Things You May Have Missed During the Election #2: Deforestation and Walmart’s Gigaton Goal

edf-business-of-food-blog-graphic_shelton-grp_12-7-16Editor's Note—We're proud to make two, new introductions this month: Katie Anderson joins our Supply Chain team as a Project Manager with a focus on deforestation, and "The Business of Food" is born as a new category dedicated to exploring how the growing, processing, distributing, purchasing, consuming and disposing of food impacts our communities, our economy and our planet.

A month out from the election, we know that the global community faces significant uncertainty about what President-elect Trump and his administration will mean for climate outcomes. But with the 24-hour news cycle making it clear just how “transitional” this presidential transition period is, I think it’s worth shining a light on three recent events that I’m going label has hopeful, tragic and confounding:

  1. Hopeful: as part of its 2025 sustainability goals, Walmart announced a target reduction of 1 gigaton of greenhouse gases from its supply chain;
  2. Tragic: Brazil’s National Institute for Space Research (INPE) announced a 29% increase in deforestation over the past year;
  3. Confounding: thinking he was going to have a climate change chat with Ivanka Trump, Al Gore made a trip to Manhattan—and ended up sitting down with the President-elect as well.

Let’s take the second part first and talk about deforestation.  Tropical deforestation contributes about 15% of the world’s greenhouse gas emissions, making forests an incredibly valuable part of the climate conversation.

Katie Anderson Project Manager, Supply Chain

Katie Anderson
Project Manager, Supply Chain

Alongside the climate benefits, forests also provide habitat for 70% of the world’s species, allow for improved water quality and support livelihoods for indigenous communities. So INPE’s announcement is absolutely tragic—especially when you consider that the amount of tropical forest lost in just one year equals the size of the state of Delaware.

So let’s move on to the hopeful part: Walmart’s goal. Just how much, exactly, is 1 gigaton of greenhouse gas? Most often it’s held up as being equal to the annual emissions of Germany (the world’s 4th largest economy). But just so you can appreciate the scale of both Walmart’s audacious ambitions and the problem we’re facing in our rainforests, Walmart’s goal is equivalent to only ¼ the annual GHG emissions caused by global deforestation!

Which means we’ve got a long way to go.

On to the confounding part: kudos to Ivanka Trump for inviting Al Gore for a talk on climate change. Sadly, it seems her dream position of being the “Climate Czar” will be ceremonial at best, because whatever was discussed at their Manhattan meeting was likely rendered moot by her father’s nomination of Scott Pruitt to be head of the Environmental Protection Agency (EPA). I’m guessing we’ll never really know what was said, but if Donald and Ivanka are even half the business geniuses they claim to be, they should have listened to Gore, particularly if he brought up deforestation. Here’s why:

Sustainable sourcing drives business value

Creating deforestation-free supply chains provides value to corporate bottom lines. Effective work on reducing deforestation in supply chains reduces reputational risk, builds trust and transparency with consumers, and drives investor value. Just two examples include:

In other words, customers and shareholders around the world are waking up, and business leaders are responding accordingly. Given that agriculture drives 70% of global deforestation, corporate actors who source our everyday products now realize they have big role to play in finding a solution.

Walmart is a perfect example: the need to expand the sourcing of commodities produced with zero net deforestation was cited as an essential component of meeting the 1 gigaton goal. And Walmart is by no means alone: to date, 366 companies have made public commitments to reduce deforestation in their supply chains—for the simple reason that they’re becoming aware of the major risks of not engaging in deforestation-free sourcing.

Unfortunately, public information on if/how companies are achieving these goals is only available for one-third of these commitments, but it appears that, while they’re a good start, commitments alone not enough.

Given all that, what’s a forward-thinking CEO to do regarding deforestation?

Landscape-scale approaches are critical to hitting targets

An emerging opportunity is in engaging landscapes, or jurisdictions, in reducing deforestation across the entire area. Rather than going farm-by-farm to achieve certifications—which is likely to lead to islands of “green” in a sea of deforestation—a jurisdictional approach allows whole regions to be categorized as reducing deforestation.

