More and more companies are making public commitments to cut greenhouse gas emissions outside of their own operations. Why? Because compared to scope 1 and 2 emissions (from direct activities), avoiding scope 3 emissions can have the greatest impact on a corporate footprint. The numbers are clear: the majority of GHG emissions come from indirect […]

As a Trump Administration appointee tries to dismantle EPA’s credibility as a guardian of public health and the environment, other actors have been stepping up. We recently examined retailers leading the way on removing chemicals of concern from the marketplace – but there has also been significant activity from state governments and companies to increase […]

A recent study from UPS and GreenBiz revealed that 95 percent of surveyed companies recognize the effect that urbanization – particularly air quality and traffic congestion – will have on business growth and sustainability. Why? Because poor air quality costs the global economy $225 billion every year in lost labor income, according to the World […]

Clean energy is on the rise in America, and there’s no denying it. Each year, investments in renewable sources of power continue to increase, bringing with it economic and job growth. In fact, it’s on track to deliver an increasing share of total energy supply, putting traditional energy sources to the side. That’s why organizations […]

Energy efficiency is a simple, quick and cost-effective method to reduce both costs and greenhouse gas (GHG) emissions. That’s why companies are scaling up their energy efficiency projects in an effort to achieve greater results. And it’s important that they do. Buildings play a considerable role in GHG emissions: Commercial buildings in particular make up […]

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 […]

In just a few days I, along with EDF+Business’ Xixi Chen, will be traveling across China to talk with companies and students about corporate energy management. The trip comes one week after China’s “Golden Week”—the country’s eight-day-long national celebration. Each year, the holiday marks the largest week for tourism, bringing in over 700 million tourists […]

Environmental Defense Fund Q&A with Tim Goodman, Director of Engagement at Hermes Investment Management Early oil and gas industry adopters of methane management strategies and technologies are starting to see these reductions as an opportunity to gain a competitive edge. Just last week, ExxonMobil announced  a new methane reduction program for its XTO Energy subsidiary, […]

Earlier this week, New York City became the first city to devise a plan for meeting the goals outlined in the Paris Accord —the world’s first comprehensive climate agreement from which President Trump pledged to pull the U.S. from. The 1.5°C Paris Agreement-compliant climate action plan comes in response to Executive Order 26 (EO26), signed […]

By Tom Murray

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

This is the first in a series of interviews with sustainability leaders who are driving the charge towards a healthy economy and a healthy environment.

Linda Fisher is one of corporate sustainability’s trailblazers. In fact, she was named the first chief sustainability officer of a publicly traded company (DuPont) in 2004.

Over the next decade, Linda led DuPont’s efforts to establish the company’s first set of market-facing sustainability goals, which included a strong emphasis on innovation.

Prior to joining DuPont, Linda served as deputy administrator of the Environmental Protection Agency (EPA), where she had also spent a decade working to safeguard human health and the environment, including developing the agency’s first position on climate change.

I recently caught up with Linda to talk about her unique career that spanned the public and private sectors, and to hear her insights on how sustainability begets market opportunities and why business leaders are staying the course on sustainability despite an unpredictable political climate. Below is an edited excerpt of our discussion.

*Note: On September 1, 2017 Dow and DuPont completed a planned merger to form DowDuPont.

What attracted you to a career in corporate sustainability?

I got interested in sustainability as an outgrowth of my work at EPA. When you’re at EPA, you spend a lot of time writing rules and regulations preventing people from doing harm to the environment, to public health, and to our natural resources.

When I left EPA for the private sector, I realized there was more to protecting the planet than just telling business what not to do. In fact, at the time, industry was beginning to pursue voluntary initiatives and go beyond regulations that EPA set, particularly in terms of emission reductions.

I also learned that innovative companies were looking at sustainability as a driver for business growth. Companies could develop a growth strategy around new innovation products that would make society more sustainable. And that really appealed to me.

"Many companies see sustainability driving innovation & growth opportunities" former DuPont CSO…
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How did you take your insights and experiences from EPA to lead the process in developing DuPont’s 2020 Sustainability Goals?

Linda Fisher, former CSO at DuPont and Deputy Administrator of the EPA

DuPont’s early goals were really focused on reducing emissions. And everyone involved in sustainability at DuPont realized no matter how low we drove our emissions, it wouldn’t affect change. We needed a bigger vision, a larger more robust set of goals.

The real significant step change came when we set the 2020 goals. We started the process by talking with our research and development team to get them to build sustainability issues into their product development. I think that was really a big change for the company because those goals were based around: What is the future of DuPont? What are the products that we want to sell in three, five, ten years down the road? And, how can we be sure that our products are addressing some of the societal challenges around sustainability?

The goals were business-driven and market-oriented because we had to think about the sustainability trends that were going to be affecting our customers.

Can you give any examples of how those sustainability goals have played out at DuPont and what benefits the company is experiencing as a result?

Probably the biggest benefit is that DuPont has become a partner of choice for innovative companies. Companies have a problem that they want to solve or an opportunity that they want to create for their customers, and they come to DuPont to help them develop it.

Another example is photovoltaic cells. The amount of energy you’re going to get out of each individual solar cell depends on the quality of materials. DuPont, as the maker of most of the materials that go into solar cells, has partnerships with manufacturers to develop materials to last longer and be more energy efficient, which I think makes great sense to those who are interested in putting solar cells on their roofs or even for commercial grade solar farms.

And finally, when the CAFE (Corporate Average Fuel Economy) standards came out, DuPont began a long-lasting partnership with the automobile industry in developing materials to make lighter, more efficient cars that would still be safe. We also developed new refrigerants that had no ozone depletion properties.

How do you see collaboration between industry and government unfolding with regard to sustainability?

The shift I have seen from the late 90s is the environmental community and some in government are seeing industry as the source of solutions.

If we’re going to figure out how to feed nine billion people, we’re going to need the innovation to produce better seeds and grow food in a way that’s less impactful on the environment.

If we’re going to figure out how to transport nine billion people in more and more urbanized environments, we’re going to have to figure out how to make automobiles and other forms of transportation more efficient.

Many companies see sustainability driving innovation and growth opportunities. That mindset shift I think is hugely significant, and I see that gaining momentum.

