Leadership on Sustainability Must Include Helping Shape Smart Policy

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 shopper

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of their supply chains, even though the nation’s main chemical safety law, the Toxic Substances Control Act (TSCA), is outdated and hasn’t been reformed in nearly two decades.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.

That policy includes requiring Walmart’s suppliers to disclose the chemical ingredients of their products as well as phase out or declare on their packaging the ten high-priority chemicals of concern. Walmart is also moving to have its private label products meet the EPA’s Design for the Environment safety standards.

Building upon this, Walmart and Target convened a Beauty and Personal Care Products Sustainability Summit aimed at surfacing ways both companies and their suppliers can increase consumer safety, sustainability and transparency through the entire supply chains of their products.

By engaging early—especially in areas where federal action is expected in the future, as with reform of TSCA—companies can reduce their risks, whether from legal action or public perception, and build greater trust with the public. These efforts also create a lens into companies’ operations that will shape the debate as changes to federal regulations take form.

Curbing methane leakage from the oil & gas sector

Oil and gas well padAnother area where companies have been voicing support and helping guide policy is the push to reduce emissions of methane, a powerful greenhouse gas, from the oil and gas sector. Methane emissions are 84 times more potent than CO2 emissions over a 20-year timeline, and are increasingly seen as a major environmental and financial risk by both the energy and investment sectors.

That risk is driving companies in the oil and gas sector and elsewhere to encourage the federal government to regulate methane emissions. For example, in June Goldman Sachs CEO Lloyd Blankfein voiced his support of methane regulation on the Charlie Rose Show. Just two weeks ago, a group of investors managing $300 billion in assets (including the $160 billion NYC pension funds) sent an impassioned letter to EPA Administrator Gina McCarthy calling for federal regulation of methane emissions.

Your opportunity to lead in the transition to a clean energy future

Solar installationEngagement starts with being informed. That’s why EDF is eager to help you understand the need and opportunity for leadership on the EPA’s proposed Clean Power Plan (aka the Carbon Pollution Standards or 111d).

This proposed rule is the biggest single action the federal government has taken on climate change, and will help curb carbon emissions from the largest source of carbon pollution in the United States. Proposed by the EPA earlier this year, the Clean Power Plan is projected to reduce greenhouse gas emissions from existing power plants by 30 percent below 2005 levels, with room for custom implementations on a state-by-state basis so that state and local leaders can decide what solutions best fit the needs of each state’s specific economic, corporate and energy sectors.

Any sustainability officer who has tried to competitively price green power or build the business case for an energy efficiency program has a stake in the outcome. The Clean Power Plan can help shift us towards a lower-carbon economy and expand the demand and market for renewable energy and energy efficiency.  But this depends on how the plan is implemented, and getting that right depends on you.

Tom Murray, VP Corporate Partnerships, EDF

Tom Murray, VP Corporate Partnerships, EDF

Mandy Warner, Sr.  Manager, Climate and Air Policy

Mandy Warner, Senior Manager, Climate and Air Policy, EDF

Join us November 19th for a webinar with myself and Mandy Warner from EDF’s Climate & Energy team. We will walk you through how the Clean Power Plan is structured, what it means for businesses and why companies should make their voices heard as plans to implement the rule take shape.

Register here today for this informative webinar.

Investors Voice Market Support for Methane Regulation

banner_gasLast 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.

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New Report Supports Jurisdictional Approaches to Ending Deforestation in the Amazon

Andrew Hutson EDFThe world’s attention has been on Brazil lately.  With an exciting World Cup this past summer, an election season full of drama (including a plane crash), and the coming Summer Olympics in 2016, it has been easy to overlook the piece of news that has the greatest impact on all of our lives: the remarkable decreases in rates of deforestation in the Amazon.  With little fanfare (at least from the general public), deforestation decreased 70% since 2005 and Brazil has become the world leader in reducing greenhouse gas pollution.

But while this progress impressive, it is important to note that we’re still losing over 5,000 square kilometers of forest a year in the Amazon. More importantly, we’ve seen a slight uptick in the rate of deforestation over the past two years, with an increase of 29% from 2012-2013. That number looks likely to increase again this year.

As the number of companies, governments, NGOs, and indigenous peoples who signed the New York Declaration on Forests last month demonstrated, there is an eagerness to address this issue across all sectors of society. Among other goals, signatories to the Declaration seek to halve the rate of loss of forests globally by 2020 and end natural forest loss by 2030. To get there, we need a scalable and systematic approach to meet this ambitious, yet achievable goal. EDF believes one solution is the creation of Zero Deforestation Zones (also referred to as jurisdictional approaches) – nations or states that are able to demonstrate reductions in deforestation within their borders as the most effective way to save forests the scale of entire landscapes, rather than individual parcels of land.

A new report by Datu Research, Deforestation in the Brazilian Beef Value Chain, supports this notion.

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The Business-Policy Nexus: Clean Power Plan Offers Opportunity for Companies

Namrita Kapur

In our inaugural post on the business-policy nexus, Tom Murray highlighted the implementation of President Obama’s Clean Power Plan as an opportunity for companies to be leaders. Why should companies be motivated to get involved? Because they care about having access to competitive, clean energy and tools and incentives for smart energy management, which will help them meet their sustainability and carbon goals while cutting costs.

