As Investors Benchmark Methane Management, Where Will Companies Stand?

Ben Ratner headshotGlobal attention on oil and gas methane emissions is taking off. The International Energy Agency has recognized that  “the potential for natural gas to play a credible role in the transition to a decarbonized energy system fundamentally depends on minimizing these [methane] emissions.” North American heads of state recently committed to reduce oil and gas methane emissions 45% by 2025. And the U.S. Environmental Protection Agency has issued technology standards for methane from new sources, while setting the wheels in motion for a larger rulemaking that will target the existing U.S. infrastructure, whose methane emissions cause the near term climate damage equivalent to 240 coal fired power plants.

With a rising wave of public and policy maker scrutiny, it’s no surprise that methane has become a hot topic in investor circles. A group of 76 investors representing $3.6T assets under management publicly supported the North American methane announcement. And a much broader set of investors, from large institutional investors to private equity, and socially responsible investors to large banks, are turning their attention to reading up on the issue and engaging operator management in quiet but important conversations on managing this rising risk.

EDF has long recognized the power of stakeholders with an economic incentive to drive progress that helps people and nature prosper. That’s why we are devoting a growing effort to educate oil and gas investors on why methane risk matters and what they can do to address it through constructive engagement with operators across the world.

In a post-Paris, carbon constrained world where investors constantly demand more and better information on all manner of corporate responses to climate risk, it’s only a matter of time until investors have the data at their fingertips to use the quality of methane management as one additional input in decision making processes, even including which companies to buy or sell.

If that seems like a stretch, just consider: an operator managing methane aggressively is better poised for smooth regulatory compliance, while also reaping operational efficiencies through waste reduction, providing evidence they can be part of the transition to a lower carbon energy economy, showing neighbors they are helping to reduce air pollution, and even appealing to top talent in an environmentally conscious workforce.


In the meantime, EDF has released a new resource in partnership with the Principles for Responsible Investment: “An Investor’s Guide to Methane: Engaging with Oil and Gas Companies to Manage a Rising Risk”, which builds on our landmark report “Rising Risk: Improving Methane Disclosure in the Oil and Gas Industry.” While the primary audience is investors who represent growing demand for improved methane management (and indeed gave us the idea for creating a guide in the first place), the Guide is public for a reason – operators who want to get ahead of the curve can review it for themselves.

Our Guide is based on three simple ideas. 1) Methane poses a material risk, in the form of financial, reputational, and regulatory risk. 2) Managing the risk well requires directly measuring emissions, transparently reporting the plan of action and its results, and actively reducing emissions. 3) Continuous improvement is key: each company can advance along the spectrum from beginner, to intermediate, to advanced, on each dimension of measure, report, reduce.

As operators review the Guide, they can use it to benchmark where they are today, prepare for dialogue with investors, and develop an action plan for continuous improvement. Whether motivated by investor relations, operational enhancements, regulatory positioning, or simply doing the right thing, we hope operators will find the guide to be a useful tool. Competitive advantage is at stake, and there’s no time to waste.

Follow Ben Ratner on Twitter, @RatnerBen


Open Road Ahead for Clean Trucks

Our nation is making great progress in reducing the environmental impact of trucking.

This is tremendous news, of course, as trucking – the main method of transporting the goods and services we desire – is critical to the fabric of our society.

Jason Mathers, Senior Manager, Supply Chain Logistics

Jason Mathers, Senior Manager, Supply Chain Logistics

Consider these facts:

We’re making major progress because of a team effort from truck and equipment manufacturers, fleets, policymakers, and clean air and human health advocates. With protective, long-term emission standards in place, manufacturers are investing in developing cleaner solutions and bringing them to market. Truck fleets are embracing new trucks because of lower operating costs and improved performance.

(For a more detailed picture of the widespread support for cleaner trucks, see EDF’s list of quotes supporting recent national Clean Truck standards.)

We must continue this team effort to make further necessary improvements in the years ahead.

Despite our recent progress, diesel trucks continue to be a leading source of NOx emissions, which is why a number of leading air quality agencies across the nation, health and medical organizations, and more than  30 members of Congress are calling for more protective NOx emission standards.

Trucks are also a large and growing source of greenhouse gas emissions. Thankfully, the new fuel efficiency and greenhouse gas standards mentioned above – which were released this past August and just published in the Federal Register today – will cut more than a billion tons of emissions.

Trucking fleets are embracing cleaner trucks. UPS, for example, is expanding its fleet of hybrid delivery trucks. PepsiCo, Walmart, Kane and others have applauded strong fuel standards for trucks.

