Building on the Heritage of Partnership: I'm lovin' it

By Koji Kitazume, 2010 EDF Climate Corps fellow at McDonald’s Corporation, Joint degree MBA/MEM candidate at The Fuqua School of Business and Nicholas School of the Environment, Duke University, Member of Net Impact

On average, it serves 60 million customers a day through more than 32 thousand restaurants in nearly 120 countries around the world – that’s McDonald’s, where I worked as an EDF Climate Corps fellow this summer. I helped the worldwide energy team with its energy efficiency efforts in restaurant buildings and kitchen equipment. The most thrilling part of the job? Realizing the scale of the potential impact such an organization could make and being involved in that process.

Equally as exciting was my role as a part of a long-standing partnership at the intersection of business and the environment. McDonald’s collaboration with Environmental Defense Fund goes back to 1990, when the two first joined forces to explore whether the company could benefit the environment without affecting the bottom line. A major outcome of this initial partnership was the replacement of polystyrene foam sandwich packaging with paper-based wrapping, which reduced packaging volume, landfill space, energy usage, pollutant releases and all the associated costs.

Another rippling outcome of the partnership was the improvement in energy efficiency. By 2000, a decade after the parties examined various opportunities for reducing environmental impact in ways that made business sense, McDonald’s cut more than 510 million kilowatt-hours of electricity usage and 4,000 tons of greenhouse gas emissions through installing energy-efficient lighting in its restaurants. And the ripple continues to prevail – Today, new McDonald’s restaurants in the U.S. are equipped with energy-efficient features such as LED signage, high-efficiency HVAC systems and low-proximity kitchen equipment exhaust hoods, to name a few.

As excited as I was about working with McDonald’s this summer, given all that’s been done over the last 20 years I had to ask myself, “What’s left there for me to do?”

In my first weeks, I learned about trends over the recent years that have made energy management even more challenging. For example, many of McDonald’s restaurants now operate for longer hours; McDonald’s has been putting more kitchen equipment into its restaurants to support menu expansion; and energy has been deregulated in many markets. While McDonald’s continues to drive energy efficiency in spite of these trends, prioritizing efforts and tracking results continue to pose additional challenges.

So my role this summer was to help McDonald’s address these challenges with an outside-in perspective. As part of this project, I worked with the McDonald's worldwide energy director to develop a tool that quantifies financial and environmental impact of the company's energy efficiency efforts and investments for prioritization. I was stunned when I first tried analyzing a sample set of data and found that I couldn’t open the file with Excel due to the massive volume – there’s a lot of square footage, revenue, guest counts, utility rates, climate zones, emission factors and other variables to deal with.

I’m proud to report that by the end of my summer fellowship, I was able to use the very tool I had developed to calculate that the company could cut approximately 2,993,000 kWh of electricity usage and avoid 1,799 metric tons of CO2 emissions annually if it were to install occupancy sensors for lighting control in non-dining and non-kitchen areas in 775 company-owned restaurants in the U.S.

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San Diego Shows: We Can Cut Truck Emissions!

San Diego was the place to be last week to learn how companies are already cutting their truck fleet emissions and to hear about near-term opportunities for ever greater progress. Much of the action took place at the annual Greenfleet Conference.

Frito-Lay, recognizing the urgency of cutting emissions and the significant concern about future fuel prices, was a clear leader in the efforts to cut carbon pollution. Among the strategies they are pursuing are:

  • Right-sizing trucks, such as moving to a 20-foot Class 5 straight truck for urban delivery runs from a 24-foot Class 6 straight truck. This change resulted in a fuel savings of 10%.
  • Deploying more efficient vehicles, including its new Sprinter box truck with its more efficient engine, aerodynamic design and lightweight materials. The truck achieves 18 mpg — nearly 50% more miles per gallon than the previous Frito truck.
  • Deploying electric vehicles, like the 21 electric trucks Frito-Lay announced last month that it will deploy this year followed by an additional 155 trucks in 2011. Frito-Lay claims that the 176 electric trucks will “eliminate the need for 500,000 gallons of fuel annually.” This will be a savings of 5,000 tons of greenhouse gases every year.

Nestle DSD presented its use of cold plate technology for straight trucks. Using the electrix max refrigeration cold plate system, Nestle has already seen savings of 10,000 metric tons of greenhouse gas emissions. Nestle DSD noted that each one of its trucks with this type of system would use 1,000 less gallons of diesel fuel.

