By Andrew Hutson

The world’s attention has been on Brazil lately.  With an exciting World Cup this past summer, an election season full of drama (including a plane crash), and the coming Summer Olympics in 2016, it has been easy to overlook the piece of news that has the greatest impact on all of our lives: the remarkable decreases in rates of deforestation in the Amazon.  With little fanfare (at least from the general public), deforestation decreased 70% since 2005 and Brazil has become the world leader in reducing greenhouse gas pollution.

But while this progress impressive, it is important to note that we’re still losing over 5,000 square kilometers of forest a year in the Amazon. More importantly, we’ve seen a slight uptick in the rate of deforestation over the past two years, with an increase of 29% from 2012-2013. That number looks likely to increase again this year.

As the number of companies, governments, NGOs, and indigenous peoples who signed the New York Declaration on Forests last month demonstrated, there is an eagerness to address this issue across all sectors of society. Among other goals, signatories to the Declaration seek to halve the rate of loss of forests globally by 2020 and end natural forest loss by 2030. To get there, we need a scalable and systematic approach to meet this ambitious, yet achievable goal. EDF believes one solution is the creation of Zero Deforestation Zones (also referred to as jurisdictional approaches) – nations or states that are able to demonstrate reductions in deforestation within their borders as the most effective way to save forests the scale of entire landscapes, rather than individual parcels of land.

A new report by Datu Research, Deforestation in the Brazilian Beef Value Chain, supports this notion.

The report, commissioned by EDF, finds that progress in decreasing deforestation rates could easily be reversed unless ranchers are offered the right incentives to switch practices on their ranches and the right policy frameworks are adopted by companies and governments.  It currently makes far more financial sense for a rancher to clear new forest than to move to sustainable pasture management. As a result, they may be forced to either continue to deforest or switch to other crops such as oil palm, which is expected to more than double by 2020 in Brazil.

The report also concludes that jurisdictional approaches have the potential to address many of the root causes of deforestation and “trim administrative costs across the value chain, reduce leakage, and increase retailer and consumer confidence in the veracity of deforestation-free products.”

So, ranchers need financial incentives in order to make the necessary investments to drive production intensity increases and meet the requirements for the various certification schemes covering deforestation. Such incentives could come from a number of sources including financial mechanisms such as REDD+, or bilateral aid from the international community dedicated to ending deforestation.  Norway, for example, has pledged to donate $500 million per year and has spent nearly $750 million on the Amazon Fund since 2009.  We also should not forget that there are plenty of domestic resources to address these challenges as well.  Brazil is a rapidly growing economy with a GDP of over $2 trillion.  In addition, one of the strongest incentives can come from the preferences of buyers in supply chains, who may simply refuse to purchase beef associated with deforestation.

But more importantly, public and private sector initiatives to end deforestation need to be more comprehensive. Moving forward, efforts need to move beyond the focus of single crops or supply chains and build on the progress of lessons from certification and commodity roundtables. Important synergies exist between a jurisdictional approach to supply chains, like Zero Deforestation Zones, and public policy.  Implementing supply chain commitments at the jurisdictional level reinforces the incentives for governments to put in place policies that reduce deforestation within an entire jurisdiction, and builds off the existing structure for monitoring and verifying reductions in deforestation at a jurisdictional level.  The two approaches are mutually reinforcing and can help solve this challenge in an affordable and achievable manner.

For additional reading – http://www.washingtonpost.com/blogs/worldviews/wp/2014/10/09/small-ranchers-and-the-key-to-amazon-deforestation/

By Namrita Kapur

In our inaugural post on the business-policy nexus, Tom Murray highlighted the implementation of President Obama’s Clean Power Plan as an opportunity for companies to be leaders. Why should companies be motivated to get involved? Because they care about having access to competitive, clean energy and tools and incentives for smart energy management, which will help them meet their sustainability and carbon goals while cutting costs.

The decisions being made in the coming months on the Clean Power Plan proposal can help accelerate the transition to a cleaner energy economy for years to come, expanding the demand and market for renewable energy and energy efficiency. Any sustainability officer who has tried to price green power on the market or build the business case for an energy efficiency program has a stake in the outcome.

What is the Clean Power Plan?

Known in policy circles as 111(d)–the relevant section of the Clean Air Act–the Clean Power Plan creates the first national limits on carbon pollution from existing power plants. It does so by setting state carbon pollution reduction targets specifically tailored to each state’s energy infrastructure and emission reduction opportunities. Part of the President’s Climate Action Plan that was announced in June 2013, the Clean Power Plan is expected to achieve a 30% reduction in carbon pollution from the U.S. power sector by 2030, as compared to 2005 levels.

Support for common sense pollution limits is diverse and strong—public polling has found that 64% of Americans believe the government should limit greenhouse gas emissions from existing fossil fuel-fired power plants to address climate change and improve public health. Power plants – the focus of the Clean Power Plan – emit nearly 40% of the carbon pollution in the United States. This initiative is a huge opportunity to make a meaningful dent in carbon emissions.

What Does This Mean For Businesses?

For many companies working in the clean energy or energy efficiency sectors, they will see direct benefits as demand for their products and/or services grows.

The bigger point is for companies in general: not only can the Clean Power Plan drive greater access to energy efficiency and renewable energy opportunities in the states and regions where companies operate, it’s also expected to lower average electricity bills overall in 2030.

We’ve already seen how cutting greenhouse gases can drive economic activity, in the nine states participating in the Regional Greenhouse Gas Initiative (RGGI). Investments from the first three years of RGGI alone, largely in efficiency programs, are saving customers over $1 billion on their energy bills. The RGGI states have seen power sector emissions drop 40 percent–even as the regional economy grew by 7 percent.

Within the Clean Power Plan’s broad, flexible framework there are many possible paths to the goal–some that can be beneficial to companies even if they are not part of the power sector, which is why it is important to pay attention and even get involved.

For example, programs in Minnesota and Illinois, as described below, could potentially be adopted, expanded, and adapted by other states/regions to comply with the Clean Power Plan and can benefit a broad cross-section of companies:

• Minnesota has a program in place to offer companies incentives to make their facilities–from office buildings to manufacturing plants–more energy efficient. The state offers a wide variety of utility energy conservation programs in the residential, commercial and industrial sectors, targeted to both retrofitting existing buildings and new construction.