Manufacturers are developing solutions to further improve the environmental footprint of trucking. In the past few weeks alone:

  • Cummins unveiled a 2017 engine that cuts NOx emissions 90 percent from the current emission standard.
  • Volvo Trucks North American showcased its entry to the DOE SuperTruck program, which is  a concept truck capable of surpassing 2010 efficiency levels by 70 percent and exceeding 12 miles per gallon.
  • Navistar also revealed its SuperTruck, the CatalIST, which hit a remarkable 13 mpg.

The progress we’ve made to date does more than just improve conditions within the U.S. Our strong standards push U.S. manufacturers to develop solutions that will resonate with international markets. For example, the European Union, Brazil, India, Mexico, and South Korea all are exploring new fuel efficiency and greenhouse standards for big trucks. U.S. manufacturers will be well positioned to compete in markets that put a premium on fuel efficiency.

In the coming years, we will need to continue to advance protective emission standards to protect the health of our communities and safeguard our climate. When the time comes, we will be building upon an impressive record of progress and cooperation.

Working smarter, not harder: goals help companies get strategic about climate change

lizIt’s no secret that companies use goals to push their businesses in a positive direction. Whether it’s about creating more value or reducing impacts, goals provide focus, direction and a sense of urgency. Recently, a wave of corporate, climate-related goals, such as renewable energy and emissions-reduction targets, have grabbed the public’s attention. Companies, cities and other large institutions are stepping up and committing to reduce their environmental impact. But behind the scenes, are these goals actually leading to corporate action? And if so, what kind?

As program director of EDF Climate Corps, every summer I get a glimpse inside the operations of 100 large organizations that are working to manage energy and carbon in progressively responsible ways. This past summer, 125 EDF Climate Corps fellows – talented graduate students armed with training and expert support – worked to advance clean energy projects in large organizations across the U.S. and in China. Their project work reveals that organizations are more strategic, focused and results-oriented than ever. More than 70 percent of EDF Climate Corps host organizations have energy or emissions-reductions goals, and to meet these targets, our class of 2016 fellows was strategically deployed to help achieve them. In fact, the majority (two-thirds) of our entire cohort of fellows worked on strategic plans and analyses that will help turn these goals into action. So what did we see this summer?

  1. Ambitious goals are driving big impacts at the building level

A great example of goals driving smart and strategic action in buildings is our recent work in New York City. Over the summer, more than 25 fellows worked within companies, city agencies and even a local utility to design strategic plans to help meet Mayor de Blasio’s ambitious 80 x 50 goal that pledges to reduce city greenhouse gas emissions 80% by 2050.  Rather than approach this one boiler room at a time, our fellows worked on ambitious, portfolio-wide equipment replacement and onsite renewable energy plans, with the potential to impact thousands of buildings at once. It’s great to see a municipal goal drive strategy from both the public and the private sector. The mayor’s goals are clearly spurring action and large-scale strategy is the way to drive rapid improvements that would take much longer through an incremental approach.

  1. Public goals allow leaders to shine, but also inspire others to follow

Many corporations maintain internal sustainability goals but shy away from publicizing them for a multitude of reasons – from fears of greenwashing to competitive advantage. But we’ve recently observed that this trend is changing, with more and more of our host companies realizing that smart, data-driven analysis can help them set public commitments with confidence. For example, EDF Climate Corps host Amalgamated Bank wanted to incorporate climate change mitigation in its mission, but first needed to dig deeper into its data to create smart goals and a strategy to achieve them. With the help of their EDF Climate Corps fellow, who conducted the first greenhouse gas emissions inventory and an assessment of its carbon footprint, Amalgamated Bank got the information it needed to set ambitious goals, culminating in a September announcement to become the second largest net-zero energy bank.

  1. Supply chains are beginning to benefit from corporate goals

While many corporations have articulated impressive goals related to their corporate operations, setting targets in supply chains is an even more ambitious endeavor. Corporate supply chains are the source of significant carbon emissions and are notoriously hard to manage. Longtime EDF Climate Corps host Verizon – a corporation with a history of setting and achieving sustainability goals –knew that by working strategically it could tackle this daunting challenge. This past summer, Verizon asked its EDF Climate Corps fellow to help the company cross the finish line on its 2017 supplier target. By creating a holistic strategy that used a combination of risk-identification and supplier engagement, Verizon is now on track to accomplish its 2017 supplier goal and formally launch its next target to help manage supply chain carbon emissions.

