No Water Means No Beer, and Other Insights from an LA Water Conference

Beer lovers – now that I have your attention – let’s talk water. Nowhere in the country is water more critical an issue and looming risk than in my home state of California… critical to farmers, utilities, businesses, and yes, even breweries.

San Luis Reservoir

The San Luis Reservoir, facing low levels in 2008

The current drought has brought a host of challenges for our growing state, including more wildfires, collapsing delta ecosystems and fisheries, decaying infrastructure and declining water quality. While California is on track to reduce carbon pollution due to our progressive climate and energy policies, our water challenges are the elephant in the room.

So it was inspiring to attend a daylong event convened by the Pacific Institute in Los Angeles, where leading corporate, nonprofit and technical water experts honed in on water stewardship and shared innovative solutions to the business and environmental challenges we face with regard to water scarcity.

The companies represented there – including AT&T, Deloitte, MillerCoors and Veolia – see water scarcity as a current business risk, as well as a critical component to economic growth in California, the Colorado River Basin and around the world. The World Economic Forum even ranked water crises as the third most pressing global risk for 2014. “Often, the greatest risks come from conditions over which the company has the least influence,” noted Jason Morrison of the Pacific Institute, whose Water Action Hub offers a powerful guide with tools and resources for collective action.

The day’s far-reaching discussion would be impossible to capture in a single blog post, so I'll highlight here just a few of the challenges and solutions that stuck with me after a full day of information sharing.

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Changing the Methane Numbers Game

Adding to the drumbeat for action on the supercharged climate pollutant methane, Showtime’s “Years of Living Dangerously” series recently spotlighted methane emissions leaking from America’s oil and natural gas infrastructure.

YOLD_well_photo

One theme of the May 19 episode hinged on a numbers question: Just how much methane is getting out? This question, a common one in the methane arena, refers to the national methane leakage rate for the entire oil and gas supply chain.

Various numbers, as low as 1 percent, were suggested for the national average with 4 percent, 11 percent and even 17 percent reported by scientific studies in some oil-and-gas producing regions. The problem is, it’s the wrong question.

We should stop fixating the debate on just how bad the problem is, when we know there is a problem and we can address it with confidence today.

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Smithfield Foods, world's largest pork producer, works with EDF to cut emissions

Corn is a common hog feed.

First, the facts: We will have 9 billion people on the planet by 2050. That's 2 billion more than we have today – stretching Earth's land and water resources to meet nutritional needs in a dramatically changing climate.

In the United States, the Environmental Protection Agency calculates that agriculture is the fifth-largest source of greenhouse gas emissions, contributing 8 percent of total GHGs. Fertilizer use and soil management are responsible for half of those emissions.

Next, the challenge: Many farmers encounter difficulties in determining the precise amount of nitrogen fertilizer their crops need. It gets tricky. Using too little fertilizer can limit crop production. Too much fertilizer pollutes water and emits a potent greenhouse gas called nitrous oxide, which is 300 times more powerful than carbon dioxide.

The stark reality is that crop production must increase approximately 70 percent by 2050 to feed our growing human population. We cannot choose between agricultural productivity and sustainability – we must have both.

To address the challenge, Smithfield Foods, the world's largest pork producer, and its hog production subsidiary, Murphy-Brown, are working with grain farmers to reduce excess fertilizer on crops grown for hog feed. The project will help farmers save money on fertilizer, while maintaining high crop yields, improving water quality and reducing climate impacts. The initiative is the first of its kind among animal agriculture companies.

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Raising the Bar for Private Equity ESG Reporting

As the old management adage goes, “what gets measured gets managed.” Private equity firm Apax Partners took an important step toward embodying that concept this spring by releasing a sustainability report rich with key metrics from its portfolio companies' progress in environmental, social and governance (ESG) management.

Apax Partners logo

As last year’s Pitchbook survey showed, ESG management is increasingly a mainstream issue for private equity firms. The detailed data that Apax portfolio companies are gathering — and reporting as a group — form the foundation for companies to manage ESG issues, as well as benchmark and then measure any advances.

