I am just back from a week in Beijing, where Environmental Defense Fund was part of Walmart’s announcement of a new goal to reduce greenhouse gas emissions in its China supply chain. Had I not been there in person, I’m not sure I could have accurately comprehended how essential that this goal – a 50 million metric ton (MMT) reduction by 2030 – must be followed by swift implementation.
That’s because every day in Beijing felt like the worst day in San Francisco, my home, when last year’s horrific wildfires made our eyes and lungs burn. “Normal” in Beijing means not being able to see down to the end of the block, and sharing the crowded streets with commuters, parents and children all covered by facemasks.
McDonald’s – the world’s largest restaurant company – recently announced new climate goals, which were quickly followed by many comments like this one, from Axios:
"These are concrete targets, but they’re not as of yet backed up with specific plans of how to get there."
Axios is right. These are concrete targets (and they’ve been approved by the Science-Based Targets Initiative). Here are the details: by 2030, McDonald’s is pledging to reduce greenhouse gas emissions from their restaurants and offices by 36 percent, and reduce their emissions intensity (per metric ton of food and packaging) across their supply chain by 31 percent. The company estimates these reductions will prevent 150 million metric tons of C02 equivalents (CO2e) from being released into the atmosphere. That’s huge – it’s the equivalent of removing 32 million cars from the road for one year.
But I want to challenge Axios in saying that the company has “no specific plans" to get there.
With all economic and environmental indicators pointing towards a clean energy future … the Trump administration continues to move the U.S. backwards by repealing the Clean Power Plan.
While disheartening at a personal level, at a professional level I see no signs of the private sector retreating from the clean energy economy. Leading companies are zeroing in on the strategic moves that strengthen long-term business resilience.
Right now there is a broad and diverse coalition supporting the Clean Power Plan, including 18 states, 60 municipalities in red and blue states, some of the nation’s leading power companies, consumer and ratepayer advocates, faith organizations, public health associations, small business associations, iconic corporate leaders like Apple, Google, and Mars, and many others.
We’re too far down the road to a clean energy economy to turn back now.Read more
In the absence of federal leadership and oversight, who will be the standard-bearer for the environment?
The opportunity and need for bolder private sector leadership has never been greater. Business must continue to step up and lead the way to a more sustainable world where companies, communities, and the environment thrive. Your legacy must now be a legacy of leadership and stewardship. One cannot exist without the other.
Long-term economic growth and business competitiveness depends on a thriving environment. By 2050 there will be 9.5 billion consumers on our planet, all demanding more energy, food, products and services than ever before. This presents a huge challenge, and a huge opportunity for business leadership, collaboration and advocacy.
Tom Murray, VP EDF+Business
It is up to you to inspire, influence and innovate for a future where both the economy and the environment can prosper. We know this is achievable because we’ve proven it. Environmental Defense Fund (EDF) has been at the forefront of this change for 25 years, bringing cutting edge science, policy, and economic expertise to high-impact companies – including McDonalds, Walmart, and KKR – to transform business as usual in their products, operations, and advocacy. But now it’s time for all of us to raise the bar.
Set big goals
When companies like Walmart, PepsiCo and Microsoft set aggressive sustainability targets, three very important things happen:
Loud and clear signals are sent to employees, customers, investors, competitors and other stakeholders that they are planning for long-term competitiveness; not short-term politics. By publicly committing to bold environmental goals that reflect their impact and influence, business leaders are building a legacy of responsible prosperity for their organizations.
Big public goals inspire competition and results. There’s never been a more important time for business to create a race to the top, not because regulations demand it, but because employees, customers, the economy, and the planet deserve it. And, business operates on a global scale. Environmental leadership and oversight –or lack thereof — in the U.S. is no reason to fall behind in the global race to dominate the clean energy sector.
Big challenges breed big innovations. Rarely do business leaders know exactly how they will achieve their aggressive sustainability goals; but instead use goals as an impetus to innovate. Sustainability is a business challenge like any other – solutions and efficiencies are found through strategic, innovative thinking and an openness to bring the right people to the table to find the most transformative solutions.
