By Ellen Shenette

It’s no secret that renewable energy is becoming cheaper, and while we’ve seen companies like Google and Microsoft investing in utility-scale renewables, what about mainstream corporate America? Are large corporations jumping on the clean energy bandwagon or are they dragging their feet? As a data analyst at EDF Climate Corps, I turned to the numbers for answers. Fortunately, I didn’t have to look far. An analysis from our recently release report: Scaling Success: Recent Trends in Organizational Energy Management, says it all.

For almost a decade, EDF Climate Corps has been partnering with business to save money and reduce greenhouse gas emissions by improving energy efficiency through our graduate fellowship program.

As I followed the numbers, a new clean energy trend stood out: over the last 5 years, clean and renewable energy projects have grown five-fold, with 1/3 of our partner organizations working on at least one clean energy project in 2015. Companies have been using their EDF Climate Corps fellows to decipher the complex landscape of technologies, policies, procurement strategies, and financing options for renewable energy. As we tally the results for our 2016 fellowship program, we expect the focus on clean energy to continue to grow, and don’t plan on it stopping anytime soon.

Following the money

But why have we observed this recent uptake in clean energy projects? It seems to be “all about the Benjamins.” Our data shows that fellows are increasingly able to build a solid business case for clean energy projects. In just 2 years, the average payback for clean energy projects decreased dramatically from around 4 years to under 2 years and we’ve seen a surge in positive Net Present Value (NPV) clean energy projects. This tell us that clean energy projects are becoming increasingly cost competitive – a mirror image of industry trends.

Which brings us back to our initial question – are large corporations jumping on the clean energy bandwagon? Yes, mainstream corporate America IS adopting clean and renewable energy- and they are doing it cost-effectively. The winds of change are blowing in the right direction (and hopefully through a wind turbine!) and our EDF Climate Corps fellows are proving that investment in renewables makes good business sense. However, there are still challenges to getting clean energy adoption at scale. Many renewable energy projects with large returns also require large upfront capital investments, and although the projects may have a positive NPV, some still fall outside the required payback period for corporations. We’ve seen that lack of funding and competing internal priorities are still major barriers to implementation.

How companies can continue to drive forward

And so, a new question emerges – what should companies be doing to drive clean energy projects internally? First, corporate leadership should set targets for renewable energy procurement and benchmark against their peers. Second, energy managers should pilot clean energy projects to demonstrate their viability. These pilots can serve as proof points for future projects and larger-scale investments. While navigating the complex clean energy alphabet soup (PV, PPAs, RECs, RPS, ITC, etc.) can be tough, especially given the nuances in state level policy and regulations, partnering with a third-party organization (such as a program like EDF Climate Corps, another NGO or a vendor) is a great way to accelerate your clean energy projects. You just may find that making the business case for clean and renewable energy isn’t as hard as you thought.

I invite you to learn more about what 8 years of EDF Climate Corps data tells us about trends in energy management and clean energy by reading our Scaling Success report.

 

 

 

 

 

By Liz Delaney

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

Liz Delaney, Program Director, EDF Climate Corps

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

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

 There is robust demand for clean energy solutions

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The way forward

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

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

 

By Liz Delaney

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.

By Jenny Ahlen

Companies have the opportunity to use their voice to draw attention to issues that matter to their business and to their customers.  Today, a handful did just that – by announcing their commitment to sustainable agriculture.

Over the past several months, I’ve spent countless hours representing Environmental Defense Fund in a room with Cargill, General Mills, Kellogg Company, Monsanto, PepsiCo, The Nature Conservancy, Walmart, and World Wildlife Fund. This group makes up the Midwest Row Crop Collaborative (MRCC) – a diverse coalition working to reduce the environmental impacts of commodity row crop production (i.e., corn, soy, wheat, etc.) throughout the Upper Mississippi River Basin.

This isn’t just good news for the planet. Implementing on-the-ground solutions that reduce fertilizer pollution and improve soil health can also result in higher yields for farmers, reduced risk of supply chain disruptions for food companies and retailers, reduced air and water pollution, and improved transparency for consumers.

Why companies care about fertilizer and soil health

Farmers and food companies need fertilizer to grow their ingredients, but fertilizer in excess of the amount crops need can lead to water and air pollution and wasted money for farmers, who spend approximately half of their input costs on fertilizer.

Each year, fertilizer runoff contributes to an aquatic dead zone in the Gulf of Mexico – an area the size of Connecticut that so devoid of oxygen, marine life cannot survive. And excess nitrogen fertilizer can lead to nitrates contaminating drinking water and water supplies – posing serious health risks to infants in particular.

Three pilot states

That’s why, along with a council of scientific and agronomic advisors, the MRCC will work with growers to help improve and implement conservation activities across three pilot states that are responsible for 44 percent of the corn, soy, and wheat production in the U.S.: Illinois, Iowa, and Nebraska.

By vastly increasing the number of row crop acres enrolled in sustainability measures in these three states, farmers and companies can help protect food security and drinking water supplies, while improving efficiencies in their business operations.

The power of collaboration

Farmer organizations, environmental groups, food companies, state and local watershed organizations, and many others share these common goals – and much work is already underway.

That’s why the MRCC isn’t reinventing any wheels. It’s shining a spotlight on an important environmental issue that is often overlooked, while helping support and scale the various technical and regional sustainability efforts already in place.

When leading companies collaborate around a common goal, both business and the planet will thrive.

Conclusion

This work is hard and will take time, but I’m more hopeful than ever that one day my daughter won’t grow up to read about toxic algae blooms or dead zones in the news and I’ll know I had a small part to play in that.

 

By Tom Murray

Full disclosure:  I’ve been a big fan of Michael Porter and Mark Kramer since my days as a graduate business student.  Lots of hours on group projects working on five forces analysis, you get the idea.  So it was especially rewarding to read their recent Fortune article looking at the actions behind the Change the World list of leading companies who are doing well by doing good.

Porter’s and Kramer’s Creating Shared Value approach is “moving into the mainstream and growing exponentially. Companies that adopt shared-value thinking remain committed (as they should) to philanthropy and corporate social responsibility. But they’re moving beyond often-fuzzy notions like sustainability and corporate citizenship, and instead making measurable social impact central to how they compete.”

Sustainability as a fuzzy notion for business strategy?

I’m going to push back on that.

As the environmental NGO that spearheaded a first of its kind partnership with McDonalds over 25 years ago, Environmental Defense Fund (EDF) has partnered with hundreds of leading companies to address sustainability in specifically non-fuzzy ways. We do it by following the science and making sure that every EDF+Business project drives measurable environmental and business results.

Porter and Kramer single out EDF and our 10+ year partnership with Walmart. (Thank you, we’ve actually worked with 15 companies on the Fortune list!) The non-fuzzy win-win to this partnership is that EDF helped Walmart set a first of its kind goal for reducing its supply chain greenhouse gas emissions (GHG) by 20 million metric tons (MMT) by 2016. We helped design the stretch target and then stuck around for the tough middle miles of execution, forging solutions across their global supply chain to achieve that goal. The result? A reduction of 36.5 MMT of GHG emissions by the end of 2015.

EDF is also working with Walmart to eliminate chemicals of concern from health and beauty products on their shelves. The result? A reduction of 23 million pounds of chemicals out of products in 24 months.

This is just one example from our rich history of collaboration with leading companies. Our partnership with McDonald’s eliminated the Styrofoam clamshell packaging and over 300 million pounds of waste. Our partnership with FedEx created the first fleet of hybrid delivery trucks reducing emissions by 65%. Our work with Kohlberg Kravis Roberts (KKR) resulted in 27 KKR portfolio companies achieving nearly $1.2 billion in avoided costs and added revenue, while eliminating more than 2.3 million metric tons of greenhouse gas emissions, 27 million cubic meters of water use, and 6.3 million tons of waste through eco-efficiency efforts.