• Illinois has both renewable energy and energy efficiency standards in place, and has seen its overall electricity market prices go down because of growth in zero-marginal-cost renewable energy sources like wind. This matches what we are seeing across the country–wind and solar have been cheaper than new coal-fired power in some places.

These two states (and every state) have different goals under the Clean Power Plan and different pathways available to achieve them. This is your opportunity to make your voice heard within the states you operate in and create a pathway that will make it easier for you to reach your corporate carbon reduction, green power sourcing and energy efficiency goals.

How Do You Get Involved?

Companies like yours have an opportunity to engage with state officials, utilities and other stakeholders to shape your state’s implementation plan. There are many ways to get involved in this process. Your company can:

1. take part in stakeholder groups;
2. offer public comments to decisionmakers working on state plan development;
3. weigh in with state energy regulators overseeing energy planning decisions; or
4. engage with both state legislators and your Member of Congress by sharing your energy efficiency or renewable energy stories or advocate for various policies and programs.

If you would like further guidance or help in getting involved, please reach out to us at business@edf.org.

This is your opportunity to not only drive the creation of incentives that will support your company’s carbon reduction goals, but also a chance to help transform the entire energy system. Now that’s what we call leadership!

By Victoria Mills

Energy efficiency is a goldmine, but not everyone has the time or resources to dig. That’s why for the past seven years, over three hundred organizations have turned to EDF Climate Corps for hands-on help to cut costs and carbon pollution through better energy management. And every year, the program delivers results: this year’s class of fellows found $130 million in potential energy savings across 102 organizations.

But this year we also saw something new. In addition to mining efficiencies in companies’ internal operations, the fellows were sent farther afield – to suppliers’ factories, distribution systems and franchisee networks. What they discovered demonstrated that there is plenty of gold to be found across entire value chains, if companies take the time to mine it.

Here are three places where EDF Climate Corps fellows struck gold:

1. China. Five multinational companies – Apple, Walmart, McDonald’s, Cummins and Legrand – enlisted EDF Climate Corps to uncover efficiencies in their Chinese operations, with some focusing on suppliers’ factories. The fellows’ analysis highlighted how best practices in energy management could be scaled across hundreds of suppliers, saving tens of millions of dollars.
2. Distribution systems. When moving goods, costs and carbon are highly correlated metrics: improve one and you will improve the other. The fellow at Ocean Spray Cranberries identified a significant reduction in transportation emissions by shifting a portion of the company’s shipments from trucks to rail.
3. Franchise networks. Dunkin’ Brands brought on two fellows to reduce carbon emissions associated with franchise operations. One of them developed a green construction program for new restaurants; the other set emissions reduction targets for franchisee-owned baking facilities.

Looking beyond the fence line for energy savings is critical to achieve cost savings and emission reductions at scale. It’s also evidence of an evolution in corporate social responsibility, from compliance to eco-efficiency to value chain optimization. Ultimately, where this continuum leads is to constructive engagement in public policy, as businesses help to shape the incentives and regulations needed to protect public health and the economy from the worst impacts of climate change.

The companies in EDF Climate Corps are at the forefront of this evolution. We look forward to continuing to help them dig for gold throughout their value chains, and reap the rewards in profits, innovation and a healthier planet.

Learn how an EDF Climate Corps fellow could provide hands-on help at your organization

By Jenny Ahlen

In 2013, Walmart launched an initiative with the potential to optimize fertilizer use on 14 million acres of U.S. farmland by 2020. This was a great step in the right direction for reducing greenhouse gas emissions and water pollution by improving nitrogen fertilizer use. Momentum on this work grew in April when Walmart suppliers including Cargill and General Mills stepped up and made joint agricultural commitments at Walmart’s Sustainable Product Expo.

Now, a little over a year since this work kicked off, it’s great to see another major boost of momentum. On Monday, Walmart hosted their fall Milestone meeting, which included an announcement from United Suppliers to join the fertilizer optimization work – committing to enroll 10 million acres by 2020.

This is a big deal for two reasons. First, this commitment is significantly larger – more acres – than any other we’ve seen so far. Second, this is the first time a major agricultural retailer has joined this initiative.

Often, when we talk about sustainability efforts in the supply chain, we gloss over how complex the system is and the number of players involved. To date, the fertilizer optimization work lead by Walmart has been primarily focused on its direct suppliers. From there, it was the food companies’ responsibility to tackle that complexity and figure out how to connect with the farmers.

That’s what makes this pledge from United Suppliers so exciting. Rather than waiting for the Walmart signal to trickle down through the supply chain, United Suppliers saw an opportunity to engage proactively and help their retail owners become more efficient with farmer customers.

Founded in 1963, United Suppliers is a cooperative of agricultural retailers – the companies that sell supplies and services to farmers in their communities. United Suppliers has over 700 locally controlled ag retail owners with thousands of retail locations throughout the United States and Canada. In order to meet its commitment, United Suppliers is rolling out a new platform called SUSTAIN™, which will harness cutting edge technology and practices to optimize crop nutrients.

Agricultural retailers are the trusted advisors that farmers know well and work with regularly. Having them join Walmart’s fertilizer optimization initiative is incredibly powerful, and hopefully more of them will follow United Suppliers leadership and help their farmer customers become more profitable while reducing their environmental impact.

By Michael Reading

Since 2008, EDF has worked with private equity firms to integrate environmental, social and governance (ESG) management into their practices. Leveraging our EDF Climate Corps program is a key strategy for replicating our work and we have now placed 44 EDF Climate Corps fellows among private equity firms and portfolio companies, to date. To learn more about how a particular firm has benefitted, I recently spoke with representatives at Warburg Pincus to hear how the EDF Climate Corps program has enhanced their continued efforts to share ESG-related best practices with their portfolio companies.

This summer, Warburg Pincus hosted an EDF Climate Corps fellow for the second year in a row, and again chose to place the fellow at the firm level, rather than with a single portfolio company. “Running this process from the center allowed us to identify different opportunities, across our portfolio and coordinate work on each of them,” Warburg Pincus Vice President Michael Frain told me.