Hybrid trucks were widely discussed too:

  • Verizon mentioned its efforts to deploy hybrid aerial fiber splicing trucks. According to Verizon, each one of these trucks will “save approximately one gallon of petroleum fuel consumption per hour of operation and reduce six to 12 metric tons of CO2 emissions annually per aerial truck.”
  • UPS, which recently added another 130 hybrid trucks to its fleet, has achieved a 35% fuel economy improvement with its existing hybrid trucks. Some drivers, UPS noted, have regularly achieved 40-50% fuel economy improvements with these trucks.

Every company noted that improvements make business sense today.

It was also clear that, over the coming ten years, there is great potential for significant efficiency improvements from our trucks.

Achates Power, a San Diego-based engine design and development firm, also discussed its unique engine technology.  This engine has demonstrated it can meet the world’s most stringent emissions standards while delivering 15% better fuel efficiency than the best engines of today, well more compared to the average engine on the road. And this is before aero, tire and electrification is added to the truck to increase efficiency even further.

Finally, at Integer Research’s Diesel Emissions Conference & Diesel Exhaust Fluid Forum, Freightliner Trucks noted that they are planning to “improve the fuel efficiency of its Class 8 trucks 20% between now and 2020, with a five-year goal to boost freight efficiency by 33%.”

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Just Under the Wire–Court Lifts Restraining Order Against CEC

By Derek Walker, Director, California Climate Initiative; Deputy Director, States Climate Program

The California Court of Appeal Fourth District has just lifted a restraining order that would have prevented California's Energy Commission (CEC) from distributing $33 million in federal stimulus money that was part of the American Recovery and Reinvestment Act (ARRA).

Today’s decision in favor of the CEC protects critical funding for "Energy Upgrade California,” an energy efficiency (EE) retrofit program that will help create jobs, save people money and protect the environment. The CEC  restraining order would have blocked money for this comprehensive, statewide energy efficiency and renewable energy building improvement program sponsored by the PUC, utilities and local governments.

Environmental Defense Fund and the Natural Resources Defense Council publicly warned that the program needed to proceed as planned, cautioning that, if California loses the money, we all lose out. We also filed a brief in the California Court of Appeals in Riverside County asking the court to hear an emergency petition by the CEC to lift the restraining order.

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Defining the Next Generation of Sustainable Business: An EDFix Call Series

The Future of GreenEnvironmental Defense Fund is working with Stanford’s Graduate School of Business Center for Social Innovation to discuss the the next generation of sustainable business. Beginning October 26 at 1:00 pm ET, we will host an 8-part series of one-hour expert interviews and open dialogues on business and environmental collaboration. The collection of conversations will be available as podcasts to help encourage discussion and innovation in this dynamic field.

Background

In 1990, EDF and McDonald's announced an alliance to reduce the environmental impact of the fast-food chain's packaging waste. This partnership was a risky move for both organizations, and reactions ranged from skepticism to outrage. The New York Times explained the situation saying "if it works, [it] could change the way environmental groups interact with Corporate America. But, if it fails, positions could harden on both sides, with executives dismissing environmental advocates as impractical visionaries and environmentalists becoming more determined than ever to use the courts and political process to force change."

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EDF Climate Corps Tour: Come meet the team and learn about opportunities for you

Fall is just beginning and the EDF Climate Corps team is already making the rounds  to MBA schools and business and energy conferences across the country. We are looking to meet MBA students who are inspired by sustainability, and provide the opportunity to use their  business skills to turn their inspiration into practice.

EDF Climate Corps trains a select group of MBA students in energy efficiency best practices, pairs them up with a Fortune 1000 company, and then sends them out into corporate America to uncover efficiencies that can save the environment and improve their host company’s bottom line. Read more about our selection criteria here.

As I mentioned before, the EDF Climate Corps recruiting tour is already underway. Here are a few of the places we’ve had the opportunity to share some insight on the program:

On September 15, we visited University of Virginia’s Darden School of Business, where 2010 EDF Climate Corps fellow at CSX Corporation, Matt Coleman, spoke with students about how his internship provided tangible experience to jump-start a career in corporate sustainability. Will Teichman, a member of Target’s Environmental Sustainability team and Darden alum, added some valuable perspective from a participating company’s point of view and noted that MBA internship opportunities in corporate responsibility, like EDF Climate Corps, are few and far between.

