By Fred Krupp

Just over a decade ago, EDF and Walmart launched a groundbreaking partnership—one that's delivering powerful results and helping to scale sustainability across the retail supply chain. 

About 20 years ago, I got on a plane to Bentonville, Arkansas, home of Walmart. Buoyed by the success of EDF's pioneering partnership with McDonald's, which did away with the company’s polystyrene packaging and reduced waste by 300 million pounds in the first decade, and by our continued success with other leading brands, I hoped that the world's largest retailer might become our next big corporate partner.

Big companies can leverage big changes.

But the visit flopped. The leaders I spoke with at the time wanted to focus on their core business, so we didn’t get the partnership going for another 10 years. By 2005, however, a new generation of Walmart leaders had become convinced that sustainability should be a core business principle, right alongside low prices and great customer service. EDF helped awaken Walmart to the possibilities.

I invited Lee Scott, Walmart's CEO at the time, to join me on a climate study tour. It began in New Hampshire, with a trip to the summit of Mount Washington. For decades, scientists there had braved minus-50-degree temperatures to chip ice off gauges hourly to get good readings, 24/7, even in gale force winds and ferocious storms. As we ascended the mountain, the temperature dropped 50 degrees. At the top, safely indoors, we had a simple supper with the observatory’s scientists and talked about how Walmart could become a force for environmental progress. I wasn’t sure what Lee would decide, but out of that evening came his welcome commitment to lead on these issues.

Though it had taken some time to begin working with Walmart, we soon learned that the company generally moves quickly. To get things done we had to be in the room. So we opened up our own office in Bentonville, which remains an effective base of operations to this day.

In the early days of the partnership, we were eager to demonstrate that big goals could drive big innovation, and big results. This was too rare a convergence of market power and environmental opportunity to approach timidly.

Walmart, to its credit, stepped up and set ambitious goals: to power its operations with 100 percent renewable energy, to create zero waste, and to sell products that sustain people and the environment. EDF also convinced the company to publicly embrace an initial climate goal: to reduce 20 million metric tons of greenhouse gas emissions from its global supply chain by 2015.

True to EDF form, we stuck around after the public commitments. And we’ve been on the ground with Walmart for the past ten years, driving results through an extensive process of trial and error. We started out by looking at   Walmart’s retail operations, but soon recognized that the biggest opportunities were to be found in its vast network of suppliers.

Walmart’s supply chain accounts for 90 percent of the company's total greenhouse gas impact. EDF helped the company realize that by taking simple steps, such as encouraging suppliers to make efficient use of raw materials, it could drive change on a grand scale. One example: optimizing fertilizer use on farms that grow e the corn used in so many Walmart products. This idea proved to be contagious. Six major brands, including Coca-Cola, Smithfield Foods and Cargill have now committed to optimize fertilizer use on 20 million acres of U.S. farmland by 2020.

Walmart’s purchasing and convening power creates a ripple effect across the retail sector.  Three years ago, EDF helped Walmart create a first-of-its-kind chemicals policy that led to the phasing-out of ten chemicals of concern in over 10,000 home and personal care products sold by Walmart. The phase-out soon expanded to major manufacturers like Johnson & Johnson and Colgate-Palmolive, and even led to a collaboration with Target to encourage industry-wide adoption of safer products.  This private sector leadership was critical in driving support for the strong chemical-safety reform legislation that recently passed the U.S. Senate and could reach the President's desk this year. Our work with Walmart is still gaining momentum.  While we surpassed by 30 percent our goal of reducing 20 MMT of GHG from Walmart’s supply chain, we see the potential for much greater reductions. And the partnership is just beginning to go global: from improving energy efficiency in supplier factories in China through our Climate Corps program, which trains graduate students to help companies mange energy use, to sustainably sourcing commodities from deforestation free zones.

Walmart is no stranger to controversy, and EDF’s decision to enter into this long-term partnership has not gone unchallenged.  But the scale and purchasing power of Walmart couldn’t be ignored 10 years ago, and it can’t be denied today. By working with Walmart we are driving a level of environmental progress that has surpassed our original expectations.

I am proud of the persistence and ambition that both EDF and Walmart have displayed over the past ten years, and I look forward to the even more ambitious goals that Walmart will set for the next ten. If history is any guide, the decade ahead will prove transformative.

Dive deep into the first 10 years of our Walmart work.  

By Elizabeth Sturcken

I'm really proud of the tireless and innovative work that EDF's Corporate Partnership team has done with Walmart. It's been a successful 10-year journey  and I've done a lot of cheer leading over the last decade.

But now I'd like to look forward. Because we still have huge environmental challenges to tackle, and we're still looking to powerful businesses, like Walmart, to model the way toward a sustainable future.

Through our work with Walmart, McDonald's, FedEx and others over the past 25-years, we've seen a framework for corporate sustainability leadership emerge that other companies can use, across industries and around the world.

For EDF, this framework is critical to spreading environmental and business benefits throughout the corporate sector. By sharing best practices, EDF can have impact that extends far beyond the individual companies that are our partners.

EDF has identified three key elements that will reduce environmental impacts while increasing companies’ resilience and profitability:

Science – make it count: Corporate sustainability goals must be built on a solid foundation of science – to put a company’s environmental impact in perspective to the overall challenge of achieving sustainability on a global scale. Science helps set and identify the scale of the environmental challenges that any company must address and target the highest impact areas. Science-based analysis also tells companies what, realistically, they can do to meet their goals and when they should expect to meet them. Applying science also means grounding corporate sustainability goals in economics and recognizing that addressing climate change and other environmental supply chain risks is smart business.

Strategy – make it core: By looking closely at how sustainability goals align with its core business, companies can create measurable environmental impact that allows business and the planet to thrive. Companies have to start with the basics – focusing on their own operations first – but they quickly need to focus on where their big leverage is. Depending on the company, core could be driving their supply chain, engaging customers or changing their products themselves. Publicly set ambitious yet achievable goals and consistently measure progress like any key performance indicator. Send a clear signal to stakeholders, customers, staff and competitors that sustainability is an integral element of business. Corporate sustainability strategies that harness a company’s comparative advantage and internal expertise will add value and efficiencies to its supply chain while reducing environmental impact.

Systems – make it scale: No one company can tackle the world’s environmental challenges alone. Companies must actively collaborate with supply chain partners to send a clear demand signal for sustainable products and practices across the supply chain. It is no longer enough for companies to simply tend their own sustainability gardens, corporate leadership must engage with buyers, suppliers and producers beyond its four walls. Companies must work pre-competitively with others to achieve the environmental outcomes that the planet demands and that their business needs.

The power of partnerships – Read the case study of EDF & Walmart's 10-year journey toward sustainability.

By Namrita Kapur

This post is part of an EDF+Business ongoing series on sustainable finance, highlighting market mechanisms and strategies that drive environmental performance by engaging private capital. EDF is actively engaging leaders with the capital and expertise needed to catalyze sector-wide changes—from accelerating investment in energy efficiency and clean energy, to protecting tropical forests, restoring depleted fisheries and saving habitats of endangered species.

Green bonds were a glimmer in the eye for investors when we first reported on them two years ago, but since then these sustainability-oriented debt financing instruments have exploded onto the investment scene. In fact green bonds were held up as a key instrument to keeping warming below the global high-end target of 2°C at COP21.

In the past year, the market to buy these bonds — which, by design, are linked to an environmental benefit — has significantly grown and matured. In the course of 2015 the green bond market expanded from $37 billion to $42.4 billion, with much of this growth due to diversification — both in who is issuing them and for what wider types of projects.

While expansion of this market is encouraging, its growth is much slower than most experts had originally anticipated. Early predictions for 2015 had the green bond market booming to $80 billion, or even $100 billion. Instead, due to a slow Q3 of only $6.7 billion in green bonds, numbers seem to have stagnated. Still, deliberately delaying issuances in order to coincide with the Paris Accords was common and could account for this slump. What does the future hold for this market, especially in the wake of COP21?

At COP21, green bonds were seen as a promising new source of climate financing for cities and regions to use for low-carbon infrastructure projects to help meet the emission reduction targets set in the Paris Agreement.

Already, both India and China issued their first green bonds in 2015, with Yes Bank in India issuing a bond to fund low-carbon power plants and a wind energy firm issuing the first in China. Over the past year, the Agricultural Bank of China has also raised around $1 billion in green bonds that will help finance renewable energy and energy efficiency projects. Furthermore, both countries have separately issued a set of regulatory standards for these bonds, which will help pave the way for further market growth in coming years. Additionally, during COP21 the African Development Bank issued a $500 million, 3-year green bond to show its commitment to growing the green economy on that continent. Building on these efforts, developing nations are now positioning themselves to lead in the growth of green bonds.

Despite lower growth than expected, as the examples above indicate, 2015 was still an exciting year for the green bond market, and we look forward to seeing how the Paris Agreement further fuels the sector.

In future posts, we’ll be delving into the key trends we’ve observed in this market. Those trends include a move towards strengthening standards to prevent greenwashing, debates around whether pureplay green companies should be exempt from burdensome documentation, and the continuing diversification of the green bond marketplace. Watch this space over the next few months as we explore many of these developments, and explain what they mean for the future of these sustainability-oriented debt instruments.

