There’s no avoiding it, business must lead on climate

A few weeks ago, I attended the Earth Day Network’s Climate Leadership Gala in Washington, DC.  Each year the event brings together more than 300 leaders from business, government and the NGO community to celebrate achievements in working towards a clean energy future. This year’s top honor, the Climate Visionary Award, was presented to Unilever CEO Paul Polman for his commitment to fighting climate change.

Tom Murray, VP Corporate Partnerships, EDFBold, passionate leadership like Polman’s is essential to tackling climate change while helping to create an economy that benefits us all. He understands that it’s not a choice between business and the environment. In fact, a thriving economy depends on a thriving environment.

Corporate sustainability leadership is now more important than ever. It’s clear that the Trump Administration’s efforts to roll-back environmental protections have thrust U.S. businesses into a critical leadership role on clean energy and climate change. (In fact, I’ll be talking with business leaders later today about how they are “responding to the new norm” at the Sustainable Brands Conference.)

Over the past 25 years at EDF we’ve seen corporate sustainability go from simple operational efficiencies to global supply chain collaborations; now it’s time to go further. Business must continue to raise the bar for sustainability leadership.

How?

  1. Set big goals, then tell the world

Thinking big and setting big goals, are required to drive big innovation and big results.  Many large companies have demonstrated that if you commit to aggressive, science-based, sustainability goals, you can deliver meaningful business and environmental results. For example, Walmart, a longtime EDF partner with a track record of setting aggressive yet achievable climate goals, has recently set its sights even higher by setting a goal to source half of the company’s energy from renewable sources by 2025 and by launching Project Gigaton, a cumulative one gigaton emissions reduction in its supply chain by 2030.

And Walmart is not the only one. Other companies are stepping up as well – especially around commitments to go 100 percent renewable. Whether its online marketplace eBay committing to 100 percent renewable power in all data centers & offices by 2025, Tesco, one of the world’s largest retailers, announcing science-based targets and committing to 100 percent renewable electricity by 2030 or AB InBev committing to 100 percent renewable power, companies from diverse industries are taking a positive step forward.

While setting goals is a great first step, companies also need to communicate about the goals and progress. Not only does this increase transparency into a business’ sustainability efforts, it lets the world know that sustainability is core to its business. Publicly committing to sustainability goals sends a strong signal to suppliers, shareholders and customers.

  1. Collaborate for scale

In December 2016 I wrote about Smithfield Foods, the world’s number one pork producer, and its plan to cut greenhouse gas emissions 25 percent by 2025. The commitment was important both because Smithfield was the first major protein company to adopt a greenhouse gas reduction goal but also because the reductions would come from across Smithfield's supply chain, on company-owned farms, at processing facilities and throughout its transportation network.

Smithfield understands that some environmental challenges are too big to handle on their own, and they know collaboration is the key to deliver impact at scale.

Other companies are also looking beyond their own supply chain and forming mutually beneficial partnerships. Take the recent partnership between UPS and Sealed Air Corporation, for example. The two companies have announced the opening of a Packaging Innovation Center in Louisville, Kentucky where they will solve the packaging and shipping challenges of e-commerce retailers but also drive new efficiencies while minimizing waste. This is a critical issue that is material to both their businesses, and by joining forces, are finding ways to solve an environmental challenge while improving their bottom lines.

  1. Publicly support smart climate policy

I can’t stress how critical it is right now for business leaders to move beyond their comfort zones and make their voices heard on smart climate and environmental policy. If you want to be a sustainability leader, continuing to hoe your own garden is no longer enough.  You need to align your strategy, operations, AND advocacy.  We know that environmental safeguards drive innovation, create jobs, and support long-term strategic planning.

The good news is leading voices are chiming in, from CEOs signing an open letter to Trump to more than 1,000 companies signing the Low-Carbon USA letter, in favor of environmental policies.

Some companies like Tiffany & Co. are also taking a public stand on their own. The company used its usual ad position in the New York Times to tell President Trump directly that Tiffany is backing policies that will lead us to a clean energy future.

The Way Forward

Taking the leadership mantle is never easy, but now is the time for every corporate leader to get off the sidelines and into the game. There’s plenty of room for more leaders like Polman who are ready to address climate change head-on, creating opportunities for economic growth, new jobs, and a cleaner future.  Will your company be next?

Follow Tom Murray on Twitter: @TPMurray

Smart Money: Top Investors Press Oil & Gas Companies to Tackle Methane Emissions

A global group of 30 leading institutional investors coordinated by the PRI (Principles for Responsible Investment) has announced a new initiative that will encourage oil and gas companies, including gas utilities, around the world to initiate or improve efforts to measure, report, and reduce methane emissions. The move is the latest evidence that investors are concerned with the financial, reputational and environmental risks associated with unmonitored and unchecked methane venting and leakage.