From speaking further with Frain and Daphne Patterson, Warburg Pincus’ first EDF Climate Corps fellow and newly minted associate, four key themes emerged:

Use consistent metrics when comparing projects. As the EDF Climate Corps fellow surfaced possible projects for energy efficiency or resource management, having a consistent set of metrics made it easy to compare the return on investment of each project based on different conditions. For instance, a given electricity efficiency project might save 6 cents per kilowatt-hour (kWh) in Texas, but 22 cents per kWh in southern California. “Though very simple math, the opportunity to analyze the potential results of specific projects on a regional basis enables us within Warburg to drive a more substantive conversation within both the firm and the portfolio,” Frain said.

Listen to local needs. Patterson found that she brought the most value to portfolio companies when she acted as a student of local conditions and as a resource to assist companies in responding to the concerns they were hearing from various constituencies. “Given the range of opportunities across the 120 companies worldwide with varying profiles, I learned very quickly that one can’t necessarily go in with a toolset that they can immediately plug in and apply,” she said. “There needs to be a genuine process of listening first to what that company is looking for and then building the most appropriate tools in response.”

Michael Reading

Cross-pollinate. “Our portfolio companies started discussing different perspectives on ESG and the various levers to value; such as saving electricity, and effectively communicating the measures they are implementing to impact sales, hiring and retaining talent. Customers and supply chain companies are looking at ESG issues with increasing frequency,” Frain stated. “Many of our portfolio companies are doing positive things on ESG issues, but don’t necessarily have a communications strategy regarding their efforts and accomplishments.”

As portfolio companies discovered new ways to tell the story of their ESG successes, they have shared wins and strategies, through Warburg Pincus’ quarterly Green Council meetings, through the EDF Climate Corps fellow, or more broadly through their websites. Examples include the crafting of a portfolio company’s first sustainability report, enhancing tracking of ESG metrics, and developing internal “Green Teams.”

Layer success on top of success. As Warburg Pincus deepened its engagement with the EDF Climate Corps program, it saw the benefits multiply: first, bringing on Patterson last summer, then Jan Schwarting this past summer and now hiring Patterson to continue the work on a full-time basis. “We found so much value that we hired our fellow,” Frain says, noting that the work and the value continue to grow.

“Helping our portfolio companies manage risk, improve efficiency, and reduce environmental impact and costs enables us to build more valuable, competitive and sustainable entities,” he says. “That’s our business and ESG is fully aligned with that.”

You might also enjoy:

• EDF Climate Corps
• Private Equity Interest in EDF Climate Corps at an All-Time High
• PitchBook Survey Highlights Growing Importance of ESG

By Nancy Buzby

There is so much going on at SXSWEco this week that it would be impossible for one person to do a comprehensive wrap-up, so please take this commentary as a slice of a very big pie. And, note that my particular slice is viewed through a very marketing and business-oriented lens. Still, as an EDF’er working with the private sector, I’m always looking to share new, pragmatic ideas and business cases for saving the environment. I think the most pleasant surprise of SXSWEco Day One was that so many others feel the same.

But first a head-scratcher. Why is it that the regions that are the most climate and socially vulnerable (Southern U.S.), are also home to some of the biggest climate science-denying politicians? Many thanks to Dr. Robert Bullard of Texas Southern University for so eloquently tying environmental justice to social justice; for me this was a necessary epiphany for how we think of building resilience in the face of climate challenges.

At EDF we believe that the corporate sector can thrive by valuing, protecting, and improving the environment, so the session on Creating Climate Wealth held a ton of appeal. Ann Davlin and Jigar Shah threw out business scenarios for environmental impact like candy from a parade float. I managed to grab a few choice nuggets:

• If you’re spending $20k to run you’re A/C over 20 years, doesn’t it make sense to spend more money up front for long-term efficiency?
• The average American family is paying an extra $4k per year for energy over 1999, yet wages have not similarly increased.
• If you’re going to do transportation planning, how about you plan to push people out of their cars by having the busses run every 5 minutes?
• Why do corporate CFOs use a 50% discount rate for sustainability initiatives but set the bar so much lower for other investments?

My first SXSWEco Bravery Award goes to the gentleman from Nike who stood up and asked how his company could take advantage of the environmental opportunities in front of them. To which Ms. Davlin replied, “Your biggest opportunity is greening the supply chain.” Music to my ears – have I mentioned EDF’s work with Walmart?

My second SXSWEco Bravery Award goes to Dr. Kathryn Clay from the American Natural Gas Association who joined EDF on the panel exploring methane leaks from the natural gas supply chain. Fielding questions from concerned citizens and landowners after showing EDF’s methane mapping results was not a comfortable situation.

I’m sure I missed some other key bravery awards so please feel free to send me your nominees via twitter.

And because I love hearing how different organizations are getting their stories out and mobilizing action, kudos to BlueStateDigital, Sierra Club, and the Rockefeller Foundation for finding ways to use digital and social media as an echo chamber for changing the conversation and influencing action. The key epiphany shared – “Listen, mind your data, and adapt.”

The only drawback to SXSWEco is that there are so many great topics being covered concurrently, that I can’t help but wonder what I’ve missed. Please feel free to share and fill in the gaps.

By guestblogger

Guest post by Chris Pinney, President, High Meadows Institute

While it may seem that increasing progress is being made on integrating sustainability in the financial sector, the recent UN Principles for Responsible Investment (PRI) conference in Montreal was a sobering reminder of the challenges that still need to be addressed.

On the one hand, we have seen a rapid growth of financial firms subscribing to the UNPRI, with firms now representing $45 trillion in assets under management.  At the same time, as UNPRI’s Managing Director Fiona Reynolds reported in Montreal, only 6% of asset owners committed to the UNPRI report that their performance management and compensation systems for senior executives include metrics that recognize and reward sustainability performance. As she noted, “What gets measured gets managed. If responsible investment is to become truly mainstream, it must start at the very top of every organization, with the right incentives.”

Combatting skepticism from investors

Keynote speaker Spencer Glendon from Wellington Management noted from a mainstream investor perspective that while there is general agreement that climate change is a risk, there is a “paucity of truth but a wealth of information” around the subject, making it difficult for investors to accurately assess the risk climate change represents. His perspective was echoed in both corridor and panel conversations, suggesting that many mainstream investors remain deeply skeptical about the current data around sustainability issues like climate change. At the UNPRI academic conference prior to the main meeting, academics blamed themselves in part for the confusion around climate science and the fact the only 40% of Americans  view climate change as a major threat to the country, according to a January 2014 Pew Research poll.

