The state of green business? Hopeful, puzzling… and pushing forward

I always look forward to the latest State of Green Business report from GreenBiz. It invigorates me and reminds me that there are a lot of talented people making sure that both business and the planet can thrive– a notion that I’m holding tight as the political atmosphere gets increasingly crazy.

I found two of the trends in the report of particular interest because they signal that smart business leaders are staying the course on climate.

Trend: Corporate Clean Energy Grows Up

The trend toward corporations transitioning to renewable energy has been gaining momentum for years. Today, twenty-two of the Fortune 100 have committed to procuring 100% of their energy from renewables, and 71 have a public target for sustainability or renewable energy.

“Business is a very important advocate for clean energy, because it speaks the language of hard economics,” points out Jim Walker, co-founder of The Climate Group. “It’s sending a strong signal to policymakers and the general public that this is the inevitable direction we’re going to move towards – a 100% clean energy economy.”

When innovative companies like Apple, Amazon, Unilever, and Google show leadership on renewable energy, their suppliers, customers, competitors, and the market respond. Microsoft, for example, is helping lead the way by purchasing 237 megawatts of capacity from projects in Wyoming and Kansas. And, Walmart, a long-time EDF partner, has also made a commitment to source 100% of its electricity from renewable energy. Currently at 25%, they’ve made significant progress on implementation.

With corporate leadership like this in place, it’s clear that business will continue to have an impact on the renewable energy revolution. The recent report from my EDF Climate Corps colleagues is proof of that: the solar power sector is growing quickly, and is a major source of jobs that are a.) impossible to outsource and, b.) available in all 50 states.

Trend – Companies Put Their Money Where Their Suppliers Are

According to the Business and Sustainable Development Commission, embedding sustainable business practices in the global food and agriculture industry could deliver $2.3 trillion annually.

“All stakeholders can share in the benefits: smallholder farmers improve their livelihoods; suppliers gain increased security of supply with improved quality; and we reduce volatility and uncertainty with a more secure and sustainable supply chain,” wrote Unilever CEO Paul Polman.

Elizabeth Sturcken, Managing Director, EDF+Business

When a corporation commits to reduce emissions in their supply chain, the results can be powerful.  We’re seeing this firsthand with our work with Walmart. EDF spent 10 years with Walmart to help drive sustainability across its global supply chain. The result? By the end of 2015, through leadership, innovation and a diverse range of projects, Walmart had exceeded its goal to reduce supply chain emissions eliminated 36 MMT of greenhouse gas from its supply chain. Now, they’ve committed to removing 1 Gigaton of emissions by 2030 – the equivalent of the total annual emissions of Germany.

Smithfield Foods is another company that EDF collaborated with in setting a goal to reduce absolute greenhouse gas emissions by 25% by 2025 across its upstream U.S. supply chain. EDF will continue to help Smithfield improve fertilizer efficiency and soil health, which will reduce nitrous oxide emissions from grain farms.

But to keep moving forward on these sustainability trends and others requires business to use its voice and influence to not backpedal on policies that are a win-win for our environment and our economy. We are at a crucial period where companies need to make the long-term economic case for policy, including the Clean Power Plan, Toxic Substances Control Act (TSCA) and ensuring the U.S remains part of the Paris Agreement.

Businesses will not go backwards on environmental protection. It’s bad for business and the environment. In fact, over 600 businesses have signed the Low Carbon USA letter calling on U.S. elected leaders to stay the course on environmental protection and climate leadership.  Now is the time for unlikely voices to step up and continue to press the case for action; the recent call for a carbon tax is probably most noteworthy because it was brought forth by Republican party faithfuls.

If there was one sentence in the State of Green Business report that captured the feeling of the moment it was this: “It’s hard to imagine a time more hopeful and horrifying for sustainable business.” At EDF, we’re not only hopeful but we’re committed: the economy and the planet can—and must–thrive together. Any conversation that suggests otherwise is a non-starter.

 

Now trending in global business: collective action on deforestation

edf-business-of-food-blog-graphic_shelton-grp_12-7-16With U.S. policy engagement on climate action in limbo, the rest of the world is marching forward. As major CEOs and political leaders gathered at the recent World Economic Forum (WEF) in Davos, Switzerland, clear support was shown for creative investment in clean energy, sustainable development and other climate change mitigation practices.