Innovation in industry can move at a faster pace than government regulation, leaving a gap between the interest and need to bring new innovations to the market and the regulations to assure the public safety of new products. How does industry regard regulation?

I think industry realizes — and I’ll speak for DuPont but I see this in other companies as well — that there is a role for well-written, science-based regulations because those regulations assure the public that new innovative products can be used safely, and are produced in a way that minimizes the impact on the environment.

DuPont was one of the leaders in nanotechnology and we knew that globally this technology might be essential to producing some of the innovative materials that we would need.  But there was no well-written risk framework or regulatory framework on nanotechnology.

At the request of Environmental Defense Fund (EDF), we put a team of professionals together from DuPont and EDF to produce a framework for the risk management of new nanotech materials. That partnership produced a great quasi-regulatory document. DuPont committed to following it, and many governments around the world used the framework as a model for how they wanted to develop a regulatory process around nanotechnology.

The EPA plays an important role in ensuring the safety of new products being brought to market. However, the EPA is facing significant leadership, staffing, and resource challenges. What are your thoughts about EPA and what’s happening in Washington right now?

I am very concerned about what’s going on at EPA. It’s an agency that is critical to the US and critical to industry. EPA has a very important role to play in assuring the public that our manufacturing facilities are well-run, and our communities are not at risk. They also have a critical role to play in approving products as quickly as they can.

DuPont is a company that wants to comply with regulations, and tries its best to get good science before the agency around those products. But then DuPont needs a well-staffed, well- run agency to get those products approved.

I am concerned about the discussion around rolling back a lot of the EPA regulations. I don’t think the answer is rolling everything back. In fact, I think that makes US industry less competitive, not more competitive.

We are in many ways the envy of the world in terms of what our environmental regulatory framework has done. There is always room to improve, but I don’t want to see that undone.

A significant reduction in the overall EPA budget can lead to not just a reduction in federal protection but also a reduction in state and ultimately local protection as well, because federal funds appropriated to EPA are then dispersed to state environmental programs.

Where would you like to see sustainability leadership in the future?

There is a part of industry that doesn’t see the opportunity in their future to help solve the world’s sustainability problems. These companies may be less innovative. They may be tied to old systems and old technology.

I think that the future of sustainability is with the companies that have the capacity and skillset to drive innovation and provide society with solutions. I see most of those companies sticking to their commitments on sustainability.

I thought it was very reassuring that hundreds of companies signed and publicly stated that the US should stay in the Paris climate accord. In the face of political pressure, those companies were willing to stand up and be counted and encourage the US government to stick with the accord.

I would say those companies look at the Trump administration’s position on the environment as short term, and they’re looking to build their companies long term. The long-term trend means producing products that put far less demands on the planet. And I think there are a lot of companies that see themselves in that space and they’re not turning back.

What’s next for you personally?

I’m trying to see as much of the world on a bicycle as I can. I’ve been personally trying to make up for lost time in terms of being outside as opposed to being in an office.

But I’m still involved in sustainability. I’m consulting with companies around their opportunities and challenges in sustainability. I get very excited about helping companies solve problems and set a high bar for others in their industry.

Follow Tom on Twitter, @tpmurray

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By Boma Brown-West

Credit: Flickr user Mike Mozart

Today, Walmart updated their ambitious Sustainable Chemistry Policy on Consumables, which to-date has resulted in a 96% reduction in the weight of High Priority Chemicals. The new commitments set a bold goal of reducing Walmart’s chemicals footprint by 10% – over 55 million pounds of priority chemicals – a historic move.

Reducing chemicals of concern from products is a major interest for consumers. Modern science increasingly shows that certain chemicals prevalent in products can impact our health. Walmart’s renewed commitment to drive safer products onto store shelves is a laudable effort.

Walmart’s announcement signals to 700 global suppliers of 90,000 consumable products that…
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Walmart’s policy expands on the three original commitments of the Sustainable Chemistry Policy: “Transparency,” “Advancing Safer Formulations,” and product leadership in a section now titled, “Advancing Our Assortment.” Walmart has set clear, measureable goals and commits to reporting publicly on its progress to implement these new commitments. So what does Walmart champion in its policy refresh? Let’s take a look.

ESTABLISHMENT OF STRONG PRINCIPLES:

For the first time, Walmart publicly states its own sustainable chemistry principles. It is a strong list, including commitments to the 12 principles of green chemistry (the foundation of the green chemistry movement), transparency about approach and progress, and the belief that leadership means much more than legal and regulatory compliance.

ON TRANSPARENCY:

Walmart recognizes that it still has work to do with suppliers to improve ingredient disclosure, so existing commitments still stand, including a 2018 deadline for better ingredient disclosure on product labels.

However, there are also some notable new features of Walmart’s commitment to “Transparency.”

• NEW GLOBAL COMPONENT: Walmart is a global company, so it’s important to see it begin expanding its sustainable chemistry efforts worldwide. Walmart is starting with ingredient disclosure, both online and on-pack, for private label and national brands. This commitment reflects the demands of over 80% of global consumers for greater ingredient transparency when shopping for personal care and household cleaning products. .
• TRANSPARENCY MAKES BUSINESS SENSE: Walmart has committed to participate annually in the Chemical Footprint Project. The Chemical Footprint Project is a benchmark tool that enables investors to compare companies’ management of chemical risks. Signatories represent over $2.3 trillion in assets under management and purchasing power, including BNP Paribas Investment. This new commitment reflects Walmart CEO Doug McMillon’s historic move last year to declare to investors that the company’s sustainability initiatives would help the company win in the 21st  century.