By Tom Neltner

As we discuss frequently on this blog, maintaining transparency and control of your company’s supply chain can help limit potential risks to your business. With some food additives, however, transparency is not enough and certain chemicals should be removed from your products, or risk having to reformulate quickly at significant cost or having to recall products with those ingredients.

A set of seven carcinogenic flavor chemicals under review by the Food and Drug Administration (FDA) offers a good example of these risks. On Jan. 4, 2016, the FDA announced that it is considering whether to rescind its 1964 approval of – effectively banning – seven flavoring chemicals as food additives.

The flavoring chemicals under review may be found in any food product but are not required to be named on the label. The most commonly used ones appear to be eugenyl methyl ether, myrcene and pulegone. They could be considered natural flavors, since they can be either extracted from plants or chemically synthesized.

Carcinogenic Flavoring Chemical Chemical Abstract Service Number Sensory Properties per GoodScents Company Benzophenone / diphenyl ketone 119–61–9 Balsam, rose, metallic, powdery, and geranium Ethyl acrylate 140–88–5 Harsh, plastic, acrylate, and fruity Eugenyl methyl ether / 4-allylveratrole / methyl eugenol 93–15–2 Sweet, fresh, warm, spicy, clove, carnation, and cinnamon Myrcene / 7-methyl-3-methylene-1,6-octadiene 123–35–3 Peppery, terpene, spicy, balsam, and plastic Pulegone / p-menth-4(8)-en-3-one) 89–82–7 Peppermint, camphor, fresh, herbal, buchu Pyridine 110–86–1 Sickening, sour, putrid, fishy, and amine Styrene 100–42–5 Sweet, balsam, floral, and plastic

The agency filed the notice in response to a food additive petition from eight public interest organizations, including EDF, which asserted the chemicals were ‘found to induce cancer in man or animal.’ The law is clear that such chemicals must not be added to food. A food additive petition is FDA’s primary mechanism to add, remove or change its approval of food additives.

If FDA accepts the petition for one or more of the seven carcinogenic flavoring chemicals, food containing the affected flavor(s) would be considered adulterated on the same day the agency publishes its decision in the Federal Register. The petition process offers no exemption for existing food or a delayed effective date. The only way to suspend the decision is if someone objects to it and demands a hearing within 30 days of FDA’s announcement of acceptance.

FDA’s goal is to make a decision on food additive petitions within 360 days of filing, although the statute calls for action within 180 days. FDA filed the flavoring chemicals petition on August 17, 2015, so it’s possible they will make a decision by this summer.

Are these chemicals really unsafe?

The public interest groups’ petition asked FDA to determine whether the seven carcinogenic flavoring chemicals are unsafe because they violate the provision of 21 U.S.C. § 348, which states: “no additive shall be deemed to be safe if it is found to induce cancer when ingested by man or animal, or if it is found, after tests which are appropriate for the evaluation of the safety of food additives, to induce cancer in man or animal…” If an additive is found to induce cancer, the law makes clear that it be banned without consideration to the amount people eat.

The National Toxicology Program (NTP) – a part of the U.S. Department of Health and Human Services – found each of the seven chemicals induces cancer in man or an animal. Two of the carcinogenic flavors, styrene and eugenyl methyl ether, have been officially designated by NTP to be ‘reasonably anticipated to be human carcinogens,’ and NTP studies concluded that the other five induced cancer in animal studies. The California Environmental Protection Agency and the International Agency for Research on Cancer have also designated many of them as carcinogens.

In contrast, the Flavor and Extract Manufacturers Association’s (FEMA) Expert Panel considers all of these same flavors except styrene, which it delisted in 2015, to be Generally Recognized as Safe (GRAS).

What do I do now?

Since there may be no notice of FDA’s action between the filing and the final decision, forward-thinking companies should identify which foods they make or sell that may contain any of the seven flavoring chemicals and reformulate the product to remove them.  With more than 2,700 other flavoring chemicals allowed to be used, suppliers have options, but it can take time to find a different ingredient mix that provides a comparable taste.

Further reading:

• Securing Safer Chemicals in Food
• Who Is Promising What on Food Additives?

By Sean Wright

No one likes uncertainty, least of all investors. From changes in interest rates, to supply chain disruptions, the list of risks investors must monitor is long and growing. Good, actionable information is investors’ most important tool for risk management and integral to successful investing. Without proper data, investors are flying blind.

A new report published by EDF this week  throws the spotlight on a growing risk for investors—methane emissions from the oil and gas sector. As so clearly demonstrated by the ongoing and massive leak at Aliso Canyon, methane emissions pose a multitude of expanding risks, with both short and long-term consequences.

Three key risks from oil & gas methane

At 84 times more powerful than carbon dioxide in the short-term, methane emissions represent a potent and fast-emerging form of carbon risk. In a world looking to reduce carbon pollution, methane emissions pose regulatory, reputational and economic risks. Preparedness to comply with forthcoming rules varies across the industry, methane undercuts natural gas’ ability to play a role in a carbon-constrained world, and emissions of methane are lost product amounting to $30 billion a year globally.

Investors should be asking themselves these questions:

• Do you know how much money your oil and gas companies are losing?
• Do you know if they have a plan to reduce emissions to limit impacts?
• Do you know how prepared they are to comply with forthcoming regulation?

It’s difficult to find out, and that’s a problem.

The power that good information offers investors

Methane disclosure in the oil and gas industry is poor, leaving investors in the dark. The industry generally fails to disclose the information investors require tor properly manage the aforementioned risks and assess corporate methane performance.

EDF reviewed investor-facing disclosures for 65 large oil and gas companies, and found few companies report on methane and existing disclosures are low-quality, vague and overly qualitative.

If I were an investor, this would concern me.

I would know – before I came to work at EDF, I was an equity analyst on Wall Street. I spent my days pouring over data trying to spot opportunities and risks. The numbers were trustworthy and actionable as figures in financial filings must be audited and reported according to strict accounting rules

One of the most striking findings is that zero of the 65 companies we reviewed disclose targets to reduce methane emissions. Without reduction targets, how can investors know that management attention is focused, and the emissions, and thus risk, will be reduced? Additionally, less than a third of companies voluntarily disclosure emissions –making it difficult for investors to hedge methane risk by investing in companies with comparatively lower emissions,

What investors can do to improve reporting

Improving methane emissions is possible, and our new report offers practical solutions, including a set of methane metrics that can help turn much of the raw data companies already have into meaningful information. Investors should urge companies to report their emissions via platforms such as CDP, which recently revamped its Oil and Gas Sector Supplement using our metrics. Make methane a part of your engagement with management, using a list of questions included in the Rising Risk report’s appendix as a guide.

Asking about methane will send a signal that it is an issue that needs oversight. For example, ask a company how much product they are losing. If they are unwilling or unable to answer that question, shouldn’t that give you pause?

EDF is hosting a webinar for investors and other interested parties on Friday, Jan 15th at 11AM ET to discuss the Rising Risk report and what investors can do to bolster disclosure. Andrew Logan from Ceres, Chris Fowle from CDP and Jonas Kron from Trillium Asset Investment will join Rising Risk lead author Sean Wright to share their perspectives on this fast-emerging investor risk.

Register now for this exciting webinar

By Steven Goldman

This post is part of an EDF+Business ongoing series on sustainable finance, highlighting market mechanisms and strategies that drive environmental performance by engaging private capital. EDF is actively engaging leaders with the capital and expertise needed to catalyze sector-wide changes—from accelerating investment in energy efficiency and clean energy, to protecting tropical forests, restoring depleted fisheries and saving habitats of endangered species.

 

We’re proud to see the Green Portfolio Program, an initiative we helped kickstart in 2008 with private equity firm Kravis Kohlberg & Roberts (KKR), evolve to identify and implement more efficient practices in its portfolio companies that drive business value and reduce environmental impacts. Last week, KKR relaunched this initiative as the Green Solutions Platform (GSP), expanding its mission to include companies outside of its private equity portfolio, as well as a wider range of business and environmental benefits.

KKR announced a shift in its investment strategy in its latest ESG report, and the relaunch of the GSP gives us a first glimpse into what that means in practice. The GSP’s scope has expanded beyond finding energy, water and waste reductions – what KKR refers to as “eco-efficiency projects” – to include portfolio company projects that can drive both top-line and environmental gains (“eco-innovation”) and companies whose core business drives a positive environmental impact (“eco-solutions”).

Much like GE with its Ecomagination product line or social enterprises focused on delivering renewable energy or clean water, the GSP’s new direction has the potential to support business activity that, by its nature, curbs climate impacts and creates value for communities and companies alike.

In just eight short years, 27 KKR portfolio companies reported that they achieved nearly $1.2 billion in avoided costs and added revenue, and avoided 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. We’re heartened to see an already-forward looking firm push its boundaries further in the pursuit of greater environmental gains, and look forward to seeing what innovations emerge from the Green Solutions Platform.

By Boma Brown-West and Jennifer McPartland

Increasing the safety of products calls for a structured, thoughtful approach: knowing which chemicals of concern you want to remove from your supply chain, putting in place a methodology and resources to meet that goal, and evaluating progress as you move forward. That’s at the core of the pillars of leadership for safer chemicals we’ve identified through our collaborations with Walmart and others.