This effort is well underway. To date, over 275 companies are taking action on science-based targets. Here’s a step-by-step guide to learn more about setting your own science-based target.
Collaborate for scale
Private sector leaders must work together and use their purchasing power to inspire a future where both business and the environment can prosper. There is too much rhetoric coming out of Washington, DC today about a false choice between a healthy environment and a growing economy. To borrow a well-used phrase from former Secretary of Labor Robert Reich …that’s rubbish. The good news is that we can have both. There are currently over four million jobs in the clean energy and sustainability sectors across all U.S. states. The solar industry is growing at a rate of 12 times faster than the U.S. economy. Business is innovating to create cleaner air and water, safer products and abundant, low-cost energy supplies while figuring out how to accommodate a growing population without decimating natural resources.
Business leaders must look beyond the four walls of their own operations and drive broader change across their industries and global supply chains.
The good news is that the momentum for a sustainable future is not going to come to a screeching halt now that Trump has said the U.S. will pull out of the Paris Agreement. Business leaders have voiced their intent to stay the course, loud and clear. But business has always relied on regulatory guardrails for long-term planning when it comes to the environment. What happens now?
First, if your company is already on the front-lines of climate policy, keep your foot on the gas and your brand at the forefront. If you need help stepping up your sustainability, EDF and other NGOs are here to help to drive business- and planet-worthy victories.
Second, if you’ve been sitting on the sidelines waiting to see what happens, now is the time to join the conversation. Step up and voice your business-first reasoning for a clean energy, sustainable future. Collaborate with others in your industry to amplify the message. Join other like-minded business leaders to uphold strong, global commitments.
How you can get involved:
Add your brand to the 1,219 mayors, governors, college and university leaders, businesses and investors who have voiced their continued support for the Paris Agreement – We Are Still In.
Join the world’s most influential companies in committing to 100% renewables
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-freeagriculture 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.
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!
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?
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.
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
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.
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.
Five years ago I turned in my laptop and brought my business consulting experience to Environmental Defense Fund. Some might see that move as making a break. I saw it as honoring a connection.
Public service may be the noblest calling. But it is also among the hardest. That’s why I believe business leaders have a role in government. Strong business leaders ask questions – and care about the answers. They consult experts who know more than them – and then solve thorny problems that matter to peoples’ lives. They take accountability.
So as a student of business, for much of my life I have casually told friends I would like to see an experienced business person in the Oval Office.
Now we have one.
As Donald Trump takes office, he must draw on the best skills represented in the business world.
Trump and his administration must make an urgent commitment on the economic issue of climate change and clean energy, before a problem worsens, accountability mounts, and the U.S., as the world’s second largest pollution emitter, is seen as a deadbeat on the global stage.
Trump’s handling of climate may well define his legacy, especially for generations of Americans to come.
Yet Mr. Trump has called climate change a hoax, nominated a climate skeptic to head our Environmental Protection Agency, and suggested he may pull the United States out of the Paris Climate Agreement.
We will learn a lot about the administration’s economic prowess by whether it remains lashed to a special interest agenda, or studies up and seizes climate action for the economic opportunity that it is.
The incoming administration should take a page from Gary Garfield – ex-CEO of Tennessee based Bridgestone. In an open letter to the President-Elect, Mr. Garfield observed: “A hasty decision on [leaving the Paris climate agreement], will likely isolate our nation, cede technology, innovation and jobs to China, and limit market access for our exporters.”
But it doesn’t have to be that way. Gary Garfield notes: “A decision to stay the course on climate and institute policies harnessing American ingenuity to create truly efficient clean energy technology — akin to the effort behind the Manhattan Project — will help drive both jobs and our economy for decades to come.” Mr. Garfield should know a business opportunity when he sees one; he grew profits at Bridgestone five-fold in six years.