The EDF Climate Corps community is a living laboratory. Through our fellowships and engagement with large energy users, we see companies and cities trying new things, and working smarter, not harder, to achieve ambitious goals. We’ve mirrored this journey as well, moving from a “one boiler room at a time” mentality to broader, more strategic engagement with companies to help drive progress. Through a focus on smart energy strategy, driven by goals, we know that companies can generate a virtuous cycle of positive returns for their organizations.

Managing the Rising Risk of Methane, What Investors Can Do

sean-headshotIn a recent blog post, I discussed three ways investors can have a positive impact on the environment.  One of those levers is engagement, or using your influence with the companies you invest in to help ensure those companies are being managed both profitably and sustainably.

Principles for Responsible Investment (PRI) is a recognized global authority on how investors can engage with companies to manage environmental risks. Environmental Defense Fund (EDF) is partnering with PRI to release a new how-to guide for engaging with oil and gas companies globally on methane emissions.

As investor scrutiny ramps up on all forms of climate risk, investors globally are becoming more aware of and concerned about the material risks that methane poses to portfolios, detailed in EDF’s Rising Risk report.  That report found methane poses a series of reputational, regulatory and financial risks to operators and their investors.  Methane, 84 times more powerful than carbon dioxide, is a potent form of carbon risk, and left unmanaged it can literally leak away shareholder value.

An Investor’s Guide to Methane responds to growing demand from investors globally for practical guidance on how to not only manage these risks through company engagement, but surface opportunities as well.  Investors want to understand how companies should measure their emissions, what they should be reporting, and what kinds of best management practices they should adopt to keep more product in the pipeline.  This guide provides details on what leading methane management looks like.

Just as investors use quarterly earnings to understand who the most profitable companies are, investors can use the performance benchmarking framework included in the guide to help differentiate relative methane performance.  Because methane management is such a powerful proxy for operational excellence, understanding relative performance on the issue can be a helpful insight for investment decision-making. As such, early-engagers will have a first-mover advantage. This framework is also designed to help identify concrete next steps companies can take to improve management, such as using additional emissions reductions technologies or adopting methane reporting metrics.

summary-performance-assessment-toolThe guide also provides detailed questions to help support constructive dialogue.  For example, EDF’s Rising Risk report found that as of early 2016, zero of the leading 65 companies in the US had disclosed a methane reduction target. The guide includes questions such as “What form of a quantitative methane reduction target would work best for your company?” that can help an operator think through how to best set an ambitious but achievable target.

As part of their engagement, investors should expect all operators to measure, report and reduce their emissions:

Measure – We’ve all heard the phrase “what gets measured, gets managed.” Getting accurate information on a company’s methane emissions is the first step in understanding the extent of the problem, uncovering hidden risks, and identifying opportunities to bring more product to the bottom line.  The more accurate the information, the better positioned companies will be to effectively reduce emissions. Expert level methane management requires companies to utilize robust direct measurement, or the process of getting out into the field to measure emissions, as this is more accurate than desk-top estimates.

Report – Investors require actionable methane information in order to understand the relative performance of operators, and leading companies will demonstrate how they are managing methane risk.  Operators should set and disclose a methane reduction target, and report how they plan to meet that target. For example, expert level operators will report the frequency, scope and methodology for their leak detection and repair (LDAR) programs as one best practice to limit emissions.

Reduce – Minimizing methane emissions is highly cost effective, and can be done using proven, off the shelf technologies.  Because methane is both pollutant and product, many of these technologies have a positive payback. Investors should feel confident in encouraging companies to reduce emissions knowing they can do so in a shareholder-friendly manner.  Leading operators will show a declining trend in emissions, frequently inspect assets for leaks, join global voluntary initiatives like the Oil and Gas Methane Partnership, and support regulations to reduce emissions.

The key points from these three buckets, as well as related engagement discussion questions, are summarized in a 2-page cheat sheet summary investors can take to meetings with them.

managing methane riskMethane is the next frontier for investor engagement on climate and carbon risk. Unmanaged emissions of methane can directly undermine the natural gas’ ability to play a role in a lower-carbon energy economy, impair social license to operate and be a proxy for operational inefficiency.   Conversely, active methane management can inspire investor and stakeholder confidence, keep product in the pipeline and prepare companies to operate in an increasingly carbon-constrained, regulated world.

Investors should utilize their influence, and this guide, to ensure companies are proactively managing methane risks and leveraging opportunities.

