in which the energy-saving property was made ready for its intended use. It is divided into three categories:

• Lighting
  
  
• HVAC & hot water
  
  
• Building Envelope

The maximum deduction of $1.80 per square foot requires a 50% reduction in total annual energy and power costs (compared to a reference building that meets the minimum requirements of American Standard of Heating, Refrigeration and Air Conditioning Engineers (ASHRAE) 90.1-2001), not to exceed the amount equal to the cost of energy efficient commercial property placed in service during the taxable year. A partial deduction of $.60 per square foot requires a 16 2/3% reduction in energy consumption, and can be achieved through improvements in one of the previous 3 categories (Lighting, HVAC, Building Envelope). With recent technological advances in lighting, as well as the generally lower costs compared to the other categories, this deduction is considered the “lowest hanging fruit”. A partial deduction for Interim Lighting affords the bank a deduction between $.30 - .60 per square foot and requires a 25 – 40% reduction in lighting power density (50% in the case of warehouses). As many banks have multiple branches, and this is a per building incentive, the deductions can be quite substantial.

To summarize:

Improvements can be made in three categories

• Lighting
• HVAC
• Building Envelope
• Each can achieve a $0.60 deduction per sq. ft.
• Lighting is considered the “low hanging fruit” due to rapid ROI and lower upfront costs

Three Year “LookBack”

What about banks which may have already made significant investments in energy upgrades? Fortunately, the IRS rules allow banks to take deductions on qualified upgrades completed during the 3 prior tax years. For qualifying institutions, this is simply found money.

Certification of Qualified Property

To insure receipt of expected credits, the taxpaying entity must certify the property meets all energy-conservation claims, and establish the total annual energy savings required for obtaining a partial deduction. The guidelines provide information about the software programs that must be used in calculating these power and energy expenditures.

Additionally, the property must be certified as an energy-efficient commercial building property by a qualified individual. These individuals may not be related to the taxpayer and must be an engineer or contractor properly licensed in the jurisdiction where the building(s) is/are located. The certification need not be attached to the tax return, but Section 1.6001-1(a) of the IRS regulations state that taxpayers are required to maintain books and records that would satisfy investigation into the applicability of the deduction.

Note: The preceding article is not legal nor accounting advice and should not be relied upon without the advice and guidance of a professional Tax Advisor familiar with all relevant facts. It is always highly recommended that you consult with your own attorney and accountant regarding any IRS Tax Code issues.

Joseph Winn is the President of GreenProfit Solutions, Inc. a sustainability consulting, certifying and contracting firm. For more information, please contact Joseph at 1-800-358-2901 or email jwinn@greenprofitsolutions.com.

New SEC Guidance on Climate Change Disclosure - Part 1

What does the Securities and Exchange Commission (SEC) have to do with sustainability? On January 27th, 2010 the SEC published guidance for public companies on the reporting of impacts potentially contributing towards climate change. Additionally, they disclose the effects climate change may and can have on a company’s profitability. While some public and corporate officials are stating that the risks cannot as yet be properly assessed and the requirements are premature, most major investors, which have been supporting the new guidelines, are pleased. Why has the SEC taken this action and is this information really pertinent to an investor?

Let’s take a look at what has been occurring over the past decade. Many states and local governments have enacted their own legislation resulting in greater regulation of greenhouse gas emissions (GHG). GHG legislation on climate change is currently pending in Congress after the House of Representatives approved a bill, later amended in 2009 by the Senate, to limit a company’s emissions of greenhouse gases through a system of “Cap and Trade”. Even the EPA has begun to require large emitters to disclose and report their data.

Since the 1990’s, 186 countries have supported the efforts of the Kyoto Protocol, and the European Union Emissions Trading System (EU ETS) which is the mechanism that controls the Cap and Trade system of allowances and credits for carbon and other greenhouse gases. While the U.S. has never ratified this treaty, U.S. companies doing business in those countries are required to comply.

Climate change risk has not gone unnoticed by the insurance industry. In their 2008 report, major investment firm Ernst & Young stated that climate change was the top strategic risk. They explain it as being, “long-term, far-reaching, and with significant impact on the industry” (Climate Change Greatest Strategic Risk to Insurance Industry). It remained on the top 10 for 2009 (Top 10 Risks Most Likely to Affect the Insurance Sector During 2009). Partially as a result of these reports, the National Association of Insurance Commissioners (NAIC) created an industry standard of mandatory disclosure. Designed for state regulators, it highlights potential financial risks due to climate change as well as actions taken to mitigate them. New actuarial models are in development along with new products specifically designed to cover these new risks.

So what are the risks to a public company? Legislation and new regulations can certainly have a significant effect on capital expenditures. Cap and trade allowances could also force a high emitter to buy credits, creating a negative effect on cash flow. Even companies not subject to new regulations could be affected if their own supplies and services are suddenly only available at a higher cost. As with any challenge, there will be companies well-positioned to benefit from current and proposed legislation. For example, those with “credits” (businesses emitting below their quota) may be able to sell them as investment instruments to improve their own capital position.