Difficulties around institutionalizing environmental performance

Chris Pinney

On a related front is the two-fold challenge investors face: making the link between investment performance and sustainability, and sorting through the ever-growing set of survey instruments and reporting standards for sustainability. Professor George Serafeim from the Harvard Business School noted that Harvard’s research showed that only 13% of 120 ESG indicators they reviewed had a measurable impact on financial performance.  Furthermore, he noted these factors only have relevance when analyzed in the context of the ESG issues that are specifically material to the industry the company operates in. In this context, he made a strong case for initiatives like the Sustainability Accounting Standards Board (SASB), which is creating industry-level materiality standards for companies to use in their reporting to the U.S. Securities and Exchanges Commission, enabling investors to evaluate and understand which ESG issues they should focus on for investment purposes.

While significant challenges remain to be addressed, it is clear there is growing momentum to integrate sustainability in mainstream capital markets. The increasing number of signatories to the UNPRI and the participation in UNPRI gatherings is just one indicator of this trend, with recent initiatives such as SASB providing practical tools for moving the sustainability and finance agenda forward. The High Meadows Institute is pleased to collaborate with EDF on this journey working with our private equity and financial partners.

Chris Pinney is President of the High Meadows Institute (HMI), a new policy institute founded by a small group of investors and business leaders, to engage business leadership in the creation of a social contract that can ensure economic and social progress for all in the 21st century.

You might also be interested in:

• Financial Sector Focuses on Risks from Methane
• In New Report, KKR Deepens Commitment to Tackling ESG Concerns
• PitchBook Survey Highlights Growing Importance of ESG

By Sean Wright

In 1933, Milton Heath senior opened a small, family-run consulting firm to find leaks from natural gas pipelines by conducting vegetation surveys in New England Fields. More than 80 years later, the family business has grown substantially, and now the Texas-based company provides more than 1,200 manufacturing and service jobs across the country. Their business model may have changed—but their commitment to finding and reducing leaks of methane—a potent greenhouse gas—has not wavered.

Stories like Heath’s are the focus of a new report released this week by Datu Research. The Emerging U.S. Methane Mitigation Industry looks at the growing industry that specializes in manufacturing technologies and providing services that help oil and gas companies reduce their environmental impact and deliver a valuable product to market. The report analyzes more than 70 companies that limit emissions of methane and provide high-paying, highly skilled jobs to thousands across the country. These companies are part of an increasingly strong market growing amidst rising awareness of the need to reduce methane pollution alongside the domestic energy boom.

This analysis shows that the economic growth of this burgeoning sector can be seen in 46 states, in over 500 service and manufacturing locations. The majority of these companies are small businesses, and they are putting America to work to build and support solutions that clean our air, while providing in-demand occupations in high salaried jobs. The dozens of companies featured in the report are the picture of American ingenuity. Whether the companies specialize in lasers, infrared cameras, leak detection and repair, low-bleed pneumatics, gas capture devices, etc… each stands ready with proven solutions.

The report comes as the EPA is considering whether to implement national standards to limit methane emissions from oil and gas operations. Good, comprehensive policy would help drive the full extent of emissions reductions we know are possible, and which this industry is poised to deliver at a massive scale. Utilizing these services and technologies to reduce methane leaks is a win-win for our climate, pocketbook, and communities. With the right rules in place, these companies can grow jobs in states like Ohio where manufacturing jobs are getting a boost from these types of industries.

“The oil and gas industry is growing every day in our state, creating thousands of jobs for Ohioans," Ohio EPA Director Craig W. Butler said. "This report illustrates Ohio is at the forefront nationally, creating jobs and protecting the environment while reducing emissions from this new industry."

The report clearly shows companies and technology to reduce methane exist, and the benefits are many. But without putting firm national standards in place, methane emissions, already responsible for about a quarter of the warming we experience today, are expected to continue to increase about five percent by 2018. It’s promising that some companies have started to look out for their bottom line and take action to reduce methane leaks, but as an EPA Inspector General report found, these voluntary measures are not enough to address the magnitude of the problem – one that leads to $1.8 billion in lost product every year.

The Emerging U.S. Methane Mitigation Industry suggests strong federal standards can clean up up our energy mix  and conserve an American resource. We all want economic growth, a healthy private sector, good-paying jobs and a clean America. This industry and their technologies show that, with the right policies, we can have it all.

By Nancy Buzby

If you've been following the news coming out of the UN’s Climate Summit this week, you probably get the sense that nothing substantive happened.  You can certainly be forgiven for thinking so – there was a lot of pomp and lofty talk (this is the UN after all) and in the end no concrete global agreements were signed. Below the surface, however, quiet momentum for key policy actions was built. And even quieter, but yet potentially more exciting, commitments were made. Chief among these was news that global agriculture giant Cargill committed to ending deforestation across all commodities in its supply chain as part of the New York Declaration on Forests.

This is a big deal.

Why?  Forests – and especially tropical forests – are vital to life on this planet and to the stability of the climate. More than 70 percent of the world’s species live in forests, making them critical bulwarks against biodiversity loss. Equally important, the loss of forests is responsible for 12 percent of total global greenhouse gas (GHG) emissions, not to mention the impacts on livelihoods and cultural legacies, as millions of indigenous peoples call the forests home. The production of commodity agriculture is the largest driver of global deforestation, responsible for 85 percent of total forest loss. Palm oil, beef, and soy bear the lion’s share of the responsibility. Cargill has a significant interest in all three of these commodities, plus several others with non-negligible impacts on forests like cocoa.

This is not a secret to the companies in global supply chains for these products. But, commitments and actions so far have been mostly limited to the public-facing brands and retailers. In 2010, the Consumer Goods Forum (CGF), a network of more than 400 companies with $3.1 trillion in revenues committed to achieving deforestation-free supply chains by 2020.  As economically powerful as these companies are, they need the support and cooperation of the major commodity traders and producers who are closer to the action.  ADM, Bunge, Cargill, and Louis Dreyfus (the so-called “ABCD” companies) control an estimated 90% of the global soft commodity trade, with emerging market competitors such as Wilmar and Olam establishing a growing footprint.

And indeed, Cargill and other companies have been engaged on the issue of deforestation through participation in Brazil’s Soy Moratorium and focused efforts to end deforestation attributed to palm oil production. But, this new commitment represents a big new step. It covers all commodities in all locations around the world.  It is also timely – as the Soy Moratorium, which has contributed to Brazil’s tremendous progress in slowing deforestation in the Amazon, is set to expire at the end of the year.

