The 4 critical steps to climate leadership

Business leaders can no longer afford to look the other way on climate change. The recent National Climate Assessment revealed that regional economies and industries dependent on natural resources are increasingly vulnerable to the impacts of climate change – as are energy systems. Warmer climates will increasingly disrupt international trade, prices, and supply chains, and costs could reach hundreds of billion dollars per year by the end of the century. Climate change doesn’t just threaten ecological balance, it threatens corporate balance sheets.

In light of these findings I’m encouraged by a recent survey of corporate leaders, 82 percent of whom said companies need to advocate for or take a stand on environmental, social and governance issues and that “climate and environment” was one of the three highest priorities for their organizations.

Knowing that a company should take action, however, is a long way from actually taking action on climate. While there are a growing number of cases where leading companies and major investors are ahead of the federal government on climate action, it’s simply not enough, and many more U.S. businesses need to step up.

The role that CEOs and companies play in global governance is changing. Leaders and laggards, winners and losers, will all be defined by how they respond to climate change. The leaders will surface based on their ability to take these four critical steps. Read more

Can top retailers make safer chemicals commitments tangible for consumers?

The Mind the Store campaign recently released their third annual Who’s Minding the Store? report, which ranks retailer action on the removal of toxic chemicals from products. Many of this year’s top performing retailers are familiar. Apple, Walmart, Target, and CVS, all in the top 10, are companies that EDF considers to be safer chemicals leaders. Importantly, several retailers received much improved scores – Amazon, Walgreens, and Rite-Aid are the most improved retailers compared to 2016. We’ve previously blogged on Amazon and Rite-Aid’s new chemicals policies (see here and here, respectively). Walgreens is the newest face in this crowd, releasing its chemicals policy earlier this month. With more and more retailers making commitments, the market demand for safer chemistry in products is now undeniable.

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Amazon joins Walmart, other major retailers on safer chemicals

Retail demand for safer products is not only here to stay – it’s now a source of competition in the evolving marketplace. Amazon is the latest retailer to join Walmart, Target, CVS Health, Home Depot, and Rite-Aid by publishing a chemicals policy and a public Restricted Substances List. Amazon and several of the above-mentioned retailers represent half of the top ten retailers in the US. Amazon’s new policy is a big deal: not only is Amazon the third largest retailer by sales in the US, it is the first primarily ecommerce retailer to create a chemicals policy. Ecommerce represents a challenge in terms of implementing such a policy, but as shoppers increasingly turn to online retailers for many of their purchasing needs, this also presents a major opportunity to increase the availability of safer products.

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Scaling for good: can McDonald's raise the bar for sustainable food?

At Environmental Defense Fund, we believe that environmental progress and economic growth can and must go hand in hand. EDF+Business works with leading companies and investors to raise the bar for corporate sustainability leadership by setting ambitious, science-based goals; collaborating for scale across industries and global supply chains; publicly supporting smart environmental safeguards; and, accelerating environmental innovation.

This is the 10th in a series of interviews exploring trends in sustainability leadership as part of our effort to pave the way to a thriving economy and a healthy environment.

Let’s turn back the clock to 1990. It was a milestone year for McDonald’s, as the company opened its first restaurants in Moscow, mainland China and Chile. It was also when the largest restaurant company in the world joined forces with Environmental Defense Fund to launch a groundbreaking partnership that would find ways to reduce McDonald’s solid waste. The results? $6 million in savings, more than 300 million pounds of packaging eliminated, and 1 million tons of corrugated boxes recycled.

2018 is shaping up to be a big year for McDonald’s too, with a packaging waste goal set in January and an announcement to reduce emissions across its supply chain in March. Led by Executive Vice President and Chief Supply Chain and Sustainability Officer Francesca DeBiase, McDonald’s has raised the corporate leadership bar with these ambitious sustainability targets. But now, the difficult and complex work of meeting these goals begins.

I caught up with Francesca ahead of the Global Climate Action Summit this week to ask her about what the roadmap to meeting these goals looks like, and how they’ll collaborate with their suppliers and the industry to prioritize action on the areas where McDonald’s has the biggest opportunity to reduce greenhouse gas emissions, including responsible beef production

Here’s an edited transcript of our conversation.

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Here's why EDF Climate Corps' network-based approach is a game-changer for corporate sustainability

You know that feeling when you’re cheering for your team to win, and they do? That’s the feeling I get to experience every day in my job as Manager of the EDF Climate Corps network (aren’t I lucky?!) Yesterday GreenBiz announced it’s “30 Under 30" – a global search for emerging leaders who are shaping the next generation of sustainable business. To my delight, I saw Kayla Fenton, a 2015 EDF Climate Corps fellow, included in this impressive group. This was exciting, but not surprising; the EDF Climate Corps network is filled with inspiring leaders, just like Kayla, who are tackling corporate sustainability issues every day.