Download An Investor's Guide to Methane

Follow Sean Wright on Twitter, @SeanWright23

Additional reading: Why energy investors need to manage methane as a Rising Risk


PepsiCo Joins Growing Ranks of Green Supply Chain Leaders

PepsiCo, one of the world’s largest food and beverage companies, this week announced new sustainability goals. The goal that caught my attention is:

“we intend to reduce absolute greenhouse gas emissions across our value chain by at least 20%

In setting this impressive goal, PepsiCo join Kellogg’s and General Mills in setting big, comprehensive greenhouse gas emission reduction goals for their supply chain.

So, this leadership action is officially a trend.

Jason Mathers, Senior Manager, Supply Chain Logistics

Jason Mathers, Senior Manager, Supply Chain Logisticsgreenhouse gas emission reduction goals for their supply chain. So, this leadership action is officially a trend.

It's also a really big deal.

Companies are increasingly focused on cleaning up supply chains because of Sutton’s Law as applied to corporate sustainability: that is where the impact is. Over 90% of natural capital impacts associated with food and beverage companies occur in supply chains. The statistics are similar for the retail and consumer goods industries too. This is far from an academic point.

Supply chain executives are increasingly attuned to the fact that driving sustainability improvements needs to be a focus in the years ahead. In a recent survey from SCM World, 77% of food and beverage supply chain professionals recognized that “their supply chain plays a substantial role in securing the future of the planet.”

PepsiCo and other leaders are moving from the realization that there is a challenge to taking meaningful action. The new and important aspect of their approach is that they are aiming to improve their entire value chain. In doing so they are stating the obvious: it is no longer sufficient to make improvements in a few areas only. They need to tackle the system.

Now certainly some will look askance at these goals and warn of “boiling the ocean”; nothing could be further from the truth. The fact is that these goals are necessary and achievable.

They are necessary because they establish a long-term corporate commitment to continuous improvement on supply chain sustainability. As the goals are performance based, supply chain managers will be able to objectively track their progress and do what they do best – reduce risks, increase efficiency, and cut costs. They will be freed from chasing big shiny objects in the name of sustainability. Instead, they will be empowered to drive improvements with the best return.

These goals are achievable because they deploy a Science-Strategic-Systems approach – a proven framework for corporate sustainability success:

  • Science: These initiatives are built on a solid foundation of science that puts corporate sustainability goals in context of the overall challenge at hand. As a result of this, these corporate commitments are consistent with the scope and pace of greenhouse gas emissions targets necessary for climate stability. Framing the goals in terms of what our best science dictates ensures that the companies will be using the best metrics to assess progress.
  • Strategy: Supply chain greenhouse gas reduction goals are strategic for food and beverage, consumer brands, retailers and others because it directly targets the largest areas of impact. By placing the focus on these areas, companies are able to put durable solutions in place that expand revenue and drive business growth. They strengthen relationships with key suppliers and develop a fuller understanding of market risk.
  • Systems: The audacity in the scope of these goals is a power in itself. Far from the small-minded outlook that warns of boiling oceans, big goals such as these require companies to drive improvements to entire systems. The manifest challenge of tackling systems forces these companies to recognize they must collaborate with others – beyond the four walls of their company— to achieve their goals. With partners, they can drive deep changes in how products are made, designed, packaged and distributed; and collaborate with policymakers to align market incentives with sustainable business practices.

PepsiCo deserves our praise for setting its new goals. But, more importantly, it needs our help in achieving them.

Not just the help of EDF and other advocates, of course, but the help of its suppliers, retail customers and competitors too. We all have a role in driving down supply chain emissions.For EDF, we’re helping by partnering with PepsiCo and others to develop best practices to drive supply chain improvements, including reducing the environmental impacts of commodity row crop production, strengthening zero deforestation zones, and greening product distribution.

We are also calling on other companies to join PepsiCo, General Mills and Kellogg’s by setting transformational supply chain sustainability goals too. It is what the future of corporate sustainability looks like.

What’s your company going to do?

What was Left Off the Menu at the WSJ Global Food Forum?

Many of us spend a considerable amount of time thinking about food – whether it’s deciding what’s for dinner or how healthy something is for our family. Given that I work on food sustainability and am married to a chef, I spend an even more extreme amount of time thinking about food.

Last week, the Wall Street Journal hosted the first annual Global Food Forum in New York City – more proof that food and agricultural issues are increasingly on the radar screens of many jenny_helen_expertexecutives, including those from Walmart, Campbell’s Soup, Panera, Perdue, Monsanto, and many more.