I could go on, but I think you get my point. Plus, unlike August 1, 1990 when launched our work with McDonald’s, we’re no longer alone, our colleagues at BSR, Ceres, CI, TNC, WRI and WWF are leading complementary, collaborations with leaders across the economy and around the world. When business partners with an NGO like EDF, the results are anything but fuzzy.

When NGOs and Business work together, they can change the world. @TPMurray
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With that said, the key themes in Porter and Kramer’s article are solid. Corporate leaders need to integrate societal, and in broader terms, the planet’s needs into their core strategies. Investors need to consider creating value for the planet as well as themselves when allocating capital resources. And businesses and NGOs need to work together to ensure that creating shared value is the strategic norm for the future.

Follow Tom Murray on Twitter: @tpmurray

 

By Tom Neltner

In our work with retailers and food manufacturers, EDF strongly recommends submitting all ingredients for U.S. Food and Drug Administration (FDA) safety review, especially those additives deemed ‘generally recognized as safe’ (GRAS). This includes things such as flavors, sweeteners, preservatives and the like. If an unreviewed ingredient is identified in a recipe, we also recommend that the grocer or manufacturer require the supplier to send the ingredient through an FDA GRAS review.

One question we often get is, “Doesn’t that take a long time?” Quite simply, the answer is no. But some players in the food industry try to perpetuate that myth so they can continue to self-certify safety and bypass FDA’s scrutiny.

In the 2014 report, “Generally Recognized as Secret: Chemicals Added to Food in the United States,” more than fifty companies were shown to be deliberately avoiding FDA reviews of 275 chemical additives marketed for food uses. On their own, the companies determined that the substances’ uses were GRAS, without making the safety assessment of the chemical publicly available or submitting it for review by FDA. It’s tough to imagine how it could be “generally recognized” if the safety studies are kept secret.

One reason these companies gave for avoiding the agency’s review: FDA is too slow, resulting in delays in product marketing and sales.

So, are FDA reviews so long as to justify bypassing the agency?

In short, no. FDA explicitly allows the use and marketing of a self-certified GRAS substance while a review is under way. No delay there.

Even if a company were to wait, FDA’s target is to complete a review in 270 days, and they have been quite consistent in meeting that target. Since 2010, FDA has published a performance report; the chart below summarizes median time frames by quarter.

Source: FDA

For roughly four out of five cases, FDA finds the GRAS safety conclusion adequate and issues a “no question letter” for the additive. On occasion, the agency has taken up to several years to review a GRAS notification, but those cases usually involve complex scientific issues that need to be resolved by the company. For example, it took FDA four years (2002-2006) to conclude its safety review and issue a no-question letter for the use of arachidonic acid-rich fungal oil and docosahexaenoic acid (DHA)-rich tuna oil in preterm and term infant formula. The company submitted 10 amendments to address issues raised by the agency.

When companies are unable or unwilling to answer FDA’s questions, they can ask FDA to ”cease to evaluate” the submission. Catechins from green tea extract, lupin flour and soy isoflavone extract are examples of ingredients where safety reviews were stopped, but which are currently in our food supply.

Reviews Necessary for Keeping Food Safe

FDA is responsible for ensuring that companies comply with the law, that food is safe, and that GRAS safety determinations are made properly. If FDA doesn’t know what chemicals are in our food or what types of food they are in, it can’t do its job. The GRAS exemption, as it is currently being implemented by FDA, means that the agency is unable to protect our food and our health. And FDA agrees.

To recap: review is voluntary, and a company can request that FDA stop its review when agency scientists ask too many questions. Businesses can market their products while under review, or without notifying the agency of its decision.

But when FDA is given the opportunity to review safety data, it does it in a timely manner, most of the time. Blaming FDA for a “slow review turnaround” to justify a deliberate decision to keep the agency and the public in the dark doesn’t pass muster.

So take our advice: require suppliers to confirm that all of their ingredients have been reviewed by FDA. If they tell you it will take too long, call their bluff. It’s the cost of doing business with you, because your customers and their safety come first.

By Tom Murray

A number of America’s most iconic brands helped pave the way for the new Clean Truck standards announced August 16th by the U.S. EPA and DOT. Nearly 400 companies, large and small, publicly urged strong, final fuel efficiency and greenhouse gas standards for heavy trucks.

Through their action, these companies have reaffirmed a basic truth of business today: to be a “leader”, companies must align their sustainability goals and strategies with their external engagement on policy.

Tom Murray, VP, Corporate Partnerships Program

While there are many differences as to how these 400 companies intersect with heavy trucks—manufacturers make the trucks, fleet owners drive the trucks, brands hire the trucks to move their goods to market—they are all unified by one resounding theme: cleaner trucks are better for their business, better for our health and better for the planet.

Indeed, common-sense efforts to cut climate pollution have gone mainstream in business. Earlier this year Microsoft, Google, Amazon, Apple and others raised the bar on corporate climate leadership by standing up for the clean power plan. Colgate-Palmolive, Hewlett Packard Enterprise, Nike, Starbucks and over 100 other companies built on this trend by urging “the swift implementation of the Clean Power Plan and other related low-carbon policies so that we may meet or exceed our promised national commitment and increase our future ambition.”

But this corporate support of the clean truck standards goes even further: it’s another step in the evolution of corporate climate leadership. This is beyond simply supporting good policy; a number of these companies are actively shaping it to deliver significant sustainability benefits. Among the companies that distinguished themselves in this effort are:

• PepsiCo: the largest private fleet in the U.S. led the way in demonstrating the alignment between its sustainability objectives and its policy advocacy through an op-ed, and expert testimony.
• Walmart, the 3rd largest private fleet in the U.S., was highly proactive and constructive in its engagement on the clean truck phase two program, supporting it with public statements, and expert commentary.
• Cummins, FedEx, Eaton, Wabash National, Conway, and Waste Management joined PepsiCo in the Heavy Duty Leadership group that urged the EPA and DOT to: “Achieve Significant Environmental, Economic and Energy Security Benefits.”
• Honeywell, Achates Power and a number of other innovators made clear that they were ready to meet the challenge of building more fuel efficient trucks.

There were hundreds more examples like these—each one of them a proactive leadership action that demonstrates the new frontier for corporate leadership.

Securing these protections was a real team effort.  The Pew Charitable Trusts organized a letter of support for strong standards signed by IKEA, Campbell’s Soup, and many others. Ceres brought forward a strong statement from General Mills, Patagonia and more. The Union of Concerned Scientists articulated how strong rules would benefit leading fleets, including UPS, Coca-Cola and Walmart. Together, these efforts marshalled an unprecedented level of corporate support for a critical piece of climate policy.

So, if your company is among the now hundreds of companies actively advocating for strong climate protection measures, thank you. We look forward to your continued leadership and engagement on other critical advances, including implementation of the Clean Power Plan and moving forward with reductions in methane emissions. We want to work with you to shape protective policies that also make business sense.

If, however, your company is still stuck at talking the talk, it’s time to start walking the walk when it comes to supporting common sense measures like the Clean Trucks program.

You’re falling behind the leadership pack in the one of the world’s most important races.

By Jason Mathers

Across America, companies have reason today to celebrate an important step to drive cost and emissions out of their supply chain. The U.S. EPA and U.S. Department of Transportation unveiled new fuel efficiency and greenhouse gas standards for heavy trucks. Once fully implemented, the new standards will cut over a billion tons of climate pollution and save hundreds of millions of dollars by 2035.

Jason Mathers, Director, Supply Chain

Every business in America stands to benefit.

Why? Because every business in America relies, in some form, on trucking services. Product manufacturers need trucks to get goods to market. Service and knowledge companies depend on trucks to deliver equipment and supplies. Retailers utilize trucks in distribution.