Walmart set a strong new commitment to reduce the chemical footprint of its consumables product…
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 ON ADVANCING SAFER FORMULATIONS:

The biggest changes in Walmart’s new policy appear in its “Advancing Safer Formulations” section. These changes include:

• SCALING ACTION: Walmart sets a strong new commitment to reduce the chemical footprint of its consumables product portfolio by 10% by 2022. Walmart learned a lot about how to implement a safer chemicals initiative in a practical, meaningful, and measurable way through its original policy, which successfully focused efforts on a select few High Priority Chemicals (HPCs). As Walmart nears full elimination of its existing HPCs, the retailer is taking those learnings and expanding its safer formulation target to a larger pool of priority chemicals (PCs). The new goal is notable for a large retailer like Walmart: based on their 2016 chemical footprint, a 10% reduction translates to over 55 million pounds.
• TAKING STEPS TO TACKLE FRAGRANCES: Walmart has expanded its reference list for Walmart Priority Chemicals by adding two new authoritative lists that identify fragrance chemicals of concern. These lists, the EU Fragrance Allergens and the EU Cosmetics Regulation (Annex II), reflect an understanding that allergens are important to address when talking about cosmetics, personal care products, and cleaning products.
• IT TAKES A VILLAGE: Similar to their approach with their new historic Project Gigaton, Walmart recognizes that success demands a collaborative effort between the company and its suppliers. In addition to the High Priority Chemicals it will continue to target for reduction, Walmart calls on suppliers to help them tackle other priority chemicals (PCs). Since PCs are not equally represented across products and suppliers, this approach allows its suppliers to focus on those chemicals of concern that are most relevant and impactful to their particular product lines. We recommend several steps to ensure that this approach is successful: (1) ask suppliers to give their time-bound reduction plans including which chemicals they will target in what products, (2) hold check-ins along the way to keep them accountable, and (3) give recognition to suppliers who already have small chemical footprints and those that go above and beyond on their reduction targets.
• CONTAMINANTS MATTER TOO: Walmart’s policy now includes contaminants of concern as an area of focus in recognition that problematic chemicals in products can be intentionally added or come along the way through manufacturing processes (e.g. sourcing, chemical synthesis, product formulation). For example, benzene and 1,4 dioxane are known contaminants of concern that sometimes appear in formulated products and are carcinogens. Walmart recognizes that consumers can be exposed to chemicals of concern regardless of how they enter a final product—intentionally or unintentionally—and is taking action to be more holistic in their approach to safer chemistry.

ON ADVANCING THEIR ASSORTMENT:

• CERTIFICATIONS ACCELERATE PROGRESS: In keeping with its strategy of phasing out priority chemicals and encouraging the use of safer chemistries, Walmart recommends its suppliers utilize product certifications that emphasize material health and are applicable to their specific product categories. These certifications – U.S. EPA’s Safer Choice, EWG Verified, and Cradle to Cradle – credibly evaluate ingredient safety, are transparent about their approach, and reward products for continuous improvement.

When EDF opened an office in Bentonville ten years ago, we believed Walmart was a company that could scale environmental progress. Over the past several years, we have worked with Walmart in its iterative pursuit of safer chemicals leadership. Walmart has learned a lot in implementing its original policy and has used those lessons to inform its new, ambitious steps towards advancing safer, effective and affordable products. We expect them to continue learning and evolving their commitments in the future – with a firm eye on driving safer products into the marketplace.

Boma Brown-West, Senior Manager, Consumer Health, EDF+Business

By Ben Ratner

The degree to which the oil and gas industry can be trusted to play a constructive role in a low carbon future depends in no small measure on whether and how it reduces climate pollution today. That’s why company insiders, investors, and policy makers should take careful note of the sensible and innovative commitments announced by XTO Energy, the ExxonMobil subsidiary that leads the United States in natural gas production.

The industry’s many outside stakeholders both in the U.S. and around the world are increasingly calling for emission reductions and greater commitment to cleaner production. Companies that heed those calls, and advance new technologies, will be much better positioned to answer society's demands for responsibility.

Political Pendulum

Ben Ratner, Director, EDF+Business

Unfortunately, the current picture for much of the rest of the industry is less bright. Oil and gas trade associations—of which companies like Chevron, BP, ExxonMobil and many others are members—have egged on a Trump administration ideologically bent on eliminating national methane safeguards.

Even as company-level leadership like XTO’s will likely increase confidence in that company’s responsibility, industry support and acquiescence on Trump environmental rollbacks undermines confidence in the responsibility of the silent masses of thousands of operators who have not yet stepped up. Indeed, many in the industry are already concerned that overreach will carry a price when the political pendulum swings back the other direction.

So even as the Trump administration and lowest elements in industry pursue a deregulatory agenda that simply goes way too far, XTO has committed to reducing its methane emissions in the United States, through a set of tangible actions that move the company well beyond compliance.

America’s largest driller is raising the bar for methane emission reductions via @RatnerBen
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Commitments to Implementation and Innovation

Elements of the XTO commitment include phasing out a known type of intentionally venting devices in existing facilities; enhancing construction standards to install zero emitting devices at new facilities with electricity access; and undertaking leak detection and repair in existing facilities not already subject to regulations.

XTO will also partner with methane mitigation companies to innovate new, lower-emitting technologies for remote sites that lack electrification. And, ExxonMobil will continue its work with the Stanford Natural Gas Initiative, including the company’s new commitment to serve as a technical advisor on the Stanford/EDF Mobile Monitoring Challenge.

Most importantly for industry, regulators, and the courts, XTO’s actions reinforce the technical and financial feasibility of reducing oil and gas methane emissions, which cast a long shadow over claims that natural gas can play a credible role in the transition to a low carbon energy economy.

Looking Ahead

Of course, any company with the carbon footprint of XTO can and should always do more to address its emissions. We will look for robust XTO disclosure that enables stakeholders to closely follow and assess the progress and results of its U.S. methane program. And we hope that XTO’s announcement is a harbinger of things to come from parent Exxon Mobil, which can expand leadership in support of global methane emission reduction goals, and flaring reduction.

It is too soon to know whether others in the U.S. oil and gas industry will follow suit with strong operational commitments and a more balanced, pragmatic approach to federal and state methane policy.

But we do know that America’s largest driller is raising the bar for methane emission reductions in its onshore operations.

The question now is who will follow?

Follow Ben on Twitter, @RatnerBen

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By Alissa Sasso

We’ve previously introduced our readers to the Chemical Footprint Project (CFP), a benchmarking survey that evaluates companies’ chemicals management practices and recognizes leaders. The CFP recently released a Model Chemicals Policy for Brands and Manufacturers, a template to help companies develop and share their chemicals policies. A chemicals policy institutionalizes a company’s commitment to safer chemicals and ensures understanding of these goals among all levels of their business, including the supply chain.