Commitments are only the first step.  The remaining task is translating such commitments into concrete action. EDF believes that in order to end deforestation, we must create a durable, at-scale model that meets the demand for agricultural commodities while protecting forests. We envision a scenario where supply of agricultural commodities is produced in Zero Deforestation Zones (ZDZs)—nations, states and territories that are able to demonstrate reductions in deforestation within their borders.

Sourcing agricultural commodities such as palm oil, beef, and soy from ZDZs creates a range of benefits:

• Simplified traceability and attribution – All products coming from a designated ZDZ will meet the criterion of “deforestation-free”. While not replacing good supply chain governance, this reduces both the cost of tracking commodities to a specific parcel of land and the complex challenge of attributing deforestation to the production of particular commodities.

• Level playing field— All crops and companies under the same rules, including those bound for markets without high sustainability concerns.

• Reduced reputational risk — ZDZ sourcing offers better overall performance with fewer opportunities for supply chain violations to occur.

• Reduced threats to market access — Legal frameworks such as U.S.’s Lacey Act and Europe’s Forest Law Enforcement, Governance and Trade (FLEGT), have strengthened enforcement against illegal deforestation, pressuring businesses to improve supply chain standards.

• Opportunities for revenue generation for governments — Such revenue could come from international financial mechanisms such as REDD+, which could be directed to increase subsidies for low carbon agriculture, certification costs, or extension services that in turn encourage farmers to comply with existing regulations such as Brazil’s Forest Code.

• Benefits for local communities — Including indigenous peoples, who depend on forests and agricultural products by offering technical assistance to improve yields and maintain the vital ecosystem services and livelihoods the forests provide.

Cargill’s commitment is important on its own, but it may also represent a tipping point in this vital segment of the supply chain.  In the coming months and years, EDF, alongside its partners in the environmental community, will be working hard to ensure that these commitments become reality.  We will also encourage the other large players such as ADM, Bunge, and Louis Dreyfus to follow suit.

While the private sector cannot drive the creation of ZDZs on its own, it can be a major catalyst. By choosing to source agricultural commodities such as palm oil, beef, and soy from Zero Deforestation Zones, companies can meet their commitments and strengthen the impetus for critical policy reforms necessary to ensure our forests remain standing.

By Tom Murray

As we approach the 25-year anniversary of EDF’s work with the corporate sector, it’s an opportune time to reflect on our successes and plan for the work ahead.

Over the years we have worked with McDonalds, Walmart, FedEx, KKR and many others to integrate sustainability into their operations, strategy, and supply chain management.  Together, we have kick-started market transformations in sectors including fast food, shipping, retail, private equity and commercial building energy efficiency.  While we’ve made great strides, there remains a huge distance to go in order to fully protect our natural resources, clean up our dirty energy system, and turn the corner on global greenhouse gas emissions in time to avoid the worst impacts of climate change.

Looking ahead, the opportunity and need for more aggressive private sector leadership has never been greater.  Moving from environmental progress today to full scale solutions tomorrow will require a new type of corporate leadership. This next step will require a willingness to align corporate sustainability operations, strategy AND policy.

Voluntary corporate efforts have made a difference and will continue to be a critical pathway for innovation. But this is not sufficient to meet the size and scale of the challenges we face.  Businesses must take the next leadership step – helping to shape and support the smart regulatory and policy changes required to preserve the natural systems that people, communities and companies need to thrive.

Simply put, the bar is now higher for companies that want to lead on sustainability.

The greatest need for this kind of leadership is on climate and clean energy, where a price on carbon and effective policy are needed to protect public health, the environment and the economy from the worst impacts of climate change. In the days and months ahead, there will be several opportunities for companies to put this type of leadership to the test in support of the Clean Power Plan and Phase two of the fuel-efficiency and GHG standards for trucks.

Power plants are the largest single source of carbon emissions in the U.S. The Clean Power Plan requires that we cut pollution by 30 percent. These new carbon pollution standards are rolling out on a state-by-state basis, giving room for custom implementations that fit the needs of the state’s specific economic, corporate and energy sectors. The private sector needs to step up and weigh in now on how carbon reduction goals are met in their states.

This state by state approach is laid out under Section 111(d) of the Clean Air Act. In the coming weeks, we’ll be looking at ways for business to specifically engage on this policy in key states.

Also, just over the horizon in early 2015, The EPA and NHTSA will announce new fuel efficiency and GHG emissions standards for medium- and heavy-duty trucks. Business needs to step up and support stringent new standards, not only for the potential 40% reduction in fuel consumption and reduction in emissions, but also to drive a lower per-mile cost of heavy truck operations. We will continue to explore and educate how these standards can benefit and be influenced by business.

By engaging in a meaningful way, companies can help shape these policy decisions and others to benefit the economy and the environment.

To be sure, EDF is not alone in this work. Nor are we alone in coming to the conclusion that the next wave of business leadership must include leadership in the policy arena. The important connections between business and policy made by BICEP and We Mean Business have highlighted this very issue.

Just this week, there are great examples of businesses stepping up and taking a stance. Google Executive Chairman Eric Schmidt publicly severed ties with the American Legislative Exchange Council (ALEC) for its opposition to U.S. action on climate change. Microsoft also recently ended ties with ALEC due to its opposition to renewable energy, and Facebook looks to be following suit.

So how can EDF help? We bring to the table not only 25 years of corporate partnership experience but 45 years of history and expertise on the policy side. We’re well-positioned to play the role of collaborating with the industry leaders to understand what policy means to them and make the environmental and business case for engaging.

We’ve challenged companies to set and track aggressive sustainability goals for their operations and supply chains. We will continue to do that. But expectations have grown alongside the urgency of the environmental challenges facing us.

In the coming months, we’ll be exploring this next frontier of corporate leadership and what it means for companies that want to lead the way.

By Chris Meyer

This post is our second in a series on how companies can reduce deforestation from their supply chains. Read the first post here.

What do companies, governments, civil society organizations and indigenous peoples have in common? Despite their differences, they share a common interest in reducing deforestation, the second largest source of global emissions after fossil fuels.

