A path to prosperity that we can all embrace

Prosperity. We all want to attain it, yet the ways we each define it are as different as we are.

As President Trump charges through his first 100 days, there is a risky theme being pushed that a prosperous America comes with a choice between environmental protection and economic growth.

This concept is not only false, but dangerous and short sighted.

Just look at China. When I was there last year, I saw a country that, during its own industrial revolution, made decisions that had unfortunately sacrificed the environment for a short-term surge in economic prosperity. Those tradeoffs were made during a time when coal and oil provided over 90% of energy consumption, and as a result, air quality reached unhealthy standards. Now China, the world’s fastest-growing economy (IMF), is sprinting to play catch-up. In 2015, in fact, China invested $102.9 billion in renewables, making it the world’s largest investor in clean energy (the US, by contrast, invested $44.1 billion that same year). (IEEFA.org, 2017)  Earlier this year, as the Trump Administration ceded U.S. leadership, China continued to step up with a new commitment to invest over $350 billion in renewable power generation.

So I reject the idea that people have to choose between a thriving economy and clean air and water. Or that we need to choose prosperity in the short-term, but an unstable and unhealthy climate in the long-term. We should not be forced into believing false choices. Instead, we demand and deserve a healthy future where both the economy and the environment can prosper.

Protecting the environment is being positioned by President Trump as something that stifles U.S. businesses with over-regulation. And while not all regulation is perfect, sometimes policy is necessary to round out the sharp edges of capitalism. We must ensure that we’re not just eradicating environmental regulation, but instead making informed improvements with both business and the environment in mind. Just look at California as a case in point. The state’s clean energy standards for cars, buildings and electric utilities are some of the strictest in the U.S., yet California’s jobs and overall economy continue to grow steadily.

And on a national scale, a new report from Environmental Defense Fund shows that our best line to job creation lies in the sustainability and clean energy market. Addressing climate change isn’t hampering growth, it’s driving it. Sustainability now collectively represents an estimated 4-4.5 million jobs in the U.S.  The solar industry alone is currently growing at a rate 12 times faster than the rest of the U.S. economy. Clean energy and sustainability is feeding a burgeoning pipeline of well-paying jobs across all 50 states. Jobs that cannot be outsourced I might add.

The Republican’s choice for Secretary of Energy, oil industry ally Rick Perry, said during his confirmation hearing, “the question is how we address (climate change) in a thoughtful way that doesn’t compromise economic growth.”  It’s a good question, and one that must be very thoughtfully considered by Mr. Perry. When it comes to the environment and public health, we cannot repeal safeguards without devising safer, smarter replacements that diminish economic burdens while maintaining, or even increasing, protection. We need to envision prosperity through a lens where both the environment and the economy can thrive.

Our path to prosperity must be driven by long-term economics, not short-term politics.

Rolling back environmental safeguards, pausing innovation on fuel efficiency and clean energy, and reigniting a U.S. reliance on coal and oil is short-term thinking that puts us on a dangerous path.

Business prosperity in the long-term relies on resource availability. By 2050 the world will be home to 9.5 billion consumers, all looking toward business to provide the products and services they need. This consumption drives our economy—but puts a massive burden on our planet’s resources.

This is why Google, Microsoft, Nike, Nestlé, Walmart and many others are committed to sourcing 100% of their electricity from renewable energy. This is why PepsiCo is focused on improving water use efficiency, reducing food waste and eliminating emissions from its supply chain as part of its 2025 goals. And despite the threat of environmental rollbacks and noise about pulling out of the Paris Climate Agreement, 1000 companies and investors have signed on to the Business Backs Low-Carbon USA statement, which reiterated support and intent to implement the historic Agreement to address climate change. Not because regulation demands this, but because long term prosperity requires it.

If America is to continue our longstanding tradition and commitment of leaving a better future for the next generation, we must continue making decisions that align economic prosperity with environmental protection and human health. This, to me, is the most important test of business leadership.  It’s time for committed sustainability leaders to live those values, speak truth to power, and move the dialog beyond transactional, and short term campaign promises to long-term health for the economy and the planet.