I was eager to attend the event and hear the discussions among some of the most powerful food companies out there. They covered many topics including food safety, “clean” labels, biotechnology, antibiotic use and the humane treatment of animals.

All important stuff—but given the prestige of the event, I’d like to bring up the elephant in the room (or more accurately the elephant not in the room): sustainability. The environmental impacts of agriculture were barely touched upon, and considering the corporate heavyweights who were in the room, this was a missed opportunity on a massive scale.

Why? Because across the entire food production supply chain, sustainability and profitability go hand-in-hand. Consider just a few of the advantages offered by sustainable growing methods:

Increased efficiency and cost savings: Crops take up on average only 40 percent of the nutrients applied to them each growing season. The rest is susceptible to running off the field, and contributing to water and air pollution.

But optimizing fertilizer use—using just the right amount and avoiding over applying—can mean higher yields and lower input costs for farmers, while simultaneously reducing that pollution-causing runoff.

Improved supply chain resiliency: One of the biggest risks that businesses face in the coming decades is supply chain disruptions caused by climate change. Unpredictable weather events like flooding and drought can mean grain shortages or inventory losses.

A couple of years ago, thousands of jobs were lost when Cargill closed meat processing plants in Wisconsin and Texas because drought had reduced its cattle count. And, according to a UC Davis study, last year saw about 542,000 acres of California farmland being left fallow for lack of water. That's about 7 percent of the state's irrigated farmland—meaning thousands fewer farm laborers had work.

But sustainable growing methods can help mitigate these risks. By helping farmers become more resilient, businesses are also protecting themselves by ensuring a consistent, dependable supply of goods. This improved resiliency is something shareholders are increasingly aware of.

Improved customer trust: The ability to share where and how ingredients are grown helps meet consumer demand for transparency. Consumers are clearly becoming more educated, and to remain competitive businesses need to respond to this demand.

Given all this, what advice do I have for the organizers of next year’s WSJ event?

First off, include deforestation, which is responsible for nearly 15 percent of the world’s greenhouse gases. In many tropical nations, it is more economical to cut down forests for farmland than to protect them.

In addition to taking on a massive carbon footprint, companies sourcing food from deforested land are likely exposing themselves to legal and ethical risks. Solutions exist, such as sourcing from large-scale zones that operate under an umbrella of sustainable practices, but companies need to be educated and informed about their options.

Second, shine a spotlight on corporate sustainability leaders helping make farmers more resilient and profitable, such as:

  • The Midwest Row Crop Collaborative, a diverse coalition of food companies, retailers, and nonprofits working to expand on-the-ground solutions to protect air and water quality, enhance soil health, and maintain high yields throughout the Upper Mississippi River Basin.
  • Land O’Lakes’ SUSTAIN® platform, co-developed by EDF, which trains agricultural retailers in best practices for fertilizer efficiency and soil health. The ag retailers then bring this knowledge to the customers they serve. Kellogg Company, Campbell’s, and Smithfield Foods are all using SUSTAIN as a way to connect directly with growers in their sourcing regions.

Lastly, talk about food waste. Up to 40 percent of food in the U.S. ends up in a landfill – the equivalent of $165 billion each year. The only way to truly address the environmental issues of our food system while feeding a growing global population is to reduce food waste, which translates into improved bottom lines for farmers, food companies, and customers.

So, yes: I spend a lot of time thinking about sustainable food. But sustainability is clearly where the food industry is going.

The WSJ Global Food Forum should be thinking about it too.

Three Ways Investors Can Drive Environmental Gains

sean-headshotInvestors can be powerful change agents when it comes to the environment. Investors have capital which they can allocate in ways that either help or hurt the environment. They also have significant influence with the companies they invest in and with policymakers globally, both critical stakeholders when it comes to improving the environment.

While some investors are already working at the nexus of the environment and finance, given the earth’s pressing environmental challenges like climate change, overfishing and deforestation, there has never been a greater need for all investors to engage on sustainability issues. For example, private capital will be essential in order to mitigate the worst impacts of climate change – a recent UN study estimated that it will require roughly $90 trillion dollars, much more than philanthropic or public (i.e., government) investments can fund.

Of course, investors should consider environmental issues not just to do good, but also because the returns often meet if not exceed the performance of more traditional investments. And because investors are interested in risk-adjusted returns, managing environmental risks like carbon and water is critical to any comprehensive investment process.

Below are three levers investors can use to when considering environmental impacts:

  1. Capital allocation – The first decision any investor must make is where to invest their money. Considering sustainability issues can help drive capital towards investments that provide both an environmental and financial dividend.

