Moving Beyond Commitments: Collaborating to End Deforestation

Deforestation can pose significant operational and reputational risks to companies, and we at EDF are seeing companies start to take action in their supply chains. Deforestation accounts for an estimated 12% of overall GHG emissions worldwide–as much global warming pollution to the atmosphere as all the cars and trucks in the world. In addition, deforestation wipes out biodiversity and ravages the livelihoods of people who live in and depend on the forest for survival.

Tropical deforestation in Mato Grosso do Sul, Pantanal, Brazil (Source: BMJ via Shutterstock)

Tropical deforestation in Mato Grosso do Sul, Pantanal, Brazil (Source: BMJ via Shutterstock)

Unfortunately, it’s a hugely complex issue to address. Agricultural commodities like beef, soy, palm oil, paper and pulp—ingredients used in a wide variety of consumer products—drive over 85% of global deforestation. Companies struggle to understand both their role in deforestation, and how to operationalize changes that will have substantive impacts.

When the drivers of deforestation are buried deep in the supply chain, innovative and collaborative solutions are required. In the past several years, we have seen many in this space make big commitments toward solving the problem, but gaining transparency into tracking against these commitments has been almost as difficult as gaining transparency into the supply chains themselves.  For many companies, the hope for making good on their promises may come in the form of powerful partnerships.

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Smithfield Foods, world's largest pork producer, works with EDF to cut emissions

Corn is a common hog feed.

First, the facts: We will have 9 billion people on the planet by 2050. That's 2 billion more than we have today – stretching Earth's land and water resources to meet nutritional needs in a dramatically changing climate.

In the United States, the Environmental Protection Agency calculates that agriculture is the fifth-largest source of greenhouse gas emissions, contributing 8 percent of total GHGs. Fertilizer use and soil management are responsible for half of those emissions.

Next, the challenge: Many farmers encounter difficulties in determining the precise amount of nitrogen fertilizer their crops need. It gets tricky. Using too little fertilizer can limit crop production. Too much fertilizer pollutes water and emits a potent greenhouse gas called nitrous oxide, which is 300 times more powerful than carbon dioxide.

The stark reality is that crop production must increase approximately 70 percent by 2050 to feed our growing human population. We cannot choose between agricultural productivity and sustainability – we must have both.

To address the challenge, Smithfield Foods, the world's largest pork producer, and its hog production subsidiary, Murphy-Brown, are working with grain farmers to reduce excess fertilizer on crops grown for hog feed. The project will help farmers save money on fertilizer, while maintaining high crop yields, improving water quality and reducing climate impacts. The initiative is the first of its kind among animal agriculture companies.

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President Obama Goes to Walmart

I never really expected to be sitting in a Walmart in Mountain View, CA listening to President Obama speak about environmental commitments, but I am excited for the momentum he is generating, particularly in the private sector, to support the EPA announcement on carbon limits on June 2nd.

Obama WalmartSo why Walmart?

The President is making a point. Walmart gets about 25 percent of its global electricity from renewables. In the United States over all, only about 2 percent of power comes from solar sources. In 2005, Walmart set a goal to be supplied 100 percent by renewable energy. To date Walmart has 335 renewable energy projects underway or in development across their global portfolio. Having the president hold Walmart up as a role model is a great way to drive other industry leaders to follow suit.

This recognition is great news to EDF since we are a key NGO partner to Walmart and have been working with them on environmental solutions since 2005. (See the full EDF – Walmart partnership timeline). In 2008, EDF and Walmart announced a jointly-developed clean energy project to install and assess next generation solar technology at over 30 Walmart facilities. Today Walmart has 250 solar energy systems installed in the U.S. and has a solar energy capacity of 65,000 kW, top of the Solar Energy Industries Association rankings of U.S. companies.

Are industry leaders following suit?

The private and public sector commitments announced today represent more than 850 megawatts of solar deployed – enough to power nearly 130,000 homes – as well as energy efficiency investments that will lower bills for more than 1 billion square feet of buildings. Additionally, the President announced new executive actions that will lead to $2 billion in energy efficiency investments in Federal buildings.