Follow Tom on Twitter, @tpmurray


When the EPA is under threat, so is business: 2 key examples

American businesses benefit tremendously from the robust voluntary and regulatory programs of the U.S. Environmental Protection Agency. These programs are now under threat of massive budget cuts and regulatory rollbacks.  In the coming weeks and months, the experts at EDF+Business will examine what a weakened EPA means for business. 

While some politicians may question the reality of climate change, most CEOs do not. So it’s no surprise that while Congress has been stuck, business has been busy addressing the problem. Luckily, they’ve had a helpful partner by their side: the U.S. Environmental Protection Agency (EPA).

Contrary to now head of the EPA Scott Pruitt’s claim that business has been subjected to "regulatory uncertainty"—stated during this year’s Conservative Political Action Conference—the Agency has administered a number of voluntary and regulatory programs that help corporations respond to the challenge of climate change. For companies, future planning is simply good business. This is why many in  Corporate America—having long accepted that climate change is real— are continuing to transition towards low-carbon energy options and work with the EPA to move forward in a sensible, cost-effective manner.

But with the recent announcement on Pruitt’s plans to cut the EPA’s budget by a reported 24 percent—to roughly $6 billion, its lowest since the mid-1980's–it may be up to the business community to defend the instrumental role of the Agency in helping business thrive while protecting the environment.

Here’s a look at just two of the many EPA programs that have helped business transition to a clean energy future.

Forging a smart economic future with the Clean Power Plan

Many in the business community strongly supported the EPA’s Clean Power Plan (CPP)—the first-ever national limits on carbon pollution from power plants. The argument? Dirty sources of energy generation are becoming a growing concern for corporate America. These energy sources are increasingly uneconomic. Fortune 500 companies routinely set renewable energy and emissions reduction goals, but find roadblocks in many energy markets around the country.

Liz Delaney, Program Director, EDF Climate Corps

Fortunately, the CPP can open new opportunities for businesses interested in operating in a clean energy economy. The rule’s flexible framework puts states in the driver’s seat to set plans that call for the most appropriate and cost-effective solutions for meeting pollution reduction targets while spurring innovation. If you ask me, this satisfies Pruitt’s call to "restore federalism" by giving states more of a say in regulations. The plans provide clarity on the energy options available to businesses in different regions, helping to inform their long-term carbon reduction strategies and eventually increase access to cost-effective low-carbon energy.

This explains why last year major innovators including Mars, IKEA, Apple, Google, and Microsoft filed legal briefs in federal court supporting the EPA’s Plan. And more recently, leading executives from over 760 companies and investors—many of them Fortune 500 firms—called upon the new Administration to move ahead with policies to address climate change, like the Clean Power Plan.

The CPP is positioned to:

  • Generate $155 billion in consumer savings between 2020-2030
  • Create 3x as many jobs per $1 invested in clean energy as compared to $1 invested in fossil fuels
  • Lead to climate and health benefits worth an estimated $54 billion, including avoiding 3,600 premature deaths in 2030

The Green Power Partnership

The Green Power Partnership is a voluntary program launched by the EPA to increase the use of renewable electricity in the U.S. Under the program, businesses are armed with resources and provided technical support to identify the types of green power products that best meet their goals. Since its inception, the Partnership has made notable progress in addressing market barriers to green power procurement.

Through the Partnership, companies can reduce their carbon footprints, increase cost savings, and demonstrate civic leadership, which further drives customer, investor and stakeholder loyalty. Take Colgate-Palmolive for example: as one of the Green Power Partnership’s national top 100, the consumer products giant has generated close to 2 billion kWh of annual green power through wind power alone. This represents 80% of the company’s total electricity use.

Today, hundreds of Partner organizations rely on billions of kWh of green power annually. At the end of 2015, over 1,300 Partners were collectively using more than 30 billion kilowatt-hours (kWh) of green power annually, equivalent to the electricity use of more than three million average American homes.