One way to allocate capital toward more sustainable investments is to integrate environmental criteria into the investment process. Organizations like Carbon Disclosure Project (CDP) and Sustainability Accounting Standards Board (SASB) improve disclosure on issues like carbon emissions and water, enabling investors to gain insight into how efficiently a company operates and manages environmental risk. In this respect, as Environmental, Social and Governance (ESG) disclosure improves, investors can move from screening out whole sectors to proactively allocating capital toward companies that better manage material environmental issues, an investment trend which is becoming more mainstream in the U.S.  For example, while Environmental Defense Fund’s (EDF) Rising Risk report found methane disclosure in the oil and gas industry to be poor, as methane data improves, investors will be able to shift capital to those operators who are actively managing risk from this powerful pollutant and wasted product.

Investors can also place their money into investments with an explicit environmental component, like green bonds. These bonds are a debt instrument specifically tied to achieving a beneficial environmental outcome like energy efficiency, climate resiliency, or water infrastructure. The market for these double bottom line investments has grown from less than $3b just a few years ago to over $40b in 2015.

Investors are gaining new opportunities to invest in innovative products that help to reduce carbon emissions from deforestation and agriculture and improve sustainable fishing practices around the globe. Sustainable investing is also no longer just for sophisticated institutional investors. As financial tech startups are enabling individual retail investors to invest in an environmentally-friendly manner – giving all an opportunity to do well by doing good.

  1. Company engagement – Once their money is allocated, investors can then use their influence as equity or debt-holders to hold corporations accountable for environmental performance, risk management and disclosure. Organizations like Principles for Responsible Investment (PRI) and Interfaith Center on Corporate Responsibility (ICCR) act to help investors be effective engagers by coordinating efforts on topics from deforestation and palm oil to water risks, and encourage collaboration where possible.

Engagement can include the ability of asset owners like private equity to work with portfolio companies to become more sustainable. EDF worked with leading private equity companies to design the Green Returns tool, which enables private equity to approach value creation through an environmental lens, and spot opportunities such as energy efficiency and waste reduction initiatives that generate cost-savings. Using this tool, Kohlberg Kravis Roberts (KKR) was able to add $1.2 billion to the value of their portfolio while avoiding significant greenhouse gases, water use, and excess waste.

Shareholders in public companies also have the ability to file shareholder resolutions to publically encourage better environmental management. In 2016, shareholders filed a record number of climate-related resolutions, which a recent Harvard Business School study has shown to be effective in improving both financial and environmental performance when focused on material ESG issues.

  1. Policy Support – Getting the rules right will be critical in both addressing environmental issues directly and in driving private capital towards environmentally-friendly assets. As Hank Paulson, the former Treasury Secretary and CEO of Goldman Sachs noted in a recent NY Times Op-Ed, we need policies that “include environmental regulations to stimulate clean, sustainable development; incentives and subsidies for clean energy investments; and the pricing of carbon emissions.”

Investors with expertise on business, markets, and finance have an important role to play in the policy process. The next generation of investor leadership on sustainability will require aligning external policy positions with internal sustainability practices and playing a proactive and public role to support legislation and regulations.

Organizations like CERES have been instrumental in activating investors on policy matters. Just this year, CERES played a leading role in getting 76 global investors with $3.6 trillion in assets under management (AUM) to support methane regulations in the U.S. and Canada while working with organizations like Institutional Investors Group on Climate Change (IIGCC) in Europe to recruit 130 investors with $13 trillion in AUM to support implementation of the Paris agreement. Such statements of support are meaningful in helping build the business case for environmental policy.  And direct engagement with law and policy makers is a next frontier for investors looking to maximize their impact on supporting sound policy development.

The need for investors to engage on environmental issues has never been greater, and the opportunities to do so profitably have never been more widespread. Investors of all kinds should incorporate the levers of allocation, engagement and policy in their investment process – a move with the potential to benefit both the planet and their portfolios.

Follow Sean Wright on Twitter, @SeanWright23

Why energy investors need to manage methane as a Rising Risk


Time to Tell the EPA What Works in Methane Mitigation

aileen_nowlan_31394The Environmental Protection Agency (EPA) has committed to regulate existing sources of methane from the oil and gas industry, and it is asking for information from the methane mitigation industry to make sure the rule’s approach and requirements account for recent innovation. The EPA’s announcement comprises the U.S. portion of the North American commitment to cut methane by up to 45% from the continent’s oil and gas industry by 2025. Existing sources in the oil and gas industry make up over 90% of the sector’s emissions, which contribute over 9 million tons of methane pollution annually.