This is all part of an important, ongoing shift in the private equity industry: from questioning if firms can create value through ESG management, to how can firms capture the value.

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EDF Climate Corps fellows – right where they need to be

EDF Climate Corps on Years of Living Dangerously

Watch the episode featuring
EDF Climate Corps
Monday May 26th at 8 pm on Showtime

When the producers of Years of Living Dangerously – Showtime’s groundbreaking new series about climate change – were looking for a story of hope, they turned to EDF Climate Corps. The series, which brings the reality of climate change into your living room every Monday night, does not spare the viewer the devastating impact on people of wildfires, superstorms and droughts. But it also shows how people can be part of the solution to climate change. The three EDF Climate Corps fellows featured in this Monday’s (5/26) episode are protagonists in that story of hope. They show how saving energy benefits both the environment (by cutting carbon emissions) and the bottom line.

One exchange that Showtime caught on camera goes something like this:

Jessica Alba:  “Can you can walk into any organization and tell them how to save energy and money?”

Climate Corps fellow:  “Yes.”

EDF Climate Corps fellows are turning up in all kinds of interesting places this year. In January, Tyrone Davis joined the first lady to watch the State of the Union address. This month, fellows will appear on television to give people hope about solutions to climate change. And this week, we announced the 2014 class of Climate Corps fellows – 117 top grad students chosen from close to 700 applications – all going to where the biggest opportunities are to save energy.

EDF Climate Corps Working in Key Geographies

This year, we’ll have six Climate Corps fellows in China, now the world’s biggest emitter of greenhouse gas. About two-thirds of our 117 engagements will be in the nine U.S. states that consume over 50% of the nation’s energy. And 16 of those will be in Chicago accelerating progress toward the city’s 20% energy reduction goal.

EDF Climate Corps Helping Key Sectors 

Climate Corps fellows continue to work in large commercial buildings like the Merchandise Mart in Chicago. But we’ve also expanded the sectors in which we work to include manufacturing (with Legrand, Lockheed Martin and Owens Corning), cities (Baltimore, Boston and Los Angeles) universities (Clark Atlanta and the University of Texas Southwest Medical Center), data centers (RBS Citizens and Comcast), utilities (Pacific Gas & Electric), and even military bases (US Army at Fort Bragg).

EDF Climate Corps Tackling Diverse Projects

The 2014 class of Climate Corps fellows are working on a wider range of projects than ever before. About half will be working on building energy efficiency. The rest of the projects include:

  • Energy strategy, data management and employee engagement
  • Water efficiency – implementing the unique toolkit that EDF developed with AT&T
  • Supply chain logistics – integrating our expertise in green freight and operating more efficient warehouses

EDF Climate Corps is recruiting, training and deploying the sustainability leaders of tomorrow; a viral solution that gives us hope that we can bend the curve on carbon emissions and avoid the worst impacts of a warming world. But don’t just take my word for it. Tune into “Years of Living Dangerously” on Monday May 26th at 8pm on Showtime. See for yourselves how our fellows helped Caesars Entertainment Corporation, Texas Southern University and Office Depot scale their energy management efforts.

 

Also of interest:

Years of Living Dangerously: Two producers, coffee and a vision for climate action

Behind the Showtime cameras with EDF Climate Corps fellows

EDF Climate Corps, creating a new generation of leaders

 

Be humble, be bold: inspiration from the 2014 Shared Value Summit

“Be humble; be bold,” said David Browning of TechnoServe, offering his advice on developing partnerships at the 2014 Shared Value Leadership Summit. By that, he explained, your goals should be aspirational, but that you should “ground-truth” your strategies before getting too far ahead of yourself.

Michael Reading

As a manager in new project development with EDF’s corporate partnerships team, I was drawn to the Summit to learn from other organizations working to harness the power of markets to drive societal and environmental progress, creating “shared value” for all involved. Browning’s talk was just one of the highlights of the Summit, where an inspiring combination of expertise, experimentation and uncommon alliances was on display.

Redefining shared value

Shared value is a still-evolving idea, first defined in 2011 as “a management strategy focused on companies creating measurable business value by identifying and addressing social problems that intersect with their business.” While the terminology is new, the concept of creating it through corporate-NGO partnerships thankfully isn’t.