Pruitt has ratified the belief that we can “grow jobs, grow the economy while being good stewards of the environment”–and he’s right. The renewable energy industry is now outpacing the rest of the U.S. in job creation; which is good news for business and the economy at large. American wind power now supports more than 100,000 jobs—an increase of 32% in just one year—and solar employs more people in U.S. electricity generation than oil, coal and gas combined.

Long-term economics versus short-term politics

We don’t know what will happen in Washington over the next few years. But many businesses are moving forward. Rather than shift course, corporations are increasing investments in clean, reliable power, a move that is consistent with sound business practices.

But business can’t do it alone. The EPA supports responsible companies who have committed to reducing their carbon footprints while safeguarding our planet. It’s time for business to not just leverage their scale and buying power to help accelerate the transition to a clean energy future, but to speak up in favor of maintaining a well-funded agency that continues to make decisions based on sound science and the law.

In his first address to the EPA, Scott Pruitt said, “you can’t lead unless you listen.” Let’s make sure he hears from the businesses that are focused on a future where both the economy and the environment can thrive.

Stay on top of the latest facts and information affecting the intersection of business and the environment. Sign up for the EDF+Business blog.

Your Name

Your Email

Both fields are required.

———————————————————————-

Follow Liz on Twitter, @lizdelaneylobo

———————————————————————

 

EPA SmartWay and Clean Truck Standards save U.S. businesses millions


American businesses benefit tremendously from the robust voluntary and regulatory programs of the U.S. Environmental Protection Agency. These programs are now under threat of massive budget cuts and regulatory rollbacks.  In the coming weeks and months, the experts at EDF+Business will examine what a weakened EPA means for business.

It’s safe to say that the EPA isn’t having the best week. Whether it was new administrator Scott Pruitt vowing to slash climate and water protections at CPAC or this week’s reveal that President Trump wants to slash a reported 24 percent of its budget, the EPA has taken a beating recently. However, what may not be as obvious is that slashing EPA’s budget and reducing funding to key programs actually hurts businesses that have greatly benefitted from EPA programs.

A key example of how the EPA bolsters business is freight. In the freight world, the EPA has done a lot for companies’ bottom lines while protecting human health and that of the planet. Companies seeking to

reduce freight costs and achieve sustainability goals across supply chains receive immense value from the EPA.  Two key programs that provide this value are the U.S. EPA SmartWay program and the Heavy-Duty Truck Greenhouse Gas Program.

A compelling value proposition for business

SmartWay was created in 2004 as a key part of the Bush Administration’s approach to addressing clean energy and climate change. The program has grown from fifteen companies at its start to nearly 4,000 companies today. The program attracts strong private sector participation because it offers a clear and compelling value proposition: freight shippers gain access to information that enables them todifferentiate between freight carriers on emissions performance.

Jason Mathers, Director, Supply Chain

This saves shippers money and cuts carbon emissions. Freight carriers participate in the program to gain access to large shippers, such as Apple, Colgate-Palmolive and Target.

The EPA SmartWay program is not only a popular program that is delivering billions of dollars of annual savings to the U.S. economy, it is also a core strategy for companies to reduce their freight emissions. The agency has calculated that since 2004, SmartWay partners have saved:

  • 72.8 million metric tons of carbon emissions
  • Over 7 billion gallons of fuel
  • $24.9 billion in fuel costs

To put it in perspective, the reduction of 72.8 million tons of emissions is roughly the equivalent to taking 15 million cars off the road annually. The $25 billion in aggregate savings from this one program is more than three times the annual budget of the entire EPA.

Given the strong value proposition of the program, it is no surprise that many companies with existing science-based targets on climate emission reductions participate in EPA SmartWay, including: Coca-Cola Enterprises, Dell, Diageo, General Mills, Hewlett Packard Enterprise, Ingersoll-Rand, Kellogg Company, Nestlé, PepsiCo, Procter & Gamble Company and Walmart.

Clean fuel driving a healthy U.S. economy

Another key program that is saving companies billions is the Heavy-Duty Truck Greenhouse Gas Program. This program supports long-term cost savings and emission reductions through clear, protective emission standards with significant lead time.