However, figuring out how to move from hazardous chemicals to those that are inherently safer – without increasing risk or compromising performance – takes having a clear, replicable process. Chemicals Alternatives Assessment (CAA), sometimes referred to simply as Alternatives Assessment, is one such process, a powerful methodology that can help you select ingredients in line with your safer product design objectives. CAA helps product designers identify, compare and select safer alternatives to chemicals of concern (including those in materials, processes or technologies) on the basis of key attributes – notably their hazards, exposure potential, performance, and economic viability.

CAA was born out of a need to help companies make smarter choices about the chemicals used in every day products, and ultimately make our world a healthier one. As a methodology, CAA was developed as a practical way of incorporating safer product design into product development and reformulation.

Right now the application of CAA is following a trajectory similar to that of life cycle analysis in its early years: the community of practice has gradually grown and diversified in the last decade, from environmental health researchers to industry practitioners. Application of CAA has become more integrated into the daily work of users across academia, government, and business. A recent Environmental Health Perspectives article found that increased use of CAA across sectors has led to a rapid evolution of the field of practice, resulting in a number of frameworks and methods. So much so, that the National Academies, one of the premier scientific institutions in the United States, published its own framework in 2014 to bring together for practitioners the major concepts and elements of CAA developed over the past decade.

No matter the framework or implementation methodology used, Chemicals Alternatives Assessment as a practice is governed by an overarching set of principles:

• Reduce hazard by replacing a chemical of concern with a less hazardous alternative. This approach provides an effective means to reduce risk associated with a product or process if the potential for exposure remains the same or lower. Consider reformulation to avoid use of the chemical of concern altogether.
• Assess use patterns and exposure pathways to limit exposure to alternatives that may also present risks.
• Obtain access to and use best available information that assists in distinguishing between possible choices. Before selecting preferred options, characterize the product and process sufficiently to avoid choosing alternatives that may result in unintended adverse consequences.
• Require disclosure and transparency across the supply chain regarding key chemical and technical information. Engage stakeholders throughout the assessment process to promote transparency in regard to alternatives assessment methodologies employed, data used to characterize alternatives, assumptions made and decision making rules applied.
• Use information about the product’s life cycle to resolve trade-offs, meaning better understand potential benefits, impacts, and mitigation options associated with different alternatives. When substitution options do not provide a clearly preferable solution, consider organizational goals and values to determine appropriate weighting of decision criteria and identify acceptable trade-offs.
• Lastly, take action to eliminate or substitute potentially hazardous chemicals. Choose safer alternatives that are commercially available, technically and economically feasible, and satisfy the performance requirements of the process/product. Collaborate with supply chain partners to drive innovation in the development and adoption of safer substitutes. Review new information to ensure that the option selected remains a safer choice.

EDF worked with a leading group of experts from NGOs, academia, government and business in 2013 to codify and publish this philosophy as the Commons Principles of Alternatives Assessment (2013). Today, these principles have over 100 signatories ranging from business leaders to environmental advocates who all recognize the critical need for a paradigm shift in how chemicals are evaluated and selected during product development.

As your company examines its own supply chain impacts, processes like Chemicals Alternatives Assessment can help you more effectively consider ingredient hazard potential when selecting among candidate ingredients during product development and reformulation. As mentioned above, a number of tools and implementation frameworks exist to help you put CAA into practice, including OECD’s Substitution and Alternatives Assessment Toolbox. We encourage companies to work to incorporate CAA into its product design process and will continue to share additional resources that can help them ensure safer products for consumers and communities alike.

Further reading:

• Product Design: Where the Rubber Hits the Road on Safer Products
• Consumers Deserve To Know What's In Their Products

By Elizabeth Sturcken

In the wake of the COP 21 talks in Paris, I’m heartened by what appears to have been a strong business presence there. Does the agreement go far enough? It’s a start. Which then got me day dreaming about the ideal, “what’s next” conversations that I hoped were taking place (along with really good coffee and pastry, of course!).

So, without further ado, here is my dream COP 21 conversation (entirely a figment of my imagination, of course. But hey—a girl can dream, can’t she?):

The scene: a bustling Café in Paris’ 4th arrondissement.

The players: Paul Polman, CEO of Unilever and Doug McMillon, CEO of Walmart. Both men sip espressos.

Doug:  May I join you?

Paul: Doug, great to see you!  Have a seat!  How are you?

Doug (sitting): I’m exhausted. I never realized how much of a circus these global meetings are. Hey, congratulations on the Times article! Man, that’s showing ‘em how business can lead on sustainability.

Paul: Thanks—and look who’s talking! Congrats yourself on reducing all those CO2 emissions. How many million metric tons again? Twenty?

Doug: It was actually twenty-eight, thank you very much! It all just goes to show you: set a BHAG, and big innovation follows.

Paul: “BHAG”?

Doug: A BHAG— a Big, Hairy Audacious Goal. Our 20 million metric tons pledge in 2010 was a BHAG. So was your pledge to halve Unilever’s environmental impact by 2020. I bet when you made that you didn’t know exactly how you were going to get it done, am I right? And yet, you’re on your way—and already seeing results?

Paul: We are. SO many people said to me, ‘sustainability? It’s too expensive!’  But our revenue is up 22 percent.

Doug: Exactly! And how’d you do it?  By cutting waste, finding efficiencies — by innovating, right?  It’s “Good Business 101”, for crying out loud! Frankly, I can’t understand why every CEO isn’t doing this!

They both sip their coffee and think about this.

Paul: Well, in their defense—it is hard.

Doug: Yes. Hard it is. But the good CEOs—the forward-looking ones whose companies will thrive in the long term—know that it’s worth it, know that it’s the smart play. Heck, look at Indra over at Pepsi. She gets it! If climate change disrupts her access to water, she’s out of business! Or Peter Agnefjall at IKEA?  He gets it, too! How disruptive was hurricane Sandy to their supply lines? It must have cost them millions!

Paul: Hey, you’re preaching to the converted! I’m just saying, the complexity of it all is mind-boggling. Take soy as just one example: it’s in SO many of our products. To source it sustainably means engaging how many farmers, in how many countries?

Doug: True, but I’ll say it again: with big goals comes big innovation. You know as well as I do that the solutions are here—and so is help, in the form of NGOs like EDF, programs like SUSTAIN and alliances like Field to Market. They helped us with fertilizer and corn. You must have used them to help with all the tracking, all the verification, all the metrics?

Paul: We did. But all that’s just for soy—just one ingredient. We sell over a thousand products—

Doug: Most of which fill Walmart’s shelves. For all of those products there’s The Sustainability Consortium. Walmart has over 100,000 suppliers globally, and they helped us survey most of them to get a measurement on where each product stood in terms of sustainability.

Paul: I love TSC! And we took that survey. I agree with you—it’s all about metrics and science.

Doug (excited): Boy, this just might be the caffeine talking, but here goes! I challenge you to take it to the next step: use TSC to survey all of Unilever’s suppliers. Your supply chain is where everything is hiding! A survey will help you move the needle by finding all your environmental “hot spots”. And social hotspots, for that matter—this is risk mitigation on all levels!

Paul (equally excited): Well, this might be the caffeine answering, but I accept your challenge!

Doug: Man, if only every company had a Paul Polman! You epitomize the definition of environmental leadership: first, you make it count, with science and metrics.

Paul: We do.

Doug: Second, you make it core to your business.

Paul: Check!

Doug: Third, you make it big—meaning you know you can’t do it alone.  You know you have to engage your suppliers and your customers. And if we’re going to hit the 2-degree goal they agreed to last weekend, we need clear, level-playing field policies that encourage leadership.

Paul: You’re right. But business can’t do it alone! How the heck do these politicians expect us CEOs to make long-range plans with no policy parameters or guideposts?! What’s up with that??

Doug: I hear you! All we want is a clear idea of the landscape ahead! Who can make clear, good-for-business decisions with the sands shifting all the time?!

Paul: Hey, I’ve got an idea: there’s a big party happening near the Louvre—lots of government-types. What do you say we take another shot of espresso, then go talk some sense into those pols?

Doug: I say, deux cafés, s’il vous plait!

By Victoria Mills

The chorus of business voices calling for climate action has grown steadily in size and strength in the months leading up to the Paris climate talks. Now that COP 21 is finally here, companies have pumped up the volume even more, with a full-page ad in the Wall Street Journal and a wave of new commitments to the American Business Act on Climate Pledge.

Championing a Low-Carbon USA

In today’s Wall Street Journal, over a hundred U.S. companies placed a full-page advertisement calling for a shift to a low-carbon economy. The ad’s message is simple: failure to act on climate change puts America’s prosperity at risk, but the right action now will create jobs and boost competitiveness. Companies as diverse as Colgate-Palmolive, eBay, General Mills, Ingersoll-Rand, Microsoft, Owens Corning and Pacific Gas & Electric signed on to the ad, which encourages the U.S. government to:

1. Seek a strong and fair global climate deal in Paris that provides long-term direction and periodic strengthening to keep global temperature rise below 2°C
2. Support action to reduce U.S. emissions that achieves or exceeds national commitments and increases ambition in the future
3. Support investment in a low-carbon economy at home and abroad, giving industry clarity and boosting the confidence of investors

These companies recognize that their efforts alone can’t solve an issue like climate change. Businesses need governments around the world to act as well. By setting ambitious goals and providing regulatory certainty, governments can unleash the power of the marketplace to deliver the necessary reductions in emissions, while also boosting competitiveness and economic growth.