The opportunity is open now to tell the EPA what works in methane mitigation.


Emission standards for existing sources of methane will not only reduce greenhouse gases but could also create new markets and customers for the growing mitigation industry. The regulation will likely start with one or more approved work practices to find and fix methane leaks, describing a technology or group of technologies that must be used in a certain manner. For example, EPA’s New Source Performance Standards for new and modified sources of methane required the use of optical gas imaging cameras or “Method 21” instruments. With far more existing sources of methane than new or modified sources, being part of an approved work practice for existing sources would open up a significant market opportunity.

In one of the first steps toward developing the existing source rule, the EPA has set up a voluntary Request for Information, asking anyone with “information about monitoring, detection of fugitive emissions, and alternative mitigation approaches” to submit details by commenting on the Request for Information docket online. The EPA states it is particularly interested in “advanced monitoring technologies” that could be “broadly applicable to existing sources.” The EPA cites as an example “monitoring systems that provide coverage across emission points or equipment in a way that was not previously possible, thus enabling a different approach to setting standards.” A good submission may include “published or unpublished papers, technical information, data, or any other information” that might be relevant.

The deadline to submit information via comment to the agency is November 15, 2016. But there is no need to wait–those who submit earlier will be part of the conversation sooner. And a number of important topics need to be discussed to shape the existing source regulation. The federal New Source Performance Standards and Colorado’s methane regulation contain a pathway for innovative technologies—a mechanism, supported by industry and  environmentalists alike, for the EPA to evaluate and approve better methane reduction approaches. A similar approach could help incentivize advanced technology deployment for existing sources.  This request for information is the first invitation of many to highlight innovation in the methane mitigation industry.

Follow Aileen Nowlan on Twitter, @Aileennow

Read more about the emerging Methane Mitigation industry

Why energy investors need to manage methane as a Rising Risk


Is mainstream corporate America jumping on the clean energy bandwagon?

It’s no secret that renewable energy is becoming cheaper, and while we’ve seen companies like Google and Microsoft investing in utility-scale renewables, what about mainstream corporate America? Are large corporations jumping on the clean energy bandwagon or are they dragging their feet? As a data analyst at EDF Climate Corps, I turned to the numbers for answers. Fortunately, I didn’t have to look far. An analysis from our recently release report: Scaling Success: Recent Trends in Organizational Energy Management, says it all.

For almost a decade, EDF Climate Corps has been partnering with business to save money and reduce greenhouse gas emissions by improving energy efficiency through our graduate fellowship program.

As I followed the numbers, a new clean energy trend stood out: over the last 5 years, clean and renewable energy projects have grown five-fold, with 1/3 of our partner organizations working on at least one clean energy project in 2015. Companies have been using their EDF Climellen_blog_box3-finalate Corps fellows to decipher the complex landscape of technologies, policies, procurement strategies, and financing options for renewable energy. As we tally the results for our 2016 fellowship program, we expect the focus on clean energy to continue to grow, and don’t plan on it stopping anytime soon.

Following the money

But why have we observed this recent uptake in clean energy projects? It seems to be “all about the Benjamins.” Our data shows that fellows are increasingly able to build a solid business case for clean energy projects. In just 2 years, the average payback for clean energy projects decreased dramatically from around 4 years to under 2 years and we’ve seen a surge in positive Net Present Value (NPV) clean energy projects. This tell us that clean energy projects are becoming increasingly cost competitive – a mirror image of industry trendsfig9_es_blog.

Which brings us back to our initial question – are large corporations jumping on the clean energy bandwagon? Yes, mainstream corporate America IS adopting clean and renewable energy- and they are doing it cost-effectively. The winds of change are blowing in the right direction (and hopefully through a wind turbine!) and our EDF Climate Corps fellows are proving that investment in renewables makes good business sense. However, there are still challenges to getting clean energy adoption at scale. Many renewable energy projects with large returns also require large upfront capital investments, and although the projects may have a positive NPV, some still fall outside the required payback period for corporations. We’ve seen that lack of funding and competing internal priorities are still major barriers to implementation.

How companies can continue to drive forward

And so, a new question emerges – what should companies be doing to drive clean energy projects internally? First, corporate leadership should set targets for renewable energy procurement and benchmark against their peers. Second, energy managers should pilot clean energy projects to demonstrate their viability. These pilots can serve as proof points for future projects and larger-scale investments. While navigating the complex clean energy alphabet soup (PV, PPAs, RECs, RPS, ITC, etc.) can be tough, especially given the nuances in state level policy and regulations, partnering with a third-party organization (such as a program like EDF Climate Corps, another NGO or a vendor) is a great way to accelerate your clean energy projects. You just may find that making the business case for clean and renewable energy isn’t as hard as you thought.