Methane is a potent greenhouse gas with over 80 times the warming power of carbon dioxide over a 20-year timeframe. It’s responsible for about 25% of the warming our planet is experiencing today. Globally, the oil and gas industry is among the largest man-made sources of methane.

Methane is also the main ingredient in the natural gas, the product that major global producers have marketed to investors as central to their growth in the years ahead. Companies tout gas as a clean, low-carbon fuel, ignoring the vast amounts of unburned methane escaping from their systems each year, or the lack of transparency with regard to monitoring and reduction strategies.

The owners and asset managers involved in the PRI’s methane initiative oversee more than $3 trillion. They are global in scope, representing a dozen countries across North America, Europe and Asia-Pacific. PRI plans to engage 29 companies on four continents, from across the natural gas supply chain (the names aren’t being made public). They will be urging greater transparency and stronger, more concrete actions, including setting methane targets and participating responsibly on methane policy.

A centerpiece of PRI’s ongoing efforts to improve companies’ methane management and disclosure will be the Investor’s Guide to Methane, published jointly with EDF last fall. PRI’s global methane initiative complements ongoing U.S. engagement efforts on methane led by the Interfaith Center on Corporate Responsibility and CERES.

Trumping Shortsighted Politics

This is an uncertain time for the methane issue globally. On the one hand, President Trump and many U.S. lawmakers are trying to roll back methane policies established during the Obama administration. On the other, officials in Canada are expected to release draft oil and gas methane regulations this year, and similar rules are being developed in Mexico.

Political backpedaling from methane controls is shortsighted and counterproductive for both industry and environment, ignoring one of the biggest and most cost-effective opportunities we have to slow the warming of our globe. But these major investors, whose long-term investment horizons require them to look beyond the short-term calculus that dominates both politics and executive compensation packages, are taking a view to match their financial stake in the industry’s future.

What they see is a growing liability for an industry looking to the production and delivery of natural gas a growth engine over the coming decades. The problem isn’t going to go away, no matter what they’re saying in Washington.

Producers like BP, Shell and Chevron routinely cite rising global demand for natural gas as a primary driver of growth and valuation. But in markets for new electric generating capacity, natural gas is increasingly competing on a cost basis with clean, renewable sources like wind and solar. Failure to deliver on its frequent promises to deliver a more climate-friendly energy choice puts the gas industry and its investors at risk.

That makes methane the key variable. Conservative estimates are that, worldwide, companies are releasing at least 3.5 trillion cubic feet of methane to the atmosphere each year. That’s about the same amount as all the gas sold by Norway – the world’s seventh largest producer. Besides being a huge climate problem, it’s also a huge waste of a valuable product, and perhaps an indicator that attention to the integrity of operations is not as great as what companies claim.

Industry Awakens to the Problem

Concern about methane isn’t limited to oil and gas investors. There’s growing awareness within the industry itself that methane poses a reputational risk, sparking some companies to start addressing the challenge.

For example, 10 of the world’s largest oil and gas companies – BG Group, BP, Eni, Pemex, Reliance Industries, Repsol, Saudi Aramco, Shell, Statoil and Total – recently launched the Oil and Gas Climate Initiative (OGCI), a billion-dollar investment to accelerate commercial deployment of low carbon energy technologies. Their primary focus will be carbon capture and storage and reducing oil and gas methane emissions.

Similarly, the Oil and Gas Methane Partnership (OGMP), a voluntary effort to improve emissions reporting and accelerate best methane reduction practices recently issued its first annual report, detailing emissions found in nine key source categories throughout individual operator’s systems. Launched in 2014, participating companies include BP, Eni, Pemex, PTT, Repsol, Southwestern Energy, Statoil, and Total.

First Steps toward Big Benefits

These are crucial first steps for the industry, and is a sign that companies looking for ways to adapt to the changing climate surrounding its business. But the industry still has a very long way to go. Fixing the problem could yield huge benefits: A 45% reduction in global oil and gas methane emissions would have roughly the same climate impact over 20 years as closing one-third of the world’s coal fired power plants.

Investor calls for action on methane are quickening and now industry needs to show shareholders it will take the necessary steps to deliver on the low-carbon fuel promise of natural gas. Investors want to invest in well-run companies with good governance, and increasingly look to methane as a proxy for efficient operations. As company executives think about how to attract capital, they will be well-served to note this emerging dynamic and proactively get ahead of the issue.

Spurring investment in environmental solutions starts here

As the Stanford Social Innovation Review (SSIR) blog series “Mission Possible: How Foundations Are Shaping the Future of Impact Investing” rightly states, there are increasingly innovative ways for philanthropic money to play a more strategic role in capital markets to advance social and environmental progress.

Like the thoughtful foundation leaders contributing their perspectives to this series, we at Environmental Defense Fund (EDF) continue to evaluate, evolve and articulate our own sustainable finance strategies. And, over the past several years, we have become ever more convinced that leveraging the power of financial markets is core to delivering on the ambitious goals we laid out in our Blueprint 2020 strategic plan. This is because we know that the amount of philanthropic and public sector resources deployed to addressing our key issues is a small fraction of the total capital needed. We, therefore, must tap into the influence, expertise and capital of the private sector and the financial markets that direct those capital flows to be successful in our efforts.

