Private Equity Interest in EDF Climate Corps at All-Time High

Summer at EDF is always an exciting time as EDF Climate Corps fellows fan out and begin their placements at organizations across the country. This year we're thrilled to see a dozen fellows working with private equity firms and their portfolio companies, the highest number of such placements in a single summer. In total, EDF has now placed 44 EDF Climate Corps fellows in the private equity sector to date.

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CC 2012 fellow Sarah Stern presents her work to CD&R's Daniel Jacobs, left, and Thomas Franco, right

Managing investment dollars equivalent to roughly 8 percent of U.S. GDP, the private equity sector is critical to sharing, replicating and advancing corporate environmental best practices, so it's gratifying to see the level of activity continue to build. New hosts this year include portfolio companies Associated Materials, Avaya, Floor & Décor, Philadelphia Energy Solutions and Taylor Morrison. Private equity firms KKR and Warburg Pincus are also hosting fellows this year, as they have previously.

Since EDF and KKR first partnered in 2008 to launch the Green Portfolio program, KKR’s portfolio companies have achieved more than $900 million in financial impacts while avoiding 1.8 million metric tons of greenhouse gas emissions, 4.7 million tons of waste and 19.5 million cubic meters of water use. Out of this work, EDF developed and made available to companies a free tool for identifying and managing environment, social and governance (ESG) issues.

As to Warburg Pincus, for the second year in a row they are sponsoring an EDF Fellow to work with several portfolio companies during the summer on energy efficiency and sustainability projects.

Watch this space later this summer for updates on this year's EDF Climate Corps fellows as they find ways to save money and reduce emissions by cutting energy waste, making the case that what is good for our planet is good for business. Their success is the best evidence of the strategic shift among investors, who increasingly recognize ESG management as a powerful tool for improving investment practices and creating value for both companies and the environment.

Also of interest: Private Equity Firms Realize the Value of Participating in EDF Climate Corps

 

In New Report, KKR Deepens Commitment to Tackling ESG Concerns

Too often, environmental performance gets labeled as the responsibility of one team within a company – whether that of a dedicated sustainability staff, external or public affairs, legal or compliance, etc. As a result, a company’s staff can often think of environmental and social governance (ESG) issues as what Douglas Adams once famously termed an SEP – Somebody Else’s Problem.

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With the release of its 2013 ESG and Citizenship Report, private equity firm Kravis Kohlberg & Roberts (KKR) shows it’s taking a different approach:  KKR has adopted a new global policy that makes identifying and addressing ESG risks in both the pre-investment and investment phases, for its staff, everyone’s problem.

Notably, KKR’s private equity investment professionals are being integrated into the ESG risk assessment process: first, in assessing risks during the diligence phase, and second, working with portfolio companies, consultants and subject matter experts to set performance goals and measure against them during the typical five to seven years a company remains part of its portfolio.

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Financial Sector Focuses on Risks from Methane

Environmental concerns about methane emissions continue to grow as more people understand the negative climate implications of this incredibly potent greenhouse gas. Now the financial community is taking note of not only the environmental risks but the impact of methane emissions on the oil and gas industry’s bottom line. Methane leaks not only pollute the atmosphere, but every thousand cubic feet lost represents actual dollars being leaked into thin air—bad business any way you look at it.

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Source: Ash Waechter

Last week the Sustainability Accounting Standards Board (SASB)—a collaborative effort aimed at improving corporate performance on environmental, social and government issues—released their provisional accounting standards for the non-renewable resources sector, which includes oil and gas production.

These accounting standards guide companies on how to measure and disclose environmental, social, and governance (ESG) risks that impact a company’s financial performance. Their work highlights the growing demand amongst investors and stakeholders for companies to report information beyond mere financial metrics in order to provide a more holistic view of a company’s position.

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EDF named “Trusted Leader” in Inaugural GreenBiz NGO Report

Environmental Defense Fund (EDF) is honored to be ranked by GreenBiz as one of the three trusted leaders among environmental nonprofits, along with World Wildlife Fund (WWF) and The Nature Conservancy (TNC) – truly excellent company.