I first met Kayla when she was preparing for her summer with Nestle Waters NA. In just ten weeks, she managed to surpass everyone's expectations. “Kayla’s detailed analysis and cross-company collaboration created the internal engagement and buy-in to move forward with a Power Purchase Agreement (PPA) for my last company. Her great work inspired me to bring on an EDF Climate Corps fellow in my new role with Danone Waters of America to advance carbon reductions in North America for our carbon neutral brand, Evian." Recalled Debora Fillis-Ryba, Kayla's former supervisor at Nestle, now with Danone Waters of America. 

Now, with Amazon, Kayla manages programs to minimize the company’s footprint by eliminating packaging waste. Her efforts save the company money and energy, and optimize delivery by reducing material across the supply chain. It’s innovative, it’s sustainable and it’s economic – it’s winning!

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Amazon’s big opportunity: Transparency in sustainability

At Environmental Defense Fund, we believe that environmental progress and economic growth can and must go hand in hand. EDF+Business works with leading companies and investors to raise the bar for corporate sustainability leadership by setting aggressive, science-based goals; collaborating for scale across industries and global supply chains; publicly supporting smart environmental safeguards; and, accelerating environmental innovation.

This is the fifth in a series of interviews exploring trends in sustainability leadership as part of our effort to pave the way to a thriving economy and a healthy environment.

Over the past few years, Amazon’s sustainability team has been busy setting ambitious goals on renewable energy, making their voice heard on smart environmental policies, and leveraging their expertise in technology to drive innovation that can benefit the planet – and boost profits.

I recently chatted with Kara Hurst, head of worldwide sustainability at Amazon and former CEO of The Sustainability Consortium, about how innovation and environmental goals intersect at Amazon, the launch of the new Amazon Sustainability Question Bank, and how sustainability issues could play a role in deciding the next Amazon headquarters (HQ2).

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We’re thankful for…companies setting climate goals!

Target has joined other retailers on the right path to developing a robust science-based policy for tackling greenhouse gas emissions in its operations and supply chain, creating more momentum toward action on climate by leading companies.

At COP23 in Bonn, Germany, we heard leaders at some of the world’s largest companies share their commitments to step forward on climate issues. This year we’ve also seen American companies like Mars Inc., Walmart, Hewlett Packard Enterprise and Amazon set ambitious goals during a time when our government is stepping back. At EDF+Business, we see time and time again why our world needs healthy environments and healthy businesses in order to truly prosper.

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The state of green business? Hopeful, puzzling… and pushing forward

I always look forward to the latest State of Green Business report from GreenBiz. It invigorates me and reminds me that there are a lot of talented people making sure that both business and the planet can thrive– a notion that I’m holding tight as the political atmosphere gets increasingly crazy.

I found two of the trends in the report of particular interest because they signal that smart business leaders are staying the course on climate.

Trend: Corporate Clean Energy Grows Up

The trend toward corporations transitioning to renewable energy has been gaining momentum for years. Today, twenty-two of the Fortune 100 have committed to procuring 100% of their energy from renewables, and 71 have a public target for sustainability or renewable energy.

“Business is a very important advocate for clean energy, because it speaks the language of hard economics,” points out Jim Walker, co-founder of The Climate Group. “It’s sending a strong signal to policymakers and the general public that this is the inevitable direction we’re going to move towards – a 100% clean energy economy.”

When innovative companies like Apple, Amazon, Unilever, and Google show leadership on renewable energy, their suppliers, customers, competitors, and the market respond. Microsoft, for example, is helping lead the way by purchasing 237 megawatts of capacity from projects in Wyoming and Kansas. And, Walmart, a long-time EDF partner, has also made a commitment to source 100% of its electricity from renewable energy. Currently at 25%, they’ve made significant progress on implementation.

With corporate leadership like this in place, it’s clear that business will continue to have an impact on the renewable energy revolution. The recent report from my EDF Climate Corps colleagues is proof of that: the solar power sector is growing quickly, and is a major source of jobs that are a.) impossible to outsource and, b.) available in all 50 states.

Trend – Companies Put Their Money Where Their Suppliers Are

According to the Business and Sustainable Development Commission, embedding sustainable business practices in the global food and agriculture industry could deliver $2.3 trillion annually.

“All stakeholders can share in the benefits: smallholder farmers improve their livelihoods; suppliers gain increased security of supply with improved quality; and we reduce volatility and uncertainty with a more secure and sustainable supply chain,” wrote Unilever CEO Paul Polman.