While many ideas were discussed, however, one topic emerged as both a driver of climate impact and an opportunity area for huge climate benefits: deforestation.

Two major initiatives around deforestation were launched at the WEF:

A fund to catalyze private investment in deforestation-free agriculture was announced by the Norwegian government, the Sustainable Trade Initiative (IDH), UN Environment, the Global Environmental Facility, and many other supporters. Their goal? To help fund sustainable intensification of agriculture in jurisdictions which are effectively working toward reducing deforestation. The fund will be operational by middle of 2017 and aims to protect over 5 million hectares of forest and peatlands through its projects by 2020. 

Norway pledged up to $100 million, with a capitalization goal of $400 million from other donors and private sector partners. The model aims to engage even more private sector financing, for a total investment of $1.6 billion by 2020. The Tropical Forest Alliance 2020 and major food giants like Carrefour, Marks & Spencer, Mars, Nestle and others are expressing support. Unilever is the first corporate leader to commit funding, with a pledge of $25 million over the next 5 years.

A plan to use big data to monitor and trace the raw materials in major corporations’ supply chains. Led by the World Resources Institute, the initiative has major support from food companies such as Bunge, Cargill, Walmart, and others, with a total combined value of $2.9 trillion.

The goal is to build a decision-support system to help companies track progress and real-time challenges associated with their deforestation commitments. The tool will enable corporations to make real-time decisions about geographies to prioritize in their deforestation reduction work, and get alerts when illegal activities are happening in those regions. While the tool is still in very early stages, the future could be bright.

Deforestation-free sourcing? There’s an app for that!

Deforestation_in_Panama

Two initiatives… powerful trends

So: what do these two initiatives—one helping to ensure that farming already-cleared land becomes more productive, and one helping companies shed light on the complex, murky labyrinth of their global supply chains—tell us about emerging trends in global climate leadership?

  1. Forests matter: Stakeholders understand the importance of forests for climate and supply chain stability. The impressive list of participants and lofty goals show that forests have become part of the main stage for how to address climate change globally. Deforestation contributes about 15% of greenhouse gas emissions annually, but can also be a major carbon sink if managed appropriately. Corporations understand that forests are vital for reducing reputational risk in product lines, ensuring stable weather patterns that can produce viable crops into the future, and increasing the resiliency of major geographic regions against drought and flooding. These new commitments indicate that action on forests as part of the climate dialogue are here to stay.
  1. Collective action is the right tool: Companies see the value in working collectively on effective solutions for deforestation reduction. Corporations know that there is significant risk in not engaging effectively on forests, both for the climate and for their supply chains. But the more challenging question to date has been: how? Over 350 companies have made public commitments to reduce deforestation related to major agricultural commodities in their supply chains. However, only one-third of these companies report on how they will reach these goals. These two new initiatives show the value of collective action between companies, non-profits,
    Katie Anderson, Project Manager, EDF+Business

    Katie Anderson, Project Manager, EDF+Business

    and governments to engage effectively in the multi-faceted challenge of deforestation-free sourcing. The days of working in silos, simply along supply chain boundaries, are no longer the most effective strategies. Working together provides new, creative solutions that can have an impact across entire regions rather than solely withinthe boundaries of sourcing relationships.

  1. There is still much to be done. While these initiatives are important signals of major trends within the deforestation space, they are still only in their infancy. Time will tell if the stakeholders engaged will be able to actualize the ambitious goals and creative thinking embedded in these ideas.

But, I’m optimistic. What emerged out of Davos tells me that the collective work of these major corporations can get us to where we need to go: productive, economically viable agricultural supply chains without destroying critical forest habitat upon which we all rely.

Will the U.S. join this trend toward collective action? The jury is still out on that one.

 

 

As Trump signals a rollback on environmental regulations, a new jobs report indicates that may not be such a good idea

Jobs coverPresident Trump’s regulatory freeze that halted four rules designed to promote greater energy efficiency appears to be just the first salvo in an ongoing plan to roll back environmental protections and slash environmental budgets. While that is obviously foolish from an environmental perspective, it is also problematic from an economic/job creation standpoint.

As program director of EDF Climate Corps, I have daily insight into how businesses are accelerating the transition to a clean energy economy while hiring the next generation of talented, motivated leaders – which is a good thing, because they’re needed.