Walking the Talk with the White House

This week, the White House announced that another 73 companies – including Amazon, Cisco Systems, DuPont, National Grid and News Corp. – have signed on to the American Business Act on Climate Pledge. By signing the pledge, businesses not only declare their support for a strong outcome in Paris, but also commit to cut greenhouse gas emissions in their own operations. With this third wave of pledges, 154 companies are saying that a low-carbon economy is good for business. These companies have operations in all 50 states, employ nearly 11 million people, represent more than $4.2 trillion in annual revenue and have a combined market capitalization of over $7 trillion.

Aiming High for Best Results

One final point about goal-setting: ambitious goals drive superior results. Just ask Walmart. The retailer recently surpassed its goal of reducing its global greenhouse gas emissions by 20 million metric tons by 2015, reducing them instead by 28 million metric tons. The company achieved these reductions through a wide range of initiatives, from improving energy efficiency to greening its fleet to working with EDF to cut fertilizer use across 20 million acres of farmland. If you had asked Walmart ten years ago how it was going to deliver the 20 million metric tons, it’s unlikely they could have told you. But having an ambitious goal sealed their commitment and unleashed the creativity needed to get it done – and then some.

Perhaps that’s the strongest message for our negotiators in Paris: set the targets needed to stabilize the climate, and let business innovate to meet them. Whatever the outcome of COP 21, the leadership these companies have demonstrated through their public commitments to address climate change will be even more important after the delegates come home and it’s time to turn talk into action. We look forward to seeing that leadership continue in the months and years ahead.

By Jenny Ahlen

When it comes to Walmart meeting its greenhouse gas goal, parenting and sustainability have more in common than you think.

Notes from the Nursery/Eco-Business Nexus

By Jenny Ahlen

I’m proud to say that Walmart just announced that they’ve not only hit but surpassed a goal that was, at the time, considered nothing short of audacious: to reduce global greenhouse gas emissions (GHG) by 20 million metric tons (MMT) in just six years.

So why am I proud? Two reasons.

First, I’ve worked alongside them every step of the way. Environmental Defense Fund (EDF) has been Walmart’s lead partner throughout this process, and as a Supply Chain specialist for EDF, I know first-hand the massive amount of research, measurement, innovation, collaboration and communication that has gone into bringing this goal across the finish line.

Second, I’m a brand new mother – and as I stare down into my 5-month-old daughter Helen’s eyes, there’s nothing I care more about than ensuring she grows up in a world that is on course to thrive—both economically and environmentally.  Walmart’s achievement gives me hope for both.

So, yes, I’m proud. Because while it may seem that my two unique perspectives—one from the nursery, one from inside the halls of the world’s largest retailer—are worlds apart, they actually have a lot in common.

In truth, helping a multi-billion dollar corporation reach a major sustainability goal is a lot like raising a child.  So for other companies who want to follow Walmart’s lead, I offer the same advice that I will one day give to Helen:

1. Set Your Sights High – Lofty goals drive big innovation. When the 20 MMT goal was announced, it was uncharted territory – no one had ever pledged to remove the GHG equivalent of 4 million cars from their supply chain before! Neither Walmart nor EDF knew the clear path forward, but the sheer scale of the goal made us rise to the challenge. And after some unsuccessful attempts, we were finally able to prioritize the most important areas of GHG impact for Walmart—which enabled us to develop strategies to change those systems. This resulted in not just meeting the goal, but setting long-term change into motion.

1. It Takes a Village – Collaboration is key. Don’t just “be open” to help; actively search it out. Certainly the partnership with an NGO like EDF was critical for success; we provide them with expertise, encouragement and course correction through all the ups and downs of the process. But beyond that, the EDF and Walmart teams quickly realized that the only way to change systems to achieve huge greenhouse gas reductions was by engaging their 100,000 suppliers and other key supply chain stakeholders. It also meant being creative, as is exemplified by the “chicken-and-egg issue” we faced with recycled plastic. Many places don’t offer recycling because there’s no market for the material. At the same time companies want to use more recycled content but can’t get their hands on it.  The solution?  The Closed Loop Fund, where donations from Walmart, suppliers, and others started a revolving loan fund to help develop much-needed recycling infrastructure.

1. The Future is Bright – Success breeds success. Getting started can be difficult, but once you’ve got momentum, great things can happen. One of the “hotspot” areas of GHG reductions we targeted was nitrogen fertilizer used on corn—while vital to keep yields high and prices low, too much nitrogen results in massive GHG emissions and water pollution from runoff.

We set out to improve farmers’ access to tools and information that help them optimize their fertilizer consumption and crop yields.  It has taken a few years for farmers to explore interventions and really start to put the work into practice—and it will take even more time to have this spread throughout the farmer community.  But as more and more farmers embrace new methods and technology, they quickly see the benefits. Accelerated uptake will in turn mean a dramatic accumulation of GHG and water savings.

I actually could go on and on, as the parallels are seemingly endless. But best to conclude with some parental words of advice:

To my daughter: never stop growing, changing, evolving.

To Walmart and the global business community: moms are the CFO of the household. We make 85% of all consumer purchases, and we care—deeply—about the health of our children and the world they will both inhabit and inherit. Both the environment and economy can thrive, but not without your leadership.

Job well done, Walmart! Take a moment to reflect and celebrate… then get back to work. Our children’s future depends on it.

By Jason Mathers

It’s one thing to reach a goal, stop and toast your success. But in the case of Walmart’s announcement yesterday, the finish line became a mile marker and now the company is looking at how much farther it can go.

In 2005, we worked with Walmart to set its first long-term freight goals – to increase its fleet efficiency by 25 percent by 2008 and then to double it by 2015. Walmart cleared the first goal with room to spare and announced yesterday that it has not only doubled fleet efficiency but is now on track to go further – and in the process, will avoid almost 650,000 metric tons of CO2 and save nearly $1 billion in this fiscal year alone.

It’s a testament to the holistic approach Walmart’s taken to improve the efficiency of its fleets. The Walmart sustainability team started by choosing a specific metric of cases shipped per gallon burned in 2005 – shipping the most cases of goods the fewest miles using the most efficient equipment – and then attacked the problem from all sides to get it done.

As companies work to increase the efficiency of their freight moves – taking steps on their Green Freight Journey – it’s tempting to choose one area to work on at a time. But by choosing a few key areas to focus on – developing innovative solutions for loading, routing and driving techniques, and collaborating with tractor and trailer manufacturers on new technologies – Walmart was able to bolster freight efficiency along its supply chain at multiple points.

No Trailer Left Half-Full

One strategy – which we’ve covered here frequently – is ensuring that trailers are loaded as effectively as possible to move the most cases of goods at a time. Walmart worked to lightweight and streamline both packaging and shipping containers, enhanced multi-stop delivery capabilities, and coordinated and consolidated shipments to minimize total truck trips.

Shrinking Distances, From Distribution to Delivery

Walmart also worked to decrease the number of miles its goods traveled by working with its associates to find the most effective strategies for moving them between stores and distribution centers. This included finding the “best” (i.e., most efficient) distribution center between suppliers and stores, eliminating empty miles (i.e., trucks traveling empty) and mapping routes to increase fuel efficiency, for example, by avoiding areas with excessive hills or congestion.

Finding Efficiency Through Technology, Collaboration, Innovation

Lastly, Walmart integrated more efficient technologies and practices into how it moved freight. For example, It adopted more fuel-efficient trucks, ensured they were calibrated and maintained to ensure they were performing well, and incorporated improvements to make them lighter-weight and more aerodynamic. Also, operating today’s technology is different from how most drivers learned to drive so Walmart’s logistics team applied a mixture of techniques, training, reporting and competition to motivate drivers to improve their performance.

Greening Freight Takes – And Needs – Many Kinds of Effort

As mentioned above, with these new efficiencies, in this fiscal year alone, the company expects to save nearly $1 billion compared to a 2005 baseline, and avoid almost 650,000 metric tons of CO2 emissions. Although it can be assumed that improving fuel efficiency of its equipment would be the most impactful effort, it turned out that the operational side of filling the trailer and reducing miles was just as important in meeting Walmart's goal.

Jason Mathers, Senior Manager, Supply Chain Logistics

The takeaway from Walmart’s efforts is that all three types of intervention are important in setting and meeting ambitious goals on freight, but its suppliers and vendors play a significant role in helping achieve them. Loading and routing companies, for example, can control a lot of factors on their own, but making sure they serve a company’s larger efficiency or sustainability goals requires close coordination.

Also, as we’ve seen over the last few years, companies are already capable of developing innovative technologies that can double current truck fuel efficiency, but for them to scale up in the market, the whole industry has to get behind a boost in fleet efficiency, in the form of strong federal standards that will set a floor for new trucks. We’ve already seen how the first round of heavy truck standards, which first took effect in 2014, triggered huge market demand for more efficient trucks, and opened up a key opportunity to help Walmart and others meet their fleet goals.