This is valuable for many reasons:

  1. the costs of monitoring compliance are shared among governments, corporate actors, and other stakeholders;
  2. it avoids leakage—a problem where one farm may reduce deforestation but will push deforestation into a different farm;
  3. it works across all commodities that drive deforestation rather than solely through certain supply chains;
  4. it protects the rights of landholders and indigenous communities.

Now, more than ever, business needs to lead

President-elect Trump often cites business as “the solution” to what’s ailing our country. In terms of climate change, this is one area where he and I agree.

In these uncertain (read: hopeful, tragic, confounding) times, it is incredibly important for corporations to publicly lead on how they work within their operations and their supply chains to reach climate balance. This means setting bigger goals, digging more deeply into the weeds to understand the impacts of their supply chains, and reaching beyond their walls to find the solutions that are most likely to bring the change we need.

Methane Detectors Challenge: An Unlikely Partnership

The 2016 election was one of the most divisive in recent history. I cannot remember a more polarizing time. However, today, I believe, more strongly than ever, that many Americans across the political spectrum have a hunger for something better: for turning down the volume, having rational conversations and finding common ground that unites us.

In the energy sector and environmental communities, this common ground means achieving solutions that benefit the environment and help businesses thrive, not pitting one against the other.

Three years ago, Environmental Defense Fund launched the Methane Detectors Challenge, an unlikely partnership between oil and gas companies and U.S.-based technology developers. This partnership aims to reduce methane emissions by catalyzing technology solutions that continuously detect these emissions. This is our story.

 A Shared Problem, A Shared Solution

25-percent

About 25 percent of today’s warming is driven by emissions of methane, a potent greenhouse gas. Methane emissions from the oil and gas industry speed global climate change, waste a valuable energy resource (methane is the key component of natural gas), and often slip into the atmosphere with other pollutants, harming air quality.

In other words, methane emissions are a problem and detecting leaks quickly is a needed solution.

However, in 2013, we learned that no oil and gas operators were conducting 24/7 monitoring of methane emissions. None. Some companies were not using technology to conduct leak detection and repair activities, while others conducted manual leak surveys with special cameras once or twice a year – far better than nothing, but a long way from continuous detection made possible in the digital age.

When EDF learned about this lack of continuous monitoring, we could have launched a negative ad blitz. Started a petition. Designated a villain.

We didn’t.

Instead, where some might see failure, we saw opportunity and a reason to partner. We decided to take a risk, try something bold. We decided to partner with leading companies in the oil and gas industry, technical experts, and others, to source innovative technology solutions from the marketplace and solve the methane leak problem.

We called it the Methane Detectors Challenge. Our aim was to catalyze the development and adoption of new, cost effective, continuous detection systems.

I remember sharing our vision with Mark Boling, President – V+ Development Solutions at Southwestern Energy, over breakfast. Before the food had even arrived, Mark committed to Southwestern’s participation. We had our first partner. And this was just the beginning.

A Partnership Blooms

In the months that followed, we recruited partner after partner: Apache, Anadarko, BG Group, Hess, Noble Energy, Shell, Southwestern and Statoil. We found experts willing to lend their knowledge, from places like the Environmental Protection Agency, the Department of Energy, and the University of Houston.

We launched a series of gatherings that brought stakeholders together in Houston to define the problem and develop a shared plan of action. We got to know one another and to develop a common empathy for the challenges we all shared.

At the end of our first Steering Committee meeting, one of our corporate partners came up to me and said, “Great meeting today, but one thing you should change. Don’t call it the EDF Methane Detectors Challenge. Just call it the Methane Detectors Challenge. We’re all in this together.”

In March 2014, our jointly developed request for technology proposals was out in the world, and we soon reviewed twenty proposals from four different continents. The surge of market interest was incredible, and the best of the proposals inspired excitement among all partners.