Our new report, Now Hiring: The Growth of America's Clean Energy & Sustainability Jobs, underscores this trend. As the economy becomes more sustainable and energy efficient, a new market for clean energy and sustainability jobs is created. This market is large, growing and intrinsically local. Even better, these jobs span across economic sectors, including renewable energy, energy efficiency and other green goods and services, like local and state government, transportation and corporations.

The report revealed three key trends as sustainability jobs continue to grow across the country:

  1. Sustainability jobs represent a large and growing portion of the U.S. workforce across multiple sectors.

This isn’t a small, niche workforce. In fact, it’s outpacing the rest of the U.S. economy in growth and job creation. Solar employment opportunities alone are currently growing at a rate 12 times faster than the rest of the U.S. economy. And, they are generating more jobs per dollar invested–more than double the jobs created from investing in fossil fuels. Sustainability now collectively represents an estimated 4-4.5 million jobs in the U.S., spanning energy efficiency and renewable energy, to waste reduction and environmental education.

  1. Due to the on-site nature of many renewable and energy efficiency jobs, these jobs cannot be outsourced, and can pay above average wages.

 These aren’t just any jobs; they are well-paying, local opportunities that bolster our domestic economy. Most renewable and energy efficiency jobs can be found in small businesses, requiring on-site installation, maintenance and construction, making them local by nature. And, many pay higher than average wages. For example, energy efficiency jobs pay almost $5,000 above the national median, providing rewarding employment options to all Americans–even those without college or advanced degrees.

  1. Clean energy and sustainability jobs are present in every state in America.

The entire country has benefitted from the boom in clean energy and sustainability jobs, which has employed workers in every state. Energy efficiency alone provides 2.2 million jobs, spreading out across the nation.

Continuing the Momentum

So how do we continue this momentum? Investments in clean energy and sustainability pay off in the long run and foster a stronger economy—that equals more jobs and a cleaner future. This is why businesses are increasing their investments in sustainability. A recent survey found that three quarters of firms now have dedicated sustainability budgets, and even more have hired additional sustainability staff. But that doesn’t surprise me. Corporate America understands that prosperity and a low-carbon economy go hand-in-hand, and should continue to support investment in this area.

Policy makers at the local, state and federal level must also recognize the positive economic impacts of this new job class and support the policies and programs that encourage growth and investment in renewable energy, energy efficiency, green transportation and more. Efforts to roll back or weaken environmental and energy policies will negatively impact current and future U.S. jobs, while slowing clean energy innovation.

If the question is how to help both the environment and the economy, we don’t have to search for the answer: it’s already here. America is transitioning to a clean energy future—we can’t afford to stand in its way.


Additional Reading:

Will the new President flunk the climate business test?

China is going all-in on clean energy while the U.S. waffles. How is that making America great again?


Follow Liz Delaney on Twitter, @lizdelaneylobo


 

Business won’t back down on clean energy future

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

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

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

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

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

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

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

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

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

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

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

Solar jobs in the U.S. on the rise

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

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


Additional reading:

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

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


Follow Tom Murray on Twitter, @TPMurray


Three Ways Trump’s EPA Pick is Bad for Business

President-Elect Trump’s selection of Oklahoma attorney general Scott Pruitt as the next head of the Environmental Protection Agency has drawn swift criticism from environmental and health advocates. Passing the nation’s environmental agency to one of its staunchest opponents risks upending the clean air and clean water that Americans of both parties demand. And looking deeper, Pruitt’s track record suggests he will harm the American economy while increasing pollution.

Here are three ways the Pruitt choice isn’t just bad for the environment, it’s bad for business:

1. Blocking federal methane rules means more wasted American energy
Protecting common sense standards to reduce oil and gas methane emissions is a winning opportunity for American business, but that did not stop Pruitt from suing EPA on its proposed methane rules earlier this year.

Methane is a natural resource, and cutting methane emissions means cutting economic waste. A recent study from ICF International found that drilling on federal and tribal lands – mostly in the rural West -leaked, vented, and flared natural gas worth about $330 million in 2013. Across the U.S., the market value of wasted natural gas is estimated at $2 billion.

