Ben and Jerry’s became the latest corporate voice calling for strong fuel-efficiency and greenhouse gas standards for heavy trucks. In a Guardian op-ed, CEO Jostein Solheim made a compelling triple-bottom-line case for protective standards for new trucks.
Mr. Solheim noted that seventeen percent of the company’s carbon footprint is associated with transporting products. This includes bringing ingredients to manufacturing facilities (three percent) and moving the finished products to distribution centers (fourteen percent).
Like packaging, transportation and distribution is a consistent, significant carbon footprint component of every product: six percent of H&M clothes; twenty-five percent of the carbon budget from Mars; and thirty five percent of Philips operations, for example. And, trucks are the largest single component of distribution emissions, accounting for 57% of the collective impact. Therefore, it is in the interest of every product manufacturer and brand in the U.S. to see these trucks use less fuel.
The single most impactful thing we can do today to reduce emissions from product distribution is to build more efficient trucks. We have the technical know-how to cost-effectively double the efficiency of freight trucks. We also know that having well-designed standards in place is a necessary step to bringing these solutions to market at scale. Read more
California public school teachers. Religious charities. New York police officers and firefighters.
What do all of these groups have in common? Investors representing them — who manage $1.5 trillion in retirees, current employees’, and others assets – are standing together and calling for strong rules limiting harmful methane emissions from the oil and gas sector. This level of outpouring – from diversified investors with holdings in the oil and gas industry – represents five times the support investors expressed for methane rules last year. A trend is emerging.
The investors, including the largest retirement funds in California and New York, issued a powerful statement in support of the president’s methane proposal aimed at cutting emissions nearly in half in a decade. A centerpiece is regulation of methane, the primary ingredient in natural gas, which has over 80 times the warming power of carbon dioxide in the first 20 years after it’s released and is responsible for 25 percent of the warming we are feeling today.
From their vantage point as long-term stakeholders, the “serious threat” methane poses to climate stability compels them, as fiduciaries, to support action to cut emissions and avoid near term threats to “infrastructure and economic harm that will weaken not only the companies we invest in, but the nation as a whole.” Market pressure like that is difficult to ignore. Read more
Last week’s papal encyclical on climate change galvanized those of us who already see responsible stewardship for the earth as both a moral mandate and business imperative. In the 184-page document, Pope Francis calls for a sweeping overhaul of political, economic and individual practices to halt the degradation of the environment and protect our planet for the long term.
The pope's sweeping vision is sure to prompt churches, people of faith and a whole range of organizations to rethink their actions with regard to use of energy, water and other natural resources. But already, religious organizations have been working quietly and steadily to effectively manage their environmental impact, in keeping with the established theological tradition of moral economic development and use of resources.
(Credit: Sacred Heart)
Take Gene Murphy of Prescott, Ariz., as a prime example of someone sitting at the intersection of religion, sustainability and business. As the business manager for the Sacred Heart Parish in the Diocese of Phoenix, Gene has developed scalable solutions for his church and school that could and should be replicated across all churches, schools and relevant organizations.
The church performed a clean energy retrofit covering lighting, windows, waste and solar power that dramatically reduced their utility spending from $94,500 a year to $37,000, or $157 in daily savings and transformed the 32,000 square foot school into a near net-zero building. The solar project alone reduces more than 230,000 lbs of CO₂ per year, and the building is now lit with 97 percent LED lights. Gene is already drafting a template for similar organizations to use in analyzing their opportunities in light of new technologies, regulations and methodologies.
At EDF, we see Gene and the Sacred Heart Parish as a real-life example of the kind of pragmatic stewardship the pope is calling for, and we got on the phone with him to get some deeper insights into the parish's transformation. Read more
Freight transportation is the work horse of the global economy, ensuring that the products consumers want get on the shelves where and when they want them. With 70 percent of U.S. goods being moved by truck, freight is a key source of U.S. fuel consumption and corporate greenhouse gas (GHG) emissions. Today, freight also offers companies a key opportunity to drive us toward a lower carbon future.
In a Wall Street Journal op-ed with EDF President Fred Krupp, Pepsico Chairman and CEO Indra Nooyi voiced the company’s strong support of the new fuel efficiency and GHG standards for medium and heavy duty trucks released June 19th by the U.S. Environment Protection Agency and Department of Transportation. Over the life of the program, these robust standards will cut fuel consumption in new trucks by 1.8 billion barrels of oil and reduce carbon emissions by one billion metric tons.