On September 23rd, leaders from all of these groups will meet at the UN Climate Summit in New York City to spark action on climate change issues including deforestation. The Climate Summit hopes to rally action around two forest efforts, creating incentives to reduce deforestation in tropical countries through REDD+ policies (Reducing Emissions from Deforestation and forest Degradation) and eliminating deforestation from the supply chains of commodities such as palm, beef, soy and paper.

The Board of the Consumer Goods Forum (CGF)—a group of 400 companies with combined sales of around $3.5 trillion—has committed to help achieve zero net deforestation by 2020. However, CGF has also recognized that they cannot solve deforestation on their own, and have called on governments to make REDD+ a priority in a legally binding UN climate agreement in 2015. 

At EDF, we believe that REDD+ is the best way to reduce deforestation and promote sustainable economic development and that consumer goods companies are in a prime position to support REDD+ in the countries they source from.

Acre: REDD+ in practice

Acre, Brazil

The state of Acre, Brazil provides an example of how REDD+ can bring governments, companies and local communities together to reduce deforestation and increase economic development. Acre has committed to reduce deforestation by 80 percent by 2020 compared to a historical baseline from 1996-2005, which would prevent 182 to 221 million tons of carbon dioxide emissions using REDD+ policies. Also, Acre installed a robust monitoring system of its forests, including satellite imaging to track deforestation.

To reduce deforestation, Acre has created various incentives programs, including:

• Supporting timber certification through the Forest Stewardship Council (FSC) and investing in manufacturing plants to produce more valuable wood products;
• Designing strategies for zero deforestation beef growth to produce more cattle on already cleared land; and
• Rewarding indigenous peoples for protecting forests. Indigenous peoples have already received $2.9 million to restore degraded lands using traditional land use practices, to protect habitats and watersheds, and to preserve their cultures.

As a result of its efforts, Acre reduced deforestation by 60 percent in 2010 compared to a 1996-2005 baseline, while increasing its real GDP by 62% since 2002, nearly doubling the national average GDP growth.

In Acre, Brazil, deforestation decreased by 60 percent compared to a 1996-2005 baseline, while GDP per capita increased by 70 percent and cattle herd size increased by 14% since 2005.

Scale and international recognition

In contrast to smaller REDD+ projects, Acre’s REDD+ program covers the whole state, and aligns all policies and land-use planning around the joint objectives of reducing deforestation, increasing agricultural productivity, and improving livelihoods. Acre has also harmonized its reduction target, reference level, and monitoring system with Brazil’s National Climate Change Policy (NCCP) so the state can link up to the national REDD+ program.

Acre will become the first pilot project for Jurisdictional and Nested REDD+ (JNR) programs by the Verified Carbon Standard, an offset standard setter, and will become the first jurisdiction to supply compliance grade REDD+ credits. Acre signed a Memorandum of Understanding with California (along with Chiapas, Mexico) and agreements with the Brazilian states of Sao Paulo and Rio de Janeiro and the Brazilian Development Bank (BNDES) to develop guidelines for including REDD+ in  the states’ existing or projected carbon markets. Acre has also received an initial payment of $20 million from the German Development Bank.

Lessons from Acre

Acre holds valuable lessons for governments and businesses on how to reduce deforestation across a whole jurisdiction while increasing sustainable economic development.

To meet their deforestation-free commitments, companies should source commodities from jurisdictions like Acre and encourage countries and states that they source from to adopt REDD+ programs so that companies can benefit from the strong policy framework, robust monitoring systems and incentives that these programs provide.

Chris Meyer

Alisha Staggs

Chris Meyer, EDF’s Amazon Basin Outreach Manager, and Alisha Staggs, EDF’s Corporate Partnership Project Manager, will present more on how to eliminate deforestation from company supply chains using REDD+ at The Sustainability Consortium (TSC) Member Summit in Berlin from September 30th to October 2nd.

Additional reading:

• Moving Beyond Commitments: Collaborating to End Deforestation
• Ready for REDD: Acre’s State Programs for Sustainable Development and Deforestation Control.

By Jason Mathers

Every product that ends up on a retail shelf or is sold online has a freight footprint. The annual impact of freight across U.S. retail and consumer goods supply chains is significant – over 160 million metrics tons of greenhouse emissions. Or, more than ten times Walmart’s 2010 scope 1 & 2 emissions in the United States.

There are ample opportunities for retailers and their suppliers to improve efficiency, reduce costs and emissions from their freight supply chain. These companies can get more products on each truckload, move more cargo by rail, and collaborate with other companies to find shipping efficiencies.

To capture the most savings opportunities, companies need a long-term plan of action with common key performance indicators (KPIs) and goals shared between logistics teams and corporate sustainability officers.

EDF created our Green Freight Journey model to be a framework that companies can use to manage supply chain freight emissions. The Green Freight Journey has five steps:

• Step One: Get Started, where a company assembles the right group of internal stakeholders and defines its objectives and key metrics.
• Step Two: Create Momentum, where a company launches a pilot effort to improve performance in one key area. It leverages the results of the pilot to increase internal visibility about the strong value of green freight initiatives.
• Step Three: Accelerate Performance, where a company expands the scope of its green freight efforts from one or two projects to a system-wide effort to reduce costs and emissions.
• Step Four: Declare a Goal, where a company sets a multi-year goal to drive internal focus and resource allocation.
• Step Five: Raise the Bar, having accomplished its first generation green freight goal, a company assess and sets a new longer term improvement target.

If you are attending RILA Sustainability later this month, visit the EDF booth (NP6) in the exhibit hall to learn more how your company can leverage the Green Freight Journey framework to identify and implement cost and emission reductions project. In addition to the EDF Green Freight Handbook, we will available at our booth have a benchmarking survey for companies to help them assess their next step on the Green Freight Journey.

By Ben Ratner

This post originally appeared on EDF Voices.

The technologies we see today didn’t all start out in the forms we’re used to. The phones we carry in our pockets used to weigh pounds, not ounces. Engineers developed hundreds of designs for wind turbines before landing on the three-blade design commonly seen in the field.

(Missy Schmidt/Flickr)

Fast forward and now we're looking at a drunk-driver-and-alcohol sensor that was converted into a methane leak detector. And a sensor purchased off the web for less than $30 that was transformed into a monitor that fights off greenhouse gases.

I was excited to see the diversity of technologies such as these moving forward in the Methane Detectors Challenge.