Our advice to companies: pay attention to Walmart’s efforts, see how they can apply to your own sustainability roadmap and internal targets, and help drive innovation in how we get goods to market. In the long run, it’ll help your company cut costs, fuel use and climate impacts – and as we’ve seen here, it can happen faster than you think.

Also of interest:

• Climbing Toward Corporate Sustainability, Even Walmart Can’t Do It Alone
• Companies Hail Triple-Bottom-Line Benefits of Cleaner Trucks
• Walmart, General Mills and Anheuser-Busch Make Greening Freight a Priority

By Elizabeth Sturcken

Ten years ago, the CEO of Walmart and the president of Environmental Defense Fund hiked together on Mount Washington in New Hampshire. Along the way, Lee Scott of Walmart (now retired) and Fred Krupp of EDF talked about climate change and the environmental challenges of our time. They also talked about ways that Walmart could drive positive environmental change in its product lines and operations.

The hike turned out to be the start of a ten-year journey of collaboration between Walmart and EDF, one that has helped define a new model of corporate sustainability.

In a speech that year, Lee Scott laid out three aspirational goals:

“Our environmental goals at Walmart are simple and straightforward:
1. To be supplied 100 percent by renewable energy.
2. To create zero waste.
3. To sell products that sustain our resources and environment.

These goals are both ambitious and aspirational, and I’m not sure how to achieve them…..at least not yet. This obviously will take some time…”

Lee Scott, Oct. 23, 2005

Now, on the ten-year anniversary of the 21st Century Leadership speech, EDF is taking a moment to take stock of how far this journey has taken us and the distance left to travel.

First, what have we achieved? Here are three of our proudest accomplishments:

click to enlarge.

1. Today, Walmart is announcing that it will surpass its aggressive goal of reducing 20 MMT of greenhouse gas emissions from its supply chain. In total, Walmart will reduce 28 MMT of GHG from its supply chain by the end of 2015. To achieve this goal, Walmart tackled a diverse range of projects: from helping end consumers through improving products like LED light bulbs; to creating a Closed Loop Recycling fund, and changing food date labeling to reduce waste; and working with EDF to conserve fertilizer use on over 20 million acres of U.S. farmland.

Overall, the 20 MMT reduction of GHG from Walmart’s supply chain is the equivalent of getting almost six million cars off the road.

Yes, EDF pushed Walmart to set this goal; but we also worked side by side with them to achieve it. It is this type of long-term collaboration that drives results at scale, an achievement foreshadowed by EDF president Fred Krupp when he said, "When you can get big companies to do important things, you can change the world."

2. In 2013, Walmart put a chemicals policy in place that is phasing out chemicals of concern in over 100,000 home and personal care products like laundry soap and shampoo. Private brand products now list all of their ingredients online so consumers have more transparency into what chemicals they are using in their home and on their bodies.

3. EDF and Walmart helped create the Sustainability Index, a tool powered by The Sustainability Consortium (TSC) that has evaluated billions of dollars of products on Walmart shelves. To date, 70% of Walmart suppliers have filled out the Index.

Second, how have we achieved these successes? In a word: Collaboration. The type of close collaboration that saw EDF setting up an office of experts in Bentonville, AR to dig into the nuts and bolts of the world’s largest retail supply chain. As different as our organizations may be, we both understood that we were facing environmental challenges that demanded market based solutions, delivered at a scale. Ten years ago, neither one of us had a clear idea of how we would attain these goals, but we knew we had to bring our comparative advantages to the table and try.

One of the first challenges the EDF team pushed with Walmart was to follow the science and incorporate climate into its goals. Walmart agreed. No one knew precisely how Walmart could reduce 20 MMT of greenhouse gases from its supply chain, but we both knew that when you set audacious goals, innovation tends to follow. And analyzing the supply chain, we found that a huge source of greenhouse gas emissions was fertilizer loss (or runoff) on farms.

Taking advantage of EDF’s history of working with farmers, we were able to work with stakeholders all along the supply chain – food companies, agricultural retailers, and farmers – to optimize fertilizer use while maintaining crop yields. Now, multiple companies have committed to optimizing fertilizer use on over 20 million acres of U.S. farms, saving farmers money while reducing climate impacts. It’s an approach to environmental innovation that is a win for sustainability and for profitability.

Taking on toxic chemicals in products was also a huge hurdle. Our 40-year-old chemical safety laws were badly broken; the cause of reform had been stalled in Congress for years. EDF saw that the consumer’s health needs couldn’t wait and Walmart agreed. In 2013, Walmart launched a new Policy on Sustainable Chemistry in Consumables to its suppliers. This policy identified about ten chemicals of concern for reduction, restriction and elimination. In 2014, it joined Target to host a first of its kind sustainability summit with other retailers to motivate supply chains to be more transparent about the chemicals in their beauty and personal care products. Walmart is working on labeling all of its private brand home and personal care products in accordance with the U.S. EPA’s Safer Choice Labeling program, which meets the highest standards of safety.

Early on, we recognized that we couldn’t manage what we couldn’t measure. That’s why EDF and Walmart worked together to create an Index to accurately quantify and communicate the degree to which any particular product is (or is not) sustainable. When you have hundreds of thousands of products on the shelves of any given store, documenting this is challenging at best.. Suppliers were asked a huge range of questions, from how much water and fertilizer was used to grow wheat or corn, to the mining practices used to extract natural elements used in computers or jewelry. The Sustainability Index uses the science and tools developed by The Sustainability Consortium (TSC), which now has over 100 global members including companies, universities and NGOs. At this point, thousands of products have been evaluated and last spring this information became customer facing for the first time through Sustainability Leaders badges that appear on Walmart.com.

As EDF and Walmart traversed this increasingly complex path over the past ten years, I admit that we threw a lot of ideas against the wall. Some stuck, some didn’t.

I recognize that there will always be the challenge of balancing short-term financial pressure against long-term environmental risks. These two challenges will increasingly converge as extreme weather disrupts business operations and as we struggle to provide food and products to a growing population without wiping out all of our natural reserves.

Moving toward the climate talks in Paris later this month, EDF is looking for corporate leaders to step up even more on climate — making public, science-based commitments and creating an environment where denial and delay by private and public sector leaders is no longer acceptable. As we’ve learned through our 10-year journey with Walmart, tending one’s own sustainability garden is necessary but no longer sufficient; corporate leaders of today and tomorrow need to collaborate widely and consistently to leverage their impact at scale. When that happens, both the economy and the planet can thrive.

By EDF Staff

Heath Consultants' methane-measuring drone

Dr. Jason Gu was still a graduate student when he developed the technology behind SenSevere, a start-up that creates laser-based gas sensors for use in heavy industry and power plants. Today, he’s working to apply this technology to methane emissions from the oil and gas industry, making him one of the many entrepreneurs developing solutions to tackle the problem. His fascination with innovation isn’t just making his clients more efficient—it may also be saving the planet.

The hidden cost of methane

Methane, the main component of natural gas, is a powerful pollutant responsible for a quarter of the global warming we feel today. The oil and gas industry releases 7 million tons of it into the atmosphere every year through emissions from oil and gas fields and associated pipelines, resulting in over a billion dollars’ worth of wasted American energy resources. And, toxic chemicals like benzene, a known carcinogen, can accompany methane emissions, posing a potential threat to public health.

“The industry is beginning to become more sensitized to the fact that methane is an aggressive greenhouse gas,” said James Armstrong, president of Apogee Scientific, a Colorado-based methane mitigation company. For more than 15 years, Apogee has manufactured a methane detection system that uses a vacuum and infrared sensors and can be mounted to trucks, ATVs and helicopters to identify leaks in the field. “If you find the leaks and repair them, you’re not only helping the environment…you’re extending the resource.”

New frontiers for entrepreneurs

Today, a range of solutions are available to address the problem, from mechanical leak-preventing sealing devices to handheld infrared cameras. A 2014 ICF International report found that these existing technologies can reduce methane emissions by 40 percent, while costing oil and gas companies less than a penny per thousand cubic feet of gas produced.

For businesses operating in the field of methane mitigation, opportunity lies not only in existing technologies, but also in emerging ones. Heath Consultants, a Texas-based, family-run business, has been helping oil and gas companies capture wasted gas for over 80 years. But when they look to the future, they see a new way to possibly reduce emissions even more effectively: drones.

In August, Heath Consultants announced that, along with several research partners, they received part of a $60 million grant to develop a methane-monitoring drone that can reliably and cost-effectively detect and measure methane leaks.

“One drone will be able to monitor multiple wellheads, pipelines, separation tanks and anything else it needs to,” said Paul Wehnert, senior vice president of sales and marketing with Heath Consultants. “It will sit in a doghouse, probably charging by solar power. It will then fly a programmed, aerial grid to monitor the various sites.”

Dr. Gu, of SenSevere, has a different approach. As part of the Environmental Defense Fund’s Methane Detectors Challenge, his four-person team has developed a stationary laser system that can continuously and cost-effectively monitor for methane emissions. The system, Gu claims, allows for “organized responses to leaks in hours, not months.” That could mean the difference between a methane leak costing pennies, or costing thousands.