The first generation of this program, running from 2014 to 2017, was finalized in August 2011 and will cut oil consumption by more than 20 billion gallons, save a truck’s owner up to $73,000, deliver more than $50 billion in net benefits for the U.S. economy, and cut carbon dioxide pollution by 270 million metric tons.

The program was created with the broad support of the trucking industry and many other key stakeholders. Among the diverse groups that supported the standards were the American Trucking Association, Engine Manufacturers Association, Truck Manufacturers Association, and the United Auto Workers. The industry has embraced the new and improved trucks too.

The success of the first generation effort spurred the agency to launch a second phase that was finalized in August 2016. This effort stands to be a major success as well. The program is estimated to save:

  • 1.1 billion metric tons of carbon pollution
  • 550,000 tons of nitrous oxides and 32,000 tons of particulate matter (aka: harmful air pollutants)
  • 2 billion barrels of oil
  • $170 billion in fuel costs

This latest phase is also big hit with leading companies. More than 300 companies called for strong final standards during the rulemaking process, including PepsiCo and Walmart (two of the largest trucking fleets in the U.S.), mid-size trucking companies RFX Global and Dillon Transport, and large customers of trucking services General Mills, Campbell’s Soup, and IKEA. Innovative manufacturers, equipment manufacturers, and freight shippers have also called for strong standards.

The corporate support for these standards was so impressive that the New York Times issued an editorial illustrating a rare agreement on climate rules.

Every company that sells goods in the market benefits immensely from these two programs and many others from the U.S. EPA. Programs like EPA SmartWay and the Heavy Truck Greenhouse Gas Standards are saving companies and consumers billions of dollars annually, and are integral to corporate efforts to cut carbon emissions.

Looking ahead

In his remarks to EPA employees on his first day on the job, Pruitt acknowledged that “we as an agency and we as a nation can be both pro-energy and jobs and pro-environment…we don’t have to choose”. My hope is that this is a signal of open mindedness to a path forward would allow further improvements to the environment and the economy rather than roll-backs on vital programs and protections.

Perpetuating the belief that the EPA and business are at odds will not only hurt the environment, but would endanger American prosperity.

Stay on top of the latest facts and information affecting the intersection of business and the environment. Sign up for the EDF+Business blog.

Your Name

Your Email

Both fields are required.

———————————————————————-

Follow Jason on Twitter, @jasonmathers

———————————————————————

No “alternative facts” needed: leading on sustainability is smart business strategy

A Businessman is looking out the window in a modern panoramic meeting room in New York. The concept of the meeting of the Board of Director of the huge transnational corporation.

For the people who dedicate their lives to helping keep the planet livable, it’s hard to wrap one’s mind around our new weird, warped, post-election world. Every day seems to bring some new government official denying facts and science (aka reality), or doing unthinkable damage to the suddenly-less-venerable institutions they now lead.

As someone who has a 20-year track record of working side-by-side with the private sector to create positive environmental change, I can just imagine how anxious business executives must be feeling these days. The specter of a three a.m. tweet from the White House demanding that they run their company according to a Presidential whim, rather than the realities of the global marketplace (or the expectations of shareholders), can make for a lot of sleepless nights.

Unlike certain “business-executive-Presidents", however, real CEOs have to be fact-driven.

And the forward-thinking executives—the ones who are thinking hard about the long-term growth, profitability and resiliency of their companies—are well aware of the facts. They know that human-caused climate change is real, and carries with it huge costs. Executives selling food grown in rapidly changing landscapes and/or products dependent on materials from across the globe aren’t playing in a fantasy world where climate change is a “hoax invented by China.”

And they know that how we deal with climate change will determine whether we will be a driver or a destroyer of business value. As a peer-reviewed study in the journal Nature recently found (and the New York Times reported): "even if the world is able to stave off an increase in atmospheric temperatures of 2 degrees Celsius or 3.6 degrees Fahrenheit — a goal agreed to as part of the Paris deal — climate change could wipe out $1.7 trillion worth of global financial assets."