What is new, as noted in the opening plenary, is the rapid shift of companies from launching many small-scale pilot projects to “developing the playbook”–codifying and scaling best practices across business units and entire sectors.

Honing the playbook

The term playbook itself captures the diversity of efforts that companies at the Summit described as necessary to drive real results. “You have to take a variety of approaches to do something big,” said Beth Keck of Walmart in summing up the company’s wide-ranging efforts with international NGO TechnoServe to incorporate one million smallholder farmers into its supply chains. JPMorgan Chase & Co and the Nature Conservancy announced the launch of NatureVest, an innovative new platform drawn from both organizations’ strengths to drive impact investment in conservation.

Partnerships that require both expertise and experimentation to scale up impacts are never easy and speakers offered their hard-won insights. According to Zia Khan of Rockefeller Foundation, partners need to not only care about the problem to be solved, but see it as important to their organization. Our partnership with AT&T came quickly to mind; water scarcity represents a critical operational issue for the company and an important issue for EDF, which has driven us to work together to help AT&T and other companies in five water-stressed areas reduce their water use.

Applying lessons learned

At EDF, I work with colleagues to develop new models to engage business in addressing critical environmental issues, including efforts to reduce pollution from fertilizer and emissions from deforestation, and EDF’s playbook’s getting richer and more diverse with each new project. At the moment we’re ramping up a competition to identify innovative technologies to make it easier for the oil and gas industry to find and quickly fix methane leaks, as well as working with Walmart to phase out toxic chemicals from their supply chain.

With exciting challenges ahead, I look forward to applying lessons learned from the Summit: to be bold in seeking transformational change; be humble in learning from the expertise around me; and to seek alliances, however uncommon, with those willing to work together.

What We Build Together: Collaborating to Scale up Sustainability

Brendan FitzSimons speaking at Accelerating Sustainability

Brendan FitzSimons (2nd from left) speaking at Accelerating Sustainability

Today’s environmental challenges are bigger, thornier and more interconnected than ever. Meeting these challenges will require more effective collaborations among businesses, governments and NGOs to discover and deliver solutions.

That’s why it was so encouraging to see the focus on partnerships between these sectors to scale up sustainability at the U.S. Chamber of Commerce Foundation's 2014 Accelerating Sustainability Forum.

I participated in a panel entitled “Sustainability and the Return on Collaboration” with Eunice Heath, Dow Chemical’s global director for sustainability, Ann Klee, GE’s vice president of environment, health and safety, and Monique Oxender, Keurig Green Mountain’s senior director for sustainability. Chris Guenther of SustainAbility, the panel’s moderator, asked us to share our perspectives on collaboration and how they have evolved over time.

During the panel, I spoke about EDF’s more than two decades of experience working with leading companies to unlock environmental benefits, starting with our first corporate partnership with McDonalds to identify opportunities to cut waste and save money. That approach—identifying opportunities that deliver both environmental benefits and business value—has characterized our other corporate collaborations, including those with FedEx, Walmart, and AT&T.

For example, our work with AT&T has focused on identifying ways to cool their buildings more efficiently, saving both water and energy. Based on our work together, AT&T has publicly committed to saving 150 million gallons of water and 400 million kilowatt hours of electricity from building cooling each year by 2015.

Increasingly, companies like AT&T are also recognizing the influence collaborations like these can have on environmental performance beyond their own walls and operations:

Guenther noted that while collaboration is needed to develop environmental solutions that can overcome industry and competitive boundaries, these efforts can also be challenging. An audience member took that opportunity to ask the panel what we thought were the key elements for successful partnerships:

  1. Take the time to build relationships and understand your partner’s concerns.
  2. It’s important to understand the business case for making environmental improvements. Often, the business case is based on cost reductions, but other compelling arguments include risk management, the creation of new business opportunities, or brand/reputational benefits.
  3. Be clear on goals and objectives of a partnership to avoid any confusion or disappointment among both parties.

While collaborations to realize environmental benefits among companies and NGOs can change over time and require care and attention, they hold the potential to address problems affecting not only a single company, but an entire industry.