EDF is a proven leader within the environmental community in working with the financial sector to drive progress on key issues. Over the past several years, EDF initiatives have raised the bar for environmental management across the private equity (PE) industry through pioneering partnerships with KKR, Carlyle, and Oak Hill Capital, delivered healthier air to millions of New York City residents by empowering building owners and operators to invest in nearly 6,000 heating oil conversions through NYC Clean Heat, and accelerated the transition to sustainable fisheries management by providing loans totaling over $4.2 million to support California Fisheries Fund borrowers.

Building on this successful track record, we are now introducing a robust three-part sustainable finance strategy that complements the amazing work of foundations profiled in the series:

EDF’s Sustainable Finance Strategy:

  1. Getting the rules right We are working to advance policies and practices that improve transparency, reduce risks, and create clear incentives and price signals in order to design more efficient and effective markets for environmental investment opportunities.
  2. Making engagement and investment easier To spur new investment in environmental solutions, we must lower barriers and transaction costs. We are creating and promoting tools and resources that improve information flows, standardize complex projects, and build capacity in the marketplace.
  3. Demonstrating returns Environmental investments remain below the radar for many investors. We aim to connect private capital with priority environmental opportunities by working with partners on “lighthouse” or pilot transactions that demonstrate a strong investment case, mitigate risks, and deliver returns. In the process, we are creating new investment models for others to follow and take to scale.

Keep an eye out for subsequent blogs from a range of EDF experts that will profile a few specific examples to showcase how this strategy is being put into action across EDF’s programmatic work. We look forward to collaborating with those who are working in this growing space!

Upping the ante on corporate climate leadership – by a gigaton

With the Trump Administration pulling back on federal climate action, I am heartened to see that U.S. businesses are starting to assert their leadership role in the fight for a cleaner, safer world. Bold leadership is an essential factor for business today — and no company is delivering on this more than Walmart.

The world's largest retailer recently announced Project Gigaton, arguably one of the most ambitious efforts to reduce climate pollution by any U.S. corporation.

With Project Gigaton, Walmart and its suppliers are committing to a ‘moon shot’ goal – removing a gigaton of greenhouse gas emissions from the company's global supply chain by 2030. That's more than the annual emissions of Germany. It's the equivalent of taking 211 million cars off the road every year. In a word, it’s transformational.

Breaking the mold together, then and now

Fred Krupp, President, Environmental Defense Fund

Eleven years ago, I traveled to the top of Mount Washington with then Walmart CEO Lee Scott, and we talked about the company's vast potential to drive environmental progress. Since then, an amazing ripple effect has spread across the entire retail sector. Working together, EDF, Walmart and others have gathered commitments for optimized fertilizer use on 23 million acres of U.S. farmland; eradicated 36 million metric tons of greenhouse gas emissions across the retail supply chain; and improved the health and safety of hundreds of thousands of everyday products like shampoo and laundry detergent. This work is invisible to most, but massive on an environmental scale, and nothing less than trailblazing for how business leadership and legacy is measured.

For the last quarter century Environmental Defense Fund has proven the power of business-NGO partnerships to create wins for both business and the environment. Walmart’s willingness to challenge itself and its supply chain to do better has meshed perfectly with EDF’s pragmatic approach to forging innovative solutions.

Back in 2005, it was uncommon business news when Walmart announced aspirational goals to be supplied 100 percent by renewable energy, to create zero waste, and to sell products that sustain our resources and environment. Neither Walmart nor EDF knew how we’d achieve those goals, but we set off on the journey together and found success along the way.

Walmart is in it for the long haul

For leading brands like Walmart and their suppliers, long-term economics will always outweigh short-term politics. Staying the course on sustainability is motivated by competitiveness, innovation, job creation and consumer demand. Smart business leaders understand that a thriving economy depends on a thriving environment. This is not an either/or choice. By 2050, we will have 9.5 billion global consumers, all demanding more food, goods and services. The commitment to Project Gigaton signals Walmart’s readiness to plan accordingly.

The Project Gigaton challenge is massive, but by working collaboratively, our confidence for success is high. The modern supply chain is responsible for 60% of all greenhouse gas emissions, 80% of all water use and 66% of all tropical deforestation.  This is not a goal that Walmart can do alone. It takes committed collaboration: of NGOs, partners, and an extensive network of suppliers – many leading brands in their own right – to drive reductions from factories to farms to forests, fleets and beyond.

Creating long-term prosperity for business and the environment requires long-term commitment from both business and NGOs. Together, EDF and Walmart have already climbed one mountain, and now we are ready to ascend even steeper peaks. The planet is counting on us.