Retailers and consumer brands are among the top winners of strong fuel efficiency standards, as these companies account for a lot of freight movement. Companies that have undertaken detailed carbon footprint analysis often find, as Ben & Jerry’s did, that freight transportation can account for upwards of 17% of their total impact.

The new fuel standard means continued progress in tackling this significant source of emissions. This progress will reveal itself in lower carbon footprints for every product brought to market. It will be apparent through lower freight and fuel surcharge fees – saving large consumer brands millions annually.

The standards will be increased in 2024 and 2027, resulting in final standards that will require new tractor-trailer units to emit 25% less climate pollution in 2027 than in 2017. Long-haul truck drivers will see the new efficiency technology pay back in under two years.

The new standards will drive market uptake of a number of proven fuel saving technologies. Through the Super Truck program of the U.S. Department of Energy, for example, a Daimler team developed a 12.2 MPG trucks and a Cummins and Peterbilt team developed a 10.7 MPG truck. As a group of leading technology innovators noted early this year, “clear, stringent, long-term fuel efficiency and greenhouse gas standards” are critical to scaling emerging solutions “by creating certainty that high-quality, effective innovations will be rewarded in the marketplace.”

With the certainty of long-term standards, manufacturers will make the needed investments to introduce new engine platforms, better integrate powertrains, and take advantage of other cost-effective choices. In fact, this is just what has happened during an earlier phase of the clean truck program.

PepsiCo, Walmart, General Mills and a number of other leading companies played a critical role in securing the robust, final standards. They were drawn to advocate for strong standards because of the clean truck program’s combination of significant environmental and cost savings, and its ability to bring forward market-ready solutions.

It’s telling that these companies, which are leaders in adopting voluntary green freight best practices, were motivated to advocate for federal greenhouse gas and fuel efficiency standards too. They recognize that freight movement, which accounts for around 10% of U.S. greenhouse gases, has a critical role to play in cutting our emissions.

Making heavy trucks more fuel efficient is the single most important step to reducing freight emissions. The program announced will be crucial to build a low-carbon future that enables the free flow of freight. That is an outcome every business should celebrate.

By Ben Ratner

The climate change discussion is percolating even in surprising places. The latest sign: the American Petroleum Institute’s recent formation of an internal task force on climate change. Reportedly the new task force’s mandate is to revisit API’s approach to this crucial issue, going into an election year and with ever greater scrutiny on fossil fuels.

It is too soon to know whether the task force will rubber stamp a business-as-usual approach defined by glossing over climate concerns and attacking policy measures, or chart a new path instead.

But if the task force is serious about a fresh look at the issue, here are three keys for the task force to consider as it ponders the future of API on climate.

Face the Facts

The oil and gas industry must be responsive to growing pressures from its investors, corporate customers, and Americans affected by oil and gas operations – from local pollution to climate change.

The historic global climate agreement reached in Paris, supported by nearly 200 countries including powerhouses like the United States and China, was also supported by a wide cross-section of American businesses, like PG&E, which as a natural gas distribution company and power generator is a user of API members’ products and a face to climate conscious consumers.

Last April, over 400 investors representing more than $24 trillion in assets under management urged stronger leadership and more ambitious policies to lessen risk to investment and retirement savings of millions of Americans. Since then, the 2016 investor shareholder resolution season yielded a record breaking number of resolutions – 94 – addressing climate change, many levied as challenges to large oil companies.

And American public concern on global warming is reaching an eight year high, with nearly two-thirds of adults saying they worry about global warming a “great deal” or “a fair amount”, according to Gallup.

Facing all the facts, not cherry-picking them, can ground the task force’s work in today’s dynamic environment and enable an effective response in a changing world.

Solve Methane

While understanding and concern on the methane challenge has snowballed, API’s response has severely lagged.

But it doesn’t have to.

The methane emissions from the U.S. oil and natural gas industry account for the climate damage over a 20-year timeframe equivalent to roughly 240 coal fired power plants. And yet, when the Environmental Protection Agency issued rules earlier this year requiring operators to implement basic safeguards to detect and prevent emissions, API’s public response was to decry new environmental rules as “unreasonable and burdensome”.

Months prior, API’s combative regulatory filing questioned the authority of EPA even to regulate methane emissions, resisted twice-a-year inspections for accidental leaks and urged inspection exemptions that ignore insights on leak unpredictability.

The next round of methane rules is around the corner, and better late than never for API to embrace the United States’ goal of a 45% reduction in methane emissions from the oil and gas sector and to support effective national methane rules grounded in science and economics. Supporting a level playing field to address the invisible but undeniable methane problem would increase investor confidence and keep more product in the pipelines working for the economy, not against the climate. And it just might help build public trust in an industry that according to Edelman lags only the pharmaceutical and financial services industries in that category.

Truth be told, new regulations and compliance are not cost-free, but neither are exploration and drilling. Investing in effective rules will provide climate and environmental safeguards – a needed advancement responsive to legitimate pressure that is only rising.

Support Carbon Pricing

Implementing a market based approach to reducing greenhouse gas emissions is widely thought to be the ultimate key to achieving U.S. climate goals including cutting emissions 80% by 2050. Geographies from northeastern states and California to South Africa and the EU have implemented various forms of carbon pricing. A number of mostly European API members have publicly supported pricing carbon, for example BP recognizing “that carbon pricing by governments is the most comprehensive and economically efficient policy to limit greenhouse gas emissions.”

And yet, some prominent API members have to date withheld support for carbon pricing, or provided lukewarm quasi-endorsements but not lobbying muscle.

The oil and gas industry has survived through evolving, and it’s time to evolve on carbon pricing. An economically rational policy can provide the investment clarity companies want, while delivering the greenhouse gas reductions that societies, supply chains, and ecosystems need.

API is a large organization with diverse views represented, and the climate task force’s job won’t be easy. But the time for change couldn’t be better.

By Boma Brown-West

Consumers want to know that the products they buy contain ingredients that are safe for them and their loved ones. EDF has identified five pillars of leadership to help companies meet that demand and in doing so build consumer trust in the products they make and sell. One company that has recently taken major steps to drive safer chemicals and products into the market is Walmart.

In 2013, Walmart published its Sustainable Chemistry Policy, which focuses on ingredient transparency and advancing safer product formulations in household and personal care products. EDF worked with Walmart as it developed its policy and has advised the company during implementation and data analysis. This past April, Walmart announced that the company achieved a 95% reduction in the use of high priority chemicals of concern. Now, Walmart has shared considerable additional information detailing the progress made, including the identities of the high priority chemicals.

In our previous blog, we broke down the wealth of information that Walmart has shared. However, to fully evaluate the significance of the numbers, we now look at how well Walmart has done against EDF’s five pillars: institutional commitment, supply chain transparency, informed consumers, product design, and public commitment.

EDF’s Five Pillars of Leadership: How does Walmart Measure Up?

EDF’s Leadership Pillar 1: Institutional Commitment

What it is: Successful outcomes require commitment and support from leaders across the organization – from the C-suite to middle management. The most effective tool in building Institutional Commitment is a written corporate chemicals policy that articulates to all levels of the organization, as well as to business suppliers, what the company wants to achieve.

What Walmart did right: Walmart has done a great job at building a foundation for Institutional Commitment. It spent several years developing and operationalizing a comprehensive corporate chemicals policy that contains specific goals and timelines focused on transparency and safer products. In the subsequent release of its policy implementation guide in 2014, Walmart went further by providing guidance to suppliers on how to adhere to the policy. They also pledged to measure progress using a list of specific metrics, including the mass of high priority chemicals (HPCs) and number of products containing HPCs.

These are key elements of quantifying one’s chemical footprint, defined by the Chemical Footprint Project as “the total mass of chemicals of high concern in products sold by a company, used in its manufacturing operations and by its suppliers, and contained in packaging.” Walmart led by committing to measure the portion of its chemical footprint related to the products and priority chemicals covered by its policy.

