It's Earth Week: Make Your (Corporate) Voices Heard

Tom Murray, VP Corporate Partnerships, EDFThis Earth Week, I want to continue the call for a new type of corporate leadership – one that allows both the planet and business to thrive.

It’s time for corporate leaders to ramp up their sustainability goals, embed sustainability across their business strategy, and most importantly, look at the positive momentum they can drive beyond the walls of their own operations. What lies beyond those walls? Their supply chain, their partners, their competitors, their consumers, and yes, even policy.

And it’s time, this Earth Day, for corporate leaders to use their voices to amplify support for smart climate and energy policy.

Today 110 companies came together to to celebrate the historic Paris Agreement, encourage investment in the low-carbon economy, and reinforce support for the Clean Power Plan. These companies know that U.S leadership is critical to making the pledges of Paris a reality and to enable the transition to a thriving, clean energy economy.

I’m encouraged by the commitments that these and other corporations have made so far this year, but also recognize the need for more private sector leadership to make progress on climate action.

Now is the perfect opportunity to step forward and align your internal sustainability strategy with your external engagement in policy, and there are many key areas that need your support. Read more

The Bar for Corporate Leadership on Climate Has Been Raised

Tom Murray, VP Corporate Partnerships, EDFAs the legal briefings pile up over the Clean Power Plan (CPP), I’m inspired by the growing number of companies and business organizations standing up for the most significant step in U.S. history toward reducing climate pollution.

The bar continues to rise for companies that want to lead on sustainability, and it’s great to see companies aligning their corporate sustainability strategy and policy advocacy. Today’s corporate-led amicus briefs in support of the Clean Power Plan and smart climate policy are the latest example.

IKEA, Mars, Blue Cross Blue Shield MA and Adobe (collectively called Amici Companies) praised the EPA’s Clean Power Plan as a viable solution that will create market certainty and directly benefit their organizations. “It is important to the Amici Companies that they reduce their carbon footprints by procuring their electricity from zero- and low-emitting greenhouse gas (GHG) sources, not only to be good stewards of the environment, but to also because it preserves their economic interests.”

Tech industry leaders Google, Apple, Amazon and Microsoft (collectively called Tech Amici) also threw their weight behind the plan, saying, “delaying action on climate change will be costly in economic and human terms, while accelerating the transition to a low-carbon economy will produce multiple benefits with regard to sustainable economic growth, public health, resilience to natural disasters, and the health of the global environment.”

These leading companies represent half a trillion dollars in revenue, demonstrating robust business sector support for the Clean Power Plan. Their filings continue the important momentum started in July 2015 by 365 companies and investors that sent letters to governors across the U.S. stating their support as being “firmly grounded in economic reality.” Read more

Three Ways to Step Up Corporate Sustainability Leadership

Tom Murray, VP Corporate Partnerships, EDFAt COP21, the governments of almost 200 nations spoke with one voice to fight climate change. Global corporations played a critical role in making this breakthrough moment possible. Now it’s more important than ever that US business leaders continue to lead, sending a powerful message to the world about our commitment to a thriving, clean energy future.

So what can forward-thinking companies do to show leadership on climate and position their firms to succeed in the low-carbon future? Here are three ways that corporate leaders can step up their sustainability efforts in 2016:

1. Set public, science-based emission reduction goals that extend beyond your operations and into your supply chains

business leverageCompanies around the world are increasing their climate leadership and ambition. Announcing big numbers is no longer enough. Greenhouse gas (GHG) targets must be based on what science tells us is required to limit warming and stabilize the climate.

One major corporation that has actively engaged its supply chain is Walmart. Working closely with Environmental Defense Fund (EDF), the world’s largest retailer exceeded its 5-year goal and reduced 28 million metric tons of GHG from its global supply chain and product life cycles. EDF was on the ground, providing the science and uncovering the GHG hotspots in Walmart’s supply chain. By sending the right demand signals, Walmart was able to engage its vast network of suppliers to unlock innovation and drive emission reductions, proving that big goals drive big innovation.

In addition, Kellogg has announced it plans to cut GHG emissions by 65% across its own operations, and for the first time, work with suppliers to cut supply chain emissions by 50% by 2050.