Follow Fred on Twitter, @FredKrupp


 

Corporate America’s “moon shot”: Walmart’s Project Gigaton

 

At a time when leadership from the federal government is decidedly lacking, the launch of Walmart’s Project Gigaton is a cause for celebration. It is proof that companies can step up to advance solutions that will help business, people and nature thrive.

Just like Walmart itself, this is big.

The world’s largest retailer has launched an initiative to remove 1 gigaton (that’s 1 billion tons — billion with a “b”) of greenhouse gas emissions (GHG) from its supply chain by 2030. To put that in perspective, that is the equivalent of removing the annual emissions of Germany — the world’s fourth-largest economy — from the atmosphere. This audacious goal is impressive; it’s corporate America’s “moon shot,” and it shows real leadership.

Why? Because, according to The Sustainability Consortium, the modern supply chain is responsible for 60 percent of all greenhouse gas emissions, 80 percent of all water use and 66 percent of all tropical deforestation. And with the global population projected to swell to 9.5 billion consumers by 2050, it is clear there is not just a crucial opportunity for businesses to meet growing global demand, there is also a real need to protect the planet. Embracing sustainable practices is no longer an option for business. It is an imperative. The planet needs fast action at a massive scale.

So do forward-looking CEOs. Shareholders are rewarding resiliency when companies climate-proof their global operations. And customers, especially millennials, expect sustainability to be baked into the things they buy. In short, business is looking to drive bottom-line value, including growth, with sustainability.

Elizabeth Sturcken, Managing Director, EDF+Business

Which explains the significant Project Gigaton commitments being made by companies like Unilever (20 million metric tons of GHG reduction) and Land O’ Lakes (20 million acres sustainably farmed) and commitments made in the past six months by Apple, Amazon, Google, PepsiCo, Smithfield Foods and others.

Execution and delivery

But setting goals is just the first step. The execution and delivery must follow to complete this journey.

Which brings me back to this moon shot: Walmart cannot do this alone. Project Gigaton will take a village — in this case, the tens of thousands of companies that make up Walmart’s global supplier network — to make this goal a reality. And that’s a good thing: Eliminating GHG emissions at this scale will reverberate across entire sectors and industries. It will be the change to “business as usual” that’s long overdue.

That’s all fine and well, rhetorically. But what if you’re a CEO or CSR exec who’s facing the hard reality of “Where do I start”?

Some new research by Environmental Defense Fund starts to sketch out a roadmap to success — and illustrates the need for supply-chain partners to get on the bus. While we’re just at the beginning of a deep dive into the sustainability of the U.S. retail supply chain, our initial findings show two things:  the complexity and emission hotspots of box chain retailers and three clear, initial areas of focus:

  1. The supply chain is the largest source of emissions. If there was any doubt left, put it to rest: 80 percent of retail emissions occur in the supply chain; 12 percent are associated with the use and disposal of products and 8 percent come directly from retail operations — mostly buildings and facilities.
  2. Grocery is a huge hotspot and opportunity. Are you a retailer? Food company? Agricultural service provider? Farmer? Nearly half — 48 percent — of supply-chain greenhouse gas emissions come from the grocery category, which encompasses everything from fresh meat, veggies and dairy, to bakery, dry goods, beverages, snacks and frozen products. Together, these and other products emits 1.7 gigatons of GHGs (there’s that billion thing again). In other words, food production — and food waste — is definitely a place to make your numbers — and to make a difference. (Talk about low-hanging fruit!)
  3. Electricity is the biggest activity that contributes to emissions. From factories to farmhouses, whether powering a business or refrigerating an item at home, using electricity is the largest activity that produces emissions for consumer packaged goods production. Think about that: by tackling electricity use, whether from conservation or renewable energy, business leaders can not only run a more efficient operation, they can also engage their customers on which products to buy and how to best use them. That’s good business.

For those who have been paying attention to these issues for decades, these big opportunities won’t come as a surprise. But they help sharpen the focus for supply-chain professionals searching to answer the question of where to put effort and investment to get the most emissions-reduction results. Scale and speed are necessary. Knowing where to focus is critical. The EDF research is in the early stages and we plan to release the full results later this year.

In the meantime, kudos to Walmart. As suppliers make commitments for Project Gigaton that will drive reductions from factories to farms to forests to fleets, it will become imperative to identify hotspots to enable the largest impact. That’s exactly what drives innovation and the environmental impact we need.

The supply chain may be complicated, but the rewards are well worth it: thriving companies, thriving communities and a thriving planet.

Jump on the Project Gigaton moon shot. It’s leaving the launching pad, with or without you.


Follow Elizabeth on Twitter, @esturcken


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Can technology save the climate? These companies are betting $1 billion it can

Photo credit John Davidson.

Last November, on the same day the Paris climate agreement took effect, 10 of the world’s largest oil and gas companies, including BG Group, BP, Eni, Pemex, Reliance Industries, Repsol, Saudi Aramco, Shell, Statoil and Total, announced a billion-dollar investment in climate solutions. Together, the member-companies of the Oil and Gas Climate Initiative (OGCI) produce 20 percent of the world’s oil and gas and operate in 55 countries.

