When NGOs and Business Work Together, They Can Change the World

Tom Murray, VP Corporate Partnerships, EDFFull disclosure:  I’ve been a big fan of Michael Porter and Mark Kramer since my days as a graduate business student.  Lots of hours on group projects working on five forces analysis, you get the idea.  So it was especially rewarding to read their recent Fortune article looking at the actions behind the Change the World list of leading companies who are doing well by doing good.

Porter’s and Kramer’s Creating Shared Value approach is “moving into the mainstream and growing exponentially. Companies that adopt shared-value thinking remain committed (as they should) to philanthropy and corporate social responsibility. But they’re moving beyond often-fuzzy notions like sustainability and corporate citizenship, and instead making measurable social impact central to how they compete.”

Sustainability as a fuzzy notion for business strategy?

I’m going to push back on that.

As the environmental NGO that spearheaded a first of its kind partnership with McDonalds over 25 years ago, Environmental Defense Fund (EDF) has partnered with hundreds of leading companies to address sustainability in specifically non-fuzzy ways. We do it by following the science and making sure that every EDF+Business project drives measurable environmental and business results. Read more

Walking the Walk: Companies Lead the Call for New Clean Truck Standards

A number of America’s most iconic brands helped pave the way for the new Clean Truck standards announced August 16th by the U.S. EPA and DOT. Nearly 400 companies, large and small, publicly urged strong, final fuel efficiency and greenhouse gas standards for heavy trucks.

Through their action, these companies have reaffirmed a basic truth of business today: to be a “leader”, companies must align their sustainability goals and strategies with their external engagement on policy.

Tom Murray, VP, Corporate Partnerships Program

Tom Murray, VP, Corporate Partnerships Program

While there are many differences as to how these 400 companies intersect with heavy trucks—manufacturers make the trucks, fleet owners drive the trucks, brands hire the trucks to move their goods to market—they are all unified by one resounding theme: cleaner trucks are better for their business, better for our health and better for the planet.

Indeed, common-sense efforts to cut climate pollution have gone mainstream in business. Earlier this year Microsoft, Google, Amazon, Apple and others raised the bar on corporate climate leadership by standing up for the clean power plan. Colgate-Palmolive, Hewlett Packard Enterprise, Nike, Starbucks and over 100 other companies built on this trend by urging “the swift implementation of the Clean Power Plan and other related low-carbon policies so that we may meet or exceed our promised national commitment and increase our future ambition.”

But this corporate support of the clean truck standards goes even further: it’s another step in the evolution of corporate climate leadership. This is beyond simply supporting good policy; a number of these companies are actively shaping it to deliver significant sustainability benefits. Among the companies that distinguished themselves in this effort are:

  • PepsiCo: the largest private fleet in the U.S. led the way in demonstrating the alignment between its sustainability objectives and its policy advocacy through an op-ed, and expert testimony.
  • Walmart, the 3rd largest private fleet in the U.S., was highly proactive and constructive in its engagement on the clean truck phase two program, supporting it with public statements, and expert commentary.
  • Cummins, FedEx, Eaton, Wabash National, Conway, and Waste Management joined PepsiCo in the Heavy Duty Leadership group that urged the EPA and DOT to: “Achieve Significant Environmental, Economic and Energy Security Benefits.”
  • Honeywell, Achates Power and a number of other innovators made clear that they were ready to meet the challenge of building more fuel efficient trucks.

There were hundreds more examples like these—each one of them a proactive leadership action that demonstrates the new frontier for corporate leadership.

Securing these protections was a real team effort.  The Pew Charitable Trusts organized a letter of support for strong standards signed by IKEA, Campbell’s Soup, and many others. Ceres brought forward a strong statement from General Mills, Patagonia and more. The Union of Concerned Scientists articulated how strong rules would benefit leading fleets, including UPS, Coca-Cola and Walmart. Together, these efforts marshalled an unprecedented level of corporate support for a critical piece of climate policy.

So, if your company is among the now hundreds of companies actively advocating for strong climate protection measures, thank you. We look forward to your continued leadership and engagement on other critical advances, including implementation of the Clean Power Plan and moving forward with reductions in methane emissions. We want to work with you to shape protective policies that also make business sense.

If, however, your company is still stuck at talking the talk, it’s time to start walking the walk when it comes to supporting common sense measures like the Clean Trucks program.

You’re falling behind the leadership pack in the one of the world’s most important races.