New resource from @BizNGO and @EDFBiz can help you jumpstart your chemicals policy
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The CFP Model Chemicals Policy builds directly from EDF’s own Model Chemicals Policy for Retailers of Formulated Products. This alignment is important, demonstrating a consistent library of resources for companies to use as they strive to create safer products and supply chains.

The CFP Model Chemicals Policy was developed by the BizNGO Chemical Working Group (in which EDF is an active participant). The policy includes the 4 key components that EDF thinks are important for a successful chemicals policy:

• Improving Supply Chain Transparency
• Cultivating Informed Consumers
• Embedding Safer Product Design, and
• Showing Public Commitment

The CFP Model Policy is intended for brands and manufacturers of formulated products and articles (i.e., hard products, like furniture), meaning it can be used by any business sector. Embedded in the policy template are guidance and specific examples of how other companies have crafted elements of their own policies. The CFP Model Policy also aligns directly with questions in the CFP survey, making it easier for those companies who have participated in the survey to take their chemicals management commitments public in a meaningful way.

The CFP Model Policy will help brands and manufacturers take an important next step in showing their consumers that they are committed to using safer chemicals in their products and supply chain. EDF is pleased to see a new resource that builds consensus for how a company can meaningfully share their safer chemicals journey with the public.

New model policy will help brands to demonstrate commitment to safer chemicals
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For additional information, please see our additional resources:

• EDF’s Model Food Additives Policy for Retailers/ Grocers
• EDF’s blog reviewing Walmart’s latest commitments, including becoming the first retailer to participate in the Chemical Footprint Project annual survey

Alissa Sasso, Project Manager, Supply Chain, EDF + Business

By Namrita Kapur

When two large storms knocked out an estimated $200 billion in economic value within a week, critical gaps in our infrastructure preparedness were laid bare. The 2016 “Hell or High Water” series from ProPublica and The Texas Tribune predicted a scenario that “visualizes the full spectrum of what awaits Houston” if it were hit by a large-scale hurricane. Experts consulted for the series cite Houston’s unimpeded development as a principal factor contributing to the region’s high exposure to flood risks.

According to Rice University engineering professor Phil Bedient, there is no way to design a system to handle the volume of water that Hurricane Harvey dumped on the greater Houston area. That said, if Houston hopes to arrive at a cost effective solution for mitigating future flood damage, Bedient recommends targeted, balanced investments in green and gray infrastructure.

In essence, this is also the message of EDF’s new report Unlocking Private Capital to Finance Sustainable Infrastructure. The report acknowledges the US’ $1.4 trillion funding gap to meet its infrastructure needs and provides a two-pronged path forward for the public sector to fill this gap.

EDF's new Investment Design Framework points to investment-ready sustainable infrastructure projects
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On one side, the report provides case studies that examine innovative infrastructure solutions, like DC Water and Sewer Authority’s green infrastructure approach to solving its stormwater management issues, to right-size the scale of the need. On the other side, the report provides a new Investment Design Framework to facilitate the development of investment-ready sustainable infrastructure projects. Informed by extensive research and interviews with industry experts, the framework identifies four key elements for attracting private investment in sustainable infrastructure:

• Suitable investment models: The values associated with the economic, environment and social outcomes of a project should be monetized and captured as a stable revenue stream. This revenue stream will help determine appropriate investment models and potential partners.
• Standardized performance measurement: Determining revenue streams requires meaningful and standardized environmental and financial metrics. Standardization of performance outcomes across technologies and within sub-sectors are needed to scale the market.
• Transparent risk management: Many sustainable infrastructure approaches and technologies are new and have limited performance data. This can make it difficult to assess risks. However, governments and investors can work together to identify and assess risks, take mitigating approaches, and distribute risks across multiple parties that align risk with potential reward.
• Facilitating effective stakeholder engagement: Sustainable infrastructure projects that utilize innovative financing methods are often complex and require technical, financial, and legal expertise. Additionally, strong leadership and project champions are needed to drive innovative solutions and engage stakeholders to deliver successful outcomes.

Can sustainable infrastructure investments catalyze growth in the American clean energy economy?…
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As our focus shifts from storm tracking and mandatory evacuations to rebuilding and recovery, it is imperative that we seize the opportunity to do so in a way that will improve the resilience of our communities. The case studies and the Investment Design Framework included in the report are helpful tools to help make this happen. Embedding principles of sustainability into our infrastructure investment decisions is critical to achieving long-term economic, social, and environmental goals in the most cost-effective way possible. Success hinges on the public sector engaging broadly with the private, non-profit, and philanthropic sectors. We hope these stakeholders view this report as an invitation to engage with us and each other to overcome key investment barriers and unlock the flow of capital needed to deploy the infrastructure of the future – sustainable infrastructure.

Namrita Kapur, Managing Director of EDF+Business

Dakota Gangi, Sustainable Finance and Impact Investing Manager and William K. Bowes, Jr. Fellow, EDF+Business

By Tom Murray

Comparing the themes of Climate Week 2016 versus 2017 provides a telling picture of the state of climate affairs. “America Means Business: US Leadership in a post-Paris World” was last year’s focus, while this year is all about three words: “Innovation. Jobs. Prosperity.”

It has been a remarkable year for climate action – in the absence of federal oversight and leadership, we’ve seen a major shift towards city, state and business leaders becoming the standard-bearers for the environment and the economy. With the release of Fortune’s Change the World list, it is obvious that the bar for corporate leadership has been raised even further. Companies that previously stayed mute on environmental and social issues now speak out; not as an anomaly but as a defining factor of their business.

The expectations of today’s stakeholders – investors, employees, consumers, communities – demand a higher, more visionary level of sustainability leadership. Corporate leaders who put their money, and actions, where their mouth is on environmental and social issues are driving innovation, creating jobs, and gaining a new competitive edge for their businesses.

Recruiting top talent

According to a new Morgan Stanley report, millennials are three times more likely to seek out employment with a sustainably minded company.

