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!


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. Tropical forest loss 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.



Energy Management Then and Now: What You Need to Know About the Latest Trends

Liz Delaney, Program Director, EDF Climate Corps

In 2008, EDF launched Climate Corps, an innovative graduate fellowship program committed to jump-starting investment in corporate energy efficiency.

Now, after almost a decade of embedding over 700 fellows inside large organizations across all sectors—public, private and non-profit—we’ve taken a step back to survey the broader landscape.

What did we find? Energy management today looks very different than when we started out. As large organizations have shifted to take on more sophisticated approaches, significant advancements in management strategies have emerged.

And for those of you toiling away on a daily basis in the complicated world of energy management, we’re pleased to offer you a mile-high view of how your efforts fit into a larger picture of progress.

In our new report, Scaling Success: Recent Trends in Organizational Energy Management, we examine the efforts of more than 350 large organizations over eight years. Through careful analysis of over 3,000 energy project recommendations, we have identified five key trends:

  1. Energy efficiency was just the beginning. Companies have become more strategic and sophisticated about energy management over the years. Equipment upgrades and retrofits have paved the way for higher-level energy analyses and plans, integration of clean energy technologies and more.
  1. Organizations are turning one win into many. By scaling up energy efficiency projects to be multi-site and multi-facility, companies have clearly moved past the “pilot” or “one-off” stage and are now deploying efficiency measures at scale.
  1. Companies face front-loaded costs, but are realizing greater ROIs on energy projects. The days of the low-cost/no-cost energy efficiency improvement may be over. Projects now require substantial upfront capital investments, but these projects deliver more value.
  1. Energy projects now pack more environmental bang for the buck. As technologies have improved and companies have become more strategic about how they direct spending, investments in energy efficiency are providing significantly more greenhouse gas reductions per dollar spent than they did eight years ago.
  1. Strategic energy management is still hard work. Despite progress made over the years, corporations, municipalities and other large institutions still face significant barriers to project implementation.

To distill it down even further: strategic energy management has evolved from a one-off initiative into an organizational imperative. Despite the barriers, companies are scaling up their efficiency efforts, integrating clean energy more regularly and using data to drive their smart energy strategies.

If you’ve been a part of this evolution (or revolution?), congratulations! If you haven’t, now is the time to take advantage of all these lessons learned and get on board.

Either way, we invite you to learn more about our key takeaways, read our full report and keep moving forward on accelerating your clean energy projects.

Fleet Emissions Down Significantly in 2009

Emissions from fleet vehicles are down 17% from 2008 levels and 18% from 2006 levels, according to the State of Green Business 2010 annual report released today. The emissions data was provided by six of the seven largest fleet management companies.

Pages from StateOfGreenBusiness2010

While the sour economic condition was definitely a factor in the size of this decrease, the numbers likely also reflect – and to a significant degree – the fact that over the recent years corporate fleets have made strides to lower per vehicle emissions.

A likely leading non-economic factor in reducing emissions is the adoption of vehicle “right-sizing” practices. Abbott Labs, Infinity Insurance and Owens Corning were among the first companies to demonstrate the value of moving from moving to more efficiency vehicles on a wide-scale. The record gas prices of 2008 gave the shift real momentum. The 2009 emissions data reflects the first full year of operations by the more-efficient vehicles that were cycled into fleets in the mid-2008 buy cycle.

Read more about our work with these companies and partner PHH Arval.

The expansion of other emission reduction tactics is also likely reflected in these numbers. Over the past two years, there has been a proliferation of efforts that work with drivers to adopt fuel-smart driving practices. Here at Environmental Defense Fund (EDF), we noted the many companies entering this space in our 2009 Innovations Review and also create a suite of materials for fleets to use.

Increased use of efforts to improve routing and reduce idling likely also has contributed to the emissions decline. Leading fleets, including Carrier and Poland Spring, have leveraged telematics software to improve operational efficiency.

Read more in these case studies about Carrier [PDF] and Poland Spring [PDF].

I am optimistic that the trend in fleet emission reductions will continue as the economy recovers of the coming years.

From measuring emissions, right-sizing vehicles, improving routing, reducing idling and improving driving habitats, corporate fleets are broadly adopting strategies to reduce their emissions.

EDF at the Dow Jones Private Equity Analyst Outlook 2010 Conference

Capitalizing on the momentum of Environmental Defense Fund’s groundbreaking Green Portfolio partnership with leading private equity firm Kohlberg Kravis Roberts & Co (KKR), we are taking our Private Equity show on the road to one of the most visible and well-attended conferences, the Dow Jones PE Analyst Outlook 2010 in New York City, January 25th – 27th.

The event will include perspectives from elite institutional investors, fund managers and advisors about the major PE investing trends for 2010, including a focus on environmental performance.

Environmental Defense Fund will be the first and only NGO to attend the conference, and Tom Murray will speak on a panel about where investors should focus in 2010.  He’ll introduce attendees to our Green Returns program, an innovative and flexible approach designed to create business and environmental value for the private equity sector that was developed as part of EDF’s partnership with KKR.

Tom’s panel will also include speakers from top PE funds 3i, THL and Huntsman Gay, all of which take a hands-on approach to investing in their portfolio companies.

I look forward to hearing what role the top representatives of the private equity sector sees for environmental innovation in 2010 and beyond.  Share your ideas and best practices with us here.