Policy drives innovation

State and federal leaders are increasingly recognizing the role policy can play in leveling the playing field for methane reduction practices across the industry, with the Environmental Protection Agency (EPA) proposing rules in September to reduce oil and gas methane emissions across the United States. Entrepreneurs like Gu caution that these policies must include the flexibility to adopt the most effective solutions as they become available and encourage further innovation.

“Any regulations need to have a clear pathway for operators to be recognized for using innovative technology,” Gu testified at a recent public hearing on EPA’s proposed methane rules. “Without such a pathway, the proposed rule risks freezing methane detection technology at its current level.”

As momentum builds behind the effort to reduce oil and gas methane pollution, American innovators are providing the technology to cost-effectively drive emissions reductions, and are continually working to develop even more innovative, cutting-edge solutions. By crafting flexible rules, policymakers can help ensure the newest, most effective technologies are able to be adopted as they are developed by American businesses.

This content originally appeared on Washington Post’s BrandConnect.

By Michael Reading

This post is part of an EDF+Business ongoing series on sustainable finance, highlighting market mechanisms and strategies that drive environmental performance by engaging private capital. EDF is actively engaging leaders with the capital and expertise needed to catalyze sector-wide changes—from accelerating investment in energy efficiency and clean energy, to protecting tropical forests, restoring depleted fisheries and saving habitats of endangered species.

I recently returned from SOCAP15, an annual conference “at the intersection of money + meaning”… in other words, a good place to be if you’re interested in how to harness markets to deliver financial, as well as social and environmental, returns. A record 2,600 attendees turned up this year, evidence of the growing interest in sustainable finance.

The increased focus on this space has triggered a wave of innovations aimed at addressing some of the sector’s key challenges, such as building and supporting a pipeline of investible entrepreneurs, securing sufficient demand from investors, and linking those players so that capital can flow efficiently to provide the greatest impact. It’s a challenging road ahead, but the conference offered important proof points that help show the way forward.

Growing support for entrepreneurs

Now is a very good time to be a social or environmental entrepreneur. We are witnessing a growing array of resources, services, and incubator and accelerator programs aimed at kick-starting ventures and preparing them for investment. One exciting example: Agora Partnerships hosted 20+ “deal rooms” at this year’s conference, offering Latin American-based entrepreneurs who had completed Agora’s intensive six-month accelerator program the chance to pitch to interested investors. Last year, these deal rooms resulted in eight investments, ranging from $50,000 to $500,000. EDF is in the early stages of engaging with Agora as we look to scale our sustainable fisheries finance work in Latin America.

Increasing demand from investors

Investor demand is rising to meet the growing supply of social and environmental ventures. A recent survey by US SIF – The Forum for Sustainable and Responsible Investment shows that U.S.-based sustainable, responsible and impact investing assets grew 76% from 2012 to 2014. Another driver of demand is the growing trend of big banks, such as Citi, Goldman Sachs, and Bank of America, committing to increased investment in environmental innovation.

The demand extends beyond banks and institutional investors – to individuals, foundations, and companies, all of which have roles to play. During a panel discussion, Sasha Dichter, Chief Innovation Officer of Acumen Fund, an international nonprofit venture fund, noted a recent shift in how companies invest in their supply chains to build more sustainable businesses: moving from funding initiatives to becoming more deeply engaged, strategic partners. He cited the example of Acumen’s partnership with Unilever and Clinton Giustra Enterprise Partnership, which will improve the livelihoods of up to 300,000 smallholder farmers globally by investing in enterprises to support farmers and incorporate them into Unilever’s global supply chains.

Our own work to support sustainable fisheries also shows the importance and effectiveness of attracting a variety of investors in building more sustainable enterprises. At the global scale the stakes are large, and public and private capital sources have vital – and viable – roles to play. New research by University of California-Santa Barbara, Environmental Defense Fund, and the University of Washington shows that managing the world’s oceans sustainably could increase profits from the fishing sector by $51 billion a year compared to today, and $90 billion per year compared to a ‘business-as-usual’ scenario that factors in the declining health of the world’s oceans unless reforms are made. EDF’s work with the Prince of Wales’ International Sustainable Unit lays out a high-level framework for leveraging philanthropic, public, and private capital towards achieving the kinds of reforms necessary to provide more fish in the water, more food on the plate and more prosperous communities.

Strengthening connections

Simply having a supply of entrepreneurs and a demand from investors may not be enough to spur investment at scale. A number of hurdles remain in connecting entrepreneurs and investors with each other and with other critical actors, like those providing technical assistance to new ventures or due diligence to vet potential deals. Web-based platforms have been developed to help facilitate connections; however, the lack of standardization or connectivity among platforms limits their reach.

The SOcial DAta Commons (SODA), a data exchange that connects various web platforms and launched at SOCAP this year, offers a promising example of how to increase connectivity and decrease transaction costs for organizations working across platforms. By standardizing how basic information about enterprises is reported across platforms, SODA hopes it will help the various platforms “raise their visibility and lower their costs,” as stated by David Bank, of Impact Alpha, one of SODA’s co-founders. Other founding members of SODA include Artha Platform, Sphaera, Smartgrid, SVX, and USAID Global Innovation Exchange, and SOCAP.

Standardizing transactions is another key component of strengthening connections and decreasing transaction costs. For example, EDF is tackling this issue head-on with our Investor Confidence Project (ICP), aimed at unlocking access to financing for the building renovation market by standardizing how energy efficiency projects are developed and measured. Financing for energy efficiency represents a potential $1 trillion market – but, to access even a small portion of that total, the energy efficiency industry needs to demonstrate investment outcomes more clearly to investors. ICP addresses this issue, in part, by defining a clear roadmap for developing projects, determining savings estimates, and documenting and verifying results.

Finding market-based solutions to environmental challenges is a tenet of EDF’s approach, and this year’s SOCAP conference provided plenty of inspiration to consider for our own initiatives. As our work in sustainable finance advances, we’re working to make sure that new capital can flow towards solutions in spaces as diverse as sustainable fisheries finance and energy efficiency investment – and do so in ways that ensure investments generate real environmental results alongside financial returns.

By Aileen Nowlan

Bill Gates, in an interview with The Atlantic, reminded us that if Thomas Edison were alive today, he’d probably recognize a lot of our energy infrastructure – batteries and most coal plants, for example. Gates argued in the interview that we need to drastically speed up the pace of innovation to bring our energy infrastructure out of the Victorian era. But how do we change how we make and use energy? It touches everything we do, but in less than a decade we will be living, working, and traveling differently.

That’s where I –and EDF – come in.  I joined EDF this fall after working as a lawyer, consultant and accelerator for business-social collaborations, and I’ve found that it takes all kinds of skills and experiences to set ambitious targets and turn the impossible into the inevitable. From energy retrofits for churches to starting a clean energy incubator with global energy companies, I’ve attacked the challenge of achieving a low-carbon future from many angles. I’ve been drawing on all of that experience since joining EDF, at what’s proving to be an exciting time for climate change leadership.

Methane: a challenge we have to tackle today

One area where we know we have to innovate – like people stranded on a desert island – is methane emissions from oil and gas. Methane is the most powerful greenhouse gas that almost no one has heard of. And more importantly from a climate perspective, methane emissions from the oil and gas industry are cheap to eliminate, if you can find them. The recently-announced regulations on methane emissions from the oil and gas industry won’t take us all the way to the 40-45% reduction in methane emissions the administration has set as a priority. We need action at hundreds of thousands of oil and gas facilities, and that’s just for U.S. onshore oil and gas. Worldwide, methane leaks amount to 8% of global greenhouse gas emissions in 2012, or the equivalent of 40% of the total CO2 emissions from burning coal.

How do you innovate fast enough to attack this challenge? One approach we at EDF have taken with the Methane Detectors Challenge is to identify a need – invisible methane leaks – and envision a tool that didn’t yet exist that could enable the action we need – operators finding and fixing leaks faster. The ultimate goal is to make tools like that a reality, and bring to market continuous methane detection systems that are so affordable they can be deployed throughout the oil and gas supply chain.

Pilot partnerships

Last week in Houston we brought together eight oil and gas operators, and other partners in the Challenge. It’s been a long journey to get here: the meeting followed eight weeks of field testing of four promising technologies, and before that, nearly two years of refining specifications and screening technologies. Now, with the results of field testing in hand, we are moving to pilot a couple of the systems with oil and gas operator teams. This is a new role for a 50-year-old environmental organization. It feels fast –we’re pushing ourselves and others to make decisions and take action in months, not years.

But is it fast enough? How do you increase the pace of innovation? To find out, we are building learning into the DNA of the Challenge in a number of ways.

We’re staggering field deployment, working with collaborative operator teams, and building feedback into the process so operators and developers can make improvements immediately.  We’ll gather, anonymize, and share those insights, reevaluate, and month four should look different from month one. This process has us moving at the speed of a startup, continuously iterating and improving, keeping this unusual mix of collaborators rushing together to finalize and roll out our first pilot projects.