Their commitment was the beginning sign of a growing and public recognition by the oil and gas industry that tomorrow’s low carbon energy transformation has become today’s new energy imperative.

Right now, the biggest, most pressing climate item for the oil and gas industry is methane. Importantly, OGCI’s announcement included a global focus on reducing methane, a powerful greenhouse gas. Far more potent than carbon dioxide over a 20-year timespan, methane is responsible for about a quarter of the warming we feel today.

Many expect OGCI to direct hundreds of millions of its billion-dollar pledge into addressing methane. Beyond the climate benefits, it’s a smart business investment. The International Energy Agency has said, “the potential for natural gas to play a credible role in the transition to a decarbonized energy system fundamentally depends on minimizing these emissions.” Simply put, methane is an existential threat for an industry and its long term investors banking on natural gas to aid the transition to a lower-carbon energy economy.

Potential is high for OGCI’s methane endeavor to catalyze important breakthroughs. With sets of OGCI members holding joint stakes in nearly 250 natural gas projects worldwide, there is opportunity to catalyze and spread methane emission reductions throughout the whole industry. We stand ready to help OGCI develop innovative solutions and offer the following suggestions as it begins its methane work.

Data Drives Success

Data alone won’t solve the methane challenge. But strong and credible data are essential. In the United States, vast scientific initiatives have greatly improved our understanding of methane leaks, releases and total emissions from oil and gas activity. This scientific understanding helps companies identify reduction opportunities and regulators develop sound, data-based regulations.

Globally, however, methane measurement is much less mature. Filling the gaps to better inform how companies and countries can address this problem in other parts of the world is important, while companies continue to pursue mitigation opportunities. As a future founding member of the UN’s Oil and Gas Methane Science Studies partnership, OGCI is positioned to bolster reliable and transparent methane science worldwide.

Innovation Requires Collaboration

Some of the innovation required to solve the methane challenge will come from collaboration within and among the OGCI companies. But not all of it. Around the world, there are entrepreneurs, scientists and investors that are already tackling methane. In our experience with the Methane Detectors Challenge, we learned that innovation requires early and ongoing collaboration across technology and energy sector lines. Without it, entrepreneurs don’t know what the market needs or wants and energy companies don’t know what technologists can deliver.

Today, there are gaps of information, culture, language and understanding between technology entrepreneurs and the energy companies they are trying to serve. Closing these gaps by supporting technology innovation is a prime opportunity for an industry group like OGCI to support, and OGCI is positioned to do this now that it has set up a smaller investment vehicle with the license to be nimble.

Focus on Prevention and Detection

Preventing methane leaks and finding them quickly are the two most important methane opportunities.

Every leak that is prevented is a leak that doesn’t need to be repaired. Innovation in design, technologies and strategies that prevent emissions at specific and known sources of equipment should be top of mind for OGCI. For example, aerial measurement studies have shown that tanks are significant emission sources, some of which are not properly controlled. Routine methane releases from inefficient or malfunctioning valves are also believed to be a significant source.

An undetected methane leak can leak indefinitely. It’s one reason why periodic detection is so important, and efficient airborne sweeps for large leaks should be investigated. But while routine checks are better than none, they can still allow leaks to persist for months at a time. In the United States alone, studies have shown that 10 percent of leaks are responsible for 80 percent of emissions. Fortunately, next-generation detection technologies are being developed to catch large leaks with the speed we’d expect in the digital age.

Statoil, a Norwegian-based international oil and gas company and OGCI member, is pioneering continuous methane emissions monitoring at a well pad in Texas, and a leading natural gas utility is doing the same in California. These are promising developments, bringing real-time methane monitors to market. Now, the next level of industry leadership from groups such as OCGI are vital to help spur competition in this growing segment and drive unit deployment up and costs down.

Avoiding the wasteful flaring of natural gas in favor of recapturing the fuel is another worthy opportunity to tighten the oil and gas system. There are roughly 16,000 flares worldwide, and some flares burn all day and night. OGCI can galvanize investors and operators to provide the capital and incentives to put entrepreneurs to work turning wasted gas into productive use.

Results Matter

OGCI’s success will be measured by the amount of methane reductions it delivers. Now is the time for OGCI to set a clear path for how it will achieve success with its multi-million dollar methane mitigation endeavor.

EDF’s global goal – reducing oil and gas methane emissions 45 percent by 2025 – coincides with OGCI’s 10-year mandate and is a mark we encourage the group to embrace or exceed. Industry leaders and investors need to manage methane risk so that natural gas is a cleaner, more responsible transition fuel. Governments and their citizens need to know that industry is doing all it can to address the global methane challenge. OGCI is in a unique position to spur innovation that can satisfy both needs.

Follow Ben on Twitter @RatnerBen

A path to prosperity that we can all embrace

Prosperity. We all want to attain it, yet the ways we each define it are as different as we are.