Let’s not forget the potential physical effects of climate change. Sea level rise, melting of permafrost, availability of clean water, greater temperature extremes, and increase in storm intensity can all have deleterious effects on a company’s operation and even demand for their products. For example, warmer winters may reduce seasonal demand for heating supplies, while a burst of extreme cold can overwhelm distribution infrastructures; banks holding significant debt in coastal properties could be at higher risk; drought or flooding could negatively impact agricultural firms.

According to the SEC, the new disclosure guidance is simply an extension of regulations pertaining to environmental issues implemented in the early 1970’s. Focused primarily on disclosure guidelines, the original rules sought to monitor compliance regarding material discharge and environmental protection, for use in potential litigation. The current standards have evolved to “provide that information is material if there is a substantial likelihood that a reasonable investor would consider it important in deciding how to vote or make an investment decision, or, put another way, if the information would alter the total mix of available information.” (SEC Release #33-9106 (PDF))

To the CFO, properly assessing risk can be a complex issue, especially when considering the effect climate change may have on future company operations. Granted, there is a delicate balance in disclosure between compliance and stock valuation and demand. Currently, companies who are making some efforts on disclosing climate change risks are simply “burying” them in their 10-K form. It appears this practice is no longer acceptable with the new guidance requirements.
Are there any actions a company facing climate change risks may employ to comply with the full disclosure requirements and still show the company in a positive light? One method suggested is certification, primarily through an internationally recognized program and certification body. The International Standards Organization (ISO) has developed their ISO 14001:2004 Environmental Management System to assist companies in developing or transitioning to more sustainable systems and practices. Their newly developed standards ISO 14064 and 14065 provide an internationally accepted framework for measuring GHG emissions and verifying claims.

In our next article, we will examine the details and requirements of the new SEC guidance, discuss the potential benefits of a certification program, and also measure the relevance this action has on non-public companies.

Keith Winn is the VP Marketing/COO of GreenProfit Solutions, Inc. a sustainability consulting, certification, and contracting firm. You may contact Keith at 1-800-358-2901 or email kwinn@greenprofitsolutions.com.

KPMG Survey Suggests Green Shift in Car Buying

It appears the Auto industry is finally starting to focus on more fuel efficient vehicles. This according to a new global survey of 200 auto executives recently published by KPMG. Could it be they are finally listening to the public?

Hybrid vehicles placed at the very top of their list of alternative fuel technologies for the next five years, followed by battery electric, fuel cell electric and bio-diesel respectively.

Biodiesel technology is low on the list of priorities for auto industry research, according to the survey that was released Thursday.

When asked to rate which were the most important alternative fuel technologies to the auto industry over the next five years, hybrid systems were ranked first followed by battery electric power, fuel cell electric power, and biodiesel, respectively.

In the past, styling was ranked as major feature. No more though. The feature auto executives believed makes the biggest impact on customers' purchasing decisions is fuel efficiency, which was ranked the highest, while the "environmental friendliness" of a vehicle ranked second, followed by safety innovation in third. Styling did not even make it into the survey results.

"Automotive manufacturers are in the challenging position of being asked to compete on both technology and cost. With global consumers still feeling the pinch of the recession, those OEMs who can deliver on this equation will be in the driver's seat," Gary Silberg, national automotive industry leader for KPMG, said in a statement.The survey was conducted September through November 2009.

Now, let's see how they can make those large suv's and trucks truly more fuel efficient. A listing of fuel efficiency and emissions and interactive chart can be found at the EPA's Green Vehicles website.

Manufacturers also hinted at offering incentives on hybrid vehicles, something, until now, was only reserved for large vehicles with conventional gas-powered engines.

With this news, can financial institutions create an auto lending program to attract this new market of borrowers?

The survey was conducted September through November 2009.

Keith Winn is the VP Marketing/COO of GreenProfit Solutions, Inc. which assists businesses in becoming environmentally responsible. You may view their website at www.greenprofitsolutions.com or e-mail Keith at kwinn@greenprofitsolutions.com.

The Article No One Will Read

Wow. I just had a wake up call, maybe even an epiphany. While this may not be a completely green topic, it does refer to email, so unless you are printing your emails (and why would you do that?), I guess we can consider this a sustainable article.

Maybe I am the loner, but when I receive an email, and decide to open it, I generally read the whole message. These are from friends, family and known business associates. I do the same when I receive an email newsletter. After all, these are publications I subscribed to, so most of the content would be of interest to me. After sending out an important email to my friends and family, I found out that I am most definitely in the minority.

I sent out an email to about 60 people close to me, explaining an important topic, and asking their help in performing a 2 minute task. I ....wait a minute, are you still there? OK - I had to resend it 3 times so far, each time, re-explaining in different ways, as dozens of otherwise intelligent and computer savvy people were hopelessly lost. I finally had to build and send an instructional video.