By the end of 2015, in partnership with the independent non-profit Southwest Research Institute, we had conducted rigorous indoor and outdoor controlled testing of nearly a half dozen technologies. Two technologies performed excellently, catching leaks of various sizes in various wind conditions. Next step? Industry pilots.

When Challenge Strikes

As the Methane Detectors Challenge shifted from third-party evaluation to piloting, there were increased expectations of our oil and gas partners. They had already helped inform the project’s direction and shared invaluable technical input about their technology needs. The next step was a higher bar – purchasing one or more units and committing organizational resources for pilot testing.

And then a challenge struck.

In 2015, the oil and gas commodity markets fell off a cliff. Oil nose-dived from over $100 a barrel to as low as $29 a barrel. Natural gas prices crashed. Before we knew it, our partners were making layoffs, in some cases as large as 40%, and cutting capital expenditure by as much as 80% for the year ahead.

As the markets sunk and companies down-sized, our effort became much more challenging, but the foundation of trust and the value of our common mission remained unchanged. And so we persevered.

Over the course of 2016, dialogues continued between the leading entrepreneurs and a number of our industry partners. The unglamorous, but necessary issues were resolved: contracts, prices, disclosure and data sharing agreements.

And then one day, I came into my office to find a note from my colleague. “We have a deal”, it said. A large energy producer and Methane Detectors Challenge partner, Statoil, agreed to purchase a methane detection system and host a pilot with Colorado based start-up Quanta3.

Weeks later, we got more good news. Following a successful pilot test, Pacific Gas & Electric (PG&E) (an enthusiastic recent addition to the Methane Detectors Challenge), agreed to send a device from Acutect, the other leading entrepreneur, to an operating facility in California for real-world testing.

In praise of an unexpected partnership

In the coming months, we will learn much more about how the technologies developed for the Methane Detectors Challenge perform in the trials with Statoil, PG&E, and likely others. It’s too soon to know whether these technologies will provide the needed breakthrough for continuous methane detection, whether they will require additional development, or whether other advances from the marketplace will propel methane management forward.

But it’s not too soon to appreciate this unexpected partnership.

pge-methane-sensor-3828-300dpiWe have demonstrated that there is a vibrant global marketplace of entrepreneurs eager for the chance to accelerate a clean energy future and willing to take risks along the way. And, we have shown that diverse groups can come together over a shared vision.

Most of all, I hope we have proven that even in this era of divisiveness, partnerships are not just possible, they are powerful. Our door is always open to new partners.

 

EDF is grateful to our partners and hope the Methane Detectors Challenge is the beginning of something even bigger.


Follow @RatnerBen on Twitter


 

Smithfield Foods Joins the Growing List of Sustainability Leaders. Who's Next?

The largest pork company in the world, Smithfield Foods, just committed to reduce absolute greenhouse gas emissions by 25% by 2025 across its upstream U.S. supply chain, from feed grain to packaged bacon. This goal is the first of its kind in the livestock sector; and is thus big news.

It is also a long time in the making. Over the past 20 years, EDF and Smithfield have not always seen eye to eye.Tom Murray, VP Corporate Partnerships, EDF Although we have opposed Smithfield on some critical issues, we have collaborated  on others. Most recently, EDF and Smithfield worked together to help farmers who grow grain for hog feed use fertilizer efficiently and improve soil health. The business and environmental benefits that Smithfield discovered through that effort led the company to want to do more, resulting in today’s industry-leading commitment.

As part of the commitment, one area where Smithfield will work to reduce its greenhouse gas footprint—and one that EDF applauds—is in manure management.

In the past, EDF has pressed Smithfield to improve its manure management, particularly the use of uncovered hog manure lagoons. Now, within the first five years of its commitment, Smithfield will install manure management practices, including covered lagoons, on at least 30 percent of company-owned farms. These changes will eliminate harmful methane emissions and reduce ammonia nitrogen, which contributes to human respiratory illness and impairs water quality. Furthermore, Smithfield will work with its contract growers to expand the use of those practices over the full term of its commitment.