As President Trump charges through his first 100 days, there is a risky theme being pushed that a prosperous America comes with a choice between environmental protection and economic growth.

This concept is not only false, but dangerous and short sighted.

Just look at China. When I was there last year, I saw a country that, during its own industrial revolution, made decisions that had unfortunately sacrificed the environment for a short-term surge in economic prosperity. Those tradeoffs were made during a time when coal and oil provided over 90% of energy consumption, and as a result, air quality reached unhealthy standards. Now China, the world’s fastest-growing economy (IMF), is sprinting to play catch-up. In 2015, in fact, China invested $102.9 billion in renewables, making it the world’s largest investor in clean energy (the US, by contrast, invested $44.1 billion that same year). (IEEFA.org, 2017)  Earlier this year, as the Trump Administration ceded U.S. leadership, China continued to step up with a new commitment to invest over $350 billion in renewable power generation.

So I reject the idea that people have to choose between a thriving economy and clean air and water. Or that we need to choose prosperity in the short-term, but an unstable and unhealthy climate in the long-term. We should not be forced into believing false choices. Instead, we demand and deserve a healthy future where both the economy and the environment can prosper.

Protecting the environment is being positioned by President Trump as something that stifles U.S. businesses with over-regulation. And while not all regulation is perfect, sometimes policy is necessary to round out the sharp edges of capitalism. We must ensure that we’re not just eradicating environmental regulation, but instead making informed improvements with both business and the environment in mind. Just look at California as a case in point. The state’s clean energy standards for cars, buildings and electric utilities are some of the strictest in the U.S., yet California’s jobs and overall economy continue to grow steadily.

And on a national scale, a new report from Environmental Defense Fund shows that our best line to job creation lies in the sustainability and clean energy market. Addressing climate change isn’t hampering growth, it’s driving it. Sustainability now collectively represents an estimated 4-4.5 million jobs in the U.S.  The solar industry alone is currently growing at a rate 12 times faster than the rest of the U.S. economy. Clean energy and sustainability is feeding a burgeoning pipeline of well-paying jobs across all 50 states. Jobs that cannot be outsourced I might add.

The Republican’s choice for Secretary of Energy, oil industry ally Rick Perry, said during his confirmation hearing, “the question is how we address (climate change) in a thoughtful way that doesn’t compromise economic growth.”  It’s a good question, and one that must be very thoughtfully considered by Mr. Perry. When it comes to the environment and public health, we cannot repeal safeguards without devising safer, smarter replacements that diminish economic burdens while maintaining, or even increasing, protection. We need to envision prosperity through a lens where both the environment and the economy can thrive.

Our path to prosperity must be driven by long-term economics, not short-term politics.

Rolling back environmental safeguards, pausing innovation on fuel efficiency and clean energy, and reigniting a U.S. reliance on coal and oil is short-term thinking that puts us on a dangerous path.

Business prosperity in the long-term relies on resource availability. By 2050 the world will be home to 9.5 billion consumers, all looking toward business to provide the products and services they need. This consumption drives our economy—but puts a massive burden on our planet’s resources.

This is why Google, Microsoft, Nike, Nestlé, Walmart and many others are committed to sourcing 100% of their electricity from renewable energy. This is why PepsiCo is focused on improving water use efficiency, reducing food waste and eliminating emissions from its supply chain as part of its 2025 goals. And despite the threat of environmental rollbacks and noise about pulling out of the Paris Climate Agreement, 1000 companies and investors have signed on to the Business Backs Low-Carbon USA statement, which reiterated support and intent to implement the historic Agreement to address climate change. Not because regulation demands this, but because long term prosperity requires it.

If America is to continue our longstanding tradition and commitment of leaving a better future for the next generation, we must continue making decisions that align economic prosperity with environmental protection and human health. This, to me, is the most important test of business leadership.  It’s time for committed sustainability leaders to live those values, speak truth to power, and move the dialog beyond transactional, and short term campaign promises to long-term health for the economy and the planet.


Follow Tom on Twitter, @tpmurray


From row crops to rainforests: how agriculture affects us all

Happy Agriculture Day! Whether you have a special interest in agriculture or not, we’re guessing that—as a human being—you probably have an interest in food

But, on this Agriculture Day, we want to recognize and celebrate the farmers and ranchers while acknowledging the fact that we all play a part in the growing of food. In just a few decades, there will be two billion more people to feed on the planet. As a global community our challenge is to feed this growing population sustainably without depleting the soil, polluting our water and worsening global warming.