We are especially excited to see companies step up for the President’s Better Buildings Challenge which will improve energy efficiency of more than 1 billion square feet of new floor space by 20 percent by 2020. New to the President’s roster are General Motors (committing 84 million square feet), MGM Resorts (78 million square feet) and Walmart (850 million square feet).

See the complete listing of private and public sector organizations making commitments today for solar deployment and energy efficiency.

Here at EDF, we believe that companies and business leaders must pave the way to a low-carbon and prosperous economy. Today Walmart committed to double the number of onsite solar energy projects at U.S. Stores, Sam’s Clubs and distribution centers by 2020. This is in addition to their goal of reducing greenhouse gas emissions in their global supply chain by 20 million metric tons by the end of 2015.

We think President Obama’s making his announcement at Walmart today was a clear signal to the public and private sector that business needs to step up and publicly commit to ambitious environmental goals. Walmart continues to do this, and we look forward to many other industry leaders following suit.

Fertilizer and Feeding the Planet’s Growing Population

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Last week, Walmart hosted its first Sustainable Product Expo, an event that brought together CEOs and sustainability leaders from some of the retail chain’s biggest supplier companies. Leaders from General Mills, Cargill, Dairy Farmers of America and PepsiCo, among others, joined Walmart on stage to celebrate the progress they’ve made in increasing the sustainability of their operations, and to make new commitments to cut greenhouse gas emissions and other environmental impacts.

Walmart set the stage for this in 2010 by announcing their goal to reduce 20 million metric tons (MMT) of greenhouse gas (GHG) emissions from their supply chain by 2015. As of 2013, Walmart and their supply chain have eliminated 7.5 MMT of GHG emissions and have projects underway to reach 18 MMT by 2015. The key to meeting and exceeding this goal is swift and thorough follow-through on ambitious initiatives.

That’s why EDF is working closely with Walmart to help their suppliers optimize fertilizer use in their supply chain. Emissions that result from nitrogen fertilizer loss – a greenhouse gas called nitrous oxide – is 300 times more potent in damaging our climate than CO2. Walmart’s Director of Dry Grocery Tim Robinson mentioned at the Expo that 20 to 40 percent of the nitrogen fertilizer isn’t absorbed by crops, either running off into waterways or off-gassing into the atmosphere. Consequently, as the top grocer in the country, this makes fertilizer optimization one of Walmart’s major opportunities for GHG reductions in their supply chain.

Just as importantly, the UN estimates that to feed the world’s growing population, food supplies will need to increase 70% by 2050. The entire value chain needs to produce more food with fewer inputs, while still allowing farmers to earn a living with what they grow. Walmart’s suppliers’ commitments are a first step towards this future:

Cargill

“By 2020 we will double our NextField acres bringing us to over 1 million acres of total land being optimized for maximum productivity with minimum environmental impact.”

DFA

“…we will have more than 90 percent of our 9,000 member farms participating in our Gold Standard Dairy program, which focuses on resource efficiency and optimization” and are “[a]igned with industry goals to reduce environmental footprint 25% by 2020."

Kellogg Company

“In every country in which Kellogg sources rice globally, we commit to promoting and supporting initiatives with producers that will, by 2020, lead to a 25% increase in the adoption of Climate Smart Agriculture (CSA) practices.  This will improve smallholder livelihoods, enhance producer resilience and reduce greenhouse gas emissions."

Pepsi

“…we will work to engage growers of corn, oats, potato, and oranges to increase sustainable farming practices, particularly in the areas of environmental, social and economic sustainability.  As part of this worldwide program, PepsiCo's Sustainable Farming Initiative (or equivalent scheme) will be expanded to 500,000 acres of farmland in North America by the end of 2016."

Campbell Soup Company

“We commit to reducing GHG emissions and water use by 20% per tonne of food for Campbell's 5 key agricultural ingredients (Tomatoes, Carrots, Celery, Potatoes, Jalapenos)."