Additional reading:

AT&T, EDF Promote Conservation Toolkit In Water-Stressed U.S. Cities:  bit.ly/1jLX9Ww

When Social Good Trumps Competition: shar.es/SVZWQ

President Obama Goes to Walmart

I never really expected to be sitting in a Walmart in Mountain View, CA listening to President Obama speak about environmental commitments, but I am excited for the momentum he is generating, particularly in the private sector, to support the EPA announcement on carbon limits on June 2nd.

Obama WalmartSo why Walmart?

The President is making a point. Walmart gets about 25 percent of its global electricity from renewables. In the United States over all, only about 2 percent of power comes from solar sources. In 2005, Walmart set a goal to be supplied 100 percent by renewable energy. To date Walmart has 335 renewable energy projects underway or in development across their global portfolio. Having the president hold Walmart up as a role model is a great way to drive other industry leaders to follow suit.

This recognition is great news to EDF since we are a key NGO partner to Walmart and have been working with them on environmental solutions since 2005. (See the full EDF – Walmart partnership timeline). In 2008, EDF and Walmart announced a jointly-developed clean energy project to install and assess next generation solar technology at over 30 Walmart facilities. Today Walmart has 250 solar energy systems installed in the U.S. and has a solar energy capacity of 65,000 kW, top of the Solar Energy Industries Association rankings of U.S. companies.

Are industry leaders following suit?

The private and public sector commitments announced today represent more than 850 megawatts of solar deployed – enough to power nearly 130,000 homes – as well as energy efficiency investments that will lower bills for more than 1 billion square feet of buildings. Additionally, the President announced new executive actions that will lead to $2 billion in energy efficiency investments in Federal buildings.

We are especially excited to see companies step up for the President’s Better Buildings Challenge which will improve energy efficiency of more than 1 billion square feet of new floor space by 20 percent by 2020. New to the President’s roster are General Motors (committing 84 million square feet), MGM Resorts (78 million square feet) and Walmart (850 million square feet).

See the complete listing of private and public sector organizations making commitments today for solar deployment and energy efficiency.

Here at EDF, we believe that companies and business leaders must pave the way to a low-carbon and prosperous economy. Today Walmart committed to double the number of onsite solar energy projects at U.S. Stores, Sam’s Clubs and distribution centers by 2020. This is in addition to their goal of reducing greenhouse gas emissions in their global supply chain by 20 million metric tons by the end of 2015.

We think President Obama’s making his announcement at Walmart today was a clear signal to the public and private sector that business needs to step up and publicly commit to ambitious environmental goals. Walmart continues to do this, and we look forward to many other industry leaders following suit.

6 MPG? We Can Do Much Better

Here’s something to think about next time you are stuck in traffic next to an 18-wheeler.

The average tractor-trailer can travel only six miles per gallon of diesel.

These heavy trucks travel a lot too; averaging more than 120,000 miles a year or 20 round trip drives between Boston and San Francisco.

Freight trucks are on the road for one primary purpose: to get goods to all of us. In fact 70% of U.S. freight tonnage is moved by tractor-trailer trucks. Over the coming years, demand for freight services is expected to grow even more. And this is driving up fuel consumption and greenhouse gas emissions.

Strong, new fuel efficiency and greenhouse gas standards for our nation’s heavy trucks are achievable, cost-effective and critical to cutting greenhouse emissions and fuel consumption – all while we continue to depend on trucks to deliver the goods we need and want.

It is possible and affordable for tractor trailer trucks to get nearly 11mpg by 2025.

EDF is calling on the Obama Administration to set new fuel efficiency and greenhouse gas standards for heavy trucks that cut fuel consumption by 40% compared to 2010 levels.

These standards would also apply for heavy-duty work trucks, such as box delivery trucks, bucket trucks, beverage delivery trucks and refuse trucks.

The infographic below highlights some of the technology available to meet bold standards as well as the significant cost, oil and emissions savings from such standards.

One fact that just jumps out at me is this: These standards will cut our oil consumption by 1.4 million barrels a day.

That sounds like a big number and it is. It’s a bit higher than the amount of oil we import daily from Saudi Arabia.

Bold fuel efficiency standards are good for our economy, environment and energy security.

They will also be good for trucking fleets too. These trucks will cost $30,000 less to fuel a year.

Strong fuel efficiency and greenhouse gas standards for heavy trucks are an important part of the President’s Climate Action Plan. EDF will continue to work towards strong standards through our unique combination of industry engagement, regulatory design expertise and technical know-how.

Fertilizer and Feeding the Planet’s Growing Population

cornfieldbluesky_39542233_shutterstock_com_RF

Last week, Walmart hosted its first Sustainable Product Expo, an event that brought together CEOs and sustainability leaders from some of the retail chain’s biggest supplier companies. Leaders from General Mills, Cargill, Dairy Farmers of America and PepsiCo, among others, joined Walmart on stage to celebrate the progress they’ve made in increasing the sustainability of their operations, and to make new commitments to cut greenhouse gas emissions and other environmental impacts.

Walmart set the stage for this in 2010 by announcing their goal to reduce 20 million metric tons (MMT) of greenhouse gas (GHG) emissions from their supply chain by 2015. As of 2013, Walmart and their supply chain have eliminated 7.5 MMT of GHG emissions and have projects underway to reach 18 MMT by 2015. The key to meeting and exceeding this goal is swift and thorough follow-through on ambitious initiatives.

That’s why EDF is working closely with Walmart to help their suppliers optimize fertilizer use in their supply chain. Emissions that result from nitrogen fertilizer loss – a greenhouse gas called nitrous oxide – is 300 times more potent in damaging our climate than CO2. Walmart’s Director of Dry Grocery Tim Robinson mentioned at the Expo that 20 to 40 percent of the nitrogen fertilizer isn’t absorbed by crops, either running off into waterways or off-gassing into the atmosphere. Consequently, as the top grocer in the country, this makes fertilizer optimization one of Walmart’s major opportunities for GHG reductions in their supply chain.

Just as importantly, the UN estimates that to feed the world’s growing population, food supplies will need to increase 70% by 2050. The entire value chain needs to produce more food with fewer inputs, while still allowing farmers to earn a living with what they grow. Walmart’s suppliers’ commitments are a first step towards this future:

Cargill

“By 2020 we will double our NextField acres bringing us to over 1 million acres of total land being optimized for maximum productivity with minimum environmental impact.”

DFA

“…we will have more than 90 percent of our 9,000 member farms participating in our Gold Standard Dairy program, which focuses on resource efficiency and optimization” and are “[a]igned with industry goals to reduce environmental footprint 25% by 2020."

Kellogg Company

“In every country in which Kellogg sources rice globally, we commit to promoting and supporting initiatives with producers that will, by 2020, lead to a 25% increase in the adoption of Climate Smart Agriculture (CSA) practices.  This will improve smallholder livelihoods, enhance producer resilience and reduce greenhouse gas emissions."

Pepsi

“…we will work to engage growers of corn, oats, potato, and oranges to increase sustainable farming practices, particularly in the areas of environmental, social and economic sustainability.  As part of this worldwide program, PepsiCo's Sustainable Farming Initiative (or equivalent scheme) will be expanded to 500,000 acres of farmland in North America by the end of 2016."

Campbell Soup Company

“We commit to reducing GHG emissions and water use by 20% per tonne of food for Campbell's 5 key agricultural ingredients (Tomatoes, Carrots, Celery, Potatoes, Jalapenos)."

General Mills

“We will: 1) Expand 2.5x the acreage enrolled in The Field to Market sustainable agriculture initiative to 2.5 million acres by 2015; 2) Leverage General Mills' strength in connected innovation to match grower nitrogen management needs with the best global solutions; and 3) Co-sponsor an innovation challenge for the innovators and farmers who demonstrate the most promise to reduce GHG emission in nitrogen management.”

With their commitments, Walmart’s suppliers are setting new targets to strive for, and we at EDF are seeking to provide farmers with the tools they’ll need to meet them. With effective fertilizer management, we can help scale up crops to meet food needs around the world while minimizing their impacts on our climate and water resources.