The statistics are eye opening. Global food production accounts for:

  • 33% of the world’s GHG emissions
  • 70% of the world’s water consumption
  • 80% of deforestation worldwide
  • 50% of global top soil loss

What’s behind these huge numbers? When we look deeper, the problem looks different depending upon which side of the equator you’re on. From row crops to rainforests, here’s a snapshot of what’s happening, both in terms of the problem and the solution:

Domestic Agriculture                         

When we think about how we will feed an additional 2 billion people, improving yields will be critical to meet demand. Fertilizer is an essential nutrient that will help to increase the yields we need. But with less than half of nutrients applied each season being actually absorbed by crops, the unused fertilizer is bad for the planet:

  • US food production accounts for 75% of nitrous oxide emissions and has contributed to the pollution of nearly 40% of US drinking water supply;
  • Excess fertilizer and pollution is washing off of farm fields and into water ways degrading coastal ecosystems and causing algae blooms.

At the same time, this also hurts farmers financially. Fertilizer represents their single biggest input cost, so when nearly $420 million in fertilizer washes off Midwestern farm fields and into the Gulf of Mexico every year, it’s tough to remain profitable.

EDF’s work* with  Walmart, Smithfield Foods, Campbell’s Soup, Land O’ Lakes and other food companies is proving that efficient fertilizer use reduces supply chain emissions and saves money. It just needs to happen more: when food companies, retailers, and other supply chain actors send the demand for scientifically based and economically viable strategies for using fertilizer more efficiently, sustainable practices will expand and far less impact will be placed on the environment.

Agriculture and Deforestation

Agriculture is the largest single cause of deforestation. Everyday forest lands in Brazil and other tropical countries are burned down to grow crops or to create cattle pastures for beef production. The exploitation of the tropical forests for the big four agricultural commodities, palm oil, beef, soy, and pulp and paper, contributes significantly to climate change.

Deforestation accounts for about 15% of global carbon emissions annually. Hundreds of major consumer goods companies have committed to eliminating deforestation from their supply chains.

The challenge is twofold: how to increase agricultural production in these topical regions to support the livelihoods of local communities and growing global consumer needs, while fulfilling companies’ zero-deforestation commitments to reduce carbon emissions?

The solution lies in multi-stakeholder engagement. Brazil’s experience shows that collaboration between companies, government agencies and local communities within a region can successfully reduce deforestation while maintaining robust growth in production. The country successfully reduced Amazon deforestation by about 75% from 2005 to 2013.

Katie Anderson, Project Manager, EDF+Business

When executed properly, these jurisdictional approaches provide win-win-win opportunities. Companies have a new way to meet zero deforestation commitments in supply chains by sourcing from lower risk areas and reduce the risk that deforestation will spread to other suppliers. Governments have additional support to improve policies and productivity in their regions. Farmers have the needed incentives and assistance to increase sustainability and profitability on their lands.

Partnership is the key

So it’s clear: our food has costs beyond our wallets, in the form of greenhouse gases, water quality, water scarcity, biodiversity, and other important impacts that we don’t see each day when we sit down at the table.

But the good news is, there’s a lot of movement—or potential for movement— across the food supply chains, from retailers to growers to consumers, to promote sustainable practices on a multitude of food and agriculture issues.

Theresa Erhlich, Project Coordinator, Supply Chain

To tackle these costs, everyone along the food chain needs to realize that there is no free lunch (pun very much intended):

  • At EDF, we are working in collaboration with farmers, companies, governments, and other NGO’s to address these issues and reduce the impact of our food supply chains.
  • Companies (including: food companies, retailers and other supply chain actors) need to consistently send the demand signal to farmers that they want less deforestation and more efficient fertilizer use.
  • Consumers play an important role by sending our own demand signal for more sustainably produced food by thanking the companies leading the way in sustainability through shopping power.

So today take a moment think about where our food is comes from, and the hard work and energy that went into its approaches to feed people and protect our planet.

* EDF takes no money from our corporate partners—we are funded solely through grants, donations and membership. 

To make its climate commitment a success, BlackRock must focus on methane

BlackRock, the world’s largest asset manager with over $5 trillion in assets, recently announced a new commitment to focus on the financial risks of climate change, with a specific eye towards the disclosure and governance of climate risk. The company also signaled a potential greater willingness to support shareholder resolutions on climate issues.

Considering Blackrock’s massive size and influence, the significance of these announcements should not be understated. The development has the potential to drive increased attention among corporate executives in all industries on the need for more action on climate.  The move is also another welcome sign that mainstream institutional investors are taking climate risk seriously.

BlackRock’s announcement puts them in-line with other investors already doing good work on climate risk. A robust effort to limit oil and gas methane will be essential to their success, and provides a number of opportunities for BlackRock to truly lead.

Why Methane Matters to Investors

As EDF has previously highlighted, methane is a highly potent form of carbon, and therefore a significant climate risk. In fact, methane is 86 times more harmful to our climate than carbon emissions, and is responsible for a quarter of the warming we are already experiencing today.  The oil and gas industry is the largest industrial source globally, and emissions occur across the entire value chain.