What Walmart should do next: Walmart’s chemicals policy is limited to the United States and only covers formulated consumables (largely liquids, sprays and gels) sold in the household cleaning, personal care, and cosmetic aisles. We commend Walmart for starting with products that consumers use on and around themselves every day. In the coming years, Walmart should extend its sustainable chemistry philosophy across all products sold and all stores globally.

EDF’s Leadership Pillar 2: Supply Chain Transparency

What it is: A company needs to know the chemicals present in the products it sells. This means knowing all the intentionally added chemical ingredients, including those in mixtures like fragrances, as well as known contaminants that occur in the making of the product. Such information enables the identification of areas of greatest risk, opportunities for action, and a means for measuring and monitoring progress.

What Walmart did right: Walmart required suppliers to submit “full product formulations” – the names and concentrations of all ingredients in a product – to a 3rd party-managed chemicals database called WERCSmart. By doing this, Walmart gained access to aggregate information on the types and quantities of chemicals in the products on its shelves. This enables its policy implementation to be based on real data and for Walmart to be empowered to drive change and measure progress.

Walmart reported that 94% of the product formulations entered into WERCSmart are full formulations. This suggests that the retailer’s chemical footprint calculations are based on complete ingredient information. Walmart has shown real leadership here, proving that you can have greater supply chain transparency while still protecting proprietary information.

What Walmart should do next: Robust data means robust calculations, and robust data relies on transparency – about all intentionally added chemicals and any changes in formulations – along the supply chain from ingredient manufacturers to brand suppliers. Currently, it is unclear how supplier-entered data in WERCSmart is verified for accuracy. Walmart should require suppliers to proactively check that product formulas are up to date and consider introducing sporadic spot-testing of products.

EDF’s Leadership Pillar 3: Informed Consumers

What it is: Sharing ingredient information with consumers is a key part of leadership. It shows that a company embraces and executes on the philosophy that consumers have the right to know what is in the products they buy.

What Walmart did right: Walmart called for online disclosure of all ingredients in the products covered by the policy starting in 2015. According to the results of Walmart’s Sustainability Index, its annual environmental issues survey sent to suppliers, 78% of respondents reported they share ingredient information online for every product they sell globally. As we discussed in a previous blog, Walmart also began disclosing ingredients online for some of its own private brand products in 2015 — a good first step.

What Walmart should do next: Walmart should continue to push itself and its suppliers to bring greater transparency to the contents of their products. Many companies, including Walmart, continue to use generic names in their online disclosure lists, and very few companies reveal the chemicals behind trade name ingredients. EDF's Rules of Online Disclosure provide guidance for meaningful disclosure, and we encourage Walmart to adopt it as the standard for itself and all suppliers.

Walmart states that 87% (by sales) of suppliers covered by the policy (Walmart U.S.) participated in the Index. Walmart should continue to boost Sustainability Index response rates and expand coverage of the Index to all the categories and suppliers covered by the policy.

EDF’s Leadership Pillar 4: Product Design

What it is: Leading on product design means using safer chemicals and phasing out chemicals of concern when manufacturing and selling products. Measureable objectives must be set, a credible and science-driven methodology must be used to assess chemical safety, and a measurement plan implemented to track progress.

What Walmart did right: There are many things Walmart has accomplished here. Walmart’s policy prioritizes safer products for customers by calling for (1) the “reduction, restriction, and elimination” of Walmart’s designated priority chemicals (PCs) of concern, and (2) designing products using “informed substitution principles.” Walmart based its PCs list on 16 reputable regulatory and authoritative lists. Walmart focused its suppliers’ attention on a short list of High Priority Chemicals (HPCs) to catalyze action. These eight chemicals and chemical classes (butylparaben, propylparaben, nonylphenol ethoxylates (NPEs), formaldehyde, dibutyl phthalate, diethyl phthalate, triclosan, and toluene) appear on a number of authoritative lists (e.g. EU REACH Substances of Very High Concern) for their hazardous properties and are worthy of action by Walmart.

Walmart also established and implemented a strong measurement plan, the key metrics being (1) total chemical mass, measured in pounds of PCs and HPCs going out the door, and (2) frequency of use, measured by the number of products on store shelves that contain PCs and the number of suppliers using PCs in their products.

Walmart tracked progress by using aggregate data from RetailLink, its internal product inventory database, and WERCSmart, and will be tracking this information over time. Prompted by what the data revealed, Walmart identified the greatest opportunities to work with specific suppliers to drive progress against its goals. Walmart has made commendable progress in calculating and reducing this portion of its chemical footprint (95% weight reduction in use of HPCs). See our previous blog for additional details.

What Walmart should do next: While Walmart reduced the total mass of HPCs by 95%, these chemicals are still frequently being used across products by many suppliers. Aggregate exposure, which is exposure to the same chemical through multiple sources, and cumulative effects, which is exposure to multiple chemicals that contribute to the same health outcome, pose significant health risks. Creating a healthier marketplace means reducing the total toxic chemical load on people while taking into account varying susceptibilities, vulnerabilities, and co-exposures to diverse environmental stressors (e.g., social, chemical) experienced in the real world.

Walmart can’t solve this alone, but it can act. First, Walmart should talk with suppliers who don’t use HPCs and share their success stories of safer formulations. Walmart can also work with suppliers and upstream manufacturers to identify and find solutions to the issues hindering widespread elimination, such as misaligned incentives or lack of broadly applicable viable chemical substitutes.

Preventing regrettable substitutions – hazardous ingredients getting replaced with other problematic ones – remains a challenge. Walmart’s current tracking of the changing amount of all PCs is a good first step; if this number goes up while the HPCs amount goes down, regrettable substitutions may be occurring. Walmart’s report of a 45% weight reduction in the mass of all PCs is a promising result. The company should continue to track this metric, and investigate any significant increase in the mass or frequency of use of PCs.

Walmart should also meet its pledge to increase private label offerings certified by Safer Choice, a voluntary U.S. EPA program that recognizes and brings consumer awareness to products using safer ingredients. It is the only policy commitment for which no quantitative data was released. As a 2016 Safer Choice Partner of the Year, EDF believes Walmart can join the ranks of other partners, including Wegmans and Albertsons Companies (owner of Safeway, Shaw’s, and Jewel-Osco), who have successfully increased their offerings of Safer Choice products and worked to educate consumers about the program.

EDF’s Leadership pillar 5: Public Commitment

What it is: Effective communication of a company's policy, goals, timelines and progress can garner valuable support from the general public. Telling the story about one’s journey – including the pitfalls along the way – can be just as powerful as sharing success stories.

What Walmart did right: Walmart has shown strong leadership here by publishing its policy, publicly pledging to measure progress, sharing its metrics, and committing to report progress starting in 2016. Walmart has now released a trove of quantitative information, good and bad, and the calculations behind them. This is a first among retailers.

Walmart has also deepened its public commitment by meeting its own call for increased retail transparency by revealing the names of the Walmart High Priority Chemicals. Knowing the identity of the chemicals on which so much action has been focused provides a number of benefits. First, it gives the public a greater understanding of the initial results. Second, it allows Walmart suppliers to point to their own successes in tackling toxic chemicals. Finally, it focuses the market signal for safer solutions around specific compounds.

All in all, by being public about its safer chemicals journey, Walmart is communicating a clear message to its internal business, suppliers, and the public that the company is serious about driving positive change.

What Walmart should do next: We encourage Walmart to keep the momentum going – not only on implementation of its policy but also on publicizing the journey. Publishing progress results annually and sharing the instances of challenges and problem-solving will ensure that Walmart’s leadership continues to resonate with the public as well as provide incentive for other retailers to follow Walmart’s lead.