The following day at the University of North Carolina at Chapel Hill, the EDF Climate Corps team met with MBA and dual degree students interested in learning more about the opportunities available through EDF Climate Corps. Emily Martin, an EDF Climate Corps fellow at SAP this past summer, talked with her fellow classmates about the network she walked away with after participating in EDF Climate Corps. This is the network that many of our EDF Climate Corps alumni turn to in order to find like-minded colleagues forging successful pathways in corporate  sustainability.

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Can Open Innovation Make Products Better for the Environment? Accelerating Sustainable Innovation

Justin Olsson is a Harvard Law School graduate, working as a Legal Fellow for Environmental Defense Fund on developing and testing methods to accelerate sustainable innovation.

Many companies today are searching for creative ways to take their goals for business and the environment to the next level. Innovation has been a vital part of making this happen. Here are two proven success stories in sustainable innovation:

Nike

  • The problem: Nike realized its Air Soles shoes were responsible for as much CO2-equivalent as one million cars annually.

Tennant

  • The problem: Traditional floor scrubbers use toxic chemicals and pollutants, and require special safety training and handling.
  • The solution: Tennant, a midsize Midwestern company that makes commercial floor scrubbers, introduced a new machine, the ecH2O, which relies on electrolysis and water to clean floors.  The machine was recently named a top 100 innovation by R&D Magazine, and was profiled in Andrew Winston’s book Green Recovery.

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Let's Cash It in Now

According to the Federal Reserve, corporate America is sitting on $1.8 trillion in cash and short-term assets. This is an unprecedented level of cash on hand, and it could point to a way out of our economic doldrums. What if corporate executives invested that cash in one of the smartest and most financially sound opportunities available–one that not only creates jobs, but would help end our dependence on foreign oil and slow climate change while paying a steady return on investment?

I'm talking about energy efficiency. It may not be sexy, but over and over we see that upgrades to lighting, ventilation, manufacturing equipment and transportation systems pay for themselves and create new jobs.

Take, for example, a company called Cree, Inc., that makes energy efficient LED lighting. A year ago, Cree announced it would boost its local payroll by 575 workers, and just last month, the company announced that it would create another 244 local jobs over the next two years. Best of all, in an era where politicians of both parties are shouting about jobs being exported to China, Cree turns that equation on its head. Its North Carolina plant manufactured and exported the LED chips that were used to light the Bird's Nest stadium and Water Cube aquatic center during the Beijing Olympics.

The possibilities for accelerating this kind of growth are seemingly endless. Our EDF Climate Corps program uses business students to find energy savings opportunities at participating companies. In just 10 weeks at 50 companies last summer, we found $350 million in potential operating savings. And that's just the tip of the iceberg.

But don't take my word for it. The management consulting gurus at McKinsey calculate that commercial and industrial energy efficiency investments of a mere $238 billion–peanuts, compared to the $1.8 trillion on hand–would by 2020 generate $732 billion in energy savings (in today's dollars) while avoiding some 660 million tons of annual greenhouse gas emissions.

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Solutions Lab in Fayetteville on Nov. 5th – Helping Suppliers Get Ahead of the Sustainability Curve

Retail suppliers, large and small, are being asked to do more and more.  Report carbon emissions.  Eliminate waste.  Reduce energy, water and chemical inputs.  Save the planet.

As the first step on this journey, suppliers are being asked to “be transparent.” But what does supply chain transparency really mean for them?  And how can suppliers use it to create value for their businesses and strengthen relationships with customers?

Suppliers have the opportunity to explore these questions at the Green Innovation in Business Solutions Lab, a unique one-day workshop on November 5, organized by the Applied Sustainability Center at the University of Arkansas, Environmental Defense Fund and other partners.  They’ll be able to talk through shared challenges and brainstorm solutions with leading experts from academia, NGOs and the private sector.

Confirmed speakers include sustainability leaders from Walmart, such as Fred Bedore, Zach Freeze, Lea Jepson, and Vonda Lockwood, along with representatives from leading companies such as Clorox, Dean Foods and GE.

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Taking Efficiency Out of the Box

A small company finding it hard to sell its residential energy usage monitoring devices starts a “parent-teenage contract” marketing campaign. The teenager gets the parents to buy the device, and then they both sign a contract stipulating that the teenager will keep half the money saved on reduced energy usage. As the savings start to roll in, the teenager becomes more motivated to improve the household’s energy efficiency as do the parents, while the company points to this positive experience as it seeks additional customers for its monitoring device. This model has achieved success on a small scale, but could it be adopted on a wider level as it is driven by a business case, contains ingredients for cultural transformation and taps into incentives that appear to be driving action?

