Directing capital toward better results for the planet requires that companies and investors have clear information about how environmental, social and governance issues translate to real business risks and opportunities. Of the many groups today that are looking to standardize how companies report on sustainability issues, the Sustainability Accounting Standards Board (SASB) takes a distinct approach by zeroing in on what publically traded U.S. companies should disclose in their filings to the Securities and Exchange Commission (SEC). When I attended a recent workshop the organization hosted in Boston as part of Sustainable Brands’ New Metrics conference, I learned more about what SASB is up to and what impact the group’s work could have.
Last week, financial community leaders took a big step into the intersection of business and policy on the urgent need to curb methane emissions from the oil and gas sector. A group of investors managing more than $300 billion in market assets sent a letter to the U.S. Environmental Protection Administration and the White House, calling for the federal government to regulate methane emissions from the oil and gas sector. The letter urged covering new and existing oil and gas sites, including upstream and midstream sources, citing that strong methane policy can reduce business risk and create long-term value for investors and the economy.
Spearheaded by Trillium Asset Management, the cosigners of the letter to EPA Administrator Gina McCarthy included New York City Comptroller Scott M. Stringer, who oversees the $160 billion New York City Pension Funds, and a diverse set of firms and institutional investors. They spelled out in no uncertain terms that they regard methane as a serious climate and business problem – exposing the public and businesses alike to the growing costs of climate change associated with floods, storms, droughts and other severe weather.
The world’s attention has been on Brazil lately. With an exciting World Cup this past summer, an election season full of drama (including a plane crash), and the coming Summer Olympics in 2016, it has been easy to overlook the piece of news that has the greatest impact on all of our lives: the remarkable decreases in rates of deforestation in the Amazon. With little fanfare (at least from the general public), deforestation decreased 70% since 2005 and Brazil has become the world leader in reducing greenhouse gas pollution.
But while this progress impressive, it is important to note that we’re still losing over 5,000 square kilometers of forest a year in the Amazon. More importantly, we’ve seen a slight uptick in the rate of deforestation over the past two years, with an increase of 29% from 2012-2013. That number looks likely to increase again this year.
As the number of companies, governments, NGOs, and indigenous peoples who signed the New York Declaration on Forests last month demonstrated, there is an eagerness to address this issue across all sectors of society. Among other goals, signatories to the Declaration seek to halve the rate of loss of forests globally by 2020 and end natural forest loss by 2030. To get there, we need a scalable and systematic approach to meet this ambitious, yet achievable goal. EDF believes one solution is the creation of Zero Deforestation Zones (also referred to as jurisdictional approaches) – nations or states that are able to demonstrate reductions in deforestation within their borders as the most effective way to save forests the scale of entire landscapes, rather than individual parcels of land.
A new report by Datu Research, Deforestation in the Brazilian Beef Value Chain, supports this notion.
In our inaugural post on the business-policy nexus, Tom Murray highlighted the implementation of President Obama’s Clean Power Plan as an opportunity for companies to be leaders. Why should companies be motivated to get involved? Because they care about having access to competitive, clean energy and tools and incentives for smart energy management, which will help them meet their sustainability and carbon goals while cutting costs.
The decisions being made in the coming months on the Clean Power Plan proposal can help accelerate the transition to a cleaner energy economy for years to come, expanding the demand and market for renewable energy and energy efficiency. Any sustainability officer who has tried to price green power on the market or build the business case for an energy efficiency program has a stake in the outcome.
Energy efficiency is a goldmine, but not everyone has the time or resources to dig. That’s why for the past seven years, over three hundred organizations have turned to EDF Climate Corps for hands-on help to cut costs and carbon pollution through better energy management. And every year, the program delivers results: this year’s class of fellows found $130 million in potential energy savings across 102 organizations.
But this year we also saw something new. In addition to mining efficiencies in companies’ internal operations, the fellows were sent farther afield – to suppliers’ factories, distribution systems and franchisee networks. What they discovered demonstrated that there is plenty of gold to be found across entire value chains, if companies take the time to mine it.
Here are three places where EDF Climate Corps fellows struck gold: Read more
In 2013, Walmart launched an initiative with the potential to optimize fertilizer use on 14 million acres of U.S. farmland by 2020. This was a great step in the right direction for reducing greenhouse gas emissions and water pollution by improving nitrogen fertilizer use. Momentum on this work grew in April when Walmart suppliers including Cargill and General Mills stepped up and made joint agricultural commitments at Walmart’s Sustainable Product Expo.