Unilever (#21 on the Fortune list) CEO Paul Polman said that close to 1.8 million people now apply to work at the consumer giant company every year, many of whom are under 40. Why is that? “According to the data,” Polman reveals, approximately 60% “say it’s the Unilever Sustainable Living Plan and the bigger purpose that we have as a business.”

The Sustainable Living Plan is Unilever’s blueprint for growing the business while reducing waste, water, and energy use, including an ambitious goal of halving the environmental footprint of making and using Unilever products. Unilever also rises to the top in setting clear, actionable sustainability goals.

Tom Murray, VP EDF+Business

Improving the environment – and sales growth

Retail giant Walmart has been on a journey toward sustainability since partnering with Environmental Defense Fund (EDF) over 10 years ago. And its environmental efforts are paying off: ridding close to 90,000 consumer products of potentially harmful chemicals, reducing 36 million metric tons of greenhouse gas emissions from its supply chain in just six years, and now, making a bold commitment to eliminate a gigaton of emissions by 2030 – all of this with continued U.S. sales growth.

With climate change topping the list of global concerns for millennials, these planet-friendly business moves are just what Walmart needs to attract a new, younger demographic of customers.

But it’s not just Walmart that can benefit. As PBS NewsHour reported this weekend, large companies see payoffs in sustainability – including businesses like Mars Inc. and Smithfield Foods.

At the same time, new resources like the Corporate Carbon Policy Footprint hold companies accountable not just based on their own emissions, but also their public support of smart climate policy. That means consumers are better informed than ever to make purchasing decisions based on corporate climate leadership.

Investing for a healthy economy and environment

For long-term competitiveness, business investments cannot be made at the expense of the environment.  The new report from Morgan Stanley, “Sustainable Signals: New Data from the Individual Investor,” assesses the state of sustainable investing through attitudes, perceptions, and behaviors of individual investors. Their findings:

• 71% of investors polled agreed that good social, environmental and governance practices can potentially lead to higher profitability and long-term investments
• 75% of individual investors are interested in sustainable investing

Thriving business, thriving communities

Land O’Lakes, Inc. (a farmer-owned cooperative ranked #50 on Fortune’s list), is supporting its member-owners to grow crops more efficiently and is committed to influencing sustainability practices on 20 million acres of farmland by 2025. Its business unit, Land O’Lakes SUSTAIN™ delivers precision agriculture technologies, practices, services and conservation resources for farmers across North America – and works in collaboration with EDF.

This program focuses on educating agricultural retailers, farmers’ most trusted advisors, on practices that improve air, water and soil quality. The ag retailers then bring this knowledge to their customers, the farmer, who can benefit from improved efficiencies. Ag retailers benefit from staying competitive in a challenging market.

Embedding sustainability into business strategy

The Harvard Business Review article, Competing on Social Purpose, separates companies born with a social or environmental purpose – think Patagonia, TOMS, Seventh Generation – from those integrating purpose and strategy late in life. The majority of established brands fall into the latter category, despite consumers’ increasing expectations for companies to have a social purpose.

Fortunately, resources like EDF’s three-part framework for corporate sustainability leadership can help companies get started by:

1. Publicly committing to aggressive, science-based sustainability goals sends a clear market signal to your customers, shareholders and suppliers that you embrace a social purpose
2. Collaborating across departments, industries, and the entire supply chain in order to deliver impact at scale
3. Publicly support smart climate and environmental policy that will ensure long-term competitiveness by driving innovation, creating jobs, and improving efficiencies.

Whether you’re a leading global company that’s well on its way or a smaller company just beginning to embrace sustainability, business can and must lead the way toward a future where the economy, the planet, and people can prosper.

Follow Tom on Twitter, @tpmurray

Stay on top of the latest facts, information and resources aimed at the intersection of business and the environment. Sign up for the EDF+Business blog. [contact-form-7]

 

By Sean Wright

Environmental Defense Fund Q&A with Tim Goodman, Hermes Investment Management

Tim Goodman, Director of Engagement at Hermes Investment Management

When burned, natural gas produces half the carbon as coal, so it is often touted as a “bridge” fuel to a cleaner energy future. But the carbon advantage of natural gas may be lost if too much of it escapes across its value chain.

Natural gas is mostly methane, which, unburned, is a highly potent greenhouse gas accounting for roughly a quarter of today’s global warming. Worldwide, oil and gas companies leak and vent an estimated $30 billion of methane each year into the atmosphere.

EDF’s Sean Wright sat down with Tim Goodman, Director of Engagement at London-based Hermes Investment Management. Goodman, who views methane management as practical self-help for the industry to pursue, engages with oil and gas companies on strategies to manage their methane emissions. This is the first of a two-part conversation with Hermes, a global investment firm, whose stewardship service Hermes EOS, advises $330.4 billion in assets.

Wright: Do you think the oil and gas industry is changing its overall attitude towards climate after the historic Paris agreement and recent successful shareholder resolutions? If so, how do you see that change manifesting itself?

Goodman: I think climate change is obviously an existential question for the industry. The really big question is can it actually change in response to Paris? The industry is beginning to respond as a result of Paris and shareholder proposals and other stakeholder pressure. You’re seeing some of the majors increasing their gas exposure at the expense of oil. You’re seeing a number of international oil companies reducing or ending their exposure to particularly high carbon or high risk assets, such as the Canadian oil sands or the Arctic. The oil and gas industry is also starting to place a greater focus on methane management and its own emissions.

Wright: What about investors – what do you think is driving the continued momentum around methane and climate as we see larger and more mainstream funds tackling these issues?

Goodman: Let’s talk about climate for the moment – the roles of both investors and companies in the run up to the Paris agreement and during the negotiations were crucial. The investors made it absolutely clear that they wanted to see a successful Paris agreement. Addressing climate change is good for business and good for their portfolios. And we saw this with the Exxon vote – the two-degree scenario proposal where mainstream asset managers voted for this proposal. We believe that this happened because of the underlying pressure asset managers were getting from their own clients who have a long-term perspective and see climate change as a risk to their funds.