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In its inaugural NGO Report, GreenBiz asked hundreds of sustainability executives from large corporations to rate and rank 30 leading NGOs in terms of influence, credibility and effectiveness. GreenBiz charted the responses and grouped the NGOs in four categories:

  • Trusted Partners – Corporate-friendly, highly credible, long-term partners with easy-to-find public success stories
  • Useful Resources – Highly credible organizations known for creating helpful frameworks and services for corporate partners
  • Brand Challenged – Credible, but not influential, organizations
  • The Uninvited – Less broadly known groups, or those viewed more as critics than partners Read more

Along with new EDF Climate Corps hosts, new project offerings in 2014

CC-200x300Environmental Defense Fund unveiled today the first group of participating organizations to sign on for EDF Climate Corps 2014, along with a revamped list of smart energy management offerings the program will provide for them. New host organizations including Starwood Hotels & Resorts Worldwide, Dow Chemical Company and Jackson Family Wines join veteran participants like AT&T, Shorenstein Properties, PepsiCo, Caesars Entertainment and McDonald’s in choosing EDF Climate Corps as a cost-effective resource to advance organizational energy management. Read more

A Hacker, a Hipster, and a Hustler Walk Into A Bar…

O.K. not a bar, but into the Manhattan Center’s Hammerstein Ballroom for the TechCrunch Disrupt Hackathon. Never heard of a Hackathon?  Well, until recently, I hadn’t either. It’s an event where teams of coders compete over a very short period of time to develop an app. As I learned, the “Hacking Dream Team” is to have a Hacker to do the guts of the app, the Hipster to focus on the look and feel of the app, and the Hustler to hold the project and team together. According to the event organizers, this was the best attended Hackathon TechCrunch has sponsored yet. Over 160 teams of coders competed to develop apps in less than 24 hours.

Attending the Hackathon was like getting a glimpse into the future and included demonstrations of 3-D printing and drones. Hundreds of coders hunched over their keyboards to crank out apps that ranged from the whimsical—such as the music app Game of Tones to the practical—like an app to help you with your job search called Career Hound—to those that combined the whimsical/practical such as RoboKeg.

What’s Your Corporate Water Management Plan?

Jennifer Dudgeon, Principal, Sustainability, CA Technologies

How much water does your organization consume? This is a question that CA Technologies has been asked more and more frequently. Customers want to know, investors want to know. Let’s not forget the CDP is scoring water disclosure next year, raising the importance of being able to articulate how we use and dispose of this very precious resource.

As a software company with no manufacturing operations and the bulk of our offices located in multi-tenant buildings, it’s challenging to answer this question. An added complication is the fact that the cost of water is significantly undervalued. This makes it difficult to craft a business case to install the necessary water meters, which would allow us to be smarter in this area. But these roadblocks didn’t stop us – innovation is at the core of our business and that extends to the sustainability realm. In the summer of 2013 we took on an EDF Climate Corps Fellow, Jonathan Hempton, to investigate how we can transparently and inclusively account for our water use practices.

As it turns out it was good timing, since around that time EDF and AT&T were finishing a project that’s aimed to help companies like ours figure this stuff out. The Water Efficiency Toolkit provides businesses with guidance on what questions to ask their facilities teams and ways to evaluate a building’s water efficiency and possible areas for improvement. Jonathan took this material and modified it to suit our needs, developing both a water audit tool and a water scorecard, which we will be rolling out this fall.

Good news for your company or organization: AT&T and EDF are hosting a free webinar on October 2nd than can help you dive into using the tools too. To find out more and register, click here.

In May 2013 we were scratching our heads trying to figure out how we can understand our water use, and in September we have a strong foundation that will allow us to develop a corporate water management plan. Not bad for a summer’s work!

Scaling Up Building Water-Energy Savings

Increasing droughts and water shortages are causing companies to pay more attention to their water use. Leaders like AT&T understand that proactively engaging in water conservation—including working with suppliers—can help mitigate its risks to water stress.

In 2012, EDF and AT&T launched an effort to identify opportunities to reduce water and energy use in buildings, with a focus on cooling towers. It turns out that many buildings are sitting on big opportunities to reduce water use in their cooling towers — up to 40% — in ways that can also save money. Based on these findings, AT&T is aiming for 150 million gallons in annualized water reductions by the end of 2015.

28 Billion Reasons to Improve Building Cooling Efficiency

By: Tom Murray

Can you picture the amount of water you use to shower every day? Now imagine everyone in New York City – well over 8 million people – taking a shower a day of over the course of a year. That's almost the same amount of water that AT&T and Environmental Defense Fund (EDF) realized could be saved if cost-effective improvements in large scale building commercial cooling systems were adopted nationwide—28 billion gallons of water a year. That’s $170 million in annual water and sewer charges—savings that will only increase as water utility rates rise in the U.S.

In 2012, EDF and AT&T launched  a pilot to identify opportunities to reduce water and energy use in buildings, with a focus on cooling towers. Many buildings are sitting on big opportunities to reduce water use in their cooling towers — up to 40% — in ways that can also save money. Based on the results from the pilot, AT&T is rolling out a plan to achieve 150 million gallons of annualized water savings by the end of 2015. The plan includes:

1. Investing in technology to improve water use efficiency for cooling towers.

2. Investing in “free-air cooling” projects, which take advantage of the outside air to provide some, or all, of the building’s cooling needs.