So, I’m hopeful that, at least in terms of sustainability, the rational decisions being made on Wall Street will act as a counter-balance to what appears to be erratic decisions coming out of Washington. Consider just a few of the recent announcements and actions of the private sector:

  • In just the past 3 months, Google, Microsoft, Pepsi, Smithfield Foods, Walmart and many others have continued to lead the way and prove what’s possible through bold, science-based goals, investments in clean energy and expanded efforts to drive down emissions in their operations and supply chains.
  • At the recent World Economic Forum (WEF) in Davos, Unilever CEO Paul Polman said “to make America great again, climate action is very logical. This is a very convincing story for job creation and economic growth.” My colleagues at EDF Climate Corps back this up with data; the sustainability sector is booming with jobs that 1.) can’t be outsourced, and 2.) are readily available in all fifty states.
  • A WEF report on the future of retail talks about “the golden age of the consumer” and the implications and opportunities that are created for sustainability by addressing how goods are delivered—what is called the “last mile of delivery”—and how products are packaged.
  • Commenting on that same report, Walmart CEO Doug McMillon pointed out that sustainability will impact retail in ways far beyond logistics and packaging: in this age of social media sharing, the push for transparency in supply chains will be customer-driven. McMillon knows that “retailers will only survive if their business creates shared value that benefits shareholders and society.”
  • Finally, in a recent op-ed entitled Why Walmart is doubling down on its commitment to climate change, Walmart board member Rob Walton, gave a simple answer: because it’s good for business! “We set [our climate goals] because we wanted to help address climate change and improve lives, while also strengthening our company and reducing expenses,” he said. “We thought it would be a win-win: good for society, and good for Walmart.  Eleven years later, that's exactly what we've seen.”

    Elizabeth Sturcken, Managing Director, EDF+Business

    Elizabeth Sturcken, Managing Director, EDF+Business

That’s a long list—and one that adds to the mounting evidence that corporate America “gets it”:

momentum for business leadership on sustainability is here to stay. Which is in no way surprising, because after my many years of working with business, I’ve seen firsthand the immense value creation that comes with moving forward—not backward—on environmental issues.

So, for all that has changed in these times of “alternative facts,” those who care about having a livable, thriving planet can feel confident that they have a powerful ally in business. Because when it comes to our climate, our health and our planet itself, if we’re not making progress, we’re losing.

Will the new President flunk the climate business test?

The climate business test for TrumpFive years ago I turned in my laptop and brought my business consulting experience to Environmental Defense Fund. Some might see that move as making a break. I saw it as honoring a connection.

Public service may be the noblest calling. But it is also among the hardest. That’s why I believe business leaders have a role in government. Strong business leaders ask questions – and care about the answers. They consult experts who know more than them – and then solve thorny problems that matter to peoples’ lives. They take accountability.

So as a student of business, for much of my life I have casually told friends I would like to see an experienced business person in the Oval Office.

Now we have one.

As Donald Trump takes office, he must draw on the best skills represented in the business world.

Trump and his administration must make an urgent commitment on the economic issue of climate change and clean energy, before a problem worsens, accountability mounts, and the U.S., as the world’s second largest pollution emitter, is seen as a deadbeat on the global stage.

Trump’s handling of climate may well define his legacy, especially for generations of Americans to come.

Yet Mr. Trump has called climate change a hoax, nominated a climate skeptic to head our Environmental Protection Agency, and suggested he may pull the United States out of the Paris Climate Agreement.

We will learn a lot about the administration’s economic prowess by whether it remains lashed to a special interest agenda, or studies up and seizes climate action for the economic opportunity that it is.

The incoming administration should take a page from Gary Garfield – ex-CEO of Tennessee based Bridgestone. In an open letter to the President-Elect, Mr. Garfield observed: “A hasty decision on [leaving the Paris climate agreement], will likely isolate our nation, cede technology, innovation and jobs to China, and limit market access for our exporters.”

But it doesn’t have to be that way. Gary Garfield notes: “A decision to stay the course on climate and institute policies harnessing American ingenuity to create truly efficient clean energy technology — akin to the effort behind the Manhattan Project — will help drive both jobs and our economy for decades to come.” Mr. Garfield should know a business opportunity when he sees one; he grew profits at Bridgestone five-fold in six years.

