This past year, we’ve seen some bold action by companies in what we’ve dubbed the business-policy nexus, and it’s taking several different forms. Some have been calling for state or federal action on environmental impacts, while others are taking far-reaching voluntary efforts that could help support policy advocacy in the future.
Whether you view engagement on public policy as risk mitigation, providing market certainty, supporting corporate sustainability goals or securing competitive advantage, leading businesses are increasingly stepping up their efforts to support smart policy reform that will benefit the environment and economy.
Keeping toxic chemicals out of supply chains
Walmart and Target are moving to proactively get harmful chemicals out of their supply chains, even though the nation’s main chemical safety law, the Toxic Substances Control Act (TSCA), is outdated and hasn’t been reformed in nearly two decades.
Earlier this year, our long-term partner in this area, Walmart, took a big step forward by announcing a new sustainable chemicals policy focused on cutting 10 chemicals of concern from home and personal care products it sells. Chemicals of concern – for example, formaldehyde, a known carcinogen – have been found in about 40% of the formulated products on Walmart shelves, including things like household cleaners, lotions and cosmetics. Read more
Last week, financial community leaders took a big step into the intersection of business and policy on the urgent need to curb methane emissions from the oil and gas sector. A group of investors managing more than $300 billion in market assets sent a letter to the U.S. Environmental Protection Administration and the White House, calling for the federal government to regulate methane emissions from the oil and gas sector. The letter urged covering new and existing oil and gas sites, including upstream and midstream sources, citing that strong methane policy can reduce business risk and create long-term value for investors and the economy.
Spearheaded by Trillium Asset Management, the cosigners of the letter to EPA Administrator Gina McCarthy included New York City Comptroller Scott M. Stringer, who oversees the $160 billion New York City Pension Funds, and a diverse set of firms and institutional investors. They spelled out in no uncertain terms that they regard methane as a serious climate and business problem – exposing the public and businesses alike to the growing costs of climate change associated with floods, storms, droughts and other severe weather.
In 1933, Milton Heath Sr. opened a small, family-run consulting firm to find leaks from natural gas pipelines in an emerging energy market. More than 80 years later, the Texas-based business has expanded to provide more than 1,200 manufacturing and service jobs nationwide.
Heath Consultants’ business model may have changed – but the company’s commitment to finding and reducing leaks of methane—a potent greenhouse gas—has not wavered.
Stories like Heath’s are the focus of a new report released this week by Datu Research. The Emerging U.S. Methane Mitigation Industry looks at the growing industry that specializes in manufacturing technologies and providing services that help oil and gas companies reduce their environmental impact and deliver a valuable product to market.
The report analyzes more than 70 companies that limit methane emissions and provide high-paying, highly skilled jobs to thousands across the country. They operate in a rapidly growing industry responding to concerns over methane pollution that is rising in tandem with our domestic energy boom.
This post originally appeared on EDF Voices.
The technologies we see today didn’t all start out in the forms we’re used to. The phones we carry in our pockets used to weigh pounds, not ounces. Engineers developed hundreds of designs for wind turbines before landing on the three-blade design commonly seen in the field.
Fast forward and now we're looking at a drunk-driver-and-alcohol sensor that was converted into a methane leak detector. And a sensor purchased off the web for less than $30 that was transformed into a monitor that fights off greenhouse gases.
I was excited to see the diversity of technologies such as these moving forward in the Methane Detectors Challenge.
Environmental Defense Fund’s initiative with seven oil and natural gas companies—including Shell and Anadarko Petroleum Company, the latest two to join—seeks to catalyze a new generation of technology for finding methane leaks in the oil and gas sector – a powerful contributor to climate change.
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.
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.
Adding to the drumbeat for action on the supercharged climate pollutant methane, Showtime’s “Years of Living Dangerously” series recently spotlighted methane emissions leaking from America’s oil and natural gas infrastructure.