From an investor’s perspective, methane poses distinct risks. As the primary component of natural gas, methane represents lost product. All told, the oil and gas industry loses $30 billion a year on otherwise saleable product.  As such, smart investors should look at proactive methane management as a proxy for executive leadership and operational excellence.  In an increasingly carbon-constrained world, unmanaged methane emissions also invite regulatory scrutiny. Smart companies will be prepared. Lastly, methane undercuts the reputation of natural gas being cheaper and cleaner, and jeopardizes its opportunity to play a role in a transition to a lower-carbon economy. This has negative long-term demand implications.

Leading investors, including Legal & General, BMO Global Asset Management, and CalSTRS already understand that methane poses a significant risk, and BlackRock should too.

How Investors Can Engage Industry

To help investors manage methane risk through engagement, EDF, in partnership with Principles for Responsible Investment (PRI), released An Investor’s Guide to Methane.  The publication highlights best practices for measuring and reducing emissions while equipping investors with suggested questions to guide constructive dialogue.

The Guide also focuses on improving disclosure, given recent research from EDF has shown that current methane disclosure is inadequate to meet investor needs.  The methane metrics highlighted in the Guide were designed to provide investors with actionable methane data, and align with The Task Force for Climate-Related Disclosure’s framework and its focus on metrics and targets companies should use to manage climate risk, for which BlackRock prominently highlighted its support recently.

In response to growing investor concerns around methane, PRI is launching a collaborative engagement on methane, and is currently recruiting investors. BlackRock should join this effort to engage with oil and gas companies globally to reduce methane risk and improve disclosure. This is an opportunity for global leadership on climate.

Shareholder Resolutions – An Opportunity for Near-Term Action

As mentioned, BlackRock indicated it is more open to using its voting power on shareholder resolutions to manage climate risk. Currently, there are 8 methane-related shareholder resolutions up for vote this spring, and BlackRock appears to be a top shareholder for 6 of these companies.  The resolutions urge companies to provide better disclosure on methane management, and similar resolutions have earned the support of both ISS and Glass Lewis, the two major proxy advisory firms in the US. They deserve BlackRock’s vote.

New Products – An Opportunity to Innovation and Leadership

One way BlackRock could raise the bar on methane and be a global leader would be to use its platform to develop products to incentivize comprehensive emissions management.  BlackRock has already launched low-carbon exchange traded funds (ETF) that over-weight (i.e. reward) less-carbon intensive companies. Could BlackRock launch a low-methane index that screens in methane leaders and locks out methane laggards, thereby rewarding effective methane management with relatively higher share prices?

So, What is Success?

BlackRock is right to focus on climate risk as a key priority for its engagements over the next two years. If BlackRock is successful, effective methane risk management will be appropriately rewarded in the public markets, and will be par for the course for oil and gas companies who want BlackRock’s significant investment dollars. EDF stands at the ready to help BlackRock in making their important work on climate risk a success.

6 ways restaurants can fight food waste (and how you can help)

By engaging consumers, clarifying date labeling, and promoting composting, grocers, supermarkets and food companies can play an important role in cutting food waste. But did you know that an estimated 85% of food waste occurs at consumer-facing businesses and homes?

In the restaurant and food service industry, food loss occurs due to inefficiencies, pressure to offer extensive menu options, large portions and consumer culture. According to a study, 4-10% of food purchased by restaurants becomes kitchen loss, both edible and inedible, before reaching the consumer. Once the plate leaves the kitchen, diners typically leave 17% of meals uneaten and 55% of these potential leftovers are not taken home.

All this uneaten food comes with a high cost, both for your wallet and the planet:

But, by working together, restaurateurs (and their customers) can increase efficiency, save money and reduce food

waste.  Here are 6 ideas for restaurant owners, some fairly obvious, others as a result of emerging technologies or innovative practices:

  1. Limit menu items to optimize inventory management. Extensive menus require more inventory on hand at all times and could lead to greater waste.
  2. Offer reduced portion size options. Many national chains such as TGIFridays, Au Bon Pain, Maggianos and Cheesecake Factory, have begun offering small plate options to reduce waste.
  3. Use waste audit software such as MintScrape to identify waste sources.
  4. Find alternative uses for surplus food. One app, Too Good to Go, connects users to restaurants offering discounts on surplus food before closing or throwing it away. The app will be available in the U.S. in 2018.
  5. Get creative. Find ways to reuse food in creative and innovative ways. Restaurant owner Sean Telo of Brooklyn 21 is turning food waste into his Sunday tasting menu. Some recent items on the menu have included mozzarella butter, roasted eggplant puree served with biscuits, and pizza with lamb bacon, cheese, and honey.
  6. Look to best practices for ways to improve efficiency and reduce overall costs.

    Theresa Ehrlich, Project Coordinator, Supply Chain

What can customers do?

  • First, vote with your wallet by supporting local businesses and national brands committed to reducing food waste.
  • Next, when you're patronizing those businesses, be more conscientious of your ordering choices.
  • Finally, take leftovers home for a late night snack or cheap, easy lunch.  Brown bagging it can mean a greener planet!