Most writers of emails and newsletters track by Open rate. That’s totally irrelevant, because statistics and research tell me that MOST PEOPLE WON’T EVEN READ THIS. That’s right. And it’s because of a newly diagnosed syndrome, called Email Attention Deficit Disorder (EADD).

Due to information overload, it is estimated that there are over 2 billion people with this syndrome. Symptoms are:

• Simply scanning the first word or two of each sentence or paragraph;
• If the first word does not catch their attention, they skip to the next paragraph;
• If the paragraph has more than a few lines, they don’t even bother scanning;
• The average EADD sufferer spends less than 51 seconds scanning an email.

What does catch their attention?

• Highlighted important words – in red
• Bulleted topics
• Short, easy to manage paragraphs
• Videos – it’s easier than reading

What are the consequences of EADD?

• Sufferers generally miss the important points of the story
• If there is a task required in the email, ironically, they spend more time trying to perform it
• Very little knowledge is gained
• Increases confusion on topic

DO YOU HAVE EADD? If you are still reading, then you’re probably OK.

Pharmaceutical companies are ramping up research on this affliction and I’m sure we’ll soon see TV commercials to “Ask Your Doctor” for the latest and greatest new drugs…I don’t suppose they will have an email campaign.

OK, OK..my friend the Doctor just called. EADD is not an “official” syndrome….I just made that up. But the statistics and “symptoms” are real. Keep these in mind when writing your emails and newsletters and you will get more Opens and even more importantly, more people understanding your content.

Keith Winn is the VP Marketing/COO of GreenProfit Solutions, Inc. which assists businesses in becoming environmentally responsible. You may view their website at www.greenprofitsolutions.com or e-mail Keith at kwinn@greenprofitsolutions.com .

Is Your Seafood Sustainable?

Fishing practices worldwide are damaging our oceans, depleting fish populations, destroying habitats and polluting the water. Informed consumers can help turn the tide. However, before finding a solution, we must discover the problems facing marine ecosystems. The following three issues can be solved through the same strategy, consumer choice. So what are these global challenges facing fisheries? And what does this have to do with your financial institution?

Overfishing
With an ever-growing world population to feed, fisheries worldwide are strained to their limits, in a state of decline, or, in worst case scenarios, have already collapsed. In the western Atlantic, cod were once so plentiful that fishing trawlers had a hard time just pushing through them. Today, they are almost nonexistent. When a fishery collapses, thousands of people are forced out of work and the fish species itself becomes in danger of extinction. Worldwide, fishing fleets are taking fish out of the oceans faster than they can reproduce. It is important to know which fish are most vulnerable to overfishing. Generally long-lived and slow growing species, including the Chilean Sea Bass (formerly known as the Patagonian Toothfish), living at least 40 years, and the Orange Roughy (Slimehead family), known to survive for over a century, tend to mature late and have low reproduction rates. Effectively, even relatively minor fishing pressures can have devastating impacts on such fisheries.

Habitat Destruction
Another major issue facing global fisheries is habitat destruction. Some trawling techniques employ an extremely efficient method of dragging nets along the ocean's bottom, scooping up nearly every fish in its path. While it results in large catch rates, it also has the unfortunate result of destroying any life on the ocean floor as large rollers are used to weigh the nets down. This leaves a flattened seascape, unable to recruit new life in the now-barren habitat.

Bycatch
This is another serious problem in global fisheries. Most prevalent in the previously-described trawling style of fishing, it is the unwanted or unintentional catch of non-target species. Worldwide, it is estimated that fisheries dispose of 25% of their catch for this reason, resulting in a nearly 100% mortality for those unfortunate enough to be caught. For example, it is estimated that for each pound of shrimp caught in a trawl net, an average of two to ten pounds of other marine life is caught and discarded overboard as bycatch. In addition, dolphins, whales, turtles, and sharks are frequently caught in trawlers’ nets and long-line operations, often severely affecting their populations.

Solutions
So how can your financial institution help? Well, education is always the most powerful means, followed by using yours and the combined wallets of your customers and members. Encourage patronizing of establishments which support sustainable fisheries while making an effort to educate those who have yet to understand the issues. Certain grocery stores have committed to stocking sustainably harvested fish as well. How can you tell? Look for the Marine Stewardship Council seal on produce counters or in restaurants. But what about fish which aren't under the MSC guidelines? The Monterey Bay Aquarium Seafood Watch has compiled and published a series of Regional Guides which you may download free of charge. These handy pocket guides show you which fish to avoid, good seafood alternatives, and best choices for both health and sustainability. Prefer a paperless alternative? A free iPhone app (opens in iTunes), complete with all regions and their respective seafood recommendations, is available, making sustainable seafood choices accessible anywhere your iPhone or iPod Touch travels.

Photo credit: Monterey Bay Aquarium