And he is not alone. From technology to power, and investment to oil and gas, business leaders across sectors have pinpointed the urgency of addressing climate change, not just because it is the right thing to do, but because de-carbonization is one of the great economic opportunities in the 21st century:
“With tens of billions of dollars of U.S. renewable energy investment in the works this year alone, and far more globally, the question for American political leadership is whether they want to harness this momentum and potential for economic growth” – Jonas Kron, Trillium Asset Management
“In Statoil, we acknowledge that there is overwhelming evidence for human-induced climate change. Climate change is happening.”
“Finding more renewable and low-carbon energy alternatives and reducing energy intensity lowers operating costs and can enhance operational flexibility.” – Walmart
And there are scores more business leaders who recognize the data on climate change’s seriousness and recognize the responsibility – and the opportunity – their companies have to rise to the challenge. Over 600 business leaders wrote to Trump, Congress, and global leaders, to support continuation of low carbon policies, investment in the low carbon economy, and continued U.S. participation in the Paris Agreement.
There is no question that business leaders have spoken, and will continue to speak up.
Now the question is: Will Donald Trump have the business sense to listen and lead?
More than 530 companies and 100 investors signed the Low Carbon USA letter to President-elect Trump and other U.S. and global leaders to support policies to curb climate change, invest in the low carbon economy, and continue U.S. participation in the Paris Agreement. It’s a powerful message from business leaders connecting the dots between prosperity and a low-carbon economy and confirming their commitment to continue to lead the way.
The private sector call for continued leadership on climate cannot be ignored.
“All parts of society have a role to play in tackling climate change, but policy and business leadership is crucial,” said Lars Petersson, president of IKEA U.S. “The Paris Agreement was a bold step towards a cleaner, brighter future, and must be protected. IKEA will continue to work together with other businesses and policymakers to build a low-carbon economy, because we know that together, we can build a better future.”
Despite the climate uncertainty represented in President-elect Trump’s cabinet picks and campaign rhetoric, business is moving forward, actively building a clean energy future. In recent months, Google, Microsoft, Smithfield Foods, Walmart and others have continued to prove what’s possible through bold, science-based greenhouse gas reduction targets, investments in clean energy and expanded efforts to drive down emissions in their operations and supply chains. Adding to the mounting evidence that corporate America gets it and that momentum for business leadership is here to stay.
Microsoft-founder Bill Gates and nearly two dozen other business leaders launched a $1-billion fund that will finance emerging energy innovations.
A new report shows investors controlling more than $5 trillion in assets have committed to dropping some or all fossil fuel stocks from their portfolios.
These efforts are focused on accelerating the transition to a clean energy future. This might be surprising given the current political climate, but smart business leaders understand that decisions must be driven by long-term economics, not short-term politics. A thriving economy depends on a thriving environment.
"With tens of billions of dollars of U.S. renewable energy investment in the works this year alone, and far more globally, the question for American political leadership is whether they want to harness this momentum and potential for economic growth," said Jonas Kron, senior vice president at Trillium Asset Management.
“Creating jobs, and establishing the United States as an innovative world leader in creating a clean energy economy is a no brainer for the Trump administration,” said Aspen Skiing Company CEO Mike Kaplan.
The list of signatories to the Low Carbon USA letter has doubled since November, and includes some of the world’s biggest and most innovative companies, including DuPont, General Mills, HP Enterprises, Pacific Gas & Electric, Salesforce.com, Unilever, and more. These business leaders and many others know that accelerating climate policy and innovations is a pathway to creating jobs and strengthening the economy.
A growing low carbon economy already has created jobs and driven economic growth across the U.S. In fact, over 2.5 million Americans now work in the clean energy industry, making above average wages. With China investing over $360 billion in renewables, the U.S. simply cannot afford to change course on this powerful opportunity for environmental protection and economic growth while other countries capitalize.
Business is ready to lead the way and accelerate the path towards a low carbon economy. Business has spoken. Will the President-elect and his new administration listen?