Conclusion: safer chemicals leadership is achievable

Walmart’s policy is working because it hits on every one of EDF's five pillars of leadership for safer chemicals in the marketplace. Has the company achieved full leadership according to the five pillars? Not quite, but many of the critical foundational pieces (e.g. chemicals policy, measurement system, transparency goals) are in place, suggesting Walmart is well on its way if it can keep the momentum up.

EDF believes that other retailers can achieve similar successes. We look forward to doing our part to help all retailers pursue the five pillars of leadership and transform the marketplace.

To learn more about how Environmental Defense Fund is working with business to remove chemicals of concern, visit Behind the Label: A Blueprint for Safer Chemicals in the Marketplace.

Further Reading:

• Major Strides: Walmart details progress on chemicals
• Product Ingredients at Walmart Changed for the Better – Really
• Walmart: The Awakening of an Environmental Giant

By Michelle Mauthe Harvey

It’s whack-a-mole time.

In April, Walmart released their 2016 Global Responsibility Report. In it, they noted a 95% reduction by weight in the approximately ten high priority chemicals in home and personal care products covered by their 2013 Sustainable Chemistry policy. Ninety-five percent is a big number, but the substance – the chemical names, the volumes – was missing.

No longer.

Today, Walmart released the names of those high priority chemicals, with details as to how the reductions were achieved. The chemicals – butylparaben, propylparaben, dibutyl phthalate, diethyl phthalate, formaldehyde, nonylphenol ethoxylates, triclosan, and toluene – will not come as a surprise to most who work on these issues; these chemicals have been called out for action by many for quite some time.

If this announcement is met like most environmental stories told by corporations, the mole-whacking will commence shortly. WHACK! Why these chemicals and not those? WHACK! What took so long? WHACK! What about everything else? While companies that do nothing will stay in the shadows, those like Walmart trying to drive needed change usually get whacked for what they haven’t done already.

And of course a lot still remains to be done.

But this story is a good one, and Walmart deserves credit for what they have accomplished. Walmart is the one company in the world that could drive drive over 11,500 tons – 23 million pounds – of chemicals out of so much product in less than 24 months.

What’s extraordinary is that they chose to do so at all, albeit with years of nudging from EDF. Many sustainability wins are also economic wins. Reduce GHG emissions, and you’ll usually see cost savings on energy expenses. Address water use in drought-prone areas, and you avoid costly supply chain disruptions that cause price spikes and unhappy customers.

But chemicals? The business case can be thin to none. Even when the science says it’s time to make a change—that one or more ingredients are no longer as safe as we once thought they were—changing a product formula without changing the product can be really hard.

And slow – 18 to 24 months on average. The ingredients ARE the product – they are the smell, the feel, the way it cleans or softens or does whatever it’s supposed to do. If a product is on Walmart’s and other retailers’ shelves, it’s because it sells. Change it, and you risk a lot of sales if customers reject the alternative. Change a lot of products, and you risk a lot more sales.

Piling on, when you talk about chemicals, people’s eyes glaze over—or they panic. Few-to-no marketing wins exist here. Despite the fact that pretty much everything, humans included, is a chemical mixture, people don’t want better chemistry. They want no chemistry, and keep looking for nonexistent chemical-free products, as if chemicals in and of themselves are the problem (some are, but many are not).

Yet Walmart decided to tackle ingredient chemistry anyway – and they changed the marketplace.

EDF spent years working side-by-side with Walmart associates to scrutinize the science, understand the problem from the retailer and supply chain perspectives, consider possible solutions, ponder potential strategies and metrics, understand the implications of various options, and map a path forward. Many others weighed in along the way.

Then Walmart released their policy, and they went big. Walmart didn’t just call for the ouster of the high priority chemicals. They committed to make the product ingredients transparent to customers. They embraced informed substitution, which means they’re intent on making sure that what goes in is better than what’s been pushed out. And for their private brand products, Walmart set their sights on Safer Choice, a voluntary labeling program administered by US EPA that requires every ingredient to be as safe as possible.

It took EDF six years on-site to reach the September 2013 starting line, when Walmart’s sustainable chemistry policy was released and the clock began ticking. It took less than 3 years for suppliers to remove 95% of the initial chemical targets by weight from their products on Walmart shelves. The journey is far from over, but let’s rest the mole-mallets for a moment and give credit where credit is due.

A lot of heavy lifting lies ahead. Perhaps, in the meantime, start swinging at those companies that are doing nothing.

Further reading:

• Major Strides: Walmart details progress on chemicals
• Making Strides on Companies’ Chemical Footprints  

By Boma Brown-West

In 2013, Walmart published its Sustainable Chemistry Policy, which focuses on ingredient transparency and advancing safer product formulations in household and personal care products. EDF worked with Walmart as it developed its policy and has advised the company during implementation and data analysis.

This past April, Walmart announced that the company achieved a 95% reduction by weight in the use of high priority chemicals of concern. Today, Walmart shared considerable additional information detailing the progress made, including the identities of the initial high priority chemicals. Let’s unpack this.

Revisiting Walmart’s Sustainable Chemistry Policy

Broadly speaking, Walmart made three commitments in its 2013 policy:

1. to increase transparency of product ingredients,
2. to advance safer formulations of products, and
3. to attain U.S. EPA’s Safer Choice certification [formerly Design for the Environment] of Walmart private brand products

The policy, which went into effect in January 2014, focuses on formulated household cleaning, personal care, and beauty products, sold at Walmart U.S. and Sam’s Club U.S. stores. A few months after releasing the policy, Walmart published a policy implementation guide that gave suppliers greater specificity as to Walmart’s expectations and, importantly, outlined the quantitative metrics Walmart would use to track and report progress.

How Walmart has fared so far

1. “Transparency”:

Walmart’s policy requires its suppliers to be more transparent about the ingredients in their products in two ways. First, Walmart requires suppliers to submit “full product formulations” – the names and concentrations of all ingredients in a product – to WERCSmart, a 3rd party- managed product ingredient database. WERCSmart provides the retailer with aggregate information about the types and quantities of chemicals in the products on its shelves without divulging specific product formulation data.

Second, the policy requires suppliers to increase ingredient transparency to consumers by calling for disclosure of product ingredients online starting in 2015. Further, any Priority Chemical found in a product must be disclosed on the product’s packaging starting in 2018. Priority Chemicals (PCs) are Walmart’s designated chemicals of concern, drawn from 16 reputable regulatory and authoritative lists.

To track the first requirement, Walmart determined the number of products whose ingredients are fully accounted for in the WERCSmart database. According to the data, 94% of the product formulations are full formulations. This suggests that the other results Walmart presents today are based on real data.

To track ingredient transparency to consumers, Walmart polled suppliers about their online disclosure practices using the Walmart Sustainability Index, its annual environmental issues survey sent to suppliers. In 2015, 78% of respondents reported they disclose ingredients online for all their products. Walmart also breaks down the responses  in more detailed ways, such as by department.

1. “Advancing safer formulations of products”:

The bulk of Walmart’s policy focuses on providing safer products to customers by calling for the “reduction, restriction, and elimination” of Priority Chemicals (PCs), and for product reformulations to be undertaken using “informed substitution principles.” Because the list of PCs includes hundreds (if not thousands) of chemicals — as evidenced by Walmart’s reference list of regulatory and authoritative lists used to define its PCs — Walmart focused its suppliers’ attention on a shorter list of High Priority Chemicals (HPCs).

Today, Walmart identified the HPCs as propylparaben, butylparaben, nonylphenol ethoxylates (NPEs), formaldehyde, dibutyl phthalate, diethyl phthalate, triclosan, and toluene. These eight chemicals and chemical classes appear on a number of authoritative lists (e.g. EU REACH Substances of Very High Concern) for their hazardous properties and are worthy of action by Walmart. The revelation of the identities of the chemicals was long-awaited and provides context to the rest of the information Walmart shared today.