Specifically on methane, it’s practical self-help for the industry to embark on methane management. It’s an obvious practical measure for investors to engage upon. If you can reduce your contribution to greenhouse gases, save money, and gain revenue by being more efficient and safe, why wouldn’t you do that? It’s an easy entree into engaging with the oil and gas industry. Whereas the existential question, what’s your business going to look like 20 years from now, is a more difficult question perhaps both for the industry and the companies themselves.

Wright: You pretty much just explained why Hermes prioritized methane – is that correct?

Goodman: Yes. But the science is a big part of it. Methane is a far more potent greenhouse gas than carbon – the more that we can minimize its effects, the greater the window the world has to transition to a low carbon economy. Methane’s effects don’t last as long as carbon, but if we don’t tackle methane, we aren’t taking meaningful action to move to a low-carbon economy.

Wright: What do you see as the risks of unmanaged methane emissions?

Goodman: There is an economic risk and benefit for companies. Most of the measures to manage methane are relatively low-cost and can very easily be implemented for new projects. If you’re not doing them, for example, and you’re fracking shale, you’re at a competitive disadvantage to your peers. The cost-benefits perhaps are more difficult, but still there, in existing infrastructure. But particularly among the oil majors, their relationship with their host governments, local communities, and other stakeholders is vital. It’s important for companies to demonstrate good corporate citizenship. If you’re a laggard on methane, you’re more likely to be considered as an irresponsible partner both commercially and also in your local community. So I think oil and gas companies risk massive reputational and legal risks if they’re not managing methane effectively, notwithstanding the economic benefits.

Ignoring methane problem puts oil & gas companies "at a competitive disadvantage." See more…
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Wright: What do you typically hear from operators in your conversations about methane management? Do you hear different things from operators in different parts of the world?

Goodman: Methane management is part of a number of important issues that we’re engaging with the industry on, including other pollution, health and safety, human rights, corruption and climate change. What we’re hearing on methane does vary. It’s fair to say in some emerging markets methane management is not often discussed by investors with those companies. But when we do address this topic in these markets, the companies show interest and want to know why it’s important to us, what they should be doing, how they should be disclosing, etc. So we’re often having positive and interesting conversations in these markets.

In the developed markets, there’s a difference. And I think there’s a distinction between Europe and North America. The EU companies, particularly the majors, are realizing it’s an important issue and are talking about it and disclosing at least some data. In private dialogue with North American companies, it is clear methane is often an important issue for them, but their disclosure is less convincing. It does vary around the world, but you also have this interesting phenomenon, where some companies seem to be doing a good job in private dialogue, but the disclosure lags behind what they are actually doing. We also see companies attempting to present their efforts in a better light than perhaps they deserve. It’s a complex mixture, which is why engagement is so important because we are able to view the reality on the ground through private dialogue.

For more information on EDF’s investor resources on methane mitigation, please see our recent report, An Investor’s Guide to Methane, or subscribe to our newsletter.

By Ben Ratner

Three years ago, Environmental Defense Fund (EDF) united with oil and gas industry leaders including Shell and Statoil to launch the Methane Detectors Challenge – a collaborative effort to catalyze the development and deployment of stationary, continuous methane monitors. With industry pilot projects now cropping up from Texas to Alberta, continuous methane monitoring on natural gas sites is on a pathway to become one of the core tools in the monitoring toolkit.

And that’s a good thing – 24/7 monitoring is the gold standard for emissions control, opening a new frontier in site-level insight. It will enable real time identification and repair of natural gas waste that pollutes the atmosphere, and the industry’s own reputation.

Now, another exciting area of innovation is emerging, as entrepreneurs, technologists, and academics pursue mobile approaches to monitor leaks. Whether by plane, helicopter, drone or truck, mobile monitoring offers the promise of surveying highly dispersed industrial facilities – including smaller and older ones – quickly and effectively. With an estimated one million well pads in the United States alone, the speed and coverage of monitoring matter.

Environmental Defense Fund takes oil and gas operators and local media for a demonstration of mobile monitoring technology from Apogee Scientific

Mobile methane monitoring for some sites could be a perfect complement to continuous monitoring for others, offering a 1-2 punch solution to comprehensively monitor and address emissions across a highly variable industry, with fit-for-purpose tools.

A new collaborative challenge to reduce methane

That’s why we are so pleased to support Stanford University’s Natural Gas Initiative by announcing the Stanford/EDF Mobile Monitoring Challenge (MMC). The MMC is the latest collaborative innovation project from EDF, partnering with Dr. Adam Brandt of Stanford’s School of Earth, Energy & Environmental Sciences, the principal investigator for MMC and one of the world’s leading scientists studying oil and gas methane emissions.

Stanford/EDF Mobile Monitoring Challenge – Now accepting applications →

The aim of the Mobile Monitoring Challenge is to rigorously test and compare the most promising new mobile technologies and approaches to quickly detect and quantify methane emissions – with extra interest in commercially scalable options.

Calling all methane monitoring entrepreneurs

Today begins a 45-day application period for technologists around the world who wish to participate in 15 days of field trials. Stanford and EDF, aided by industry and other expert advisors, will pick the most promising submissions this fall, and Professor Brandt’s team will oversee field testing with controlled releases of methane this winter and spring, culminating in a Stanford paper documenting results for the peer-review process.

Candidates for the Mobile Monitoring Challenge should have methane monitoring technology that:

• Is field ready
• Can be deployed on a mobile platform (e.g. drone, plane, car, truck, etc.)
• Is cost-effective and can quickly detect leaks at multiple sites
• Provides both detection and quantification

See the Stanford/EDF application process for full details.

With subsequent real world testing and demonstration, the leading mobile monitoring approaches coming out of this initiative may even support regulatory compliance, propelling greater emission reductions at even less cost – the classic win/win.

How innovations in tech can help eradicate climate warming methane emissions – learn more
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Three years ago, EDF was encouraged to receive dozens of technology applications from around the world for the Methane Detectors Challenge. With the ongoing sensor revolution coupled with the surge in methane emissions interest across North America and the world, we are even more optimistic today about what the future holds.

That’s because at EDF, we know that bringing the right stakeholders together to harness diverse thinking and innovative technologies is the next wave of environmental progress.

Let the challenge begin!