This was one of the many thought-provoking anecdotes shared at the ninth Green Innovation in Business Network (GIBN) Solutions Lab held in Boston where the 90 or so participants spent the day coming up with solutions to barriers faced by companies pursuing energy efficiency. The Pew Center on Global Climate Change was a co-sponsor of the event, along with Environmental Defense Fund, Ashoka, Microsoft, Net Impact Boston and many other partners.

The GIBN Solution Labs are one-day workshops structured in an “unconference” format where participants are divided into small groups of about eight or less. Each group brainstorms solutions to a specific issue or barrier and reports back to the whole group at the end of the day. With the umbrella theme of overcoming barriers to energy efficiency, the Boston GIBN Solutions Lab focused on 14 specific topics, such as financing, making the business case and motivating the public on energy efficiency. Participants including companies, consultants, academics and non-governmental organizations spent the morning exploring a variety of topics and then chose one in the afternoon to focus on in depth through a problem identification and solution design process.

Peter Senge, founding chair of Society for Organizational Learning and senior lecturer at the Massachusetts Institute of Technology, kicked off the workshop with a thought-provoking speech that emphasized the need for a comprehensive vision for energy efficiency instead of piecemeal solutions. By the end of the workshop some pieces of the vision had emerged: establish energy efficiency as a social norm; create business models that support energy efficiency investments; and design methods to more effectively communicate the benefits of energy efficiency.

The day was filled with a constant buzz of conversations out of which emerged some “out of the box” ideas as well as best practices. The group tackling the issue of motivating the public on energy efficiency proposed a K-12 energy efficiency curriculum that would result in children passing along the learning to their parents. Interestingly, the group on improving energy efficiency of buildings also saw children as key players. It proposed student projects involving energy audits and efficiency implementation measures for school buildings. A “just do it,” results-oriented approach was suggested to get senior management buy-in for energy efficiency projects: do the energy audit (which many utilities will provide free of charge) and then use the results of potential energy savings to convince senior management to implement the energy efficiency measures. Creative employee communication methods were also suggested such as distributing figures on how much paper and printer toner is being used by the office or putting up a sign next to the printer asking “Do you really need to print this?” There were also some “out of the box” topics: one group looked at the water-energy nexus and noted that understanding the relationships between water usage and energy could spur new technical innovations such as water-less laundry systems.

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The Future Looks Bright Green – Life after EDF Climate Corps

EDF’s innovative Climate Corps program embeds top MBA students in leading companies to make the business case for energy efficiency. People often remark about the incredible amount of financial savings uncovered by our fellows. Just as remarkable? How our EDF Climate Corps fellows parlay their summer experiences into long-term careers at the nexus of business and the environment.

EDF Climate Corps has experienced exponential growth since its inception in 2007. We grew the program from just one MBA fellow in 2007, to seven fellows in 2008, to 26 fellows in 2009, and 51 fellows this past summer.

Once they finish business school, our EDF Climate Corps fellows move on to play a prominent role in the transformation to a more sustainable marketplace throughout corporate America.  Our alumni take their EDF Climate Corps training and become true agents for change. It’s no wonder that Forbes reporter, Aman Singh, recently wrote that Climate Corps is “Finally a program that gets corporate sustainability.”

I was part of the 2008 EDF Climate Corps class working at Cisco Systems where I analyzed a project that could save an estimated $8 million per year and reduce Cisco's greenhouse gas emissions by 3%. (I’m happy to report that Cisco has begun implementing my recommendations, and they’ve also hosted two EDF Climate Corps fellows since I’ve worked with them in 2008!)

Following that summer, I returned to the University of Michigan’s Erb Institute for Global Sustainable Enterprise to complete a dual MBA and MS degree program, and begin the tough work of finding a job.  My dream job was one where I could make the business case for sustainability – finding environmentally-preferable solutions that would also keep a company profitable.   I couldn’t be happier working at EDF, using my business and environmental degrees to impact dozens of companies on a daily basis.

What about the career paths of other EDF Climate Corps alumni? The success stories are as diverse as they are impressive.  – private sector, public sector, start-ups– our Climate Corps alumni  are embedded throughout the country working on  various corporate projects and platforms around energy savings and environmental innovation.   Scroll through this list to see what some of the many rock star EDF Climate Corps alumni are currently doing:

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