To assess the portion of its chemical footprint[1] related to product sales covered by the policy, Walmart has measured progress in two ways: (i) the total weight of HPCs contained in products sold, i.e. pounds of HPCs going out the door, and (ii) frequency of use, i.e. the number of products on store shelves that contain HPCs and the number of suppliers using HPCs in their products. Walmart relied on RetailLink, its internal product inventory database, and WERCSmart, mentioned earlier, to make these calculations. Walmart has also computed and published this data for all Walmart PCs in the covered product categories.

Walmart reports a dramatic reduction in the total weight of PCs and HPCs going out the door. The total weight of HPCs dropped by 95% and PCS by 45%.  The more than doubling of reduction of HPCs suggests that focusing attention on a subset of chemicals accelerated action.

Walmart attributes part of the success to its ability to determine which select set of suppliers used the majority (in pounds) of HPCs. This illustrates the utility of a product ingredient database that can provide aggregate information by supplier while not disclosing proprietary information.

As it relates to progress made in reducing the frequency of use of HPCs, the results were far more modest.  Unfortunately, it appears that suppliers who use HPCs are largely still using them, though the aggregate mass has dropped. Overall, the percent of products containing HPCs dropped by only 3 percentage points (to 16%), while the percent of suppliers using HPCs increased slightly (to 39%). Meanwhile, the percent of products containing any Priority Chemical actually went up one percentage point (to 80%).

So while the weight amount of HPCs, and PCs more broadly, has dropped significantly, there is clearly much more work to be done to achieve complete elimination of these chemicals.

1. “Safer Choice [formerly Design for the Environment] in private brands”:

Lastly, Walmart committed to increase the number of private brand product offerings bearing Safer Choice certification. As discussed in our recent blog, the Safer Choice Program is a voluntary program implemented by the U.S. EPA that seeks to recognize and bring consumer awareness to products that are leading the way when it comes to safer ingredients. This is the only commitment for which Walmart has not released quantitative data. The company reports that it has hit snags in making progress against this target but is still committed to the program.

Conclusion

Overall, Walmart has made major strides regarding the commitments set forth in its policy. Equally notable, it has set in place effective systems to measure and track progress over time – an ability that can’t be underestimated.

In our next blog, we’ll assess where Walmart’s progress rates against EDF’s five pillars of leadership for safer chemicals in the marketplace.

[1] As defined by the Chemical Footprint Project, a chemical footprint is “the total mass of chemicals of high concern in products sold by a company, used in its manufacturing operations and by its suppliers, and contained in packaging.”

Further Reading:

• Making Strides on Companies’ Chemical Footprints  
• Walmart: The Awakening of an Environmental Giant

By Tom Murray

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

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

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

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

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

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

Excuse #1 "We're not political."

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

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

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

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

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

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

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

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

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

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

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

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

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

Follow Tom Murray on Twitter: @tpmurray

Further reading:

• The Bar for Corporate Leadership on Climate Has Been Raised
• The Business-Policy Nexus: The Next Frontier for Corporate Sustainability Leadership

By Jason Mathers

There was some good news from the U.S. Energy Information Agency recently. It found that the Clean Trucks program, which is expected to be jointly finalized this summer by the Environmental Protection Agency (EPA) and the Department of Transportation (DOT), will deliver huge carbon emission reductions.

The Clean Trucks program is designed to improve fuel efficiency and reduce greenhouse gas pollution from the freight trucks that transport the products we buy every day, as well as buses, heavy-duty pickup trucks and vans, and garbage trucks. The program’s first performance standards went into effect in 2014. The EPA and DOT are currently developing a second phase of performance standards. Strong standards can help keep Americans safe from climate change and from unhealthy air pollution, reduce our country’s reliance on imported oil, and save money for both truckers and consumers.

Without the Clean Trucks program, big trucks are on pace to increase emissions more than nearly any other end-use source of emissions between 2014 and 2040.

The proposed program charts a new course. The overall impact is 1.5 billion metric tons avoided (including upstream) through 2040.

The final program, which is currently being reviewed by the Office of Management and Budget, is expected to be announced this summer. EDF and a broad collation of clean air advocates, consumer groups, equipment manufacturers, trucking fleets, and freight shippers have called for the EPA and DOT to finalize strong standards.

It is well documented that fuel-saving solutions for heavy trucks exist today and can be cost-effectively deployed over the coming decade. Moreover, making trucks more fuel efficient will reduce lifecycle costs for truckers, freight shippers and consumers. We understand that stringent long-term fuel efficiency and greenhouse gas standards are necessary to overcome a range of barriers that prevent cost-effective solutions from reaching scale.

We are hopeful that the overall emissions savings from the Clean Trucks program will be even greater than expected benefits modeled in EIA’s analysis. EDF and others have called on the agencies to reduce new truck fuel consumption by 40 percent by model year 2025 beyond 2010 levels. This would increase annual emission reductions by an additional 40 million tons annually in 2035.

Others see the potential for greater efficiency levels, too:

• An executive with Ryder, a leading trucking services company, recently noted about heavy truck fuel efficiency, “I absolutely see a pathway to 10 mpg and maybe 11 or beyond.”
• Cummins, the world-leading producer of diesel engines, noted that it sees the potential for engine CO2 improvement between 9 percent and 15 percent through 2027. This is well beyond the 4 percent improvement proposed by the agencies last year.

The proposed Clean Truck program is a critical milestone on the journey to the truly transformative emission reductions we need from the freight sector. As we noted in 2013, trucks were on the path to account for 80 percent of the growth of freight emissions by 2040. The Clean Trucks program is set to offset this growth and start us on the long-term path towards substantial emission reductions.

This is indeed an achievement worthy of celebrating.

By Sara Kroopf

Over the past decade, private investment in conservation has more than doubled, with sustainable forestry and agriculture investments as the main drivers of growth. This unprecedented expansion in “impact investing” or “conservation finance” has occurred as investors seek ROI that can also benefit the environment.  According to Credit Suisse, sustainable agriculture is particularly appealing to investors as it offers a wider array of risk mitigation approaches than sectors such as energy and transportation.

Yet despite this boom, there has been very little investment from private capital in emerging ecosystems markets, especially in the agricultural sector.

We’ve blogged before about the benefits growers – and the environment – realize from participating in agricultural carbon markets or habitat exchanges. But here’s why the private sector, food companies and retailers should invest in agricultural carbon markets.

1. Markets are up and running

The American Carbon Registry and the Climate Action Reserve, both voluntary carbon registries, have developed 10 working lands protocols over the past six years that relate to agriculture. These protocols address issues such as grasslands conversion, methane emissions from farming, fertilizer efficiency, and wetland degradation.

The protocols enable farmers who reduce their environmental impacts to earn carbon credits that can be sold through either voluntary or compliance markets, such as California’s cap and trade system. And growers are jumping at this opportunity. With the rice protocol, for example, growers spanning 22,000 acres have expressed interest in just the first year of the protocol.

Environmental Defense Fund also received two Natural Resources Conservation Service Conservation Innovation Grants to catalyze the market for agricultural offsets from nitrogen fertilizer optimization and grasslands protection. Both aim to provide attractive new investment options for companies looking to buy carbon credits.

 

2. Opportunities for investment

The opportunities for investment are plentiful and increasing. Currently, companies can purchase voluntary or compliance credits generated through agricultural offset projects. A small number of investment funds also allow private, public, and corporate investors to provide upfront capital for growers to implement and scale pilot projects that demonstrate the real potential of GHG reductions from agriculture.

The initial stages of market formation and establishment are risky and complex, and despite support from NGOs in establishing the infrastructure for nascent markets, many barriers must be overcome to create the first pilot projects. Private and foundation investment is essential to paving the way for a market to function independently.

Experts within the Conservation Finance Network, a collaboration of investors and environmental professionals (EDF included) working to leverage capital to achieve conservation goals, emphasized the importance of demand in driving a successful market. Companies play a critical role in signaling interest in credits produced through offset markets, thus providing financial support for projects.