Elizabeth Sturcken, Managing Director, EDF+Business

When a corporation commits to reduce emissions in their supply chain, the results can be powerful.  We’re seeing this firsthand with our work with Walmart. EDF spent 10 years with Walmart to help drive sustainability across its global supply chain. The result? By the end of 2015, through leadership, innovation and a diverse range of projects, Walmart had exceeded its goal to reduce supply chain emissions eliminated 36 MMT of greenhouse gas from its supply chain. Now, they’ve committed to removing 1 Gigaton of emissions by 2030 – the equivalent of the total annual emissions of Germany.

Smithfield Foods is another company that EDF collaborated with in setting a goal to reduce absolute greenhouse gas emissions by 25% by 2025 across its upstream U.S. supply chain. EDF will continue to help Smithfield improve fertilizer efficiency and soil health, which will reduce nitrous oxide emissions from grain farms.

But to keep moving forward on these sustainability trends and others requires business to use its voice and influence to not backpedal on policies that are a win-win for our environment and our economy. We are at a crucial period where companies need to make the long-term economic case for policy, including the Clean Power Plan, Toxic Substances Control Act (TSCA) and ensuring the U.S remains part of the Paris Agreement.

Businesses will not go backwards on environmental protection. It’s bad for business and the environment. In fact, over 600 businesses have signed the Low Carbon USA letter calling on U.S. elected leaders to stay the course on environmental protection and climate leadership.  Now is the time for unlikely voices to step up and continue to press the case for action; the recent call for a carbon tax is probably most noteworthy because it was brought forth by Republican party faithfuls.

If there was one sentence in the State of Green Business report that captured the feeling of the moment it was this: “It’s hard to imagine a time more hopeful and horrifying for sustainable business.” At EDF, we’re not only hopeful but we’re committed: the economy and the planet can—and must–thrive together. Any conversation that suggests otherwise is a non-starter.

 

Companies know reducing their carbon footprints makes good business sense—and that’s why they support the Clean Power Plan

Companies across the country are tackling climate change in their individual portfolios—reducing their carbon footprints by harnessing cost-effective investments in energy efficiency and clean energy. These companies are taking actions all across our nation, driving major investment in low-carbon energy resources at the local level through individual projects and investments.

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Liz Delaney, Program Director, EDF Climate Corps

These leading companies want well designed national-scale policy that complements their own efforts to mitigate climate change. The Clean Power Plan, America’s first-ever limits on carbon pollution from power plants, is a crucial opportunity to align national policy with this increasing demand for low-carbon energy. The rule provides investment certainty, while incorporating a flexible framework that ensures that its pollution reduction targets can be met in the most cost-effective manner available.

 That’s why major innovators like Google, Microsoft, and Apple—companies that employ tens of thousands of Americans across the country—are reducing their contributions to carbon pollution and supporting the Clean Power Plan. As a Google official put it, with the Clean Power Plan it’s possible to drive “innovation and growth while tackling climate change.”

 There is robust demand for clean energy solutions

Each year, EDF Climate Corps works with approximately 100 large organizations to lower energy costs and reduce carbon footprints through strategic energy management. Since 2008, we have deployed over 700 Climate Corps fellows to leading organizations to build the business case for investment in energy efficiency and clean energy, identifying cost effective ways for companies to save money while mitigating climate change.

A recent analysis of our work demonstrates several interesting trends in emissions management, many of which can be advanced by implementation of the Clean Power Plan. We are seeing companies embrace energy efficiency and deploy it at scale. Companies are taking responsibility for their environmental impact and are investing in broad solutions. For example, the report describes how Comcast identified ways to cost effectively eliminate more than 6,000 metric tons of annual carbon pollution by scaling its investments in energy efficiency over three years.

More and more corporations are also demonstrating a significant interest in zero-carbon energy. Over 80 companies, including General Motors, P&G and Walmart, have made bold and public commitments to use 100% renewable energy in their operations.

Mainstream companies are embracing the economic opportunity and societal imperative to clean up their emissions profiles, and are willing to invest in zero-carbon energy resources. In fact, in 2015, one in three Climate Corps host organizations worked with a fellow to build the business case for investment in clean energy.

Leading companies are taking individual action and supporting national scale policy solutions

By greening the nation’s power supply, we can mitigate climate change by harnessing a transition and an evolution that has already begun.

But companies are increasingly recognizing that they need to do even more than just mitigate their own pollution and procure clean energy to supply their needs. They need to advocate for smart policies too.