Environmental Defense Fund’s initiative with seven oil and natural gas companies—including Shell and Anadarko Petroleum Company, the latest two to join—seeks to catalyze a new generation of technology for finding methane leaks in the oil and gas sector – a powerful contributor to climate change.

We each went into this challenge with a clear goal and a puzzle to solve – to identify the equivalent of a carbon monoxide detector for methane that could provide continuous detection of methane leaks.

It was a business puzzle as well: The innovations have to eventually come in at a price point of $1,000 or less.

Our initial call brought in 20 proposed designs from across the globe. In the end, our team – in collaboration with the energy companies and expert advisers – chose five innovations to move forward in the Challenge.

Submissions came from a range of sources, including universities, startups and established companies from across the United States as well as from Sweden and China – each with rich technical backgrounds.

The innovations moving forward to the first round of testing are:

• RAE Systems, a division of Fortune 100 company Honeywell and SenseAir, a Swedish sensor designer, are adapting a handheld alcohol sensor – used in vehicles to detect high alcohol levels in drivers - and sampling system for very low level methane leak and hydrocarbon detection.

• A research group at University of Colorado Boulder is devising a sensor network on a single circuit board, using low-cost, commercially available sensors.

• A team from Oakland University and Michigan State University is creating a prototype electrochemical sensor solution with a target cost of $30 per sensor, building on mine safety applications.

• An established firm from China, Dalian Actech, has teamed up with Foller & Associates of San Francisco on an infrared laser-based methane detection system developed to sense natural gas in the Chinese coal industry.

• Quanta3, a scientific and engineering firm from Longmont, Colo., is enhancing its methane-specific tunable diode laser system to provide a complete, low-cost sensor package that does not require direct contact for detection.

Later this month, the innovators will bring their technologies to San Antonio, Texas, for the first round of testing at Southwest Research Institute’s facilities. The most successful innovations may advance to a second phase of more intensive laboratory and field testing, on tap for next year, and industry pilot purchases and deployments to follow.

The breadth and ingenuity of solutions on display leaves me hopeful that we’ll see one or more technologies out for pilot deployments with our industry partners next year. They can’t come too soon.

Fixing and repairing methane leaks is one of our most pressing climate challenges, and technologies like these will help us find and fix leaks with the speed we expect in the digital age. In addition, reducing leaks can help clear the air in surrounding communities, and boost the revenue of companies that act quickly to repair them by keeping more product in the pipeline.

Methane is a critical issue, and it’s promising to see the technology ingenuity of so many different companies on display, each finding an innovative way to achieve the same goal of addressing climate change.

You might also enjoy:

• EDF, Google Earth Outreach and the most innovative trend in environmental protection
• Big Data highlights huge opportunity for solar energy in Los Angeles

By Steven Goldman

Each month, EDF+Business rounds up a list of top corporate sustainability conferences around the country. Our list includes conferences at which experts from the EDF Corporate Partnerships Program will be speaking, attending or exhibiting, plus additional events that we think our readers may benefit from marking on their calendars.

Corporate sustainability conferences featuring EDF experts in September:

Sept 17-19: IFMA World Workplace Conference & Expo, New Orleans, LA
Attending/exhibiting: Scott Wood, Project Manager, and Scott Wentzell, Outreach Coordinator, EDF Climate Corps

• IFMA's World Workplace is an annual conference and exposition geared toward the learning and networking needs of professionals who support facilities—from FM, IT, PM and HR to engineering, security, real estate and sustainability/energy specialists. World Workplace is hosted by the International Facility Management Association, which works to advance the FM profession through research, certification and credentialing programs, education, global networking, industry information, government relations and partnerships with other respected organizations.

Sept 24-26: Sustainable Brands New Metrics '14, Boston, MA
Attending: Liz Delaney, Senior Manager, EDF Climate Corps, and Michael Reading, Manager

• Leading businesses are creating and valuing entirely new forms of positive environmental and social impact as well as quantifying previously ignored costs and risks. This 3-day Sustainable Brands event, in collaboration with MIT Sloan School of Management, showcases new approaches to valuing risk and impact, explores new frontiers in setting company goals and shares new solutions in ICT and data management.

Sept 29 – Oct 2: Retail Sustainability Conference, Minneapolis, MN
Attending/exhibiting: Scott Wood, Project Manager, and Scott Wentzell, Outreach Coordinator, EDF Climate Corps; Jason Mathers, Senior Manager

• ​​​​RILA's one-of-a-kind event seeks to revamp your thinking about sustainability. Sustainability is retail's future, and at this conference, attendees won't just sit and listen. Attendees will actively participate and converse with experts on the trends changing the way retail will look in 5, 10, even 20 years.

By Namrita Kapur

Prior to joining EDF, I worked in a variety of finance-related roles, from building the alternative energy franchise at an investment bank to pioneering investment in rural communities in the developing world at Root Capital. As part of my work at EDF, I’m investigating what financing mechanisms can drive investment in projects with big environmental returns, as well as financial ones. This post is the start of a new series looking at the green bond market, and in the future, I’ll be delving into other areas of impact investing.

Eighteen months ago, you might have never heard of a green bond. The market averaged less than $3 billion per year, but that is quickly changing.  $14 billion in green bonds were issued in 2013 and Bloomberg New Energy Finance projects as much as $45 billion to be issued this year. One expert even sees the market climbing to $100 billion in 2015.

Flexible financing for sustainability projects

So what are green bonds, and what is driving this market growth? Simply put, they’re a debt instrument that can be linked to an environmental benefit. One compelling aspect of green bonds is their flexibility. While some may be tied to energy efficiency and renewable energy projects, others are used for projects around climate resiliency, water infrastructure and a growing list of other high-priority sustainability areas.

As countries experience the mounting impacts of climate change, there is an increasing global demand for capital in these critical infrastructure categories. At the same time, funds that are integrating environmental, social and governance criteria in their investment decisions are looking for these types of instruments to add to their portfolios.

Marquee banks joining the marketplace

This growth coincides with a shift in the players. Before this year, multilaterals like the World Bank led the way in green bond issuance. But now we see companies including GDF Suez, Toyota and Unilever entering the green bond market with underwriting from mainstream investment banks including Bank of America, JPMorgan Chase and Morgan Stanley. Sweden’s SEB was the biggest issuer of green bonds in 2013, according to Bloomberg. These household name financial institutions are also supporters of the Green Bond Principles – a broad set of principles aimed at promoting transparency, disclosure and integrity in this nascent marketplace.