Furthermore, there are good jobs at stake keeping methane and other air pollutants in the pipes and out of the air communities breathe. A report by Datu Research identified over 75 firms with over 500 locations across the country putting people to work in the methane mitigation industry. These include well-paying jobs in manufacturing, plus leak detection service jobs that offer technical training and are inherently offshore-proof. With nearly 60% of methane mitigation firms being small businesses, including in states like Colorado, Ohio, and Pennsylvania, national efforts to support methane reductions are a job creator at just the right time.

And, many investors recognize that achieving methane reductions is vital if natural gas is to play a constructive role in the transition to a low carbon energy economy. In fact, investors representing over $3.6 trillion in assets under management praised the North American agreement to reduce oil and gas methane emissions 45%. Public pension fund CEO Jack Ehnes wrote that as a large investor with a financial stake in the long term performance of the natural gas industry, CalSTRS sees that “methane emissions — which literally leak away the potential climate benefits of natural gas over other fossil fuels — must be actively managed.”

Most recently, seven in ten Colorado oil and gas operators interviewed about that state’s experience implementing methane rules reported that the benefits of compliance outweighed the costs.

In spite of the jobs and other business benefits of regulating methane emissions, as attorney general of Oklahoma, Pruitt took a page – literally – from a large oil company and sued EPA on its proposed methane rule. This approach may have appeased a big oil backer, but is short-sighted for the industry’s own long-term good, and hurts the American workers whose paycheck comes from preventing and fixing natural gas leaks.

2. Undermining the Clean Power Plan will slow economic growth in clean energy
The Clean Power Plan helps continue the trend of generating even more jobs in fast-growing segments of the American economy, including wind and solar energy, and energy efficiency. Third party estimates suggest that the plan will create 74,000 to 273,000 new jobs in those and related industries, on top of the hundreds of thousands of already existing clean energy jobs. Unfortunately, Pruitt joined a lawsuit against the plan, parroting scare tactic claims that the rule would increase electricity prices.

In reality, the Clean Power plan capitalizes on economic progress many states are already making, such as the rise of solar energy in North Carolina and California. With costs plummeting in solar energy, renewable energy last year accounted for the majority of new installed power capacity.

And because wind and solar are generally more labor-intensive than older energy forms, we can expect a windfall of well-paying, sustainable American jobs in tomorrow’s clean energy economy if we stay the course.

These positive trends are part of why American businesses like Google have committed to sourcing 100% renewable energy. Google and other leading technology companies defended the Clean Power Plan in court because they see that market-oriented government support for clean energy will help their businesses gain access to cheap, clean, stably priced energy for years to come.

In attacking the Clean Power Plan, Pruitt raised the specter of shuttering coal fired plants. However, as a fossil-fuel backer, he should know what experts believe and even natural gas industry insiders privately admit: it is cheap natural gas, not environmental rules, that is mainly responsible for driving coal plants out of business. As CEO of Appalachian Power, a West Virginia, Virginia, and Tennessee utility said, “You just can’t go with new coal [plants] at this point in time. It is just not economically feasible to do so.”

3. Denying climate is denying a great threat – and opportunity – for business
The days of seeing global climate change as only an environmental issue are over. But while many business leaders acknowledge climate change as the fundamental threat that it is – to infrastructure, supply chains, and national security to name a few – Pruitt says the “debate” on climate change is “far from over”.

The doubt seeded by climate denialism may be fake, but it can inflict business consequences that are real. In a globalized economy, American businesses benefit from our standing in the world and the goodwill we have achieved. With the world marching toward a cleaner energy future, propelled by the climate agreement of nearly 200 nations last year in Paris, American businesses have an interest in standing with the international community and competing on a level playing field.

We have an opportunity to win the next frontier of entrepreneurship and innovation in the clean energy products and ideas demanded the world over. Yet, Pruitt would likely become the only environmental chief in the world who doubts climate change. This anomaly would isolate and embarrass America. In short, the opposite of what businesses need to hear as America competes with China and others to seize the mantle of leadership on a global economic opportunity.

There are many capable environmental leaders from across the political and philosophical spectrum. America needs leaders to chart a path of environmental stewardship and economic prosperity. Mr. Pruitt’s record suggests he would do neither.

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?

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.