Now, a little over a year since this work kicked off, it’s great to see another major boost of momentum. On Monday, Walmart hosted their fall Milestone meeting, which included an announcement from United Suppliers to join the fertilizer optimization work – committing to enroll 10 million acres by 2020.
This is a big deal for two reasons. First, this commitment is significantly larger – more acres – than any other we’ve seen so far. Second, this is the first time a major agricultural retailer has joined this initiative.
Since 2008, EDF has worked with private equity firms to integrate environmental, social and governance (ESG) management into their practices. Leveraging our EDF Climate Corps program is a key strategy for replicating our work and we have now placed 44 EDF Climate Corps fellows among private equity firms and portfolio companies, to date. To learn more about how a particular firm has benefitted, I recently spoke with representatives at Warburg Pincus to hear how the EDF Climate Corps program has enhanced their continued efforts to share ESG-related best practices with Warburg Pincus' portfolio companies.
This summer, Warburg Pincus hosted an EDF Climate Corps fellow for the second year in a row, and again chose to place the fellow at the firm level, rather than with a single portfolio company. “Running this process from the center allowed us to identify different opportunities, across our portfolio and coordinate work on each of them,” Warburg Pincus Vice President Michael Frain told me.
From speaking further with Frain and Daphne Patterson, Warburg Pincus’ first EDF Climate Corps fellow and newly minted associate, four key themes emerged:
There is so much going on at SXSWEco this week that it would be impossible for one person to do a comprehensive wrap-up, so please take this commentary as a slice of a very big pie. And, note that my particular slice is viewed through a very marketing- and business-oriented lens. Still, as an EDF’er working with the private sector, I’m always looking to share new, pragmatic ideas and business cases for saving the environment. I think the most pleasant surprise of SXSWEco Day One was that so many others feel the same.
But first a head-scratcher. Why is it that the regions that are the most climate and socially vulnerable (Southern U.S.), are also home to some of the biggest climate science-denying politicians? Many thanks to Dr. Robert Bullard of Texas Southern University for so eloquently tying environmental justice to social justice; for me this was a necessary epiphany for how we think of building resilience in the face of climate challenges.
At EDF we believe that the corporate sector can thrive by valuing, protecting, and improving the environment, so the session on Creating Climate Wealth held a ton of appeal. Ann Davlin and Jigar Shah threw out business scenarios for environmental impact like candy from a parade float. I managed to grab a few choice nuggets: Read more
Guest post by Chris Pinney, President, High Meadows Institute
While it may seem that increasing progress is being made on integrating sustainability in the financial sector, the recent UN Principles for Responsible Investment (PRI) conference in Montreal was a sobering reminder of the challenges that still need to be addressed.
On the one hand, we have seen a rapid growth of financial firms subscribing to the UNPRI, with firms now representing $45 trillion in assets under management. At the same time, as UNPRI’s Managing Director Fiona Reynolds reported in Montreal, only 6% of asset owners committed to the UNPRI report that their performance management and compensation systems for senior executives include metrics that recognize and reward sustainability performance. As she noted, “What gets measured gets managed. If responsible investment is to become truly mainstream, it must start at the very top of every organization, with the right incentives.”
In 1933, Milton Heath Sr. opened a small, family-run consulting firm to find leaks from natural gas pipelines in an emerging energy market. More than 80 years later, the Texas-based business has expanded to provide more than 1,200 manufacturing and service jobs nationwide.
Heath Consultants’ business model may have changed – but the company’s commitment to finding and reducing leaks of methane—a potent greenhouse gas—has not wavered.
Stories like Heath’s are the focus of a new report released this week by Datu Research. The Emerging U.S. Methane Mitigation Industry looks at the growing industry that specializes in manufacturing technologies and providing services that help oil and gas companies reduce their environmental impact and deliver a valuable product to market.
The report analyzes more than 70 companies that limit methane emissions and provide high-paying, highly skilled jobs to thousands across the country. They operate in a rapidly growing industry responding to concerns over methane pollution that is rising in tandem with our domestic energy boom.