General Mills

“We will: 1) Expand 2.5x the acreage enrolled in The Field to Market sustainable agriculture initiative to 2.5 million acres by 2015; 2) Leverage General Mills' strength in connected innovation to match grower nitrogen management needs with the best global solutions; and 3) Co-sponsor an innovation challenge for the innovators and farmers who demonstrate the most promise to reduce GHG emission in nitrogen management.”

With their commitments, Walmart’s suppliers are setting new targets to strive for, and we at EDF are seeking to provide farmers with the tools they’ll need to meet them. With effective fertilizer management, we can help scale up crops to meet food needs around the world while minimizing their impacts on our climate and water resources.

Business is the New Environmentalist

I just returned from Walmart’s first Sustainable Products Expo, where thousands of suppliers gathered to talk about sustainability, show off their products and make commitments for action. There’s a new energy behind sustainability thanks to Walmart’s increasing efforts over the past ten years and their dynamic new CEO, Doug McMillon.

Elizabeth Sturcken

Elizabeth Sturcken addressing the crowd at the Walmart Sustainable Products Expo

Environmental Defense Fund has been there every step of the way, pushing Walmart hard to set and follow through on aggressive yet achievable goals that can drive the kind of change that only a company that has over 100,000 global suppliers and 250 million customers a week can.

Strong Goals:  A Powerful Driver of Action

After 25 years of working with business, we know that setting goals matters in making real and lasting change.

This week’s Expo is a great example: we worked with Walmart for years to set and announce their groundbreaking goal of reducing 20 million metric tons (MT) of greenhouse gas emissions from its global supply chain. And on stage with them this week, we saw leading brands like Coca-Cola, Pepsi, Kellogg’s and General Mills stepping forward and committing to action on fertilizer and recycling — two of the biggest areas of opportunity to reduce greenhouse gas emissions in Walmart’s supply chain — directly as a result of that 20 million MT goal.

Walmart and their suppliers are seeing opportunities to make improvements not because they’re required to do so, but because it’s just good business.

Closing the Loop on Recycling

9 companies came together with the Walmart Foundation to start The Closed Loop Fund, a $100 million initiative to help communities finance recycling infrastructure projects. Their goal is to ensure that 100 percent of U.S. consumers have access to recycling.

These companies — Walmart and the Walmart Foundation, The Coca-Cola Company, Goldman Sachs, Johnson & Johnson Family of Consumer Companies, Keurig Green Mountain, Inc., PepsiCo and the PepsiCo Foundation, Procter & Gamble, SC Johnson and Unilever — have been facing a big hurdle in including more postconsumer recycled content in their products: recycling rates are stagnant and they can’t get enough materials from recycling streams to meet their goals. The Fund is part of Walmart’s holistic strategy to ask suppliers to include more postconsumer recycled content in their packaging while moving away from materials that are problematic for recycling.

Right-Sizing Fertilizer Use

From the same stage, six more companies’ CEOs — Campbell Soup Company, Monsanto, Dairy Farmers of America (DFA), General Mills, Kellogg Company and PepsiCo, plus Cargill’s chairman of the board — committed to make their agricultural operations more sustainable, with goals to reduce greenhouse gas emissions and fertilizer and water use. For many of them, this was in addition to work that they’ve already launched with Walmart to optimize fertilizer use in its supply chain. If fully implemented, this could result in greenhouse gas reductions of 7 million metric tons, reduce fertilizer runoff and help farmers cut costs.

The specific commitments each company made range from reducing the amount of GHG emissions and water used per ton of food produced (Campbells) to increasing farmers’ utilization of sustainable farming practices (Cargill, DFA, General Mills, Kellogg Company, PepsiCo).

What Really Matters:  Getting It Done

The work that Walmart and its suppliers is doing, catalyzed by the 20MMT goal, is not easy — it’s rooted in the notion that to get the kind of environmental results needed to address an issue like climate change, you need a systems approach and you need to work with suppliers. Even the world’s largest company working alone is not enough.

This week Walmart used its clout to bring together leading companies and give them a platform from which to make their commitment. Together, these companies represent more than a trillion dollars in total revenue. That’s a lot of power in the marketplace being leveraged for sustainability goals. Of course, in the end we’ll judge them all by  results— significant, measurable and transparent impacts of their efforts — and we expect Walmart to help hold them accountable for this progress.

Walmart Puts Consumer Product Suppliers on Notice: The Chemical Phase-out Starts Now

By: Michelle Mauthe Harvey and Sarah Vogel

Today dozens of consumer product makers will get a letter from Walmart detailing new requirements on phasing out a list of toxic chemicals found in goods sold by the world’s largest retailer. The comprehensive initiative is by far the largest and most ambitious of its kind. It reflects a growing trend in which consumer and wholesale purchasing power are combining to change the chemical makeup of the products we see on store shelves and bring into our homes.

Walmart_Stores

The policy and its implementation guide can be found here.

Walmart worked closely with vendors and non-profit advisors including Environmental Defense Fund. Together they spent several years developing the policy, and figuring out how to implement the unprecedented measures across a sprawling global supply chain with hundreds of suppliers. The solution had to be robust, credible and transparent. It also had to set an ambitious goal for suppliers without creating impossible hurdles. Read more

EDF named “Trusted Leader” in Inaugural GreenBiz NGO Report

Environmental Defense Fund (EDF) is honored to be ranked by GreenBiz as one of the three trusted leaders among environmental nonprofits, along with World Wildlife Fund (WWF) and The Nature Conservancy (TNC) – truly excellent company.

Murray_Tom

In its inaugural NGO Report, GreenBiz asked hundreds of sustainability executives from large corporations to rate and rank 30 leading NGOs in terms of influence, credibility and effectiveness. GreenBiz charted the responses and grouped the NGOs in four categories:

  • Trusted Partners – Corporate-friendly, highly credible, long-term partners with easy-to-find public success stories
  • Useful Resources – Highly credible organizations known for creating helpful frameworks and services for corporate partners
  • Brand Challenged – Credible, but not influential, organizations
  • The Uninvited – Less broadly known groups, or those viewed more as critics than partners Read more

EDF Highlights Important New Fertilizer Strategies at Walmart Sustainability Milestone Meeting

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At today’s Walmart Sustainability Milestone Meeting, EDF Vice President Tom Murray brought welcome attention to strategies farmers are implementing to more precisely match fertilizer use with the amount their crops need.

In a question and answer session with the head of Walmart's U.S. grocery business, which accounts for roughly half the retailer's sales and approximately a third of all U.S. grocery business, Tom commended the excellent work many farmers are already doing to get this balance right, and called on other retailers and suppliers to engage in this effort. Read more

EDF Expert Shares 4 Ways to Increase Profitability and Sustainability in 2014

Elizabeth Sturcken

Recently, EDF expert Elizabeth Sturcken wrote a post featured on Retailing Today about 4 ways to increase profitability in 2014. She highlights that “as the holiday dust clears and we settle into a new year, it’s only fitting that retailers take a moment to reflect on successes of 2013 and identify opportunities for 2014.”

Sturcken and her team put their heads together to identify the following opportunities to maximize efficiency and benefit the bottom line:

  1. Look at your waste
  2. Look at how you are transporting goods and products
  3. Look to source and sell better products
  4. Look at your buildings Read more

Guardian US Live Chat Recap: EDF, Walmart and Marc Gunther Evaluate the Sustainability Index

Last week, EDF Managing Director Elizabeth Sturcken joined Jeff Rice, Walmart’s director of sustainability, and Marc Gunther for a live chat broadcast on the Guardian US Sustainable Business Blog.

The discussion focused on Walmart’s Sustainability Index, which aims to set a sustainability standard for products by evaluating the company’s suppliers. With over 100,000 suppliers across the globe, this is quite the massive undertaking for the world’s largest retailer.

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