Follow Ben on Twitter, @RatnerBen

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By Scott Wood

This is the first of a three-part blog series covering corporate sustainability in China. Experts from EDF Climate Corps examine how businesses are shifting the ways they approach energy management in response to increasing climate commitments.

This past June, 197 countries reaffirmed their commitments to reduce GHG emissions in an effort to curb global climate change. The U.S. was not one of them. This decision, a major backpedal for America, made room for a new frontrunner to take the reins on global climate leadership. And that’s exactly what has happened.

After President Trump backed away, China, the largest GHG emitter and coal consumer, recommitted to forge ahead with the Paris agreement. The nation recognizes climate change as a major challenge faced by all mankind and a threat to national security, which is why Beijing has deemed the Paris agreement its “highest political commitment”. China’s participation in any international agreement on climate is not only critical, it’s an opportunity to dominate the clean energy sector and inspire others to take action.

Manager, EDF Climate Corps

Here are three ways China is positioning itself to meet its targets (America, take note):

1. Enforce goals at every policy level.

China has set aggressive targets aimed at reducing the nation’s greenhouse gases that are supported and enforced by climate policies at the international, national and local level. This alignment allows for greater consistency and cooperation between the private and public sectors, enabling greater efficiency in working towards these common goals.

At the international level, China reaffirmed its promise to meet the commitments (working closely alongside the EU) outlined in the Paris agreement, including peaking CO2 emissions by 2030. Domestically, China has both short-and long-term plans to help ensure their energy goals are met. The Strategic National Energy Plan was completed this past April and China is on track to achieve its energy goals outlined in the 13th Five-year plan.

At the local level, cities have their own carbon-cutting plans. Shenzhen, one of China’s manufacturing hubs, aims to peak the city’s carbon emissions by 2022—eight years ahead of the national target. Companies, too, are ramping up their efforts.  For the past two years, EDF Climate Corps has placed four fellows in IKEA’s Shenzhen offices to help meet these targets by focusing on increasing the sustainability of the company’s supply chain (Stay tuned for more on this kind of corporate engagement in the next post of this series).

2. Invest in clean energy.

China continues to expand its dominance in renewable energy. Recently, they committed to investing $360 billion in clean energy development. According to China’s National Energy Administration, renewable energy already employs 3.5 million people in China (compared with less than a million in the US) and this new investment is expected to create 13 million more jobs in the renewable energy sector by 2020. That’s enormous growth.  

The private sector is tapping into this market as well. Chinese companies already dominate among the most profitable clean energy companies in the world with 35% of the top 200 publicly traded corporations earning significant revenue from renewable energy being Chinese. Simply put, in China, clean energy is viewed as smart business and smart economics.

China takes the lead on climate change action w/ plans to invest $360bil in clean energy…
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Manager, EDF+Business

3. Use a multi-faceted approach:

China is coming at climate change from all angles. In addition to the policy mechanisms and promotion of clean energy mentioned above, China is securing long-term investment and sustained financing to encourage innovation and the adoption of new technologies. For example, this year China launched five pilot zones to promote “Green Finance”, a vehicle aimed at raising funds for pollution clean-up.

Also this year, President Xi Jinping pledged to launch the world’s largest national carbon market; a decision EDF played an important role in by providing the Chinese government with critical technical support and consultation. The market will hasten the transition to a low-carbon economy and send a message to the world that China is serious about finding solutions. Additionally, this presents an enormous opportunity for the private sector to curb emissions. Companies are incentivized to innovate and reduce their emissions, selling excess allowances and opening up new revenue streams.

The road forward for China

The momentum we’re seeing in China is in sharp contrast to Trump’s America. It’s this strong leadership and creativity that is needed to address GHG emissions within China. And it sets an example for others to follow. Delivering on its many commitments and aspirations won’t be easy, but for China to declare them as necessary is a big step in the right direction–one that has the potential to create massive positive change.

In our next blog post, we’ll take a closer look into how companies are already making and delivering on plans to do their part in helping China achieve its climate commitments.

Follow Scott and Xixi on Twitter, @scottwood_, @Talk2Xixi

Stay on top of the latest facts, information and resources aimed at the intersection of business and the environment. Sign up for the EDF+Business blog. [contact-form-7]

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By Boma Brown-West

Walmart made two big moves last week to reinforce its commitment to leadership on safer chemicals. In 2013 Walmart sent a major demand signal for safer chemicals through the supply chain – issuing its Sustainable Chemistry Policy that covered 700 suppliers and over 90,000 cleaning, personal care, and cosmetics products on its shelves. The policy called for greater ingredient transparency and the reduction and elimination of chemicals harmful to human and environmental health, starting with eight prevalent chemicals of concern. Last week, Walmart released its latest results following up on these commitments and became the first retailer to participate in the Chemical Footprint Project annual survey (and the second major retailer to become a CFP signatory).

Walmart’s participation in the Chemical Footprint Project is a new indicator of its continued commitment to safer products

The Chemical Footprint Project is an initiative to benchmark how effectively companies are managing the chemicals in their products and supply chains. As I mentioned in a previous blog, it’s a way for investors and large purchasers to assess which firms are carrying heavy chemical risk and which ones are demonstrating competitive leadership in response to growing demand for safer products. So far, 24 companies, including Walmart, participate in this program – sending a clear signal to their suppliers, investors, and consumers that chemicals management is material to business success. Leaders identified in the CFP survey show that adopting and enforcing policies and measuring progress are key to reducing chemicals of concern.

Walmart just made two big moves to reinforce its commitment to leadership on safer chemicals
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Progress on its ground-breaking policy

Also last week, Walmart quietly released its second annual Sustainable Chemistry Policy report, showing progress on its policy to eliminate priority chemicals. The chemicals of concern were drawn from 16 reputable regulatory and other authoritative lists – starting with eight High Priority Chemicals.

A chemical inventory is the first step in meeting a commitment to reduce your chemical footprint

Before jumping into the results, let's review why this public disclosure of results is important. If you can't measure something, you can't improve it effectively. Walmart’s public reporting of quantitative data shows that it is serious about measuring its chemical footprint and being transparent about it. Walmart uses aggregate chemical inventory information across and within the departments under the policy to track progress.