 

Technology Breakthroughs: Creating Fertile Ground for Innovation in the Oil and Gas Sector

aileen_nowlan_31394David Hone, Chief Climate Change Advisor at Shell, recently stated that it takes 25 years for a new technology to reach one percent of the energy system. At the multinational companies I have worked with as clients and partners, I have seen how much time it can take to launch a new idea or product.  But, I believe we can and must accelerate the pace of technology development and adoption. This is especially crucial in the area of methane detection. Methane is the main component of natural gas and methane emissions are the cause of 25% of today’s global warming.

For the past three years, the Methane Detectors Challenge (MDC), a groundbreaking partnership between Environmental Defense Fund, oil and gas companies, technology developers, and other experts, has focused on designing and testing promising methane detection technologies. Two of the most promising technologies, both of which provide low-cost continuous methane emissions monitoring, will soon be pilot-tested by major oil and gas companies. Moving from concept to pilots in just a few years teaches us that it is possible to accelerate the adoption of new technology in the oil and gas sector.

Lesson One: Bring all stakeholders to the table around a realistic shared goal

During tMDC_teamhe initial phase of the Methane Detectors Challenge, we facilitated a series of meetings between environmentalists, scientists and oil and gas companies, including Shell, Noble Energy and Southwestern Energy.  This collaborative approach set MDC up for success.  We gained insights on how methane detectors would need to work in the field—simple, self-powered, able to send automated alarms—and this helped the technology entrepreneurs target key functionality.

Our environmental goal for MDC struck a balance of ambitious and pragmatic; detecting big emissions that account for the vast majority of total methane emissions.  By understanding which features would deliver the most impact, we focused on key—but not all—technology gaps.  This dramatically sped up the development and testing time.

Lesson Two: Cast the net widely

At the start of the Methane Detectors Challenge, we cast the net widely for initial applications. If existing providers aren’t already solving the problem, there is no reason to stick with the familiar.  MDC invited applications from all over the world and from different industries.  The result was technologies adapted from outer space, coal mine safety, and personal breathalyzers, to name a few: fresh ideas and new approaches brought together by entrepreneurs who are committed to slowing the tide of climate change.

Lesson Three: Small, flexible investments can pay off

Small investments in emerging technologies can yield great results, and while not all will pay off, those with promise will improve rapidly. This is a portfolio approach to innovation—much like successful Silicon Valley enterprises. This requires leadership commitment and clear communication of project goals to all stakeholders, then being flexible and creative.

Taking some early-stage risk is necessary to create opportunity for big payoffs. Oil and gas companies are familiar with this at the exploration stage; the same is true for technology innovation.  MDC focused on new hardware solutions. Many entrepreneurs (as with entrepreneurs in other sectors) were often advancing personal funds to contract manufacturers or suppliers. This is a dangerous stage that many startups do not survive.

Oil and gas companies should consider offering working capital, rapid payment terms, and in-kind support for early-stage ventures.  The payoff could be significant—a more efficient, more effective strategy that works with a company’s exact specifications. With the right assistance, hardware startups are still not going to turn a profit on the first units, but they might make it through their first year.

MDC headerCatalyzing innovation requires flexibility and compromise on all sides.  Just as entrepreneurs aim to learn about the culture, quality and safety standards and business priorities of oil and gas customers, oil and gas companies will learn and improve faster if they ask themselves what they do and do not need from an early-stage entrepreneur as compared to their expectations of an established provider.  Their requirements for fast iteration of a developing technology may be different from adoption of a tested and proven technology. A lower risk, rapid improvement orientation can be reflected in product or service agreements, warranties, and the feedback offered to innovators.  Similarly, for oil and gas companies, the business case for adopting a new technology may not initially outweigh their current approach.  But with a portfolio of small bets, and the patience to help new ideas progress down the cost curve, these companies increase the odds that a new technology dramatically improves on the status quo.

During the Methane Developers Challenge, I have witnessed first-hand how environmentalists and oil and gas companies can learn from the portfolio approach and rapid iteration lessons of Silicon Valley innovation. In the next few months, MDC entrepreneurs will learn from deploying their technologies at major oil and gas companies. This is a powerful example of ambitious and pragmatic collaboration. This corporate leadership, with oil and gas companies taking a risk and putting their unique resources and insights to work catalyzing innovation, will enable business and the planet to thrive.


Follow Aileen Nowlan on Twitter, @aileennow


Additional information on EDF Methane Detectors Challenge

 

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.

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?