It’s inspiring to see Smithfield’s overall climate commitment and willingness to change its position on an issue like manure management. It shows how NGO/corporate collaborations can work over the long term.

With its climate commitment, Smithfield has set the bar for other livestock companies. We encourage others to follow Smithfield’s lead and set their own public targets based in strong science to reduce the climate and environmental impacts of animal agriculture and food production.

Sustainability in food supply chains: a challenge worth tackling

The climate crisis can’t be solved without addressing emissions from livestock and agriculture:

Food and agriculture companies, however, face major barriers in setting and achieving supply chain sustainability commitments. As a general rule, the majority of their environmental impacts come from the many disparate farms that grow the grains, produce, and animals that end up in our food. For companies that often do not even know the locations of those farms, it is a major challenge to influence those farmers to become more sustainable.

At the same time, food and agriculture companies see that consumers are demanding increased transparency and responsibility for all of their impacts, particularly those on human health, the environment, and animal welfare. The challenge is to figure out how to make needed improvements without substantial price increases at the grocery checkout.

The business case for sustainability – and collaboration

Companies like Smithfield are watching consumer trends and placing a bet that sustainability will be good for their bottom line. They can’t reap these benefits, though, unless they focus on providing value to the farmers in their supply chains. This value can come in many forms – some companies are offering premiums for sustainably grown grain, while others are helping farmers access programs and technologies that reduce the costs of farming.

As a vertically integrated company that owns grain elevators, feed mills, hog farms, and pork processing plants, Smithfield has a unique view into its own supply chain. But many don’t know that Smithfield purchases half of its hogs on the open market, which means the company only has clear visibility through half of its supply chain for pork. In setting a goal for its entire upstream supply chain, Smithfield is committing to work with others in the agriculture industry to assist a broad range of hog and grain farmers adopt more sustainable practices.

Smithfield’s collaboration with EDF demonstrated that the company could improve sustainability in feed grain production, the most remote link of its supply chain, in a way that benefits its business.

This success created the opening to go further, developing Smithfield’s new greenhouse gas target and putting the company in a leadership position in its industry. While Smithfield is the first livestock company to set a major greenhouse gas reduction goal, a sustainable food supply depends on it not being the last.

Who’s next?

America knows better: Addressing climate change is good business

President-elect Donald Trump made claims of his own business smarts a cornerstone of his campaign. Vote for him, the logic went, and send a first-rate businessman to the Oval Office to apply business acumen to make America great. Unfortunately, Trump’s actions to date on climate and energy – notably charging a climate change denier with leading the EPA transition and signaling desire to abandon the historic Paris climate accords – send a message of business obliviousness.

In contrast, a smart business approach would embrace tackling greenhouse gas emissions and supporting clean energy. Here are four reasons why:

  1. Create American jobs – The opportunity to create new American jobs in the transition to clean energy is tremendous. There are now more jobs in solar energy than in coal mining, and the number of solar jobs has grown more than 20 percent in each of the last three years. States like Florida and Nevada are bountiful in sun and can contribute to American energy self-sufficiency.Moreover, just as smart action to nurture domestic clean energy can accelerate jobs in the renewable sector, there are jobs on the line helping the oil and gas industry reduce its air pollution in a cost effective way. Environmental Defense Fund found that there are over 70 American firms employing Americans to help keep potent methane emissions in natural gas pipelines and out of the atmosphere. These jobs, thriving in states like Texas and Pennsylvania, are mainly small business and above average wages – exactly what we all want to see more of. Of course, it’s a competitive global economy, and taking our foot off the pedal in creating green jobs could well cede the space to others like China, which already leads the United States in clean energy investment. Whatever a politician’s personal views on climate change, it is undeniable that global demand is growing for clean energy solutions. Growing demand means growing commercial opportunity for the United States in terms of innovation and exports. But only if we seize it.
  1. Listen to leading American businesses – Savvy business people listen to each other. So Mr. Trump should be interested to learn that 154 American businesses supported the American Businesses Act on Climate Pledge in the run-up to the Paris climate accords. These businesses are a part of the backbone of the American economy, employing nearly 11 million people across all 50 states, with a then market capitalization of over $7 trillion. Participating companies of particular interest: 21st Century Fox, Dupont, Wal-Mart, even a name that will be familiar to any casino magnate – MGM Resorts.These companies not only voiced support for a strong Paris outcome, they committed to increase their low-carbon investments in line with the direction of America’s leadership. Pulling out the rug from American businesses investing in low-carbon would send a destabilizing signal to the market. More recently, 365 companies including Unilever, Intel, General Mills and others reinforced that “implementing the Paris Agreement will enable and encourage businesses and investors to turn the billions of dollars in existing low-carbon investments into the trillions of dollars the world needs to bring clean energy and prosperity to all”. In sum, the overwhelming voice of businesses who have weighed in on the Paris talks are supportive of climate action. This business groundswell cannot be ignored. Nor should Trump ignore his own prior signing of a 2009 letter that failure to act on climate and the environment would cause “catastrophic and irreversible consequences for humanity and our planet.”
  1. It hits home – Continued American leadership on climate change can help mitigate physical risks to some of Mr. Trump’s most cherished investments, for example the Mar-a-Lago golf club in Palm Beach. NOAA found that “tidal flooding is increasing in frequency within the U.S. coastal communities due to sea level rise from climate change and local land subsidence.”Just a week before the election, the Palm Beach Daily News reported that the local Shore Protection Board unanimously recommended a six-figure “coastal vulnerability evaluation” as flooding has remained long after high tide in certain cases.
  1. Voters want clean energy – One of many things that will change for Donald Trump is that going from CEO to President means having a boss – actually about 300 of million of them. A recent Gallup poll found that 64% of Americans worry “a fair amount” or “a great deal” about climate change, an increase from last year, and including 84% of Democrats, 64% of independents, and 40% of Republicans. Clean energy is also wildly popular, with over 80% of Americans saying they support increased wind and solar, according to a recent Pew Poll.

Early on the campaign trail, Donald Trump often used his association with his alma mater, the Wharton School at the University of Pennsylvania, as Exhibit A in establishing his business smarts. Political leaders including Mr. Trump must learn from experts like Wharton’s Professor Eric Orts, who noted that moving away from President Obama’s climate change polices would come with stiff costs.

From missing out on job creation to ignoring business leaders who have studied the issue and have a stake in its resolution, and from fueling risk to Trump’s own business interests to overlooking voter desires, the case is clear that the costs are stiff indeed. Climate action is good business, and the smart money says it’s time to stay the course.

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


 

 

Walmart’s 2025 Sustainability Goals: My Three Takeaways

Amidst the noise in the run-up to the election, Walmart CEO Doug McMillon will map out the company’s sustainability goals for the year 2025 later today. As a keynote speaker at this year’s Net Impact Conference, he'll be delivering a fairly lengthy, aspiration list; here are a few highlights of what the world’s largest retailer has planned:ElizabethSturcken-(2)_287x377

  • 50% renewable Energy
  • 18% absolute emissions reduction Scopes 1+2
  • 1 Gigaton emissions reduction Scope 3
  • Zero waste to landfill by 2025
  • Zero net deforestation in key commodities
  • 100% recyclable packaging in private brands

As a director of the NGO that has worked closely* with Walmart on their sustainability journey over the last ten years, here are my initial, big takeaways:

Walmart can’t accomplish such ambitious goals alone. Which is good.

Getting to 50% renewables, reducing absolute emissions from their stores and trucks, and removing a gigaton of GHG emissions from their supply chain are exactly the kinds of leadership goals Walmart should be putting forth to help meet the challenge of climate change.

But, actually delivering on these goals will be no joke. Luckily, our 25 years of working with companies has consistently revealed two, important guideposts:

  • specific, ambitious goals are vital for driving innovation and progress;
  • achieving real, science-based results truly takes a village of collaborators.

To give just one example, three years ago Walmart set a policy to eliminate eight of the most prevalent and concerning chemicals in their home and personal care products. With no clear path forward, Walmart engaged thousands of suppliers, requiring them to submit full product formulations to a 3rd-party database, then replace those eight ingredients with safer substitutes.

The result? A 95% reduction in chemicals of concern, adding up to 23 million pounds.  This affects 90,000 products that are sold everywhere, not just on the shelves at Walmart. At the same time, this work also helped to set the stage for this year’s passage of The Lautenberg Chemical Safety Act, the first piece of environmental legislation in a generation aimed at fixing our broken system of regulating toxic chemicals.

By aiming big and bringing on strategic partners, Walmart was able to go further, faster than they’d ever dreamed. The same holds true now.

Corporate sustainability is officially a trend.

Walmart’s announcement is just the latest in a string of other companies—PepsiCo, Kellogg, General Mills—who have also put forth ambitious sustainability goals. What this tells us is that companies are proving, over and over again, that this is not about “doing the right thing,” it’s about doing what creates business value and environmental progress.

As if to prove this point, last month Doug McMillon talked publicly about how sustainability is a core part of their business strategy during an investor call. In this first-time-event-for-a-Walmart-CEO, he emphasized to Wall Street that one of the four ways that Walmart will win in the 21st century: lead on sustainability by being “the most trusted retailer” and call out progress on making products like shampoo and lotion safer, healthier and better for the planet**, increasing renewables and reducing waste.

Sustainability is finally being seen for what it is: a smart business strategy. In a world of decreasing resources and consumers that want better products, there’s no other path forward in the long term.  And, looking around at what’s happening, the long term is here!

The election is finally (almost) over. Now let’s get back to work.

This election has shown that people want change.  It’s been scary and unsettling but it’s a challenge we can’t shrink from. We have healing to do as a country, which can only begin if we engage with each other. Climate change and its effects are going to get worse before they get better.  Just look at this summer’s fires in California, the hurricane in Haiti, the floods in Louisiana and North Carolina…

I know there’s another path forward.

Having worked with companies over the last 25 years doing what many thought was impossible, I have hope.  These corporate leaders aren’t waiting for regulation to force them to act, but are choosing to consciously, aggressively become more sustainable. And, I’m inspired by companies doing the hard work to think beyond their corporate walls and take ownership for the impact of the products they make and sell in the world.

The scary truth is,  business won’t know exactly how to achieve the aspirational goals we need for our planet and for long-term business viability mean that.  That forces an openness to innovation and requires bringing suppliers and customers in as partners to achieve those goals.

So congratulations, Walmart, on setting aggressive yet achievable goals for 2025—and doing what the science tells us needs to get done for a stable and healthy planet. You have a proven track record of meeting and exceeding big sustainability goals. We expect the same here.

* EDF takes no money from our corporate partners—we are funded solely through grants, donations and membership.  We like to say we get paid in environmental results.

** I’d be remiss if I didn’t point out that while Walmart is committing to healthy products in their 2025 goals, we are disappointed to not see further goals on the path to becoming a “toxic free” store.

 

Open Road Ahead for Clean Trucks

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

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

Jason Mathers, Senior Manager, Supply Chain Logistics

Jason Mathers, Senior Manager, Supply Chain Logistics

Consider these facts:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

  1. Supply chains are beginning to benefit from corporate goals

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

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

PepsiCo Joins Growing Ranks of Green Supply Chain Leaders

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

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

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

So, this leadership action is officially a trend.

Jason Mathers, Senior Manager, Supply Chain Logistics

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

It's also a really big deal.

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

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

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

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

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

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

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

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

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

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

What’s your company going to do?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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