Environmental data for the twenty-first century

It can’t – and shouldn’t – take years for transformative action to tackle climate change. Technology is changing faster with every day that passes. Our phones and medical care are unrecognizable to our great-great-grandparents, and I hope that in a few years, our energy systems will be to us as well. We need smart grids, enabled by low-cost sensors that match energy from the wind and the sun to the ebb and flow of our daily lives. Our relatives would never have imagined we could generate street-by-street maps of methane emissions – but we’re making them, today, using Google Street View mapping cars – visualizing leaks from cast-iron pipes laid when they were young.

But unlike our grandparents, we shouldn’t wait for that transformation. And we don’t have time to. Let’s get our energy systems up to speed—in this generation.

• Two Bold Efforts to Speed Methane Detection Technology to Market
• Methane Emissions Just Like Oil Spills in the Sky
• Lasers, Circuit Boards and a $30 Sensor: Innovative Solutions to the Methane Problem

By Ben Ratner

John Rae

What a difference a year can make. Even before the last weeks tick away, 2015 stands out as a remarkable and dynamic year for climate and energy in the United States.

Read on for five bold trends that are beginning to reshape our economy – and our national discourse on climate change.

1. Investments in renewables soar

I admit it: For years, I thought renewable energy was more hype than reality. I’m happy to report that recent data proves me wrong.

In just five years, solar panel prices have fallen 80 percent, and solar capacity installed worldwide grew more than six-fold. The overall cost of solar per kilowatt-hour, meanwhile, plummeted 50 percent.

For the first time in history, energy from the sun is as cheap as traditional energy in states such as Arizona, California and Texas.

The proof is in the pudding. Apple, for example, recently signed an $848-million power agreement with a solar provider – bypassing the electric grid. A deal of this magnitude shows where solar is today, and where it is headed.

2. Energy storage bursts onto the scene

If price has been the main barrier to clean energy adoption at vast scale, variability remains a second obstacle – though likely not for much longer.

Because the sun shines when people are at work, and goes down before they get home and fire up air conditioners, furnaces and electronics, there is a mismatch between when most solar energy is produced and most is needed. The key to unlocking a match is energy storage – what Deutsche B
\ank calls “the missing link of solar adoption.”

This was the year that breakthroughs in energy storage became inevitable with Tesla first out of the gate and other companies following close behind. With firms such as GE and Lockheed Martin now part of the contest, hundreds of millions of dollars of capital is flowing toward research, development and commercialization.

In fact, Deutsche Bank predicts energy storage is headed toward market readiness, with incremental storage costs likely to drop from about 14 cents per kilowatt-hour to about 2 cents within the next five years.

3. Clean Power Plan enjoys a head-start

The recently finalized Clean Power Plan puts long-overdue limits on carbon pollution from America’s power plants and will cut emissions by more than 30 percent by 2030, while preventing 90,000 childhood asthma attacks annually.

The interesting trend here is that while compliance is not required until 2022, many states are earning a big head start. Just look at Texas. While some politicians in Austin were quick to denounce the pollution limits as unaffordable, the facts paint a very different story.

The sky is not falling, it turns out. The sky is generating wind power.

Thanks in part to West Texas wind, current trends alone can carry the state to 88 percent of its 2030 power plant pollution reduction goal, while generating clean energy jobs and economic growth.

4. Fossil fuel scrutiny ramps up

While trends suggest a bright future for renewable energy, fossil fuels continue to produce two-thirds of the energy we use. But scrutiny is growing from the public, investors and the media.

2015 was the year methane popped on the national energy policy agenda. It’s a key issue because every ounce of methane emissions undermines the potential climate benefits of natural gas relative to other traditional fuels. New federal methane rules are a first step to meeting scrutiny with solutions and mark a needed trend toward regulating this potent greenhouse gas.

As New York City Comptroller Scott Stringer recently put it, “As long-term investors, we understand that strong methane emissions regulations will help to stimulate capital investment in the energy sector, reduce reputational risk and improve performance.”

5. Corporate climate action goes mainstream

General Motors. Walmart. Goldman Sachs. IKEA.  These are just a few of the 81 companies that are already supporting the White House’s climate initiative in the run-up to the United Nations-led climate talks in Paris this fall. All signed the American Business Act on Climate Pledge.

This outpouring of corporate support shows that climate action has finally gone mainstream. And it’s no wonder. With Americans acknowledging the reality of climate change by increasing margins, and supporting action to cut fossil fuel pollution by a clear majority, the signal to business leaders is unequivocal.

And because getting ahead of climate can unlock new business models, energy savings and lesser risk, the business case is a stool with many solid legs.

2015 is the year when we can truly say that our national energy landscape began to change in tandem with climate awareness. So much so that even some lawmakers who resisted change may now be reaching a tipping point.

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By Jenny Ahlen

There’s a lot of momentum in the sustainable agriculture world. We helped Walmart discover that fertilizer runoff is a significant source of greenhouse gas emissions in its supply chain, and they’re now working with suppliers to improve the way grain is grown across the U.S. That’s because half of all fertilizer applied to crops runs off the field, leading to water pollution, aquatic dead zones that kill marine life, and contributing to climate change – since the nitrogen in fertilizer runoff converts to nitrous oxide, which is 300 times more powerful than carbon dioxide.

Major food companies are also recognizing that increased weather variability from climate change can cause supply chain disruptions, that their customers are demanding transparency for how their food was grown, and that it’s in their best interest to meet retailers’ demands for sustainably grown grain.

That’s why Campbell’s Soup has focused on growing its vegetables as sustainably as possible, and why its Pepperidge Farm subsidiary is now investing in wheat sustainability in their Ohio and Nebraska sourcing areas.

My colleague Suzy Friedman, director of agricultural sustainability at EDF, recently interviewed Dan Sonke, manager of agricultural sustainability at Campbell’s, to get his take on this unprecedented momentum. Below are the highlights of their conversation on why his company is working with farmers to reduce environmental impacts, what they’re hearing from customers, and about why sustainable grain is becoming the new normal.

How did Campbell’s get involved in sustainable agriculture?

We heard from our customers and investors that they wanted more transparency and a greater focus on sustainable ag. We initially drafted goals for reducing our environmental footprint, then after I was hired we developed a plan to meet these goals, starting with tomatoes. I created a program to research the best techniques our farmers can use to grow our tomatoes, focusing on water, fertilizer, greenhouse gas emissions, soil quality, and pesticides. Based on the success of this program, we decided to expand our focus to four other ingredients: carrots, celery, potatoes and jalapenos.

Is fertilizer efficiency an easy sell to growers?

It depends on the crop. A specialty crop like tomatoes is very different from wheat. Fertilizer is a much smaller portion of production costs for tomato farmers, but fertilizer might be a top cost for wheat farmers. Vegetable farmers also sell directly to us, while wheat may go through several steps before it reaches us.

That’s why our collaboration with EDF and United Suppliers focuses on sustainability in our wheat sourcing areas. We’re deploying SUSTAIN™, developed and deployed by United Suppliers in collaboration with EDF, to help our wheat growers improve fertilizer efficiency and improve soil health, without sacrificing yields. United Suppliers brings a direct connection to wheat growers.

Are you seeing a shift change in terms of demand for sustainable grain?

Yes, yes, yes! Especially in the last two years – I’ve spent a lot of time at different forums and sustainable agriculture is next big thing that food companies are working on. There’s a big shift happening. Customers and a desire for transparency are one driver, but we also realize as food companies that sustainability of supply reduces risk in today’s world.

There’s a growing realization that agriculture represents the largest impact on natural systems and that we need agriculture to survive. We’re starting to see a lot of organizations that haven’t thought about this before start to express an interest in improving farming practices.

I see sustainability programs as a way to communicate to the world the progress that growers have made and the environmental benefits that come from efficiency.

By Liz Delaney

2015 has been an exciting year for action on climate and energy management. In the EDF Climate Corps network, there is a strong feeling of momentum, as company after company steps up to answer the call on climate action and demonstrates concrete ways that they are greening their energy programs. Looking around at last week’s Energy Solutions Exchange (ESE), which brought together 150 people from top organizations to share stories and insights, I was struck by all of the connections and interactions taking place in the room.

But if I learned anything from this year’s event, it’s that in order to continue this momentum and create lasting impact, we need to form a new equation: leadership + collaboration = impact. Leadership and collaboration are essential as there is a limit to how far we can get by ourselves – to get the big stuff done, we have to work together.

Companies are leading, but they need to talk about it more

I learned from our dynamic speakers that organizations are doing amazing things in energy management: like pioneering microgrid installations, scoping out solar PPA agreements, and scaling LED and VFD retrofits across their operations, yet many more are doing things that we don’t even know about.  To truly lead in this space, we need companies to start talking about their concrete energy solutions. Corporate disclosure and goals have the power to motivate additional companies to speak publicly and set goals of their own, but only the practical solutions designed by companies to achieve those goals will provide the roadmap for others to get there. As Anne Kelly from Ceres noted, “policy is a lagging indicator” and we should instead look to corporate actions to lead the way. Just think: a few years ago, renewables were a non-starter, a pricey alternative to traditional energy methods. Today, the growth of global initiative RE100 shows the sheer amount of companies committing to use 100 percent renewables in the near future, and EDF Climate Corps host organizations like Nestlé Waters North America have rolled up their sleeves and designed the projects that will get them there.