This is why over 100 companies, including DuPont, General Mills and Starbucks have urged “swift implementation of the Clean Power Plan” and why Google, Apple, Amazon, Adobe and others are standing up to defend the Clean Power Plan in court.

The Clean Power Plan establishes common sense national targets for reducing carbon pollution

The Clean Power Plan is an important component of a cost-effective, strategic approach to tackling climate change. It will complement and harness individual efforts to address climate change by companies across the country.

But don’t take my word for it—major businesses that are supporting the Clean Power Plan said so themselves.

Take Google, Apple, Amazon, and Microsoft. In their amicus brief filed in support of the Clean Power Plan, they noted:

By limiting emissions of carbon dioxide from existing fossil fuel-fired power plants, the Plan will help address climate change by reinforcing current trends that are making renewable energy supplies more robust, more reliable, and more affordable. Tech Amici welcome these developments. (Tech Amici brief at 2-3.)

Or IKEA, Mars, Adobe, and Blue Cross Blue Shield of Massachusetts. In their submission in support of the Clean Power Plan, they noted:

The Amici Companies have a salient interest in the development of sound policy and economically responsible environmental regulations because, as electricity consumers and purchasers, planning strategically and financially for their energy resources needs is critical to business success. (Consumer Brands Amici brief at 3.)

The way forward

Through public commitments to clean energy and through their collaborations with EDF, we know that major companies want access to clean, affordable, low-carbon energy.

It’s time we tackle climate change with federal climate policy that reflects and harnesses these powerful trends.

 

Old Excuses on Policy Advocacy Don’t Work Anymore

I admire corporate sustainability leaders who, as hockey great Wayne Gretzky once said, know how to “skate to where the puck is going, not where it has been.”

I’m optimistic about our future when I see courageous leaders at companies like Unilever, Pepsi, Mars and others lead the way by looking beyond short-term profits for long-term success and publicly advocating for the smart regulatory and policy changes required to preserve the natural systems that people, communities and companies need to thrive.

Yet, there are too many companies that still rely on old excuses when asked to take a public stand on energy and environmental policy.

To be a bold leader in the 21st century requires a strong voice on the most pressing environmental issues of the day. It’s no longer good enough to put a green label on a product or declare in an annual report that your company is making the world a better place. It’s time to take the next leadership step.

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At Environmental Defense Fund (EDF), we like to call the next step of sustainability leadership the business policy nexus. It simply means that your company has aligned your sustainability goals and strategies with your external engagement on policy.

If your company isn’t operating in the business policy nexus, it’s time to retire the following excuses and go public in support of forward-facing environmental policies:

Excuse #1 "We're not political."

Companies can no longer be silent on issues like the environment. Customers expect the brands and companies they love to stand for something and to show leadership on issues that matter to them.

In previous decades, this excuse might have sounded more like, “we want Democrats and Republican to buy our products.” However, this recent working paper by researchers at Duke and Harvard suggests that C.E.O. activism can sway public opinion — and even increase interest in buying a company’s products.

Corporate neutrality on the issues that matter may be outdated. If you don’t believe me, maybe ask Paul Polman of Unilever or Indra Nooyi of Pepsi or Yvon Chouinard of Patagonia. Their corporate voices ring loud and clear when it comes time to stand up for the environment.

Excuse #2 "It's not part of our core business."

In a 2015 article the head of government relations for one of the world’s biggest companies told the Guardian: “There’s a reluctance if a regulation doesn’t get into your core competency to get into somebody else’s backyard. It’s an unspoken acknowledgment that you stick to your knitting.”

The earth is everyone’s backyard. And the state of our environment affects every business.

Just take a look at the companies who have backed the Clean Power Plan. “Clean energy” isn’t the core competency of global giants like Amazon, General Mills, Nestle, or Levis, but these companies and many others made their corporate voices heard for the good of business and society.

Excuse #3 “Our government affairs team deals with policy.”

Some corporate leaders have been passing the buck to other departments, other industries and other leaders for too long.

You have a responsibility to inspire everyone in your organization to maximize the triple bottom line: profit, people and planet.

Leaders find it easy to measure profit; measuring social and environmental impact is a little harder. Without good data, no one in a company feels comfortable taking the lead on policy.

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This is where an NGO like EDF can help make a difference. EDF has built a framework for corporate sustainability success that encompasses science, strategy, and systems to create measurable environmental and business benefits. Your organization can use this framework to become a sustainability leader and confidently stand up for smart climate policy that addresses your future business risks.

The old excuses don’t work anymore. So stand up for change and advocate for policies that will help us overcome the most serious environmental challenges we face. The issues are too important; the consequences for little or no action are too serious.

Follow Tom Murray on Twitter: @tpmurray

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