3. Meet corporate sustainability goals

The Paris climate agreement accelerated corporate commitments to reduce GHG emissions, and/or go “carbon neutral.”  To turn these promises into action, companies will need to reduce emissions within their supply chains – but they can also purchase offset credits generated directly from working landowners.

For example, as Agri-Pulse reported in 2014, “Chevrolet's first purchase of third-party verified carbon credits generated on working ranch grasslands is part of its commitment to reduce 8 million tons of carbon dioxide from being emitted, according to [General Motors].”

Investing in sustainable agriculture also reduces the risk of supply chain disruptions from extreme weather events, and can protect our food supply. Not to mention the environmental benefits of reducing pollution, avoiding regulations, and preserving important habitats, thereby avoiding endangered species listings that can hinder development.

By Michelle Mauthe Harvey

History was made this week. Major environmental legislation was signed into law for the first time in nearly 25 years, updating the Toxic Substances Control Act (TSCA), the primary U.S. chemical safety law, and putting in place a new foundation of federal oversight for chemicals being used in the marketplace. It took the right conditions and a lot of hard work – including bold action from the retail and manufacturing sectors to answer consumers’ call for safer products – to get here.

Now, as this new law gets implemented, industry is headed for a new status quo on how chemicals are evaluated and approved for use. What does that mean for those companies already on the safer chemicals journey?

Fertile Ground for Safer Products

This new piece of legislation –The Frank R. Lautenberg Chemical Safety for the 21st Century Act – amends for the first time the core provisions of TSCA, originally passed in 1976.  It requires new chemicals to clear a safety bar before entering the market, and mandates safety reviews of all existing chemicals by the U.S. Environmental Protection Agency (EPA).

Many consumers assume this has been occurring all along. If a product has reached a retailer’s shelves, someone must have reviewed its chemical ingredients for safety, right? But this hasn’t been the case. When TSCA was signed into law, it grandfathered in the 64,000 chemicals then in use as “safe.”  The law didn’t mandate review of new chemicals entering the market, either. And it put the entire burden on EPA to find evidence of harm in order to restrict market entry. The updated law will for the first time give EPA the authority and resources to review both new and existing chemicals and make affirmative decisions about their safety, along with new authority to more easily obtain information necessary for conducting these reviews.

Under the Lautenberg Act, EPA will first focus on “high priority” chemicals, such as those classified as known human carcinogens, highly toxic, persistent in the environment or bioaccumlative (able to build up in the bodies of animals). In assessing the safety of chemicals, EPA must consider risks to vulnerable populations such as children and pregnant women. EPA can only consider the health and environmental impacts of the chemical—leaving consideration of costs or availability of alternatives to the next step when EPA is determining how to manage a chemical’s risks. The law also puts strong new limits on what information can qualify as ‘confidential business information,’ striking a balance between the public’s right to know about chemicals to which they may be exposed, and proprietary interests in chemical information important, for example, to innovation.

Accelerating a Company’s Safer Chemicals Journey

These changes will increase corporate incentives to document the safety of chemicals, good news for businesses committed to safer chemicals leadership. More information will better position companies to make informed decisions about what chemicals to use and not to use in their products.

With tens of thousands of chemicals currently on the market, change won’t come overnight. On the other hand, consumer expectations for chemical safety and transparency will continue to rise. Product companies and retailers demanding more evidence of safety and access to more information they can use to go beyond compliance will help drive the whole system, which helps raise the floor.

Businesses leading on safer chemicals are already a step ahead #TSCA
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Companies Must Still Lead the Way

By going beyond compliance and continuing to place a premium on finding ever-safer alternatives, leading companies can distinguish themselves among consumers and help raise the ceiling. With regulatory certainty, companies are better positioned to define and implement progressive chemical policies.

Passage of the Lautenberg Act is an important step on the safer chemicals journey; the government will finally be able to do a better job of protecting consumers. But companies remain a much-needed partner in making safer products the new status quo. The question leaders will strive to answer is, “How do we continue to make our products safer, affordable, and more sustainable?”

Consumers will be watching carefully to see which brands offer products that are better for them and their families. Now that the regulatory bar for safer chemicals is set higher, companies need to seek out new ways to innovate if they want to differentiate themselves, stay competitive in the marketplace and continue to earn consumers’ loyalty.

By Tom Neltner

For the second year in a row, more than a third of consumers participating in the annual food industry survey rated chemicals in food as their most important food safety issue. Every year for the past decade, the International Food Information Council (IFIC) has surveyed more than 1,000 Americans aged 18-80, to gain insight into their attitudes towards food and diet. Although the way they have polled on these topics has changed over the years, the research shows a clear and steady rise in the number of Americans concerned about chemicals in their food.

In 2016, IFIC broke down the ‘chemicals in food’ option from 2015 into more specific concerns: chemicals in food (arsenic, mercury, BPA); carcinogens or cancer-causing chemicals in food; and food additives and ingredients (caffeine, MSG, flavors, colors, preservatives, etc.).

For 38 percent of the respondents, these three specific sub-categories of chemicals in food combined were the most important food safety issue, a two-point jump since last year. And these concerns are being felt in the market: 40% of consumers who stated that chemicals were of great concern to them reported changing their eating habits.

Growing concern driving food supply chain changes

Consumers’ growing concern about chemicals reflects an increased awareness about the harmful effects they may have on human health and, importantly, a shift in how consumers are defining the issue of “safety” in food. As we reported a few months ago, a report from Deloitte, the Food Marketing Institute and the Grocery Manufacturers Association found that consumers are increasingly concerned about the short-term health effects of chemicals in food (e.g., no toxins) as well as the long-term effects (e.g. no carcinogens).

To their credit, the food industry is beginning to respond to these concerns. Grocers, restaurant chains and food manufacturers have reformulated products worth tens of billions of dollars to eliminate artificial colors and flavors. Food manufacturers and restaurants have followed the lead of retailers such as Kroger, ALDI, Whole Foods and Trader Joe’s, each of which has removed a long list of additives from their private brands.

Consumer worry about #chemicals in food grows, revealing hunger — and market opportunity — for…
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Shoppers are showing they have an appetite for these reformulated products. Less than a year after announcing it was removing artificial flavors and colors from most of its cereals, General Mills reported a 6% growth in retail sales of reformulated cereals.

Consumer concern about food safety not a fad

The latest IFIC survey and others show that consumers are likely to keep demanding safer food that won’t harm their short-term or long-term health. While reformulation takes work, options for colors, flavors and other substances are available to produce appealing, tasty and safe food. Forward-looking companies that are already making these changes are reshaping the food supply chain, and in the process, are helping to regain the public’s trust in their products.

 

Further reading:

• Securing Safer Chemicals in Food
• Consumers' Changing Views on Food Safety, and the Opportunity for Action
• Who is Promising What on Food Additives?

By Nancy Buzby

Why is it that some environmentalists feel the need to play whack-a-mole whenever a leading brand peeks its head above the fray to publicly declare a corporate sustainability achievement?

I’m not going to cite specifics – just look at the comments section of any major news outlet covering a big brand sustainability announcement – but I do want to address the negative impact this has on business stepping up for the environment.

As an environmental NGO with a history of working in the trenches with powerful businesses, Environmental Defense Fund (EDF) often gets to play the mole role. We’ve endured our share of slings and arrows since first partnering with McDonald’s over 25 years ago, so I can empathize with companies who are reticent to step up and publicly acknowledge the sustainability work they are doing.

EDF has thick skin and a singular mission to forge solutions that help people and nature thrive. It’s not always the same for major brands that have to balance the needs of shareholders, suppliers, employees, communities, and yes, the planet. It’s difficult to step forward and share sustainability stories when doing so invites backlash. I get it.