One theme of the May 19 episode hinged on a numbers question: Just how much methane is getting out? This question, a common one in the methane arena, refers to the national methane leakage rate for the entire oil and gas supply chain.
Various numbers, as low as 1 percent, were suggested for the national average with 4 percent, 11 percent and even 17 percent reported by scientific studies in some oil-and-gas producing regions. The problem is, it’s the wrong question.
We should stop fixating the debate on just how bad the problem is, when we know there is a problem and we can address it with confidence today.
I believe that Environmental Defense Fund (EDF) is at its best when we are leveraging the power of market leaders to drive innovation and solve environmental challenges. Over the years we have worked with McDonalds, Walmart, FedEx, KKR and many others to kick start market transformations in sectors including fast food, shipping, retail, private equity and commercial building energy efficiency. Notable initiatives included slashing supply chain greenhouse gas emissions with Walmart, creating a market for hybrid trucks with FedEx, and launching an innovative business internship program to catalyze energy efficiency in business.Notable initiatives included slashing supply chain greenhouse gas emissions with Walmart, creating a market for hybrid trucks with FedEx, and launching an innovative business internship program to catalyze energy efficiency in business. Read more
I came to Environmental Defense Fund from the management consulting world, and was fortunate to bring a couple of lessons with me. A simple one is that successful companies keep a finger on the pulse of the returns and risks in their industry and core businesses. The oil and gas industry has a growing risk on its hands, and that risk is methane emissions.
Study after scientific study has shown that methane emissions from oil and gas are a leading source of that powerful greenhouse gas. At more than 100x the climate impact of carbon dioxide when it is first released, methane is a supercharged contributor to climate change.
Methane escapes into the atmosphere from oil and gas production wells and associated equipment, gas compressors, and many other sources. Every ton of methane pollution is resources being wasted. Every ton contributes to an unstable climate in our lifetimes. Read more
By Homayoun Taherian
As transportation costs continue to rise, many companies are searching for ways to reduce spending by looking beyond their supply chain boundaries and collaborating with like-minded peers.
This type of horizontal collaboration – sharing supply chain assets with competitors – is known as co-loading in the freight transportation domain. Co-loading allows multiple companies to share space on the same transportation vehicle. It’s like ride sharing for freight. Co-loading does not only help save on transportation costs, it reduces carbon emissions, wear on transportation infrastructures and air pollution, in turn, creating healthier living environments across the nation.
To better understand the significance of co-loading, we need to look at the traditional utilization of truck capacities in the US. According to various DOT statistics:
- 15-25% of all the miles traveled in the US by freight trucks are empty miles. That means the vehicle carries no load while traveling. These are due to empty backhauls and deadhead miles.
- The utilization of the remaining 75-85% of the non-empty miles is on average 64%. Another way of looking at this is that we are leaving 36% of our capacity for moving freight on the table. Co-loading is a way to get the full value of each move – leading to an overall reduction in necessary trips. Read more
Environmental Defense Fund was the first environmental group to hire a full-time economist, way back in the 1970s. At the time, many wondered what economics had to do with protecting the environment. We saw an opportunity and seized it because we believe prosperity and stewardship can go hand-in-hand, and solutions that make good business sense have the best chance of catching on and delivering environmental benefits that stick. That idea remains one of our guiding principles today.
So, it should be no surprise that EDF recently commissioned a detailed economic analysis of opportunities to cut methane emissions from the U.S. oil and gas industry. Our objective was simple – show how leading companies can cut methane emissions quickly and cost-effectively.
Why focus on methane emissions, and why now? Because pound for pound, methane is a very potent greenhouse gas – 84 times more potent in the short term than CO2 when released into the air. Whether intentionally vented or inadvertently leaked, methane from the oil and gas sector is America’s largest industrial source of U.S. methane emissions.
It’s a serious problem… but after extensive analysis and discussion with industry leaders and other experts, this study shows us it’s a solvable one. Better yet, it makes a solid case for immediate action.