New Clean Trucks program: Business, Consumers and the Planet all Win

Across America, companies have reason today to celebrate an important step to drive cost and emissions out of their supply chain. The U.S. EPA and U.S. Department of Transportation unveiled new fuel efficiency and greenhouse gas standards for heavy trucks. Once fully implemented, the new standards will cut over a billion tons of climate pollution and save hundreds of millions of dollars by 2035.

Jason Mathers, Senior Manager, Supply Chain Logistics

Jason Mathers, Director, Supply Chain

Every business in America stands to benefit.

Why? Because every business in America relies, in some form, on trucking services. Product manufacturers need trucks to get goods to market. Service and knowledge companies depend on trucks to deliver equipment and supplies. Retailers utilize trucks in distribution.

Retailers and consumer brands are among the top winners of strong fuel efficiency standards, as these companies account for a lot of freight movement. Companies that have undertaken detailed carbon footprint analysis often find, as Ben & Jerry’s did, that freight transportation can account for upwards of 17% of their total impact.

The new fuel standard means continued progress in tackling this significant source of emissions. This progress will reveal itself in lower carbon footprints for every product brought to market. It will be apparent through lower freight and fuel surcharge fees – saving large consumer brands millions annually. Read more

3 Keys for the American Petroleum Institute’s New Climate Task Force

The climate change discussion is percolating even in surprising places. The latest sign: the American Petroleum Institute’s recent formation of an internal task force on climate change. Reportedly the new task force’s mandate is to revisit API’s approach to this crucial issue, going into an election year and with ever greater scrutiny on fossil fuels.

AdobeStock_56840116It is too soon to know whether the task force will rubber stamp a business-as-usual approach defined by glossing over climate concerns and attacking policy measures, or chart a new path instead.

But if the task force is serious about a fresh look at the issue, here are three keys for the task force to consider as it ponders the future of API on climate. Read more

Is Walmart a Leader on Safer Chemicals?

Consumers want to know that the products they buy contain ingredients that are safe for them and their loved ones. EDF has identified five pillars of leadership to help companies meet that demand and in doing so build consumer trust in the products they make and sell. One company that has recently taken major steps to drive safer chemicals and products into the market is Walmart.

In 2013, Walmart published its Sustainable Chemistry Policy, which focuses on ingredient transparency and advancing safer product formulations in household and personal care products. EDF worked with Walmart as it developed its policy and has advised the company during implementation and data analysis. This past April, Walmart announced that the company achieved a 95% reduction in the use of high priority chemicals of concern. Now, Walmart has shared considerable additional information detailing the progress made, including the identities of the high priority chemicals.

In our previous blog, we broke down the wealth of information that Walmart has shared. However, to fully evaluate the significance of the numbers, we now look at how well Walmart has done against EDF’s five pillars: institutional commitment, supply chain transparency, informed consumers, product design, and public commitment.

Read more

Product Ingredients at Walmart Changed for the Better. Really.

It’s whack-a-mole time.

In April, Walmart released their 2016 Global Responsibility Report. In it, they noted a 95% reduction by weight in the approximately ten high priority chemicals in home and personal care products covered by their 2013 Sustainable Chemistry policy. Ninety-five percent is a big number, but the substance – the chemical names, the volumes – was missing.

No longer.

Today, Walmart released the names of those high priority chemicals, with details as to how the reductions were achieved. The chemicals – butylparaben, propylparaben, dibutyl phthalate, diethyl phthalate, formaldehyde, nonylphenol ethoxylates, triclosan, and toluene – will not come as a surprise to most who work on these issues; these chemicals have been called out for action by many for quite some time.

Scale_Blog-Graphic

If this announcement is met like most environmental stories told by corporations, the mole-whacking will commence shortly. WHACK! Why these chemicals and not those? WHACK! What took so long? WHACK! What about everything else? While companies that do nothing will stay in the shadows, those like Walmart trying to drive needed change usually get whacked for what they haven’t done already.

And of course a lot still remains to be done.

But this story is a good one, and Walmart deserves credit for what they have accomplished. Walmart is the one company in the world that could drive drive over 11,500 tons – 23 million pounds – of chemicals out of so much product in less than 24 months.

Read more

Major Strides: Walmart Details Progress on Chemicals

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In 2013, Walmart published its Sustainable Chemistry Policy, which focuses on ingredient transparency and advancing safer product formulations in household and personal care products. EDF worked with Walmart as it developed its policy and has advised the company during implementation and data analysis.

This past April, Walmart announced that the company achieved a 95% reduction by weight in the use of high priority chemicals of concern. Today, Walmart shared considerable additional information detailing the progress made, including the identities of the initial high priority chemicals. Let’s unpack this.