Leading companies like General Mills, Walmart and Anheuser-Busch have made reducing fuel use and emissions from freight a priority in setting their internal supply chain performance goals. But Pepsico’s willingness to step forward with this op-ed is a prime example of how companies can extend their leadership by aligning their public policy stances on with their sustainability goals – what EDF has been referring to as the business-policy nexus.
Freight affects all of us, but business is in the driver's seat
Freight transportation exists to serve companies that make or sell physical goods, from brands and manufacturers using trucks to bring in supplies and ship out final products, to technology companies needing trucks to deliver the hardware that powers their online services. While medium- and heavy-duty trucks only make up 7 percent of all vehicles on the road, they consume 25 percent of the fuel used by all U.S. vehicles.
Inefficient movement of goods wastes fuel, raises costs and increases environmental impacts. For firms like Pepsico, who maintain their own fleets, as well as those that contract out for freight moves, fuel is the single largest cost of owning and operating medium- and heavy-duty trucks. Truck fuel prices have increased 58 percent since 2009, a strong incentive for increasing the efficiency of trucks that move freight. Consumers are counting on businesses to solve this problem, as those costs are passed on to consumers. Through everyday purchases, the average U.S. household spends $1,100 a year to fuel big trucks. Strong standards can cut this expense by $150 on average a year by 2030. Read more
Pump jacks lined up in Oklahoma. (Credit: Kool Kats)
Six large European oil and gas companies recently announced a commitment to engage on climate policy, calling for a price on carbon. The now-emerging picture of their coordinated corporate talking points, however, leaves no doubt that promotion of natural gas is a core part of the group’s position.
Is this development a beneficial push to help the planet transition to a low carbon economy – or just another marketing campaign? The truth, so far, lies somewhere in between.
Here are the good, the bad and the ugly highlights of what we’ve learned over the past week and what it all means.
The good: Establishing a carbon price and cutting carbon dioxide emissions
Make no mistake about it: The world’s leading economies need to establish a price and limits on greenhouse gas emissions, and leadership from the private sector is instrumental in achieving that policy objective.
For large companies such as Shell, BP and Statoil to join forces and unequivocally state, as they now have, that a price on carbon should be a “key element” of climate policy frameworks is a refreshing boost to pre-Paris United Nations climate talks.
It is a potentially powerful validation that even some of the world’s largest corporate emitters see an upside to carbon pricing and will weigh in to make it a reality.
As to promoting natural gas a solution, it is well documented that in many cases natural gas will replace coal for power generation – a shift already underway in the United States and partly responsible for driving down carbon dioxide (CO2) emissions. Read more
Europe’s largest oil companies are reportedly working together on a policy strategy leading up to this year’s international climate talks in Paris. It’s nice to hear that some of the biggest players in the global oil and gas industry want to engage in solutions, but it remains to be seen if they will take the action needed to effectively tackle some of our most immediate climate threats – or to seize a major untapped opportunity.
That opportunity is methane. The highly potent greenhouse gas that’s been largely ignored until recently represents a solution for making real and immediate progress to slow warming. So will the group of oil companies sign on to tackle methane as a big part of its strategy, or are they going to ignore it?
Methane, the primary ingredient in natural gas, has over 80 times the warming power of CO2 and is responsible for 25 percent of the warming we are feeling today. That means tackling methane is an essential piece of the puzzle in making a real impact on greenhouse emissions. Read more
A company’s public statements matter– they can influence consumer choice, sway public policy decisions and demonstrate leadership on important issues. But in terms of actual change, it’s where a company puts its money that really matters. This week, Bank of America spoke with both its voice and wallet: At its shareholder meeting last week, the bank announced a new coal policy that continues the company's commitment to reducing its exposure to coal extraction companies and accelerating the transition from a high-carbon to a low-carbon economy.
According to BoA, its portfolio has grown to favor renewable energy over coal by a ratio of more than three-to-one. That’s an important step forward toward a clean, low-carbon energy future. And, it’s one that builds on moves by other institutions, like the recent news from Goldman Sachs about how the company is looking to divest some of its mining interests and Citi’s recent 10-year, $100-billion commitment towards investments in areas like energy efficiency, renewable energy, green affordable housing and climate change resiliency projects.