While environmentalists push for change in corporate business and policy practices, we must also adjust our attitudes in working with and encouraging those businesses who are trying to make a difference.

Basic behavioral psychology leads me to believe that if we want more major companies innovating, executing and sharing best corporate sustainability practices, the whack-a-mole approach needs to stop.

And because I can already feel the mole-mallet swinging for my head, let me quickly duck and acknowledge that I am not suggesting that environmentalists do away with corporate sustainability policing. It is completely necessary to hold business accountable for the damage it does to people and planet. I’m merely suggesting a better balancing of positive and negative. Just as there is a full spectrum of environmental NGOs and their approach to business; so too should there be a full spectrum of feedback, from accountability to cheer-leading.

Perhaps I’m over-simplifying (it’s what I do, I’m a marketer), but I’d suggest that if we want companies to do more to finds ways for both business and the planet to prosper, we do more to champion those who step up and tell their corporate sustainability stories.

How about some positive reinforcement for companies that step up their sustainability game?
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Shining the spotlight on corporate sustainability wins is part of EDF’s game plan in working closely with business. We spend 10 years on the ground with corporate giants to be able to share best practices and influence entire industries. For us, critical commentary happens behind the scenes and throughout the journey, building the wins we can then share publicly.

Encouraging more big brands to share their stories can create momentum and even healthy competition to drive the next frontier of corporate sustainability.  To me, this is much more important than playing corporate whack-a-mole – but then again, I’ve always been more of a carrot than a stick person.

Here are some examples of big brands publicly stepping up for the planet:

• 110 companies step up to support the Clean Power Plan
• 58 companies commit to go 100% renewable

Follow Nancy Buzby on Twitter: @NancyBuzby

 

By Boma Brown-West

As we’ve written here before, public commitment is one of the essential pillars of leadership on safer chemicals. When a company leads in public commitment, it communicates not just its initial goal-setting, but its full safer chemicals journey publicly and honestly.

That’s no small task. The rise of shareholder resolutions across a wide range of sectors shows that investors and purchaser communities are becoming increasingly interested in how companies manage chemicals and mitigate risk. With the release of its inaugural report, one organization is throwing a spotlight on companies that are not just making, but following through on, those commitments.

Ingredients for measuring your (chemical) footprint

The Chemical Footprint Project (CFP) recognizes companies that have effectively demonstrated public commitment to improved chemicals management. A joint effort launched in June 2015 by Clean Production Action, Pure Strategies and the Lowell Center for Sustainable Production at the University of Massachusetts-Lowell, the CFP was created as a simple way for investors and purchasers to assess these critical aspects of corporate value.

The CFP’s evaluation system was designed to be flexible and can be used for any business sector, from personal care products to toys. Using a twenty question survey, the CFP assesses companies’ performance in four areas:

1. Chemicals management strategy (i.e. corporate chemicals policies),
2. Chemical inventory (i.e. knowing the chemicals used in products, manufacturing processes and supply chains),
3. Chemical footprint measurement (i.e. knowing the mass of chemicals of high concern in a company’s products and packaging, processes, and supply chain and tracking progress toward safer alternatives), and
4. Public disclosure and verification.

A company’s performance is scored on a 100-point scale, with a bonus for verification – respondents receive up to 4 points for independent validation of reported data.

Breaking down CFP’s findings

Last week, the CFP released its inaugural report, with 24 companies from seven sectors participating. Though individual company scores are presented without identification, CFP’s initial report reveals many interesting themes:

• Of the four key performance areas, participating companies scored highest on chemical inventory, followed by footprint measurement, management strategy, and lastly, disclosure & verification.
• Company scores ranged from 12 to 89. The CFP revealed that companies receiving high scores have chemicals policies and integrate them into their business strategies, showing the importance of senior management engagement.
• 90% of participating companies have corporate chemicals policies focused on removing chemicals of concern; however, only two-thirds of those companies have policies that explicitly address the use of safer alternatives.
• Many companies do not publicly disclose information on their chemicals policies and management systems, even when they have active systems in place.

A potent new tool for measuring chemicals management

The CFP has the potential to become a useful barometer of progress towards safer chemicals in the same way that CDP (formerly the Carbon Disclosure Project) and the Global Reporting Initiative (GRI) have for tracking companies’ progress on other aspects of environmental sustainability, like greenhouse gas emissions and water usage. The CFP has already amassed signatories representing $2.3 trillion in asset management and $70 billion in purchasing power.

Participating in The Chemical Footprint Project is one way a company can share progress on chemical management and gain recognition along its path to leadership from employees, suppliers, consumers and/or health advocates. EDF is pleased to see the CFP make visible in a meaningful way – one that can be shared with investors – the importance of corporate chemical management as an indicator of a company’s long-term value.

Disclosure: Sarah Vogel, Vice President at Environmental Defense Fund, is on the Steering Committee of the Chemical Footprint Project.

Also of interest:

• How Institutional Commitment Translates to Safer Products
• Behind the Label: Safer Chemicals in the Marketplace

By Aileen Nowlan

To get anything accomplished, you can’t let the perfect be the enemy of the good. One unsung story buried in last week’s release of EPA’s new source methane rules may make good options even better – driving innovation and offering industry more options to meet the methane challenge.

The new rules target a pervasive problem: methane – the primary component of natural gas – leaking throughout the oil and gas value chain. Methane emissions represent a waste of saleable resources, a reputational risk, and a contributor to both poor local air quality and climate change.

Under the EPA’s framework, oil and gas operators must take steps to minimize emissions from new and modified sources – from finding and fixing leaks to swapping out equipment to reduce methane vented from pneumatic controllers and pumps. Companies in Colorado working to comply with the state’s similar rule have reported that putting similar measures in place is cost-effective, even generating positive returns from selling the captured gas.

But what should an agency do when the solutions available now are reasonable but not perfect? Existing strategies don’t monitor all the time – only a few days a year. So leaks and malfunctions can be missed, or leak for months before they are fixed.

New technologies – emerging from research labs, startups and mature companies in adjacent sectors – can help spot leaks at lower cost, including through continuous monitoring. EDF’s Methane Detectors Challenge will launch pilots of sensitive, rugged, low-cost continuous methane monitors with oil and gas operators. Due to collaborative partnerships, these innovative technologies are advancing rapidly.

In a regulated industry like oil and gas, adaptability as technology progresses is key to ensuring operators can use more effective and lower-cost solutions as they become available. That insight led many innovators, forward-thinking oil and gas operators and EDF to call on EPA to include a pathway to innovation in the final rule.

Path open – and process in place – for emerging technologies

We were delighted to learn that the finalized new source standards offer oil and gas companies “the opportunity to use emerging, innovative technologies to monitor leaks.” The rule acknowledges that “leak detection technology is undergoing continuous and rapid development and innovation.” As a result, it establishes a process for evaluating any alternative work practice that achieves equal or greater emissions reductions. The rule also lists criteria for evaluation – so innovators and operators can get to work pulling together submissions.  This sets a floor for environmental stewardship, and gives an incentive to do better.

Any proposed alternative will need to be well tested and should be assessed carefully – a pathway for innovation is not an invitation to cut corners. But being open to alternative technologies shows faith in ingenuity. The methane experience may also offer lessons for how we approach other environmental challenges. Setting a level playing field and laying out the ground rules will help entrepreneurs and companies work out and deliver the better, faster plays.

Some old-fashioned industry monoliths may accuse the regulation of being one-size-fits-all.  But with the door open to innovation, the appetite from operators is there for more methane solutions. Leading oil and gas companies are already partnering with innovators to take advantage of this opportunity.

The day will come soon when anyone who sees only one path forward will have chosen to work with blinders on. That choice will cost them, as companies embracing innovation speed past them with efficient, low-cost made-in-America solutions.

Also of interest:

• The Methane Detectors Challenge
• Coming Soon: Solutions for Finding Methane Leaks Faster