Clear, meaningful metrics to track progress are the next step

Walmart tracks progress by looking at both weight volume – pounds of chemicals going out the door – and ubiquity – number of suppliers using these chemicals and the number of products in which they are using them. Both are important indicators of the prevalence of these chemicals in our world. Last year, Walmart achieved a 95% reduction in its High Priority Chemicals (HPCs) at Walmart US stores, equivalent to 23 million lbs. Since then, another 372,230 lbs have been removed – a 30% drop compared to the 2015 weight volume and a 96% drop since the policy began in 2014. Similar reductions continue to happen at Walmart's Sam's Club stores:  another 75,629 lbs have been eliminated, a 53% drop compared to the 2015 weight volume and a 68% drop compared to 2014. The second year results also reaffirm that a concerted effort to reduce a select set of priority chemicals, i.e. HPCs, drives results faster. Overall usage of Walmart Priority Chemicals continues to decrease (at Walmart US stores), but not nearly at the rate of that of Walmart HPCs.

Figure 1: The cumulative weight volume reduction of High Priority Chemicals since 2014 has been over 23.6 million lbs and over 164,000 lbs for Walmart and Sam’s Club respectively.

Walmart’s public disclosure also shows that the company isn’t afraid to share where performance is lagging

Though overall weight volume of the HPCs continues to drop, their ubiquity continues to be a challenge. Both the number of products (i.e. UPCs) containing the HPCs and the number of suppliers using them continues to drop, at both Walmart US and Sam’s Club stores, but at a rate slower than the weight volume reduction.

Figure 2: Current percent of products (or UPCs) containing and suppliers who using High Priority Chemicals in products, along with the respective percentage point changes since 2014.

The tools for success

In the end, Walmart continues to make progress against its policy as demonstrated through real data. Beyond data, what else contributes to Walmart‘s success?

• Clear targets
• Driving action through the business (where relationships between buyers and suppliers stress the importance of the commitments)
• Public accountability

With new notable commitments popping up from other major retailers like Target and CVS, we hope to see similar tracking and reporting of meaningful results both directly and through the Chemical Footprint Project survey.

FURTHER READING: See EDF’s previous analysis of Walmart’s first year results here and here.

Boma Brown-West is Senior Manager of Consumer Health at EDF + Business. You can follow her on Twitter for insights and analysis on safer chemicals leadership in the supply chain and subscribe to her Behind the Label newsletter here.

By Aileen Nowlan

This week, the oil and gas giant Shell took a positive step toward addressing methane emissions. The company announced a new technology trial at a wellsite in Alberta, Canada, where it is piloting a specially designed laser to continuously monitor emissions of methane, a powerful pollutant known to leak from oil and gas equipment.

The move by Shell is a glimpse into the future and demonstrates growing market interest in smart, sensor-based methane detection technology. Shell’s project joins a similar field test already underway in Texas, operated by the Norwegian producer Statoil, and a California utility pilot run by Pacific Gas and Electric Company.

Each of these deployments is promising, but the ultimate test will be broad-scale adoption of innovations that generate actual methane reductions.

For industry, there is an incentive to move ahead. An estimated $30 billion of natural gas (which is largely methane) is wasted every year due to leaks and flaring from oil and gas operations worldwide. In addition, roughly 25 percent of global warming is driven by methane. Oil and gas methane emissions also contain chemicals that adversely affect public health.

For these reasons, methane is a problem that has caught the attention of regulators, investors and consumers alike. Advancing new technologies to enable the oil and gas industry to tackle this challenge more efficiently is key, even as companies use established tools to manage emissions now.

Collaborations Spark Methane Innovation

When you bring the right people to the table, innovative solutions will follow. Behind the Shell, Statoil and PG&E demonstration projects is a collaborative initiative, the Methane Detectors Challenge, begun by the Environmental Defense Fund four years ago. The project united eight oil and gas companies, R&D experts and technology innovators in an effort to accelerate the development of next-generation methane detectors.

The formation of this project was motivated by a key insight: new technology to manage emissions needs to be created and deployed faster than ever. The Methane Detectors Challenge offers a unique resource to innovators – access to real facilities and collaboration with potential customers – which is essential to help entrepreneurs understand the market, demonstrate demand, and ultimately achieve economies of scale.

Both the Statoil and Shell pilots are using a solar-powered laser, created by Colorado-based Quanta3. The technology uses the Internet to provide real-time data analytics to wellsite managers via mobile devices or web portals.

New smart sensor pilot at @Shell offers insight into the future of methane detection technology
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Continuous Visibility, Faster Response

The oil and gas industry has a lot to gain from smart methane sensors that can prevent the loss of valuable product and reduce pollution.

Imagine a future where continuous leak detection systems allow operators to digitally monitor methane emissions occurring across thousands of sites. It’s a game-changer on the horizon. The burgeoning field of continuous methane monitoring offers a range of possibilities – including technologies capable of identifying emission spikes in real-time, allowing operators to cut mitigation time from months to days. Over time, smart sensors on wells may even help predict and prevent leaks and malfunctions before they occur.

Smart Methane Sensors Triggering New Market

The methane-sensing laser deployed by Shell and Statoil is one of many technologies in the emerging methane mitigation industry. In North America alone, more than 130 companies provide low-cost methane management technologies and services to oil and gas customers – a number likely to expand as innovators innovate, pollution requirements tighten, and producers increasingly appreciate the urgency of dealing with methane to maintain their social license to operate.

Smart automation technologies are already being used across the oil and gas industry to improve operating and field efficiencies. Continuous methane detection technology is the next logical step, which has the potential to provide significant economic, environmental and societal benefits.

The Shell pilot is a milestone to celebrate and we recognize the company for its early leadership. Now, we need governments and industry to show the determination needed to meet the methane challenge head-on. Sustained leadership is a prerequisite. But the keys to solving this problem are smart policies that incentivize ongoing innovation, and clear methane reduction goals—supported by technologies like continuous monitoring.

This post was also published on EDF's Energy Exchange blog. Image source: Shell/Ian Jackson

Aileen Nowlan is a Manager at EDF + Business. Follow her on Twitter for more news on EDF's work on innovation and energy.