I invite you to learn more about what 8 years of EDF Climate Corps data tells us about trends in energy management and clean energy by reading our Scaling Success report.






Companies know reducing their carbon footprints makes good business sense—and that’s why they support the Clean Power Plan

Companies across the country are tackling climate change in their individual portfolios—reducing their carbon footprints by harnessing cost-effective investments in energy efficiency and clean energy. These companies are taking actions all across our nation, driving major investment in low-carbon energy resources at the local level through individual projects and investments.


Liz Delaney, Program Director, EDF Climate Corps

These leading companies want well designed national-scale policy that complements their own efforts to mitigate climate change. The Clean Power Plan, America’s first-ever limits on carbon pollution from power plants, is a crucial opportunity to align national policy with this increasing demand for low-carbon energy. The rule provides investment certainty, while incorporating a flexible framework that ensures that its pollution reduction targets can be met in the most cost-effective manner available.

 That’s why major innovators like Google, Microsoft, and Apple—companies that employ tens of thousands of Americans across the country—are reducing their contributions to carbon pollution and supporting the Clean Power Plan. As a Google official put it, with the Clean Power Plan it’s possible to drive “innovation and growth while tackling climate change.”

 There is robust demand for clean energy solutions

Each year, EDF Climate Corps works with approximately 100 large organizations to lower energy costs and reduce carbon footprints through strategic energy management. Since 2008, we have deployed over 700 Climate Corps fellows to leading organizations to build the business case for investment in energy efficiency and clean energy, identifying cost effective ways for companies to save money while mitigating climate change.

A recent analysis of our work demonstrates several interesting trends in emissions management, many of which can be advanced by implementation of the Clean Power Plan. We are seeing companies embrace energy efficiency and deploy it at scale. Companies are taking responsibility for their environmental impact and are investing in broad solutions. For example, the report describes how Comcast identified ways to cost effectively eliminate more than 6,000 metric tons of annual carbon pollution by scaling its investments in energy efficiency over three years.

More and more corporations are also demonstrating a significant interest in zero-carbon energy. Over 80 companies, including General Motors, P&G and Walmart, have made bold and public commitments to use 100% renewable energy in their operations.

Mainstream companies are embracing the economic opportunity and societal imperative to clean up their emissions profiles, and are willing to invest in zero-carbon energy resources. In fact, in 2015, one in three Climate Corps host organizations worked with a fellow to build the business case for investment in clean energy.

Leading companies are taking individual action and supporting national scale policy solutions

By greening the nation’s power supply, we can mitigate climate change by harnessing a transition and an evolution that has already begun.

But companies are increasingly recognizing that they need to do even more than just mitigate their own pollution and procure clean energy to supply their needs. They need to advocate for smart policies too.

This is why over 100 companies, including DuPont, General Mills and Starbucks have urged “swift implementation of the Clean Power Plan” and why Google, Apple, Amazon, Adobe and others are standing up to defend the Clean Power Plan in court.

The Clean Power Plan establishes common sense national targets for reducing carbon pollution

The Clean Power Plan is an important component of a cost-effective, strategic approach to tackling climate change. It will complement and harness individual efforts to address climate change by companies across the country.

But don’t take my word for it—major businesses that are supporting the Clean Power Plan said so themselves.

Take Google, Apple, Amazon, and Microsoft. In their amicus brief filed in support of the Clean Power Plan, they noted:

By limiting emissions of carbon dioxide from existing fossil fuel-fired power plants, the Plan will help address climate change by reinforcing current trends that are making renewable energy supplies more robust, more reliable, and more affordable. Tech Amici welcome these developments. (Tech Amici brief at 2-3.)

Or IKEA, Mars, Adobe, and Blue Cross Blue Shield of Massachusetts. In their submission in support of the Clean Power Plan, they noted:

The Amici Companies have a salient interest in the development of sound policy and economically responsible environmental regulations because, as electricity consumers and purchasers, planning strategically and financially for their energy resources needs is critical to business success. (Consumer Brands Amici brief at 3.)

The way forward

Through public commitments to clean energy and through their collaborations with EDF, we know that major companies want access to clean, affordable, low-carbon energy.

It’s time we tackle climate change with federal climate policy that reflects and harnesses these powerful trends.