Nestlé Waters North America enlisted the help of EDF Climate Corps to analyze the potential for off-site renewable power for certain facilities. It is estimated that just switching to renewable power at two of its facilities, in Texas and Pennsylvania, would position Nestlé Waters North America to save thousands of dollars per year in energy costs, while also reducing greenhouse gas emissions by 42,000 tons and energy-related water consumption by 48 million gallons. Once implemented, these projects could increase Nestlé Waters North America’s share of renewable power by nearly 15 percent. Nestlé works with many partners and other NGOs to help advance their ambitious goals.

The power of collaboration

The benefits of forming partnerships were emphasized in every session at the ESE and for good reason. Unlike many issues where collaboration would be detrimental to competitive companies, energy management and action on climate change benefit from multiple parties at the table. When traditional competitors like Nestlé and Mars formed a united front to sign and circulate Ceres’ joint letter to U.S. and world leaders, it really drove home the fact that climate change is a pre-competitive issue as it puts each company’s ingredient supply chain at risk.

And this has never been more relevant. In the wake of company commitments like the American Business Act on Climate Pledge, the next step is for companies to develop concrete plans for how to achieve those energy goals and truly move the needle on energy management. The power of partnership will help companies reach their ambitious goals and accelerate the transition to a low-carbon economy.

EDF Climate Corps is just one of a whole host of NGO and industry partners that can help companies and organizations, such as the Business Renewables Center, who also joined the ESE to share insights and tips. Tapping the expertise of external partners can provide much needed resources to accelerate companies’ progress toward a clean energy future.

It is now time to move beyond pledges and commitments and get down to business to realize these ambitious goals. With issues this large, there is a limit to how far we can get by ourselves, and in order to get the big stuff, we will need to work together and lead to bring us to the low-carbon future we need.

For more insights from our Energy Solutions Exchange, follow @EDFbiz and the event hashtag #ESEBoston15! 

By Sean Wright

People often think of the energy sector as a great place to find jobs, but some of the best, most stable job opportunities in the sector aren’t what you’d think. They’re not dedicated to resource production, but to minimizing the millions of tons of natural gas and associated pollution that leaks as the product is produced and delivered, wasting resources and causing a serious environmental problem.

Each year, more than 7 million tons of methane – the main component of natural gas and a powerful pollutant – escapes from oil and gas operations. These emissions pack the same short-term warming punch as pollution from 160 coal-fired power plants, and equal enough wasted natural gas to heat and cook meals for 5 million American homes.

Companies across the country are already harnessing the power of American innovation to solve this problem, creating new job opportunities in the process. And, a growing trend toward stronger state and federal safeguards to standardize methane reduction best practices is putting more wind in the sails of this growing industry.

Many of the positions being created are skilled, high-paying jobs for workers such as engineers and welders, according to a 2014 Datu Research report on the emerging methane mitigation industry. But these companies need a variety of other positions filled too, from sales to accounting to general labor.

Many of these companies have their roots in traditional equipment manufacturing, such as valves and sealing technologies that keep industrial systems running as efficiently as possible. Others, such as makers of optical gas imaging, are on the cutting edge of new technologies that allow users to identify methane leaks that are invisible to the naked eye.

American small businesses dominate this industry. Over 75 U.S. companies operate 500 different locations across 46 states. Most firms are located near major energy-producing areas in Texas, Oklahoma, Colorado and Pennsylvania, helping the very communities where emissions reductions are most needed.

One example of a growing methane mitigation business is the family-run firm Heath Consultants, founded in 1933 to help natural gas companies find pipeline leaks by conducting vegetation surveys. Nearly 80 years later, this Houston-headquartered business has substantially grown, providing more than 1,200 manufacturing and service jobs nationwide.

There is high potential for more stories like this as energy companies and regulators continue taking steps to limit methane waste. In 2014, Colorado became the first state to require oil and gas operators to find and fix methane leaks. Other states like California, Ohio and Wyoming have all taken action on oil and gas air pollution. Proposed federal rules, which are currently out for public comment, will establish the first national methane standard and require all energy companies to limit their emissions.

A broad range of proven, low-cost technologies to reduce methane emissions are on the market today to achieve the reductions sought by policymakers, as established in a report by consultants at ICF International.

FLIR Systems, Inc. is one company that has seen an uptick in sales following Colorado’s implementation of methane controls. And this isn’t the first time this industry has seen the business impact of regulatory shifts. For example, the vapor recovery compressor market is currently one of the largest growth areas in energy equipment – sources for which EPA established air quality standards in 2012.

Energy companies have a number of good reasons to prevent methane emissions, from limiting their impact on air quality and the climate to preventing product loss and improving operational efficiency. The emerging methane mitigation industry stands ready to deliver these benefits, while simultaneously giving its own industry the boost it needs to thrive and create well-paying American jobs.

This article originally appeared on WashingtonPost.com.

By Alisha Staggs

By Alisha Staggs, Project Manager, Corporate Partnerships, and Ben Young, Intern, Corporate Partnerships

Deforestation in Brazil

Increasingly, major companies are seeing forest protection as a key component of their global strategy. However, many companies have yet to identify the concrete action steps to fulfill these goals.

Why not? Most likely because the agricultural landscape is complicated.

Major food retailers illustrate perfectly the complexities of the modern agricultural supply chain. These international corporations are tasked with managing a complex supply web of beef, coffee, soy, and other products that spans continents. Increasingly, the environmental impacts of these commodities cannot be viewed in isolation.

In Brazil, for instance, research suggests that increased demand for soy has pushed cattle ranching onto less productive land within the Amazon. While the cattle ranchers may be directly responsible for deforestation, the ultimate driver is the soy demand. On top of that, production of palm oil, another priority product for many consumer goods companies, is expected to more than double in the Amazon biome over the next decade.

So— how can a company ensure they are sourcing sustainable commodities without destroying the rainforest in the process?

A Solution: Zero Deforestation Zones

For illustrative purposes, let’s imagine a company, Eat-a-Lot Inc. that serves high quality beef and other food products via restaurants and other retail outlets. Consider two paths that our company might take for its beef supply in Brazil (while the US has prohibited the import of fresh and frozen Brazilian beef historically, just last month the USDA updated its rules to allow Brazilian beef into the United States),:

In scenario A, Eat-a-Lot dutifully works to engage their supplying farmers to make sure that cattle are not being raised on recently deforested land in the state of Mato Grosso. Though the beef supply chain is complex, Eat-a-Lot is able to identify a handful of properties that were illegally deforested within the past 12 months, and subsequently bans beef purchases originating from those properties. Case closed, problem solved, Eat-a-Lot is off the hook.

But not so fast. What happens to that beef if it’s not purchased by Eat-a-Lot?  It will likely end up being shipped to Russia or China or maybe even other restaurants or grocery stores in the United States, Brazil’s top destinations for beef exports, by an international company less concerned with sustainability. As the sustainability manager for one of the dominant beef processor explains, “We monitor more than 8,000 suppliers, but we’ve cut 2,000 of them off because they don’t meet our criteria. So, we eliminated 2,000 ranches, but they’re all, as far as I know, still in business — because someone else has stepped up to buy from them.”

Though the three major beef processors in Brazil (JBS, Marfrig, and Minerva) have made strides in tracking their cattle, together they represent less than 40% of the market. The end result is that, until we reach a critical mass of corporate commitments across a variety of crops and products, commodity-driven deforestation will continue.

Now consider scenario B: Eat-a-Lot maintains their deforestation commitment, but also works with the governors of the largest agricultural states of the Amazon, Mato Grosso and Pará, and EDF’s Brazilian partners, Imazon and IPAM, to develop a “Zero Deforestation Zone”. Recent analysis reveals the details behind this solution: Eat-a-Lot , suppliers, NGOs, and the government will collectively declare and enforce a state-wide ban on deforestation, while also promoting agricultural productivity enhancements to reduce the economic pressure on deforestation.

Under the Zero Deforestation Zone system, both international and domestic competitors must follow the same set of rules. No longer can illicit suppliers avoid the costs of deforestation compliance or benefit from illegal deforestation activities within Mato Grosso and Pará. On top of that, Eat-a-Lot benefits from a more productive, reliable, and legal supply-shed (à la watershed).

Collaboration is the Key

Does this completely eliminate the risks of deforestation in Mato Grosso? Likely not; some illicit producers may still slip through the cracks occasionally. But by taking proactive measures, in collaboration with multiple partners, Eat-a-Lot can become a positive force in the region.

We’ve seen a near 80% reduction in Amazon deforestation since its peak in 2005. Yet deforestation rates have stalled at roughly 5,000 km2, an area greater than the size of Rhode Island, each year. Making further progress in the region, then, will depend on companies and other stakeholders taking proactive steps to increase productivity on existing land to avoid further forest conversion.

• New Report Supports Jurisdictional Approaches to Ending Deforestation in the Amazon
• Why Unsustainable Agriculture is a Business Risk
• Powerful Business: The Lever for Change Across the Supply Chain