Investors are seeing the terrain change beneath them – from upcoming regulations like the EPA’s Clean Power Plan and federal regulations on methane emissions from the oil and gas sector, to consistently lower natural gas prices, which undercut coal’s prior price advantage over other power sources – and beginning to bet on a future that’s powered by lower-carbon options.
More of this type of corporate leadership, including metrics and timelines, is what's needed to help make the leap from today’s polluting energy system to tomorrow’s thriving, clean energy future.
Spring is high season for corporate responsibility reports, with some of the world’s most recognizable brands — including Kellogg’s, Walmart, Anheuser-Busch, Apple, Adidas, General Mills, H&M, Lowes, CVS and Hershey’s — releasing their latest updates. While each company has its own unique sustainability challenges and priorities, every one of them has a global supply chain that requires an extensive logistics network to move goods from manufacturing facilities to end customers.
What reading these reports told me is that greening freight operations is becoming a key priority for these companies, with three trends in particular standing out to me:
1. Tracking logistics emissions is a standard practice. Seven out of the ten recently released reports included data on fuel use or greenhouse gas emissions associated with freight transportation. Several companies were tracking only emissions from outbound freight transportation, presumably because of a lack of visibility into inbound moves. Adidas, one of the three that did not include information on emissions or fuel use from freight movement, did include a detailed breakdown of moves by transport modes and emissions from distribution centers and other facilities.
2. Setting performance goals is a well-accepted practice. Four of the ten companies have performance-based goals to improve environmental impact associated with freight transportation. For example:
- Walmart is seeking to double its fleet efficiency compared to 2005, and is currently 87% of the way to meeting this impressive goal.
- General Mills has a goal to reduce fuel use for its outbound moves by 35% compared to its 2005 consumption. The company has made considerable progress too, reducing fuel use by 22% compared to 2005.
- Anheuser-Busch set a goal in 2014 to reduce greenhouse gases from its global logistics operations by 15% per hectoliter sold. Its goal has a broad scope too, including inbound and outbound transportation as well as warehousing.
3. Seeking to shape external factors is a leadership practice. Much of the impact of moving freight is beyond the operational control of these companies. They have limited influence on the availability of low-impact fuels, the efficiency of freight equipment or the capacity of intermodal systems. In addition to focusing on the factors freight shippers can control, leading companies are trying to shape the overall system to provide more low-impact choices. Read more
"Kenworth truck" by Lisa M. Macias, U.S. Air Force via Wikipedia
A pair of critical analyses were just released that, together, make clear the need for a strong second generation heavy truck fuel efficiency and greenhouse gas standard.
The first piece is the U.S. Energy Information Agency’s (EIA) preliminary Annual Energy Outlook for 2015. I went right to the projection of fuel efficiency for new heavy trucks in 2020, which is 7.0 miles per gallon, and compared that to the projection for 2030, which is 7.2 miles per gallon. A three percent increase in efficiency for a decade is not too impressive.
As a result of this lack of projected progress on fuel efficiency and other factors, EIA expects that greenhouse gas emissions from heavy trucks will increase more than any other single end-use source by 2040 – an additional 120 million metric tons a year.
The other recent analysis is from The International Council on Clean Transportation, which released two papers on heavy truck fuel efficiency: one reviewing the potential of current and emerging efficiency technology, and the other examining the cost-effectiveness of these technologies.
Just in time for Earth Day, McDonald’s has released a new global deforestation commitment. While this policy is new, the company is no stranger to the issue. In fact, McDonald’s was one of the first companies to be confronted in the 1980s as consumers began to recognize the “Hamburger Connection” between beef production and tropical forests. In response, the company established its Amazon Policy, which prohibited the sourcing of beef from the Amazon. Seventeen years later, McDonald’s was instrumental in creating the Soy Moratorium, an industry-wide effort which has effectively halted soy expansion on native vegetation in the Amazon Biome. (Soy is a major source of feed for chickens and other livestock).
Now, following a wave of commitments from agricultural giants such as Cargill and ADM, the new global policy is a first-of-its-kind in the fast food sector and, if executed correctly, could stand as a shining example for other companies in the food business to follow. As one of the world’s most recognized brands, McDonald’s knows any commitment with such a large impact on the planet – tropical forests are one of the largest contributors to, and buffers against, climate change – will be heavily scrutinized. So, what do we need to know as we watch this journey unfold? To radically simplify, four things come to mind: