ROE (Return on Environment) is the new ROI: how sustainability drives business success

Comparing the themes of Climate Week 2016 versus 2017 provides a telling picture of the state of climate affairs. “America Means Business: US Leadership in a post-Paris World” was last year’s focus, while this year is all about three words: “Innovation. Jobs. Prosperity.”

It has been a remarkable year for climate action – in the absence of federal oversight and leadership, we’ve seen a major shift towards city, state and business leaders becoming the standard-bearers for the environment and the economy. With the release of Fortune’s Change the World list, it is obvious that the bar for corporate leadership has been raised even further. Companies that previously stayed mute on environmental and social issues now speak out; not as an anomaly but as a defining factor of their business.

The expectations of today’s stakeholders – investors, employees, consumers, communities – demand a higher, more visionary level of sustainability leadership. Corporate leaders who put their money, and actions, where their mouth is on environmental and social issues are driving innovation, creating jobs, and gaining a new competitive edge for their businesses.

Recruiting top talent

According to a new Morgan Stanley report, millennials are three times more likely to seek out employment with a sustainably minded company.

Unilever (#21 on the Fortune list) CEO Paul Polman said that close to 1.8 million people now apply to work at the consumer giant company every year, many of whom are under 40. Why is that? “According to the data,” Polman reveals, approximately 60% “say it’s the Unilever Sustainable Living Plan and the bigger purpose that we have as a business.”

The Sustainable Living Plan is Unilever’s blueprint for growing the business while reducing waste, water, and energy use, including an ambitious goal of halving the environmental footprint of making and using Unilever products. Unilever also rises to the top in setting clear, actionable sustainability goals.

Tom Murray, VP EDF+Business, EDF

Tom Murray, VP EDF+Business

Improving the environment – and sales growth

Retail giant Walmart has been on a journey toward sustainability since partnering with Environmental Defense Fund (EDF) over 10 years ago. And its environmental efforts are paying off: ridding close to 90,000 consumer products of potentially harmful chemicals, reducing 36 million metric tons of greenhouse gas emissions from its supply chain in just six years, and now, making a bold commitment to eliminate a gigaton of emissions by 2030 – all of this with continued U.S. sales growth.

With climate change topping the list of global concerns for millennials, these planet-friendly business moves are just what Walmart needs to attract a new, younger demographic of customers.

But it’s not just Walmart that can benefit. As PBS NewsHour reported this weekend, large companies see payoffs in sustainability – including businesses like Mars Inc. and Smithfield Foods.

At the same time, new resources like the Corporate Carbon Policy Footprint hold companies accountable not just based on their own emissions, but also their public support of smart climate policy. That means consumers are better informed than ever to make purchasing decisions based on corporate climate leadership.

Investing for a healthy economy and environment

For long-term competitiveness, business investments cannot be made at the expense of the environment.  The new report from Morgan Stanley, “Sustainable Signals: New Data from the Individual Investor,” assesses the state of sustainable investing through attitudes, perceptions, and behaviors of individual investors. Their findings:

  • 71% of investors polled agreed that good social, environmental and governance practices can potentially lead to higher profitability and long-term investments
  • 75% of individual investors are interested in sustainable investing

Thriving business, thriving communities

Land O’Lakes, Inc. (a farmer-owned cooperative ranked #50 on Fortune’s list), is supporting its member-owners to grow crops more efficiently and is committed to influencing sustainability practices on 20 million acres of farmland by 2025. Its business unit, Land O’Lakes SUSTAIN™ delivers precision agriculture technologies, practices, services and conservation resources for farmers across North America – and works in collaboration with EDF.

This program focuses on educating agricultural retailers, farmers’ most trusted advisors, on practices that improve air, water and soil quality. The ag retailers then bring this knowledge to their customers, the farmer, who can benefit from improved efficiencies. Ag retailers benefit from staying competitive in a challenging market.

Embedding sustainability into business strategy

The Harvard Business Review article, Competing on Social Purpose, separates companies born with a social or environmental purpose – think Patagonia, TOMS, Seventh Generation – from those integrating purpose and strategy late in life. The majority of established brands fall into the latter category, despite consumers’ increasing expectations for companies to have a social purpose.

Fortunately, resources like EDF’s three-part framework for corporate sustainability leadership can help companies get started by:

  1. Publicly committing to aggressive, science-based sustainability goals sends a clear market signal to your customers, shareholders and suppliers that you embrace a social purpose
  2. Collaborating across departments, industries, and the entire supply chain in order to deliver impact at scale
  3. Publicly support smart climate and environmental policy that will ensure long-term competitiveness by driving innovation, creating jobs, and improving efficiencies.

Whether you’re a leading global company that’s well on its way or a smaller company just beginning to embrace sustainability, business can and must lead the way toward a future where the economy, the planet, and people can prosper.


Follow Tom on Twitter, @tpmurray


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Investor sees methane management as self-help for oil & gas companies

Environmental Defense Fund Q&A with Tim Goodman, Hermes Investment Management

Tim Goodman, Director of Engagement at Hermes Investment Management

When burned, natural gas produces half the carbon as coal, so it is often touted as a “bridge” fuel to a cleaner energy future. But the carbon advantage of natural gas may be lost if too much of it escapes across its value chain.

Natural gas is mostly methane, which, unburned, is a highly potent greenhouse gas accounting for roughly a quarter of today’s global warming. Worldwide, oil and gas companies leak and vent an estimated $30 billion of methane each year into the atmosphere.

EDF’s Sean Wright sat down with Tim Goodman, Director of Engagement at London-based Hermes Investment Management. Goodman, who views methane management as practical self-help for the industry to pursue, engages with oil and gas companies on strategies to manage their methane emissions. This is the first of a two-part conversation with Hermes, a global investment firm, whose stewardship service Hermes EOS, advises $330.4 billion in assets.

Wright: Do you think the oil and gas industry is changing its overall attitude towards climate after the historic Paris agreement and recent successful shareholder resolutions? If so, how do you see that change manifesting itself?

Goodman: I think climate change is obviously an existential question for the industry. The really big question is can it actually change in response to Paris? The industry is beginning to respond as a result of Paris and shareholder proposals and other stakeholder pressure. You’re seeing some of the majors increasing their gas exposure at the expense of oil. You’re seeing a number of international oil companies reducing or ending their exposure to particularly high carbon or high risk assets, such as the Canadian oil sands or the Arctic. The oil and gas industry is also starting to place a greater focus on methane management and its own emissions.

Wright: What about investors – what do you think is driving the continued momentum around methane and climate as we see larger and more mainstream funds tackling these issues?

Goodman: Let’s talk about climate for the moment – the roles of both investors and companies in the run up to the Paris agreement and during the negotiations were crucial. The investors made it absolutely clear that they wanted to see a successful Paris agreement. Addressing climate change is good for business and good for their portfolios. And we saw this with the Exxon vote – the two-degree scenario proposal where mainstream asset managers voted for this proposal. We believe that this happened because of the underlying pressure asset managers were getting from their own clients who have a long-term perspective and see climate change as a risk to their funds.

Specifically on methane, it’s practical self-help for the industry to embark on methane management. It’s an obvious practical measure for investors to engage upon. If you can reduce your contribution to greenhouse gases, save money, and gain revenue by being more efficient and safe, why wouldn’t you do that? It’s an easy entree into engaging with the oil and gas industry. Whereas the existential question, what’s your business going to look like 20 years from now, is a more difficult question perhaps both for the industry and the companies themselves.

Wright: You pretty much just explained why Hermes prioritized methane – is that correct?

Goodman: Yes. But the science is a big part of it. Methane is a far more potent greenhouse gas than carbon – the more that we can minimize its effects, the greater the window the world has to transition to a low carbon economy. Methane’s effects don’t last as long as carbon, but if we don’t tackle methane, we aren’t taking meaningful action to move to a low-carbon economy.

Wright: What do you see as the risks of unmanaged methane emissions?

Goodman: There is an economic risk and benefit for companies. Most of the measures to manage methane are relatively low-cost and can very easily be implemented for new projects. If you’re not doing them, for example, and you’re fracking shale, you’re at a competitive disadvantage to your peers. The cost-benefits perhaps are more difficult, but still there, in existing infrastructure. But particularly among the oil majors, their relationship with their host governments, local communities, and other stakeholders is vital. It’s important for companies to demonstrate good corporate citizenship. If you’re a laggard on methane, you’re more likely to be considered as an irresponsible partner both commercially and also in your local community. So I think oil and gas companies risk massive reputational and legal risks if they’re not managing methane effectively, notwithstanding the economic benefits.

Wright: What do you typically hear from operators in your conversations about methane management? Do you hear different things from operators in different parts of the world?

Goodman: Methane management is part of a number of important issues that we’re engaging with the industry on, including other pollution, health and safety, human rights, corruption and climate change. What we’re hearing on methane does vary. It’s fair to say in some emerging markets methane management is not often discussed by investors with those companies. But when we do address this topic in these markets, the companies show interest and want to know why it’s important to us, what they should be doing, how they should be disclosing, etc. So we’re often having positive and interesting conversations in these markets.

In the developed markets, there’s a difference. And I think there’s a distinction between Europe and North America. The EU companies, particularly the majors, are realizing it’s an important issue and are talking about it and disclosing at least some data. In private dialogue with North American companies, it is clear methane is often an important issue for them, but their disclosure is less convincing. It does vary around the world, but you also have this interesting phenomenon, where some companies seem to be doing a good job in private dialogue, but the disclosure lags behind what they are actually doing. We also see companies attempting to present their efforts in a better light than perhaps they deserve. It’s a complex mixture, which is why engagement is so important because we are able to view the reality on the ground through private dialogue.

For more information on EDF’s investor resources on methane mitigation, please see our recent report, An Investor’s Guide to Methane, or subscribe to our newsletter.

Natural gas, meet Silicon Valley. The challenge for mobile methane monitoring is now underway

Oil and gas methane monitoring

Three years ago, Environmental Defense Fund (EDF) united with oil and gas industry leaders including Shell and Statoil to launch the Methane Detectors Challenge – a collaborative effort to catalyze the development and deployment of stationary, continuous methane monitors. With industry pilot projects now cropping up from Texas to Alberta, continuous methane monitoring on natural gas sites is on a pathway to become one of the core tools in the monitoring toolkit.

And that’s a good thing – 24/7 monitoring is the gold standard for emissions control, opening a new frontier in site-level insight. It will enable real time identification and repair of natural gas waste that pollutes the atmosphere, and the industry’s own reputation.

Now, another exciting area of innovation is emerging, as entrepreneurs, technologists, and academics pursue mobile approaches to monitor leaks. Whether by plane, helicopter, drone or truck, mobile monitoring offers the promise of surveying highly dispersed industrial facilities – including smaller and older ones – quickly and effectively. With an estimated one million well pads in the United States alone, the speed and coverage of monitoring matter.

Environmental Defense Fund takes oil and gas operators and local media for a demonstration of mobile monitoring technology from Apogee Scientific

Mobile methane monitoring for some sites could be a perfect complement to continuous monitoring for others, offering a 1-2 punch solution to comprehensively monitor and address emissions across a highly variable industry, with fit-for-purpose tools.

A new collaborative challenge to reduce methane

That’s why we are so pleased to support Stanford University’s Natural Gas Initiative by announcing the Stanford/EDF Mobile Monitoring Challenge (MMC). The MMC is the latest collaborative innovation project from EDF, partnering with Dr. Adam Brandt of Stanford’s School of Earth, Energy & Environmental Sciences, the principal investigator for MMC and one of the world’s leading scientists studying oil and gas methane emissions.

Stanford/EDF Mobile Monitoring Challenge – Now accepting applications

The aim of the Mobile Monitoring Challenge is to rigorously test and compare the most promising new mobile technologies and approaches to quickly detect and quantify methane emissions – with extra interest in commercially scalable options.

Calling all methane monitoring entrepreneurs

Today begins a 45-day application period for technologists around the world who wish to participate in 15 days of field trials. Stanford and EDF, aided by industry and other expert advisors, will pick the most promising submissions this fall, and Professor Brandt’s team will oversee field testing with controlled releases of methane this winter and spring, culminating in a Stanford paper documenting results for the peer-review process.

Candidates for the Mobile Monitoring Challenge should have methane monitoring technology that:

  • Is field ready
  • Can be deployed on a mobile platform (e.g. drone, plane, car, truck, etc.)
  • Is cost-effective and can quickly detect leaks at multiple sites
  • Provides both detection and quantification

See the Stanford/EDF application process for full details.

With subsequent real world testing and demonstration, the leading mobile monitoring approaches coming out of this initiative may even support regulatory compliance, propelling greater emission reductions at even less cost – the classic win/win.

Three years ago, EDF was encouraged to receive dozens of technology applications from around the world for the Methane Detectors Challenge. With the ongoing sensor revolution coupled with the surge in methane emissions interest across North America and the world, we are even more optimistic today about what the future holds.

That’s because at EDF, we know that bringing the right stakeholders together to harness diverse thinking and innovative technologies is the next wave of environmental progress.

Let the challenge begin!


Follow Ben on Twitter, @RatnerBen


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China: the new leading voice on climate change?

This is the first of a three-part blog series covering corporate sustainability in China. Experts from EDF Climate Corps examine how businesses are shifting the ways they approach energy management in response to increasing climate commitments.

This past June, 197 countries reaffirmed their commitments to reduce GHG emissions in an effort to curb global climate change. The U.S. was not one of them. This decision, a major backpedal for America, made room for a new frontrunner to take the reins on global climate leadership. And that’s exactly what has happened.

After President Trump backed away, China, the largest GHG emitter and coal consumer, recommitted to forge ahead with the Paris agreement. The nation recognizes climate change as a major challenge faced by all mankind and a threat to national security, which is why Beijing has deemed the Paris agreement its “highest political commitment”. China’s participation in any international agreement on climate is not only critical, it’s an opportunity to dominate the clean energy sector and inspire others to take action.

Manager, EDF Climate Corps

Here are three ways China is positioning itself to meet its targets (America, take note):

1. Enforce goals at every policy level.

China has set aggressive targets aimed at reducing the nation’s greenhouse gases that are supported and enforced by climate policies at the international, national and local level. This alignment allows for greater consistency and cooperation between the private and public sectors, enabling greater efficiency in working towards these common goals.

At the international level, China reaffirmed its promise to meet the commitments (working closely alongside the EU) outlined in the Paris agreement, including peaking CO2 emissions by 2030. Domestically, China has both short-and long-term plans to help ensure their energy goals are met. The Strategic National Energy Plan was completed this past April and China is on track to achieve its energy goals outlined in the 13th Five-year plan.

At the local level, cities have their own carbon-cutting plans. Shenzhen, one of China’s manufacturing hubs, aims to peak the city’s carbon emissions by 2022—eight years ahead of the national target. Companies, too, are ramping up their efforts.  For the past two years, EDF Climate Corps has placed four fellows in IKEA’s Shenzhen offices to help meet these targets by focusing on increasing the sustainability of the company’s supply chain (Stay tuned for more on this kind of corporate engagement in the next post of this series).

2. Invest in clean energy.

China continues to expand its dominance in renewable energy. Recently, they committed to investing $360 billion in clean energy development. According to China’s National Energy Administration, renewable energy already employs 3.5 million people in China (compared with less than a million in the US) and this new investment is expected to create 13 million more jobs in the renewable energy sector by 2020. That’s enormous growth.  

The private sector is tapping into this market as well. Chinese companies already dominate among the most profitable clean energy companies in the world with 35% of the top 200 publicly traded corporations earning significant revenue from renewable energy being Chinese. Simply put, in China, clean energy is viewed as smart business and smart economics.

3. Use a multi-faceted approach:

Manager, EDF+Business

China is coming at climate change from all angles. In addition to the policy mechanisms and promotion of clean energy mentioned above, China is securing long-term investment and sustained financing to encourage innovation and the adoption of new technologies. For example, this year China launched five pilot zones to promote “Green Finance”, a vehicle aimed at raising funds for pollution clean-up.

Also this year, President Xi Jinping pledged to launch the world’s largest national carbon market; a decision EDF played an important role in by providing the Chinese government with critical technical support and consultation. The market will hasten the transition to a low-carbon economy and send a message to the world that China is serious about finding solutions. Additionally, this presents an enormous opportunity for the private sector to curb emissions. Companies are incentivized to innovate and reduce their emissions, selling excess allowances and opening up new revenue streams.

The road forward for China

The momentum we’re seeing in China is in sharp contrast to Trump’s America. It’s this strong leadership and creativity that is needed to address GHG emissions within China. And it sets an example for others to follow. Delivering on its many commitments and aspirations won’t be easy, but for China to declare them as necessary is a big step in the right direction–one that has the potential to create massive positive change.

In our next blog post, we’ll take a closer look into how companies are already making and delivering on plans to do their part in helping China achieve its climate commitments.


Follow Scott and Xixi on Twitter, @scottwood_, @Talk2Xixi


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Related Posts

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No one-hit wonder: Walmart reinforces its commitment to safer chemicals

Walmart made two big moves last week to reinforce its commitment to leadership on safer chemicals. In 2013 Walmart sent a major demand signal for safer chemicals through the supply chain – issuing its Sustainable Chemistry Policy that covered 700 suppliers and over 90,000 cleaning, personal care, and cosmetics products on its shelves. The policy called for greater ingredient transparency and the reduction and elimination of chemicals harmful to human and environmental health, starting with eight prevalent chemicals of concern. Last week, Walmart released its latest results following up on these commitments and became the first retailer to participate in the Chemical Footprint Project annual survey (and the second major retailer to become a CFP signatory).

Walmart’s participation in the Chemical Footprint Project is a new indicator of its continued commitment to safer products

The Chemical Footprint Project is an initiative to benchmark how effectively companies are managing the chemicals in their products and supply chains. As I mentioned in a previous blog, it’s a way for investors and large purchasers to assess which firms are carrying heavy chemical risk and which ones are demonstrating competitive leadership in response to growing demand for safer products. So far, 24 companies, including Walmart, participate in this program – sending a clear signal to their suppliers, investors, and consumers that chemicals management is material to business success. Leaders identified in the CFP survey show that adopting and enforcing policies and measuring progress are key to reducing chemicals of concern.

Progress on its ground-breaking policy

Also last week, Walmart quietly released its second annual Sustainable Chemistry Policy report, showing progress on its policy to eliminate priority chemicals. The chemicals of concern were drawn from 16 reputable regulatory and other authoritative lists – starting with eight High Priority Chemicals.

Table 1: Walmart's High Priority Chemicals


A chemical inventory is the first step in meeting a commitment to reduce your chemical footprint

Before jumping into the results, let's review why this public disclosure of results is important. If you can't measure something, you can't improve it effectively. Walmart’s public reporting of quantitative data shows that it is serious about measuring its chemical footprint and being transparent about it. Walmart uses aggregate chemical inventory information across and within the departments under the policy to track progress.

Clear, meaningful metrics to track progress are the next step

Walmart tracks progress by looking at both weight volume – pounds of chemicals going out the door – and ubiquity – number of suppliers using these chemicals and the number of products in which they are using them. Both are important indicators of the prevalence of these chemicals in our world. Last year, Walmart achieved a 95% reduction in its High Priority Chemicals (HPCs) at Walmart US stores, equivalent to 23 million lbs. Since then, another 372,230 lbs have been removed – a 30% drop compared to the 2015 weight volume and a 96% drop since the policy began in 2014. Similar reductions continue to happen at Walmart's Sam's Club stores:  another 75,629 lbs have been eliminated, a 53% drop compared to the 2015 weight volume and a 68% drop compared to 2014. The second year results also reaffirm that a concerted effort to reduce a select set of priority chemicals, i.e. HPCs, drives results faster. Overall usage of Walmart Priority Chemicals continues to decrease (at Walmart US stores), but not nearly at the rate of that of Walmart HPCs.

Figure 1: The cumulative weight volume reduction of High Priority Chemicals since 2014 has been over 23.6 million lbs and over 164,000 lbs for Walmart and Sam’s Club respectively.

Walmart’s public disclosure also shows that the company isn’t afraid to share where performance is lagging

Though overall weight volume of the HPCs continues to drop, their ubiquity continues to be a challenge. Both the number of products (i.e. UPCs) containing the HPCs and the number of suppliers using them continues to drop, at both Walmart US and Sam’s Club stores, but at a rate slower than the weight volume reduction.

Figure 2: Current percent of products (or UPCs) containing and suppliers who using High Priority Chemicals in products, along with the respective percentage point changes since 2014.

The tools for success

In the end, Walmart continues to make progress against its policy as demonstrated through real data. Beyond data, what else contributes to Walmart‘s success?

  • Clear targets
  • Driving action through the business (where relationships between buyers and suppliers stress the importance of the commitments)
  • Public accountability

With new notable commitments popping up from other major retailers like Target and CVS, we hope to see similar tracking and reporting of meaningful results both directly and through the Chemical Footprint Project survey.

FURTHER READING: See EDF’s previous analysis of Walmart’s first year results here and here.


Boma Brown-West is Senior Manager of Consumer Health at EDF + Business. You can follow her on Twitter for insights and analysis on safer chemicals leadership in the supply chain and subscribe to her Behind the Label newsletter here.

Shell becomes latest oil and gas company to test smart methane sensors

This week, the oil and gas giant Shell took a positive step toward addressing methane emissions. The company announced a new technology trial at a wellsite in Alberta, Canada, where it is piloting a specially designed laser to continuously monitor emissions of methane, a powerful pollutant known to leak from oil and gas equipment.

The move by Shell is a glimpse into the future and demonstrates growing market interest in smart, sensor-based methane detection technology. Shell’s project joins a similar field test already underway in Texas, operated by the Norwegian producer Statoil, and a California utility pilot run by Pacific Gas and Electric Company.

Each of these deployments is promising, but the ultimate test will be broad-scale adoption of innovations that generate actual methane reductions.

For industry, there is an incentive to move ahead. An estimated $30 billion of natural gas (which is largely methane) is wasted every year due to leaks and flaring from oil and gas operations worldwide. In addition, roughly 25 percent of global warming is driven by methane. Oil and gas methane emissions also contain chemicals that adversely affect public health.

For these reasons, methane is a problem that has caught the attention of regulators, investors and consumers alike. Advancing new technologies to enable the oil and gas industry to tackle this challenge more efficiently is key, even as companies use established tools to manage emissions now.

Collaborations Spark Methane Innovation

When you bring the right people to the table, innovative solutions will follow. Behind the Shell, Statoil and PG&E demonstration projects is a collaborative initiative, the Methane Detectors Challenge, begun by the Environmental Defense Fund four years ago. The project united eight oil and gas companies, R&D experts and technology innovators in an effort to accelerate the development of next-generation methane detectors.

The formation of this project was motivated by a key insight: new technology to manage emissions needs to be created and deployed faster than ever. The Methane Detectors Challenge offers a unique resource to innovators – access to real facilities and collaboration with potential customers – which is essential to help entrepreneurs understand the market, demonstrate demand, and ultimately achieve economies of scale.

Both the Statoil and Shell pilots are using a solar-powered laser, created by Colorado-based Quanta3. The technology uses the Internet to provide real-time data analytics to wellsite managers via mobile devices or web portals.

Continuous Visibility, Faster Response

The oil and gas industry has a lot to gain from smart methane sensors that can prevent the loss of valuable product and reduce pollution.

Imagine a future where continuous leak detection systems allow operators to digitally monitor methane emissions occurring across thousands of sites. It’s a game-changer on the horizon. The burgeoning field of continuous methane monitoring offers a range of possibilities – including technologies capable of identifying emission spikes in real-time, allowing operators to cut mitigation time from months to days. Over time, smart sensors on wells may even help predict and prevent leaks and malfunctions before they occur.

Smart Methane Sensors Triggering New Market

The methane-sensing laser deployed by Shell and Statoil is one of many technologies in the emerging methane mitigation industry. In North America alone, more than 130 companies provide low-cost methane management technologies and services to oil and gas customers – a number likely to expand as innovators innovate, pollution requirements tighten, and producers increasingly appreciate the urgency of dealing with methane to maintain their social license to operate.

Smart automation technologies are already being used across the oil and gas industry to improve operating and field efficiencies. Continuous methane detection technology is the next logical step, which has the potential to provide significant economic, environmental and societal benefits.

The Shell pilot is a milestone to celebrate and we recognize the company for its early leadership. Now, we need governments and industry to show the determination needed to meet the methane challenge head-on. Sustained leadership is a prerequisite. But the keys to solving this problem are smart policies that incentivize ongoing innovation, and clear methane reduction goals—supported by technologies like continuous monitoring.

This post was also published on EDF's Energy Exchange blog. Image source: Shell/Ian Jackson


Aileen Nowlan is a Manager at EDF + Business. Follow her on Twitter for more news on EDF's work on innovation and energy.

Four ways businesses and cities will get us to a low-carbon future

A little over a week ago, 20 of the world’s power houses came together for the Group of 20 summit. It was disappointing to see Trump hold firm to his decision to exit the Paris Agreement while 19 world leaders publicly reaffirmed their commitment. But something good has come out of Trump’s climate defiance, and I bet it’s not the reaction he was looking for: climate action.

The inability for the federal government to agree on climate doesn’t stop momentum– it fuels it. An enormous swell of energy and activism has swept across America. Businesses, states, cities and citizens are stepping up, creating plans to pursue lower emissions on their own.

There are now over 1,400 cities, states and businesses that have vowed to meet Paris commitments, sending a message that “we’re still in” and making enormous strides on devising climate solutions that keep the agenda alive. EDF Climate Corps' ten years of experience gives us an inside look into how companies, cities and non-profits are taking action.

Here are four ways that the private and public sector are preparing for a low-carbon future:

1. Scale energy efficiency. The low-hanging fruit of energy efficiency has for the most part been picked. It’s time to take things to the next level by focusing on larger-scale, portfolio-level energy efficiency projects. Last year, Shuvya Arakali worked with American Eagle Outfitters to recommend HVAC retrofits, and other energy efficiency measures that could be deployed across the store portfolio and save thousands of metric tons of CO2e each year.

Manager, EDF Climate Corps

2. Invest in clean, renewable energy. Evaluate opportunities for both onsite and offsite renewable energy projects, like PPAs and VPPAs. Other procurement options includes mechanisms like green tariffs. The City of Fresno enlisted EDF Climate Corps fellow Katie Altobello-Czescik to help promote clean, smart energy initiatives including renewable generation, battery storage and demand response. Together, they worked on advancing a community-scale energy project aimed at helping local businesses and creating a net zero neighborhood.

3. Make a commitment—then execute. Be willing to set big goals and develop ambitious GHG-reduction targets that are founded upon science. Once they are set, create strategies to meet them. In 2015, Mayor Bill de Blasio set a goal to reduce New York City’s greenhouse gas emissions by 80 percent by 2050. The New York City's Mayor's Office of Sustainability has deployed multiple EDF Climate Corps fellows to help develop and advance strategies to meet these ambitious goals.

4. Go beyond your own company. Tackling climate change requires looking at the big picture, more than what’s happening within internal operations. Consider your supply chains by engaging suppliers and together identifying ways to reduce scope 3—both upstream and downstream—GHG emissions. This past spring, Walmart set a goal to remove 1 gigaton (1 billion tons) of GHG emissions from its supply chain by 2030. Companies throughout Walmart’s supply chain now have the directive to go beyond “business as usual” to focus on emissions reductions in their operations.

It’s difficult not to feel discouraged when our national climate policy is moving backwards instead of forwards. But that doesn’t mean the rest of the country is. United States’ leadership will continue, albeit in this new form, and businesses and cities will keep continue to advance climate solutions through smart policy, forward-thinking business and cutting-edge innovation.


Follow Ellen on Twitter, @ellenshenette


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As Trump rolls back methane rules, what should the oil & gas industry do?

This post originally appeared on Forbes.

Recently, at an oil and gas industry event co-hosted by Energy Dialogues and Shell in Houston, Ben Ratner, a Director at Environmental Defense Fund, met up with Michael Maher, presently with Rice University’s Baker Institute for Public Policy and a former longtime economist with ExxonMobil, to discuss the future of the natural gas industry. Specifically, they talked about the growing divide between those—in government and in the industry—who want less environmental regulation, particularly over the issue of methane emissions, and those who see sensible regulation as the best way for the industry to assure its future as offering a cleaner alternative to other, dirtier, fossil fuels.

Since Michael and Ben met in Houston, the Trump Administration announced the U.S. departure from the Paris climate agreement and postponements and potential weakening of methane emission rules from the Environmental Protection Agency and Bureau of Land Management. These new developments put the industry divide into sharper focus.

States could now step up to address issues that the federal government was poised to take the lead on under rules promulgated by President Obama toward the end of his term. But will states act without industry prodding or at least, support for action? And will companies most worried about license to operate intervene against delays, weakening, or even elimination of nationwide standards? Mike and Ben discuss below.

Ben: As a former oil and gas industry employee, how do you think the industry should respond to the regulatory rollbacks of the Trump administration?

Michael: This administration is moving rapidly away from a federal role in climate change policies. The question for the oil and gas industry is whether to sit back and coast on the federal failure to act or to work with states to address greenhouse emissions. Coasting may look like a cost saver for the near term, but the pendulum will eventually swing back, and a reversal of Trump’s policies is a real prospect down the road. However, if enough states—with industry support—were to effectively address methane emissions it could provide guidance for federal action down the road and protect the industry against the reputational damage of being seen to have resisted sound environmental regulation.

Michael: In the current political climate, what do you see as the role of leading companies?

Ben: The great irony here is that while the Trump attacks on environmental standards are intended to help industry by reducing costs in the short term, they may end up inflicting much greater long-term damage. A classic case of “short term gain, long term pain.”

Energy consumers, institutional investors and citizens want cleaner energy, and scrapping rules that help the industry clean up may ultimately endanger the industry’s social license to operate and make it more difficult to do business. So we will be looking hard to see which companies step forward to slow down the deregulatory torrent that is tarnishing the industry’s reputation just as demand for cleaner energy is lifting off.

In recent days, Shell and Exxon reportedly stated that they are complying with EPA’s contested methane rules, but other companies have stayed silent. Companies like ConocoPhillips and BP voiced their support for the Paris international climate agreement. With the U.S. now withdrawing from the Paris accord, will companies like these make good on addressing climate change by publicly supporting policies aimed at reducing methane emissions? We haven’t seen true industry support at the federal regulatory level, at least not yet.

At the same time, regardless of what happens in Washington, states have a golden opportunity to develop their own methane policies. In Colorado, for example, companies like Noble Energy and Anadarko worked with EDF and the state to negotiate methane and air pollution standards that work for business and the environment.

Industry played a vital role in Colorado’s success, and there will be more opportunities for industry leaders to participate in regulatory development in other states.

Ben: Are there business and reputational impacts of failing to address methane emissions?

Michael: Natural gas has historically competed with other sellers with other fuels almost totally on price. But customers and officials are increasingly looking at energy options based on environmental benefits and not just price. There is a robust debate in the Northeast, for example, about how to move forward in decarbonizing their electric power system and it is not focused solely on the costs of alternatives.

In this regard, it is in the interest of the natural gas industry to be able to promote natural gas as a much cleaner alternative to coal. But methane and associated emissions from natural gas drilling operations cloud that cleaner-than-coal claim and plays into the hands of those supporting a more rapid shift to renewables and who argue for “keeping it in the ground.”

Michael: How does EDF view methane control as part of a company’s social responsibility?

Ben: How a company manages its natural gas leaks tells you a great deal about how responsible it is, because leaks cause climate damage and can harm people’s health—especially among the most vulnerable, like children and the elderly. Also, since methane is a commercial product, if a company doesn’t know or care how much of its own product is going into thin air, that’s not a good sign.

Southwestern Energy is one example of a leader that sets a methane target, conveys to its people the value of methane management, and implements leading practices in the field. Another is Statoil, which is working with EDF and an entrepreneur to pioneer efficient new automated methane monitoring technology. These kinds of efforts can deliver financial value by recouping lost product, and demonstrating to investors, communities and other key stakeholders their lived commitment to responsible corporate behavior.

Ben: How do you see the industry tackling the methane problem?

Michael: Farsighted, well operated companies are already taking action to cut emissions, but sometimes the policy advocacy lags behind. There needs to be leadership on this issue from major players—not just singly but as a coalition urging federal agencies to retain or improve rules, rather than delay or weaken them. This coalition should also engage states in developing sound regulation of new drilling and older wells.

Some in industry are already pushing ahead with testing new technology that would reduce the cost of controlling emissions. That effort should continue, but voluntary action of this sort is not a replacement for regulations that apply across the entire industry. Nor will piecemeal voluntary efforts of a few overcome the stigma of hundreds of other companies abstaining from action to reduce their methane emissions.

Michael Maher is a senior program advisor at the Center for Energy Studies at Rice University’s Baker Institute for Public Policy

Ben Ratner is a Director with EDF+Business at Environmental Defense Fund

EDF and TNC partner on new Environmental Impact Bond to fund coastal restoration

To address the world’s most pressing environmental challenges, we must catalyze large-scale private investment in innovative environmental solutions. One place where such solutions are greatly needed is Louisiana, where more than 2,000 square miles of coastal land have vanished since the 1930s, putting communities and industries at risk from the effects of rising seas and increased storm surges.

This week, EDF begins work to develop the nation’s second Environmental Impact Bond, with support from NatureVest’s new Conservation Investment Accelerator Program, the conservation investing unit of The Nature Conservancy. In collaboration with our partners, Quantified Ventures and Louisiana’s Coastal Protection and Restoration Authority, EDF will bring public, private and non-profit resources together to accelerate Louisiana’s coastal restoration and resiliency plans through a new Louisiana Coastal Wetland Restoration and Resilience Environmental Impact Bond.

Coastal wetlands are a form of “natural infrastructure” that provide storm protection by attenuating wave energy. Continual loss reduces these protective services, potentially increasing damage from a single storm by as much as $138 billion and generating an additional $53 billion in lost economic output from storm disruptions. If no actions are taken to restore and protect the coast, Louisiana could lose an additional 1,750 square miles of wetlands by 2060, posing a direct risk to as much as $3.6 billion in assets that support $7.6 billion in economic activity each year.

Can sustainable finance help save Louisiana’s Gulf Coast?

While Louisiana expects 15 years of Gulf oil spill-related funds to support restoration work, the state has identified less than half of the funding necessary. A pay-for-success environmental impact bond backed by these cash flows can help to close this funding gap by mobilizing funds from the private sector to accelerate the pace of restoration project implementation. Restoring the coast earlier in the planning horizon will allow the state to realize long-term cost savings.

Pay-for-success (PFS) is a form of performance-based contracting that ties payment for service provision to the achievement of measurable outcomes. The PFS model has emerged as a promising approach to fund social and environmental innovation. Quantified Ventures, a pay-for-success transaction specialist, paved the way for applying PFS in an environmental context with the development of DC Water’s 2016 Environmental Impact Bond (EIB).

In September 2016, the District of Columbia Water and Sewer Authority (DC Water) raised $25 million from institutional investors Goldman Sachs Urban Investment Group and Calvert Foundation to finance the construction of green infrastructure projects that will reduce the volume of stormwater runoff entering the sewer system, thereby reducing combined sewer overflow events. If the projects perform as expected, DC Water will pay investors in accordance with the initial term rate of 3.43%. If the project outperforms expectations, DC Water will make an additional payment to investors for sharing its risk in the project. If the projects underperform expectations, then investors will make a payment to DC Water.

By sharing project risks between public and private sector partners, environmental impact bonds allow public entities to support innovative environmental solutions and private entities to put their risk-seeking capital to work. Given that sea level rise, land subsidence, storms and hurricanes add uncertainty to the successful outcome of wetland restoration, an EIB can shift part of a restoration project’s risk from Louisiana’s Coastal Protection and Restoration Authority (CPRA) to investors.

In collaboration with CPRA, EDF will select a wetland restoration project from Louisiana’s 2017 Coastal Master Plan to demonstrate the feasibility of an EIB for coastal restoration. This EIB will serve as a blueprint for investments in coastal resilience throughout Louisiana and other coastal states. We expect it may even usher in a new era of private investment in coastal resilience to help cities in the U.S. and across the globe that are already experiencing the adverse effects of climate change and are looking for solutions.

Public, Private, and Non-profit collaboration needed for a sustainable future

The amount of capital required to transition to a low-carbon economy, adapt our infrastructure to cope with the damaging effects of climate change, and preserve healthy ecosystems far exceeds the capacity of the philanthropic and public sectors alone. Of the estimated $1.5 trillion annual investment needed, roughly $700 billion is currently being invested. Innovative green investment products – like environmental impact bonds and green bonds – are helping to fill the $800 billion funding gap that remains.

Dakota Gangi, Sustainable Finance and Impact Investing Manager and William K. Bowes, Jr. Fellow, EDF+Business

We recognize that financial institutions have a role to play in addressing environmental challenges that goes beyond their direct investment dollars. EDF’s sustainable finance strategy seeks to leverage the influence, expertise and capital of the financial marketplace to protect the environment, improve livelihoods and achieve the ambitions goals in Blueprint 2020.

The project is funded by NatureVest, the conservation investing unit of The Nature Conservancy (naturevesttnc.org), through its Conservation Investment Accelerator Grant. With this support, EDF has an exciting opportunity to demonstrate how collaboration between the public, private, and non-profit sectors can address a critical environmental issue. We are excited to be working with Quantified Ventures and the state of Louisiana on this pilot project and hope that it will serve as a model for crowding-in private capital for coastal resiliency and restoration projects around the world.


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Global investor touts methane opportunity with oil & gas industry

Institutional investors worldwide are increasingly encouraging oil and gas companies to improve and disclose their management strategies to minimize methane risk.

Methane – an invisible, odorless gas and main ingredient in natural gas – is routinely emitted by the global oil and gas industry, posing a reputational and economic threat to portfolios.

Natural gas is widely marketed as a low-carbon fuel because it burns roughly 50 percent cleaner than coal. But this ignores a major problem: methane. Natural gas is almost pure methane, a powerful pollutant that speeds up Earth’s warming when it escapes into the atmosphere.

Last month marked a significant milestone in investor action on the methane issue. The Principles for Responsible Investment (PRI) launched a new initiative representing 36 investors and U.S. $4.2 trillion in assets that will engage with the oil and gas industry across five different continents to improve its methane management and disclosure practices. The PRI initiative complements existing methane engagement efforts focused on the U.S. led by the Interfaith Center on Corporate Responsibility and CERES.

EDF Senior Manager Sean Wright recently sat down with Sylvia van Waveren, a Senior Engagement Specialist with Robeco Institutional Asset Management, a Dutch-based investment firm managing over $160 billion, to discuss the matter and understand why some investors are keen to affect the status quo on methane.

Wright: Why is methane a focus of your engagements? What do you see as the risks of unmanaged methane emissions? 

Sylvia van Waveren, Senior Engagement Specialist, Robeco Institutional Asset Management

van Waveren: Methane is one of the most important drivers of engagement with the oil and gas industry. We invest in oil and gas companies worldwide. A year ago, we started engaging them, specifically on climate change – and within that the methane issue is included.

In the past, methane was viewed as a U.S. shale gas issue, but more recently it has become important in Europe as we learned that methane is a powerful greenhouse gas. So in that sense, we learned a lot from the U.S. discussions and we still do.

I would like to stress that we see the methane issue more as a business opportunity than a risk. What we often say to companies is that methane is a potential revenue source. It would be a waste if companies do not use it. 

Wright: The scope of PRI’s initiative is global, with investors from 3 different continents as far away as Australia and New Zealand, and a plan to engage with companies from the Latin America, Europe, North America and Asia-Pac. What does this level of global collaboration convey about methane emissions? 

van Waveren: I am happy and it is good to see that others have taken up the seriousness of this issue, as well.  Methane is no longer a U.S. only problem. The issue is being raised and discussed in all kinds of geographies.

I’m a firm believer in collective engagements. They can be a powerful force when the issue is not contained within borders. That is the case with greenhouse gases. So yes, I’m happy to see the PRI initiative taking off and I am an active believer in getting this solved and bringing attention to this subject.  

Wright: In your conversations thus far with companies about methane, what resonates best when making the business case for improving methane management and disclosure?

van Waveren: When we talk about motivation at the company level, I have to be honest, it’s still early days. The European companies are talking in general terms and just now conceptualizing methane policies. If we’re lucky, they have calculated how much methane is part of their greenhouse gas emissions. And if we’re more fortunate, they are producing regional and segregated figures from carbon, but it’s really very meager how motivated the companies are and what triggers them most.

I really feel we should emphasize more with companies to get them motivated and to really look at the seriousness of methane. One issue that is particularly bothersome is that many companies do not know how to calculate, estimate and set targets to reduce methane. It is still a mystery to many of them. That’s why we come in with engagements. We need to keep them sharp on this issue and ask them for their actions, calculations and plans. 

Wright: Who are other important allies that have a role in solving this problem, and why?

van Waveren: We always would like to have an ally in the government. For example, carbon pricing or carbon fixations are all topics that we look for from the government. But in practice, that doesn’t work. Governments sometimes need more time. So we do not always wait for the government. When companies say they will wait for government, we say, “You should take a proactive approach.”

We rely very much on our knowledge that we get from within the sector. We review data analyses and make intermediate reports of scoring. We find best practice solutions and we hold companies accountable. There are also times when we name names. So in that sense, that is how engagement works. The data providers and other organizations with good knowledge and good content on methane – and EDF is certainly one of them – are very instrumental to get the knowledge that we need.

Wright: Can you give me an example of a widespread financial risk facing an industry in the past that was proactively improved by investors leading the charge – similar to this initiative?

van Waveren: More than 20 years ago, we had a greenhouse gas issue – acid rain. Investors helped solve that problem. Because of this, I’m hopeful that investors can also play a positive role in reducing methane.

I would also say the issue of Arctic drilling. Not so long ago, this was top of mind when we talked to our portfolio companies. A lot of companies have now withdrawn from Arctic drilling, especially from offshore Arctic drilling. I think investors were quite successful in sending a clear signal to the industry in a collective way that we didn’t see Arctic drilling as a good process. Maybe profitable – if at all – to the companies, but certainly not for the environment.

Wright: Thank you, Sylvia. We really appreciate your time and your thoughtful answers showing how investors can be part of the solution on methane.