Revisiting Walmart’s Sustainable Chemistry Policy

Broadly speaking, Walmart made three commitments in its 2013 policy:

  1. to increase transparency of product ingredients,
  2. to advance safer formulations of products, and
  3. to attain U.S. EPA’s Safer Choice certification [formerly Design for the Environment] of Walmart private brand products

The policy, which went into effect in January 2014, focuses on formulated household cleaning, personal care, and beauty products, sold at Walmart U.S. and Sam’s Club U.S. stores. A few months after releasing the policy, Walmart published a policy implementation guide that gave suppliers greater specificity as to Walmart’s expectations and, importantly, outlined the quantitative metrics Walmart would use to track and report progress.

How Walmart has fared so far

  1. “Transparency”:

Walmart’s policy requires its suppliers to be more transparent about the ingredients in their products in two ways. First, Walmart requires suppliers to submit “full product formulations” – the names and concentrations of all ingredients in a product – to WERCSmart, a 3rd party- managed product ingredient database. WERCSmart provides the retailer with aggregate information about the types and quantities of chemicals in the products on its shelves without divulging specific product formulation data.

Second, the policy requires suppliers to increase ingredient transparency to consumers by calling for disclosure of product ingredients online starting in 2015. Further, any Priority Chemical found in a product must be disclosed on the product’s packaging starting in 2018. Priority Chemicals (PCs) are Walmart’s designated chemicals of concern, drawn from 16 reputable regulatory and authoritative lists.

To track the first requirement, Walmart determined the number of products whose ingredients are fully accounted for in the WERCSmart database. According to the data, 94% of the product formulations are full formulations. This suggests that the other results Walmart presents today are based on real data.

To track ingredient transparency to consumers, Walmart polled suppliers about their online disclosure practices using the Walmart Sustainability Index, its annual environmental issues survey sent to suppliers. In 2015, 78% of respondents reported they disclose ingredients online for all their products. Walmart also breaks down the responses  in more detailed ways, such as by department.

  1. “Advancing safer formulations of products”:

The bulk of Walmart’s policy focuses on providing safer products to customers by calling for the “reduction, restriction, and elimination” of Priority Chemicals (PCs), and for product reformulations to be undertaken using “informed substitution principles.” Because the list of PCs includes hundreds (if not thousands) of chemicals — as evidenced by Walmart’s reference list of regulatory and authoritative lists used to define its PCs — Walmart focused its suppliers’ attention on a shorter list of High Priority Chemicals (HPCs).

Today, Walmart identified the HPCs as propylparaben, butylparaben, nonylphenol ethoxylates (NPEs), formaldehyde, dibutyl phthalate, diethyl phthalate, triclosan, and toluene. These eight chemicals and chemical classes appear on a number of authoritative lists (e.g. EU REACH Substances of Very High Concern) for their hazardous properties and are worthy of action by Walmart. The revelation of the identities of the chemicals was long-awaited and provides context to the rest of the information Walmart shared today.

To assess the portion of its chemical footprint[1] related to product sales covered by the policy, Walmart has measured progress in two ways: (i) the total weight of HPCs contained in products sold, i.e. pounds of HPCs going out the door, and (ii) frequency of use, i.e. the number of products on store shelves that contain HPCs and the number of suppliers using HPCs in their products. Walmart relied on RetailLink, its internal product inventory database, and WERCSmart, mentioned earlier, to make these calculations. Walmart has also computed and published this data for all Walmart PCs in the covered product categories.

Walmart reports a dramatic reduction in the total weight of PCs and HPCs going out the door. The total weight of HPCs dropped by 95% and PCS by 45%.  The more than doubling of reduction of HPCs suggests that focusing attention on a subset of chemicals accelerated action.

Walmart attributes part of the success to its ability to determine which select set of suppliers used the majority (in pounds) of HPCs. This illustrates the utility of a product ingredient database that can provide aggregate information by supplier while not disclosing proprietary information.

As it relates to progress made in reducing the frequency of use of HPCs, the results were far more modest.  Unfortunately, it appears that suppliers who use HPCs are largely still using them, though the aggregate mass has dropped. Overall, the percent of products containing HPCs dropped by only 3 percentage points (to 16%), while the percent of suppliers using HPCs increased slightly (to 39%). Meanwhile, the percent of products containing any Priority Chemical actually went up one percentage point (to 80%).

So while the weight amount of HPCs, and PCs more broadly, has dropped significantly, there is clearly much more work to be done to achieve complete elimination of these chemicals.