3. Growing the capacity to optimize cooling tower operations by sharing training materials developed during the pilot with property managers, facility managers, and other key staff across AT&T’s highest water-using sites.

Scaling up the findings beyond AT&T to other big buildings, including office space, city halls, hospitals, schools, shopping malls, and more can start saving the U.S. billions of gallons of water a year. That’s why EDF and AT&T have created a free toolkit with resources to help organizational leaders and facility managers reduce the water used for cooling buildings. The reduction solutions in the toolkit not only benefit the environment and communities, they also save organizations money. For example AT&T found that:

  • One cooling tower filtration system upgrade costs less than $100,000 to install but promises more than $60,000 in annual water and sewer savings—paying for itself in less than two years.
  • A minor $4,000 equipment upgrade to expand free air cooling promises nearly $40,000 in annual savings.

These kinds of smart solutions will become increasingly important as climate change reduces water supplies and development ratchets up demand.  Hopefully this collaboration and toolkit will help spark the adoption of water efficiency measures in building across the country and help to make sure we continue to have enough water for people and the natural systems that sustain us.

Water Efficiency Planning: It all starts with good data

By: Caroline Goodbody

Nearly two thirds of the country remains locked in severe or higher level of drought and there is no end in sight.

I began to understand the scale of the problems facing our water systems while working for US Senator Ben Cardin. Senator Cardin is chairman of the Environment & Public Works Subcommittee on Water and Wildlife, which exposed me to the policies that surround water issues. When I wrote speeches or talking points, I would write broad umbrella statements like, “Water is essential to life, economic development, and growth,” and follow with a few facts and figures to impress whatever audience he was addressing. I knew that proper water management was important, but my understanding was only surface deep. I never had time to really explore the issue in depth and had to assume what the experts were telling me was correct.

After completing my first year in Yale’s MBA/MEM program, I had a couple of goals in mind when I looked for my "dream” internship this summer. The first was to learn the hard facts and specifics behind those grand statements I had written: I wanted to know where the numbers came from. The second was to learn how water issues are addressed outside of government, especially in the corporate sector. I was lucky to find a near – perfect fit with the EDF/AT&T Water Efficiency Project.

When I joined the team in May, AT&T and EDF had already completed the pilot phase of the project to identify opportunities to reduce water (and save money) by improving the efficiency of cooling towers on its buildings. AT&T’s Senior Energy Manager Tim Fleming explains the project in more detail here.

The next phase of the project was scaling up implementation of these findings within AT&T and more broadly. One of the tasks I was asked to take on was estimating the potential water savings that could be achieved if buildings in a dozen specific cities improved the efficiency of their cooling tower operations. These estimates help in making the case for why these cities would want to add this approach as part of overall water reduction plan.

While I knew this task would take time, I thought it would be doable and – since we were just aiming for ballpark figures – I believed would be fairly straightforward. Given how important water is to “life, economic development, and growth,” I was sure that the USGS and local governments keeps track of how much water is being used and who is using it.

So I was pretty surprised at how difficult it was to find data that allowed me to make “apples to apples” comparisons. Sometimes regional water demand would be broken down by sector; other times not. Even if water use was broken down by sector, states did not always use the same methods or definitions in determining water withdrawals and consumption. Sometimes there would be city estimates, and other times, the best I could find was regional or county level data. Finding recent data was also a challenge.

As I was combing through state and regional reports I was convinced that I was missing something. But when I dug further, and looked into methodologies, I would often find researchers making statements like, Quantification of water demand and its significance is limited by significant gaps in available data and analysis. Water has no federal data agency comparable to the Energy Information Administration that projects alternative demand scenarios,” or something along the lines of, Although the power sector is the largest user of water in the nation, national statistics on the consumption and withdrawal rates of individual power plants are characterized by inconsistencies and scarcity.”

Really?

Even though there is a universal understanding that water is essential to our economy, we have remarkably limited understanding of water use at both local and national levels. We cannot count on our water resources being reliable and predictable without accurate and comprehensive data. Water is important not just because we need it to drink and grow crops, but also because of the big role it plays in energy production. My colleague Kate Zerrenner covers this in a recent post.

The problem this lack of knowledge poses to policy makers and city planners is obvious – as populations grows, cities need to understand the constraints of local resources. But this information is important for decision makers in other sectors – including businesses. Businesses need to be able to count on a reliable source of water and a predictable source of energy.

Conquering our water challenges will be a challenge no matter what we do, but it will much easier if we have better data. And – as cliché as it sounds – will require every sector and company to look into its own facilities and find ways to reduce its water footprint. AT&T has already stepped up the plate and shown that tracking its water use and making small adjustments can save it money and mitigate future risk. The question now is, when will other businesses and government step up?

Caroline Goodbody is a joint MBA/MEM student at Yale University.