Leading companies recognise that today’s environmental challenges are too big to tackle on their own. Taking a systems-approach means looking beyond the four walls of your company, collaborating with key supply chain partners, and sending a clear demand signal for sustainable products and practices across your supply chain. Read more

KKR Expands Its Green Portfolio by Shepherding Green Solutions

This post is part of an EDF+Business ongoing series on sustainable finance, highlighting market mechanisms and strategies that drive environmental performance by engaging private capital. EDF is actively engaging leaders with the capital and expertise needed to catalyze sector-wide changes—from accelerating investment in energy efficiency and clean energy, to protecting tropical forests, restoring depleted fisheries and saving habitats of endangered species.


We’re proud to see the Green Portfolio Program, an initiative we helped kickstart in 2008 with private equity firm Kravis Kohlberg & Roberts (KKR), evolve to identify and implement more efficient practices in its portfolio companies that drive business value and reduce environmental impacts. Last week, KKR relaunched this initiative as the Green Solutions Platform (GSP), expanding its mission to include companies outside of its private equity portfolio, as well as a wider range of business and environmental benefits.

kkr_logo_13932KKR announced a shift in its investment strategy in its latest ESG report, and the relaunch of the GSP gives us a first glimpse into what that means in practice. The GSP’s scope has expanded beyond finding energy, water and waste reductions – what KKR refers to as “eco-efficiency projects” – to include portfolio company projects that can drive both top-line and environmental gains (“eco-innovation”) and companies whose core business drives a positive environmental impact (“eco-solutions”).

Much like GE with its Ecomagination product line or social enterprises focused on delivering renewable energy or clean water, the GSP’s new direction has the potential to support business activity that, by its nature, curbs climate impacts and creates value for communities and companies alike.

In just eight short years, 27 KKR portfolio companies reported that they achieved nearly $1.2 billion in avoided costs and added revenue, and avoided more than 2.3 million metric tons of greenhouse gas emissions, 27 million cubic meters of water use, and 6.3 million tons of waste through eco-efficiency efforts. We’re heartened to see an already-forward looking firm push its boundaries further in the pursuit of greater environmental gains, and look forward to seeing what innovations emerge from the Green Solutions Platform.

Corporate America Steps Up During Climate Week

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The combination of the Pope’s visit, Climate Week NYC and news of China planning a national cap and trade program has made last week huge in terms of support for climate action. But it’s also been a week of great sustainability news coming out of corporate America, and I’m excited to see the momentum building.

  • Companies publicly stating aggressive, science-based sustainability goals? Check.
  • Big brands supporting the Clean Power Plan? Check.
  • Business committing to set an internal price on carbon? Check.
  • Increasing commitment to sourcing 100% of energy from renewables? Check.

Like I said, it’s been a really good week. After 18 years as a sustainability advocate, I’m encouraged to see companies continuing to step up their leadership on climate— making public, science-based commitments and increasingly creating an environment where denial and delay by private and public sector leaders is no longer acceptable. Many of the companies who have made commitments, (this week, before this week, and hopefully leading into COP21), are demonstrating that tending one’s own sustainability garden is necessary but no longer sufficient—corporate leaders of today and tomorrow need to collaborate with each other for greater impact and assert public policy leadership as well. Read more

The Clean Power Plan is Out – Time for Business to Focus on the Certainties and Weigh In

Tom Murray, VP Corporate Partnerships, EDFCommuting home from work last week and listening to the radio, I heard the EPA’s Clean Power Plan (CPP) described as a big deal for our company, our nation, and our planet. When so much of the initial news coverage about the CPP was focused on uncertainty, it was terrific to listen to Ralph Izzo, CEO of Public Service Enterprise Group (PSEG) focus on the certainties.  According to Izzo, the science is in on climate change, the CPP creates business opportunities for PSEG and others, and the future for PSEG and utilities in general will be increased reliability, more energy efficiency, and increasing energy from carbon-free sources.

For nearly 25 years, EDF has partnered with leading companies to accelerate environmental innovation in their products, operations, strategies, and supply chains.  In fact, it was EDF’s early partnerships with McDonalds and FedEx that first attracted me to the organization.  While we’ve made considerable progress working with business, there’s still a lot of work to be done to reach the low carbon, clean energy future mentioned above.  To get there, we need more aggressive private sector leadership and strong support for solutions like the CPP.

Business weighing in on Clean Power Plan

 

What’s next with the CPP?  It’s time for business to focus on the certainties and weigh in… Read more

In Its 5th Citizenship Report, KKR Reaches Beyond ESG

This post is part of an EDF+Business ongoing series on sustainable finance, highlighting market mechanisms and strategies that drive environmental performance by engaging private capital. EDF is actively engaging leaders with the capital and expertise needed to catalyze sector-wide changes—from accelerating investment in energy efficiency and clean energy, to protecting tropical forests, restoring depleted fisheries and saving habitats of endangered species.

Sustainability pioneer and inspiration to many of us at EDF, Ray Anderson frequently talked about his company’s efforts to scale the seven faces of Mount Sustainability and develop a more responsible company along the way. Summiting a mountain is a good analogy for a company’s journey to improve its environmental performance. To succeed you need a plan, commitment, resources, and the ability to change direction if there are obstacles in your path.

In the case of a private equity firm like KKR & Co. L.P. – with over 56 portfolio companies participating in value creation programs linked to its environment, social and governance (ESG) strategy since 2009– the journey is more akin to traversing an entire mountain range, whose contours keep evolving as companies enter and exit their portfolio.

That changing landscape is what’s driven KKR to continue to adapt how it manages ESG challenges and opportunities. KKR’s recently-released 5th annual ESG & Citizenship Report details how these programs have continued to evolve since our initial partnership in 2008.

Our work together helped drive KKR’s Green Portfolio Program which, six years later, has added a cumulative $1.2 billion to its portfolio companies’ bottom lines while avoiding more than 2.3 million metric tons of greenhouse gases and reducing waste by 6.3 million metric tons and water use by 27 million cubic meters, according to results announced last fall.

kkr_logo_13932KKR’s latest report documents the firm’s progress in advancing ongoing efforts, including measuring and improving ESG performance at key portfolio companies, rolling out a publicly available ESG policy across its global private equity staff, contributing its expertise to the Sustainable Accounting Standards Boards’ development of ESG disclosure guidelines, bringing together sustainability professionals and other experts at its first Sustainability Summit last year, and hiring a full-time energy expert and two EDF Climate Corps fellows to help its portfolio companies more systematically adopt solutions for better energy management.

In addition, something new caught our eye. KKR plans to refocus its investment efforts through one of three lenses – responsible investing, solutions investing and impact investing.

  • Responsible investing incorporates ESG metrics and analysis into investment decisions.
  • Solutions investing refers to investments made in companies that have an intentional focus on solving a societal challenge and deliver traditional returns to investors, such as providers of reusable bulk shipping containers, developers of environmentally-responsible office buildings in Korea and microfinance groups increasing access to capital for business owners in rural and semirural India.
  • Impact investing goes beyond the other two, focusing on investments in companies that put environmental and social impacts on par or even ahead of financial impacts. KKR began advising two impact businesses in 2013 by providing technical assistance, helping the companies scale their businesses and secure additional funding. Moving forward, KKR will consider investing in such businesses.

At EDF, we believe that private capital can and must be part of the solution to our biggest environmental challenges. We’re encouraged to see major investors like KKR expand their investment strategy as the next step in this journey and eager to see the environmental and financial results it delivers.

Accelerating the Shift to More Efficient Trucks

Freight transportation is the work horse of the global economy, ensuring that the products consumers want get on the shelves where and when they want them. With 70 percent of U.S. goods being moved by truck, freight is a key source of U.S. fuel consumption and corporate greenhouse gas (GHG) emissions. Today, freight also offers companies a key opportunity to drive us toward a lower carbon future.

pepsico-logoIn a Wall Street Journal op-ed with EDF President Fred Krupp, Pepsico Chairman and CEO Indra Nooyi voiced the company’s strong support of the new fuel efficiency and GHG standards for medium and heavy duty trucks released June 19th by the U.S. Environment Protection Agency and Department of Transportation. Over the life of the program, these robust standards will cut fuel consumption in new trucks by 1.8 billion barrels of oil and reduce carbon emissions by one billion metric tons.

Leading companies like General Mills, Walmart and Anheuser-Busch have made reducing fuel use and emissions from freight a priority in setting their internal supply chain performance goals. But Pepsico’s willingness to step forward with this op-ed is a prime example of how companies can extend their leadership by aligning their public policy stances on with their sustainability goals – what EDF has been referring to as the business-policy nexus.

Freight affects all of us, but business is in the driver's seat

EDF - Building better trucksFreight transportation exists to serve companies that make or sell physical goods, from brands and manufacturers using trucks to bring in supplies and ship out final products, to technology companies needing trucks to deliver the hardware that powers their online services. While medium- and heavy-duty trucks only make up 7 percent of all vehicles on the road, they consume 25 percent of the fuel used by all U.S. vehicles.

Inefficient movement of goods wastes fuel, raises costs and increases environmental impacts. For firms like Pepsico, who maintain their own fleets, as well as those that contract out for freight moves, fuel is the single largest cost of owning and operating medium- and heavy-duty trucks. Truck fuel prices have increased 58 percent since 2009, a strong incentive for increasing the efficiency of trucks that move freight. Consumers are counting on businesses to solve this problem, as those costs are passed on to consumers. Through everyday purchases, the average U.S. household spends $1,100 a year to fuel big trucks. Strong standards can cut this expense by $150 on average a year by 2030. Read more

Bank of America Votes for Renewables with Its Very Large Wallet

bank-of-america-logoA company’s public statements matter– they can influence consumer choice, sway public policy decisions and demonstrate leadership on important issues. But in terms of actual change, it’s where a company puts its money that really matters. This week, Bank of America spoke with both its voice and wallet: At its shareholder meeting last week, the bank announced a new coal policy that continues the company's commitment to reducing its exposure to coal extraction companies and accelerating the transition from a high-carbon to a low-carbon economy.

According to BoA, its portfolio has grown to favor renewable energy over coal by a ratio of more than three-to-one. That’s an important step forward toward a clean, low-carbon energy future. And, it’s one that builds on moves by other institutions, like the recent news from Goldman Sachs about how the company is looking to divest some of its mining interests and Citi’s recent 10-year, $100-billion commitment towards investments in areas like energy efficiency, renewable energy, green affordable housing and climate change resiliency projects.

Tom Murray, VP Corporate Partnerships, EDFInvestors are seeing the terrain change beneath them – from upcoming regulations like the EPA’s Clean Power Plan and federal regulations on methane emissions from the oil and gas sector, to consistently lower natural gas prices, which undercut coal’s prior price advantage over other power sources – and beginning to bet on a future that’s powered by lower-carbon options.

More of this type of corporate leadership, including metrics and timelines, is what's needed to help make the leap from today’s polluting energy system to tomorrow’s thriving, clean energy future.

Further reading:

2015: A Year of Business and Policy Action on Climate

Tom Murray, VP Corporate Partnerships, EDFFor most of us, New Year’s marks the time when we set annual resolutions (personal and professional) and get to work on tackling the priorities for the year ahead. In my hometown of Washington, DC a new year also means that Congress comes back into session, lawmakers and speechwriters ready their agendas and proposals, and the president delivers the State of the Union address.

From what we heard last night and in recent announcements, 2015 could be a big year for action on climate – from government and the private sector alike. But big results will take leadership on all fronts.

Leadership from our government…

Addressing climate change is supported by the vast majority of Americans and the Obama administration is taking bold steps to curb the United States’ contribution to climate change. Last night, we saw President Obama tell the nation “no challenge – no challenge – poses a greater threat to future generations than climate change” in his State of the Union address. The President also strongly reiterated his commitment to work to ensure “American leadership drives international action” on climate change.

It is clear that climate change is an urgent national priority. Fortunately, the Administration is carrying out its promises under the Climate Action Plan, and steps taken and soon-to-be-taken have helped put us on the right path. From the proposal to reduce carbon pollution from power plants, expected fuel economy standards for medium- and heavy-duty trucks, to last week’s announcement of steps to address methane emissions from the oil and gas sector, we have seen a lot of progress to address climate change since the last State of the Union. Further, the November announcement of a joint China-U.S. agreement to address climate change on a global scale underscores how crucial U.S. leadership is at this juncture in achieving a binding worldwide climate deal. Much more work remains and leadership at all levels will be necessary to meet our climate goals. Read more