The decisions being made in the coming months on the Clean Power Plan proposal can help accelerate the transition to a cleaner energy economy for years to come, expanding the demand and market for renewable energy and energy efficiency. Any sustainability officer who has tried to price green power on the market or build the business case for an energy efficiency program has a stake in the outcome.

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EDF Climate Corps Fellows Finding Gold in the Value Chain

Energy efficiency is a goldmine, but not everyone has the time or resources to dig. That’s why for the past seven years, over three hundred organizations have turned to EDF Climate Corps for hands-on help to cut costs and carbon pollution through better energy management. And every year, the program delivers results: this year’s class of fellows found $130 million in potential energy savings across 102 organizations.

But this year we also saw something new. In addition to mining efficiencies in companies’ internal operations, the fellows were sent farther afield – to suppliers’ factories, distribution systems and franchisee networks. What they discovered demonstrated that there is plenty of gold to be found across entire value chains, if companies take the time to mine it.

Here are three places where EDF Climate Corps fellows struck gold: Read more

Gaining Momentum for Optimized Fertilizer Use in Agriculture

Jenny AhlenIn 2013, Walmart launched an initiative with the potential to optimize fertilizer use on 14 million acres of U.S. farmland by 2020. This was a great step in the right direction for reducing greenhouse gas emissions and water pollution by improving nitrogen fertilizer use. Momentum on this work grew in April when Walmart suppliers including Cargill and General Mills stepped up and made joint agricultural commitments at Walmart’s Sustainable Product Expo.

Now, a little over a year since this work kicked off, it’s great to see another major boost of momentum. On Monday, Walmart hosted their fall Milestone meeting, which included an announcement from United Suppliers to join the fertilizer optimization work – committing to enroll 10 million acres by 2020.

This is a big deal for two reasons. First, this commitment is significantly larger – more acres – than any other we’ve seen so far. Second, this is the first time a major agricultural retailer has joined this initiative.

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From the inside-out: Warburg Pincus and EDF Climate Corps’ recipe for replication

Since 2008, EDF has worked with private equity firms to integrate environmental, social and governance (ESG) management into their practices. Leveraging our EDF Climate Corps program is a key strategy for replicating our work and we have now placed 44 EDF Climate Corps fellows among private equity firms and portfolio companies, to date. To learn more about how a particular firm has benefitted, I recently spoke with representatives at Warburg Pincus to hear how the EDF Climate Corps program has enhanced their continued efforts to share ESG-related best practices with Warburg Pincus' portfolio companies.

warburg1

This summer, Warburg Pincus hosted an EDF Climate Corps fellow for the second year in a row, and again chose to place the fellow at the firm level, rather than with a single portfolio company. “Running this process from the center allowed us to identify different opportunities, across our portfolio and coordinate work on each of them,” Warburg Pincus Vice President Michael Frain told me.

From speaking further with Frain and Daphne Patterson, Warburg Pincus’ first EDF Climate Corps fellow and newly minted associate, four key themes emerged:

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SXSWEco Day One Epiphanies, Head-scratchers, and Bravery Awards

SXSWEcoThere is so much going on at SXSWEco this week that it would be impossible for one person to do a comprehensive wrap-up, so please take this commentary as a slice of a very big pie. And, note that my particular slice is viewed through a very marketing- and business-oriented lens. Still, as an EDF’er working with the private sector, I’m always looking to share new, pragmatic ideas and business cases for saving the environment. I think the most pleasant surprise of SXSWEco Day One was that so many others feel the same.

But first a head-scratcher. Why is it that the regions that are the most climate and socially vulnerable (Southern U.S.), are also home to some of the biggest climate science-denying politicians? Many thanks to Dr. Robert Bullard of Texas Southern University for so eloquently tying environmental justice to social justice; for me this was a necessary epiphany for how we think of building resilience in the face of climate challenges.

At EDF we believe that the corporate sector can thrive by valuing, protecting, and improving the environment, so the session on Creating Climate Wealth held a ton of appeal. Ann Davlin and Jigar Shah threw out business scenarios for environmental impact like candy from a parade float. I managed to grab a few choice nuggets: Read more

Sustainability and Finance – Momentum Building, But a Long Way to Go

Guest post by Chris Pinney, President, High Meadows Institute

While it may seem that increasing progress is being made on integrating sustainability in the financial sector, the recent UN Principles for Responsible Investment (PRI) conference in Montreal was a sobering reminder of the challenges that still need to be addressed.

PRI In Person banner

On the one hand, we have seen a rapid growth of financial firms subscribing to the UNPRI, with firms now representing $45 trillion in assets under management.  At the same time, as UNPRI’s Managing Director Fiona Reynolds reported in Montreal, only 6% of asset owners committed to the UNPRI report that their performance management and compensation systems for senior executives include metrics that recognize and reward sustainability performance. As she noted, “What gets measured gets managed. If responsible investment is to become truly mainstream, it must start at the very top of every organization, with the right incentives.”

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Quiet But Admirable Commitments to End Deforestation

Andrew Hutson EDFIf you saw the news that there was a UN Climate Summit this week, but haven’t followed it closely, you might well assume that nothing substantive happened.  You can certainly be forgiven for thinking so – there was a lot of pomp and lofty talk (this is the UN after all), and no global treaty was signed (although none was expected). Below the surface, however, quiet momentum for key policy actions was built. And even quieter, but yet potentially more exciting, commitments were made. Chief among these was news that global agriculture giant Cargill committed to ending deforestation across all commodities in its supply chain as part of the New York Declaration on Forests.

This is a big deal.

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