  1. “Safer Choice [formerly Design for the Environment] in private brands”:

Lastly, Walmart committed to increase the number of private brand product offerings bearing Safer Choice certification. As discussed in our recent blog, the Safer Choice Program is a voluntary program implemented by the U.S. EPA that seeks to recognize and bring consumer awareness to products that are leading the way when it comes to safer ingredients. This is the only commitment for which Walmart has not released quantitative data. The company reports that it has hit snags in making progress against this target but is still committed to the program.

Conclusion

Overall, Walmart has made major strides regarding the commitments set forth in its policy. Equally notable, it has set in place effective systems to measure and track progress over time – an ability that can’t be underestimated.

In our next post, we’ll assess where Walmart’s progress rates against EDF’s five pillars of leadership for safer chemicals in the marketplace.


[1] As defined by the Chemical Footprint Project, a chemical footprint is “the total mass of chemicals of high concern in products sold by a company, used in its manufacturing operations and by its suppliers, and contained in packaging.”

Further Reading:

Clean Trucks: Much Needed and Ready to Deliver

There was some good news from the U.S. Energy Information Agency recently. It found that the Clean Trucks program, which is expected to be jointly finalized this summer by the Environmental Protection Agency (EPA) and the Department of Transportation (DOT), will deliver huge carbon emission reductions.

"Kenworth truck" by Lisa M. Macias, U.S. Air Force via Wikipedia

The Clean Trucks program is designed to improve fuel efficiency and reduce greenhouse gas pollution from the freight trucks that transport the products we buy every day, as well as buses, heavy-duty pickup trucks and vans, and garbage trucks. The program’s first performance standards went into effect in 2014. The EPA and DOT are currently developing a second phase of performance standards. Strong standards can help keep Americans safe from climate change and from unhealthy air pollution, reduce our country’s reliance on imported oil, and save money for both truckers and consumers. Read more

Consumer Concern About Chemicals in Food Continues to Grow

Behind the Label_FFor the second year in a row, more than a third of consumers participating in the annual food industry survey rated chemicals in food as their most important food safety issue. Every year for the past decade, the International Food Information Council (IFIC) has surveyed more than 1,000 Americans aged 18-80, to gain insight into their attitudes towards food and diet. Although the way they have polled on these topics has changed over the years, the research shows a clear and steady rise in the number of Americans concerned about chemicals in their food.

In 2016, IFIC broke down the ‘chemicals in food’ option from 2015 into more specific concerns: chemicals in food (arsenic, mercury, BPA); carcinogens or cancer-causing chemicals in food; and food additives and ingredients (caffeine, MSG, flavors, colors, preservatives, etc.).

food-survey-graphics_block_2_croppedFor 38 percent of the respondents, these three specific sub-categories of chemicals in food combined were the most important food safety issue, a two-point jump since last year. And these concerns are being felt in the market: 40% of consumers who stated that chemicals were of great concern to them reported changing their eating habits.

Growing concern driving food supply chain changes

Consumers’ growing concern about chemicals reflects an increased awareness about the harmful effects they may have on human health and, importantly, a shift in how consumers are defining the issue of “safety” in food. As we reported a few months ago, a report from Deloitte, the Food Marketing Institute and the Grocery Manufacturers Association found that consumers are increasingly concerned about the short-term health effects of chemicals in food (e.g., no toxins) as well as the long-term effects (e.g. no carcinogens).

To their credit, the food industry is beginning to respond to these concerns. Read more

Corporate Sustainability Storytelling: The Whack-a-Mole Response Needs to Stop

Why is it that some environmentalists feel the need to play whack-a-mole whenever a leading brand peeks its head above the fray to publicly declare a corporate sustainability achievement?

I’m not going to cite specifics – just look at the comments section of any major news outlet covering a big brand sustainability announcement – but I do want to address the negative impact this has on business stepping up for the environment.

As an environmental NGO with a history of working in the trenches with powerful businesses, Environmental Defense Fund (EDF) often gets to play the mole role. We’ve endured our share of slings and arrows since first partnering with McDonald’s over 25 years ago, so I can empathize with companies who are reticent to step up and publicly acknowledge the sustainability work they are doing.

EDF has thick skin and a singular mission to forge solutions that help people and nature thrive. It’s not always the same for major brands that have to balance the needs of shareholders, suppliers, employees, communities, and yes, the planet. It’s difficult to step forward and share sustainability stories when doing so invites backlash. I get it.

While environmentalists push for change in corporate business and policy practices, we must also adjust our attitudes in working with and encouraging those businesses who are trying to make a difference.

Basic behavioral psychology leads me to believe that if we want more major companies innovating, executing and sharing best corporate sustainability practices, the whack-a-mole approach needs to stop. Read more