And he is not alone. From technology to power, and investment to oil and gas, business leaders across sectors have pinpointed the urgency of addressing climate change, not just because it is the right thing to do, but because de-carbonization is one of the great economic opportunities in the 21st century:

  • “With tens of billions of dollars of U.S. renewable energy investment in the works this year alone, and far more globally, the question for American political leadership is whether they want to harness this momentum and potential for economic growth” – Jonas Kron, Trillium Asset Management
  • “We support [California’s] vision for a clean energy future and agree that we need to take action today to meet the challenge.” – Melissa Lavinson, PG&E Corporation
  • “In Statoil, we acknowledge that there is overwhelming evidence for human-induced climate change. Climate change is happening.”
  • “Finding more renewable and low-carbon energy alternatives and reducing energy intensity lowers operating costs and can enhance operational flexibility.” – Walmart

Low Carbon USAAnd there are scores more business leaders who recognize the data on climate change’s seriousness and recognize the responsibility – and the opportunity – their companies have to rise to the challenge. Over 600 business leaders wrote to Trump, Congress, and global leaders, to support continuation of low carbon policies, investment in the low carbon economy, and continued U.S. participation in the Paris Agreement.

There is no question that business leaders have spoken, and will continue to speak up.

Now the question is: Will Donald Trump have the business sense to listen and lead?


Additional reading:

Business won't back down on clean energy future

With a record $1.4 trillion in sustainability assets, investors bail on fossil fuels


Follow Ben Ratner on Twitter, @RatnerBen


 

Business won’t back down on clean energy future

Tom Murray, VP Corporate Partnerships, EDFMore than 530 companies and 100 investors signed the Low Carbon USA letter to President-elect Trump and other U.S. and global leaders to support policies to curb climate change, invest in the low carbon economy, and continue U.S. participation in the Paris Agreement.  It’s a powerful message from business leaders connecting the dots between prosperity and a low-carbon economy and confirming their commitment to continue to lead the way.

The private sector call for continued leadership on climate cannot be ignored. 

“All parts of society have a role to play in tackling climate change, but policy and business leadership is crucial,” said Lars Petersson, president of IKEA U.S. “The Paris Agreement was a bold step towards a cleaner, brighter future, and must be protected. IKEA will continue to work together with other businesses and policymakers to build a low-carbon economy, because we know that together, we can build a better future.”

Despite the climate uncertainty represented in President-elect Trump’s cabinet picks and campaign rhetoric, business is moving forward, actively building a clean energy future. In recent months, Google, Microsoft, Smithfield Foods, Walmart and others have continued to prove what’s possible through bold, science-based greenhouse gas reduction targets, investments in clean energy and expanded efforts to drive down emissions in their operations and supply chains. Adding to the mounting evidence that corporate America gets it and that momentum for business leadership is here to stay.

  • Google has pledged to operate on 100% renewable energy in 2017.
  • Microsoft recently announced the largest wind power purchase agreement to date with a deal to buy 237 megawatts of capacity from projects in Wyoming and Kansas.
  • Smithfield Farms, the largest pork producer in the world, will reduce greenhouse gas emissions 25% by 2025.
  • Walmart has committed to removing a gigaton of emissions from its global supply chain by 2030.

US investment in solar is on the riseAnd clean energy investment is on the rise:

  • U.S. investment in clean energy soared from an impressive $10 billion to $56 billion between 2004 and 2015.
  • Microsoft-founder Bill Gates and nearly two dozen other business leaders launched a $1-billion fund that will finance emerging energy innovations.
  • A new report shows investors controlling more than $5 trillion in assets have committed to dropping some or all fossil fuel stocks from their portfolios.

These efforts are focused on accelerating the transition to a clean energy future. This might be surprising given the current political climate, but smart business leaders understand that decisions must be driven by long-term economics, not short-term politics. A thriving economy depends on a thriving environment.

"With tens of billions of dollars of U.S. renewable energy investment in the works this year alone, and far more globally, the question for American political leadership is whether they want to harness this momentum and potential for economic growth," said Jonas Kron, senior vice president at Trillium Asset Management.

“Creating jobs, and establishing the United States as an innovative world leader in creating a clean energy economy is a no brainer for the Trump administration,” said Aspen Skiing Company CEO Mike Kaplan.

The list of signatories to the Low Carbon USA letter has doubled since November, and includes some of the world’s biggest and most innovative companies, including DuPont, General Mills, HP Enterprises, Pacific Gas & Electric, Salesforce.com, Unilever, and more. These business leaders and many others know that accelerating climate policy and innovations is a pathway to creating jobs and strengthening the economy.

Solar jobs in the U.S. on the rise

A growing low carbon economy already has created jobs and driven economic growth across the U.S. In fact, over 2.5 million Americans now work in the clean energy industry, making above average wages. With China investing over $360 billion in renewables, the U.S. simply cannot afford to change course on this powerful opportunity for environmental protection and economic growth while other countries capitalize.

Business is ready to lead the way and accelerate the path towards a low carbon economy. Business has spoken. Will the President-elect and his new administration listen?


Additional reading:

China Is Going All In On Clean Energy As The U.S. Waffles. How Is That Making America Great Again?

With a record $1.4 trillion in sustainability assets, investors bail on fossil fuels


Follow Tom Murray on Twitter, @TPMurray


COP22 – Continued Progress Needs U.S. Business Leadership

victoriaAs world leaders gather in Marrakech for the 22nd annual Conference of the Parties (COP 22) it’s worth celebrating the remarkable progress made recently in the global fight against climate change, and the positive contribution of U.S. businesses in making it happen.

The Paris Agreement entered into force on November 4th, four years ahead of schedule. Its rapid ratification by over 100 countries representing more than half of the world’s greenhouse gas emissions demonstrates the commitment of participants to urgent action on climate change. Over 150 U.S. corporations publicly expressed support for the Paris agreement, representing more than $4.2 trillion in annual revenue and with a combined market capitalization of over $7 trillion.

Last month, the International Civil Aviation Organization agreed to cap greenhouse gas emissions from international flights at 2020 levels, using market-based mechanisms to offset climate pollution from this rapidly growing sector. U.S. airlines welcomed the agreement as an effective complement to their own efforts to cut emissions through improvements to equipment, fuels and infrastructure, and as a unified global approach to achieving carbon-neutral growth from 2020 on.

Also in October, negotiators from nearly 200 countries agreed to an amendment to the Montreal Protocol that will phase down hydrofluorocarbons (HFCs), gases with 1,000 times the heat-trapping power of CO2. The agreement enjoyed the support of U.S. chemical companies that are developing environmentally preferable alternatives to HFCs, and is good news for companies everywhere that want to cut greenhouse gas emissions from their global supply chains.

Business support was instrumental in reaching all three agreements, and will be critical to implementing them successfully. The good news is that leading companies are already taking action to help the U.S. meet its climate goals. To build on this great momentum, more companies need to take the next step in corporate climate leadership. Here are three ways business can step up:

  1. Setting ambitious GHG reduction goals. PepsiCo recently announced a goal to reduce absolute GHG emissions at least 20% by 2025, joining Kellogg’s, General Mills and Walmart in setting big goals to cut climate pollution from their supply chains. Almost 200 companies have joined the Science-Based Targets initiative, committing to reduce their GHG emissions in line with climate science.
  2. Scaling up renewable energy. Over 80 companies, including Apple, General Motors and Unilever have now joined RE100, an initiative to by committing to use 100% renewable energy sources. And the Renewable Energy Buyers Alliance brings together three different initiatives working with break down barriers to large-scale renewable energy deployment. Together, these companies are leading the transition to a clean, low-carbon energy system.
  3. Shaping public policy. Leading businesses are looking beyond their fence lines and seeking to transform the systems in which they operate. By supporting climate and energy policies that impact entire sectors of the economy, they’re having the biggest impact of all. Earlier this year, eight companies including Apple, Google and Microsoft filed amicus briefs supporting the Clean Power Plan. And private fleet owners, engine manufacturers and technology providers joined together to advocate for the new Clean Truck standards announced in August by the U.S. EPA and DOT.

It will take the continued leadership of U.S. businesses to ensure that we stay on track to deliver on the promise of Paris, meeting our 2025 targets and bending the emissions curve even more steeply downward thereafter. Working together, businesses and policymakers can create a world in which a stable climate and thriving economy go hand in hand.


Follow EDF+Business on Twitter, @EDFBiz


 

 

Panera Bread tackles “clean” food – and means it

Panera BreadLast June, fast-casual restaurant chain Panera Bread announced that it would do away with the remaining artificial preservatives, flavors, sweeteners and colors from artificial sources in its Panera at Home products. The company expects to make its entire portfolio of nearly 50 grocery items “clean,” meaning free of its “No No List” additives, by the end of 2016.

"Cleaning" up its Panera at Home product line comes in addition Panera’s 2014 commitment  to remove the “No No list” ingredients from all restaurant food offerings within the same time frame and adhere to other criteria of its “Food Policy”.

Panera has consistently run far ahead of their competitors, and they’ve done it in five key areas where companies can lead on chemicals: institutional commitment, supply chain transparency, informing consumers, public commitment, and product design. Panera set such a good example of leadership in making safer food available to their customers that we’ve developed a case study to showcase Panera’s approach and results to date.

EDF worked with Sara Burnett, Panera’s director of wellness and food policy, to develop the case study, who offered many insights into their process. For example, on Panera’s decision to expand its commitment to include retail food, Burnett shared that, “Much of the work that we’ve done to simplify recipes in our bakery-cafes has set a standard for Panera at Home products. However, the challenges in the consumer packaged goods space are unique, where artificial additives have long been used to preserve taste and appearance. For us, the answer was often simple. For instance, we decided early on to use refrigeration to help extend shelf life for products like our soups and salad dressings. Where necessary, we’ve relied on natural preservatives – such as rosemary extract – to do the job.”

Panera started that process by looking at every ingredient used in their food and deciding what was essential. Once that determination was made, Panera identified more than 150 food additives to be prohibited in their food after 2016. Of approximately 450 ingredients they manage, roughly one-third needed reformulation.

Out of several hundred suppliers, only one walked away as a result of the new guidelines. In addition, the deep dive into Panera’s sources and potential replacement options also surfaced opportunities for improvement. As a result, many of the suppliers found that they not only strengthened their relationship with Panera, but developed better business offerings for their other customers.

While a limited number of categories still require change – sweets and fountain sodas among them – Panera has overcome many of its toughest challenges. For example, broccoli cheddar soup took 60 revisions to meet customer expectations in taste tests. Many items, from candy pieces to mozzarella cheese, are now differently colored from their predecessors but meet Panera’s clean criteria and customer preferences. Two products – pepperoncini and white pastry cream – have been unable to meet both Panera’s and customers’ expectations, and will likely be removed from the menu come 2017.

Sales numbers would indicate that customers are also pleased. In July 2016, Panera Chairman and CEO Ron Shaich said “Our strong Q2 results reinforce the fact that our strategy is working and our initiatives are performing. Panera is becoming a better competitive alternative with expanded runways for growth. At a time when other restaurant companies are feeling the impact of a slowing consumer environment, we are maintaining our momentum.”

Or as Burnett puts it, “When we meet customer needs and expectations, sales follow.”

Panera is not alone in their efforts, but they are definitely among the leaders. Since Panera announced its comprehensive food policy in June of 2014, more than a dozen major food manufacturers and restaurants have also made public commitments to reduce or eliminate artificial flavors and colors from their brands.

Learn more about how food companies can lead on safer chemicals management with our blueprint for safer food additives, part of EDF’s Behind the Label initiative.

Follow Michelle Harvey at @MMHarvey

 

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 standards for methane from new sources, while Canada and Mexico begin executing their commitment to develop regulations necessary to achieve waste-cutting emission reductions.

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. As leading global asset management company Allianz Global noted to its clients, methane emissions are “the next frontier for the Oil & Gas industry” and there is an “urgent need to act."

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.

investorguide_cover

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.