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.

 

Now trending in global business: collective action on deforestation

edf-business-of-food-blog-graphic_shelton-grp_12-7-16With U.S. policy engagement on climate action in limbo, the rest of the world is marching forward. As major CEOs and political leaders gathered at the recent World Economic Forum (WEF) in Davos, Switzerland, clear support was shown for creative investment in clean energy, sustainable development and other climate change mitigation practices.

While many ideas were discussed, however, one topic emerged as both a driver of climate impact and an opportunity area for huge climate benefits: deforestation.

Two major initiatives around deforestation were launched at the WEF:

A fund to catalyze private investment in deforestation-free agriculture was announced by the Norwegian government, the Sustainable Trade Initiative (IDH), UN Environment, the Global Environmental Facility, and many other supporters. Their goal? To help fund sustainable intensification of agriculture in jurisdictions which are effectively working toward reducing deforestation. The fund will be operational by middle of 2017 and aims to protect over 5 million hectares of forest and peatlands through its projects by 2020. 

Norway pledged up to $100 million, with a capitalization goal of $400 million from other donors and private sector partners. The model aims to engage even more private sector financing, for a total investment of $1.6 billion by 2020. The Tropical Forest Alliance 2020 and major food giants like Carrefour, Marks & Spencer, Mars, Nestle and others are expressing support. Unilever is the first corporate leader to commit funding, with a pledge of $25 million over the next 5 years.

A plan to use big data to monitor and trace the raw materials in major corporations’ supply chains. Led by the World Resources Institute, the initiative has major support from food companies such as Bunge, Cargill, Walmart, and others, with a total combined value of $2.9 trillion.

The goal is to build a decision-support system to help companies track progress and real-time challenges associated with their deforestation commitments. The tool will enable corporations to make real-time decisions about geographies to prioritize in their deforestation reduction work, and get alerts when illegal activities are happening in those regions. While the tool is still in very early stages, the future could be bright.

Deforestation-free sourcing? There’s an app for that!

Deforestation_in_Panama

Two initiatives… powerful trends

So: what do these two initiatives—one helping to ensure that farming already-cleared land becomes more productive, and one helping companies shed light on the complex, murky labyrinth of their global supply chains—tell us about emerging trends in global climate leadership?

  1. Forests matter: Stakeholders understand the importance of forests for climate and supply chain stability. The impressive list of participants and lofty goals show that forests have become part of the main stage for how to address climate change globally. Deforestation contributes about 15% of greenhouse gas emissions annually, but can also be a major carbon sink if managed appropriately. Corporations understand that forests are vital for reducing reputational risk in product lines, ensuring stable weather patterns that can produce viable crops into the future, and increasing the resiliency of major geographic regions against drought and flooding. These new commitments indicate that action on forests as part of the climate dialogue are here to stay.
  1. Collective action is the right tool: Companies see the value in working collectively on effective solutions for deforestation reduction. Corporations know that there is significant risk in not engaging effectively on forests, both for the climate and for their supply chains. But the more challenging question to date has been: how? Over 350 companies have made public commitments to reduce deforestation related to major agricultural commodities in their supply chains. However, only one-third of these companies report on how they will reach these goals. These two new initiatives show the value of collective action between companies, non-profits,
    Katie Anderson, Project Manager, EDF+Business

    Katie Anderson, Project Manager, EDF+Business

    and governments to engage effectively in the multi-faceted challenge of deforestation-free sourcing. The days of working in silos, simply along supply chain boundaries, are no longer the most effective strategies. Working together provides new, creative solutions that can have an impact across entire regions rather than solely withinthe boundaries of sourcing relationships.

  1. There is still much to be done. While these initiatives are important signals of major trends within the deforestation space, they are still only in their infancy. Time will tell if the stakeholders engaged will be able to actualize the ambitious goals and creative thinking embedded in these ideas.

But, I’m optimistic. What emerged out of Davos tells me that the collective work of these major corporations can get us to where we need to go: productive, economically viable agricultural supply chains without destroying critical forest habitat upon which we all rely.

Will the U.S. join this trend toward collective action? The jury is still out on that one.