Although the growth trajectory in this marketplace is significant, it’s still a tiny fraction compared to the $1 trillion of clean energy financing that the International Energy Agency estimates is needed to avoid the worst impacts of climate change. But it’s an important starting place.

As the green bond market grows in volume, important signs to look for include standardization of issuance and even the development of a secondary market. The more that green bonds function as plain vanilla investments, the more attractive they will be for pension funds and other large investors, which will then drive capital at the scale of the need.

By guestblogger

by Rachel Finan, student at the Johns Hopkins University School of Advanced International Studies

Experts predict that by 2025 Sana’a, Yemen will become the first capital city to run out of water. They predict that by 2030 India will need to double its water-generation capacity or face the same fate, and water supplies in Istanbul, one of the world’s largest cities, is at just 28 percent. Yet before any of those cities run dry (in far off developing countries that most people in the United States associate with water scarcity issues), it could be a U.S. city that runs out of water. And it’s not just the usual suspects in the Southwest who face increasingly serious water concerns. Miami, FL is the second-most vulnerable U.S. city in a drought according to a University of Florida Environmental Hydrology Laboratory study. Cities such as Cleveland, OH; Chicago, IL; and New York, NY follow not far behind.

Just last February, California state officials announced that 17 communities and water districts could run out of water in as little as 100 days. In Texas, that number more than doubles. Earlier this year state officials reported 48 communities were within 90 days of water interruptions; as of August 20th, there are 27 communities on that list. One small town in TX reportedly already has run dry.

This begs an obvious question; what are we doing about it? Additionally, what should we be doing about it – not just as a temporary fix, but as a long-term, strategic response? What would you do if water stopped coming out of your tap? Imagine if your town was one of the California or Texas communities with only 90 days of water left. As an EDF Climate Corps fellow, I’ve spent the last several weeks contemplating these questions and identifying opportunities for Texas-based institutions to not only conserve water, but to save money while doing so. I’ve been inspired by many examples throughout the state.

One town in northern Texas has been taking particularly innovative, noteworthy steps to save their community from becoming water dry. Officials in Wichita Falls, two hours north of Dallas, were told several years ago that the town would be completely without water by 2016. Digging new wells or joining another municipality’s water supply were dismissed as unsustainable solutions. To meet the immediate need they opted for a direct potable reuse (DPR) project, meaning that they would collect their dirty water from places such as sinks, washing machines, toilets – yes, toilets –and filter that to a level that could be directly reused as drinking water. As of last week, they are the first place in the country to generate over 50 percent of their drinking water from directly treated wastewater.

“We knew this project would be a risk,” says Daniel Nix, the Wichita DPR Project Coordinator. “Could we treat the dirty waste water to meet drinking quality standards? Would the community get behind us or would everyone immediately switch to bottled water? However, we felt it was a risk we had to take because the alternative was a far greater risk. Look at any developing country where a natural disaster occurs and the water supply is interrupted– the next thing that usually happens is an outbreak of water borne diseases.”

So far, the risk has been worth it, and the project is a resounding success. The city is able to recycle five million gallons of water a day, the water quality exceeds the required standards, and numerous residents report preferring the taste of the treated water to the traditional reservoir water.

It is not just Wichita Falls that is taking impressive steps to deal with the increasingly serious water shortage – the rest of Texas makes a good case study as well. As an EDF Climate Corps fellow this summer, I had the opportunity to work at an academic medical research center in north Texas that is committed to being a leader in water-reduction initiatives. My work focused on cost-savings opportunities that can be garnered from adopting water-efficiency measures and thinking strategically about medium to long-term water use. Results included opportunities such as implementing an air handler condensate collection system throughout numerous buildings. Condensate collection involves capturing the condensation emitted from the air conditioning units. Up to 30 million gallons of water could be saved annually. Other opportunities included collecting rainwater for car washing, reducing landscape water use through xeriscaping and improving cooling tower efficiency.

The institution realizes that water reduction is a pressing matter and anticipates implementing several of these proposals. Similar initiatives are being implemented throughout Texas and not only greatly informed my work but served as eye-opening, thought-provoking examples of how communities in need have challenged themselves to innovate. Consequently, these communities have made important strides toward ensuring water security and will continue to benefit from their initiatives, both financially and in resource availability, for years to come.

Also of interest:

• EDF & AT&T's Water Efficiency Toolkit
• What We Build Together: Collaborating to Scale Up Sustainability
• Four Lessons in Corporate Water Efficiency

By Jason Mathers

When looking for ways to increase supply chain efficiencies, few strategies have the cost and emissions savings potential of collaborative distribution or shared shipping—where companies pool freight resources to reduce the amount of truck trips required to move supplies or products. As the Guardian noted in a recent article on Ocean Spray and Tropicana’s shared shipping collaboration, companies stand to annually save billions of dollars and cut over a hundred million tons of climate pollution by adopting this strategy.

A recent Logistics Management report–Getting From “Me” to “We”: Creating a Shared Infrastructure for Product Distribution–dug deeply into this topic too. It shared several examples of how leading companies are implementing this strategy. The example that stood out to me involved CVS, Kimberly-Clark and Colgate.

Finding the right supply chain partners

Suppliers had approached CVS about the opportunities available through collaborative shipping. CVS agreed to undertake a pilot to see how it could help foster this type of arrangement for goods flowing into its network.

The retailer set criteria to identify companies to pilot the concept. The criteria included product compatibility, proximity of supplier distribution centers, complementary order patterns, overlapping customer network and culture fit. CVS chose to run the pilot with Kimberly-Clark and Colgate.

(Source: Logistics Management Institute)

Before the pilot, Colgate and Kimberly-Clark both shipped directly to CVS. Each company had excess trailer capacity. As the image below demonstrates, by collaborating, the inbound trucks to CVS became better utilized. This resulted in fewer overall truck trips (109 less), lower emissions (28 tons avoided) and increased business value for all parties (7% lower inventory, 2% fewer out-of-stocks and better forecasting).

According to the Logistics Management report, the three companies now follow a four-step process:

1. CVS analyzes replenishment needs and combines orders that optimize trailer weight and cube.
2. Colgate shuttles product from its distribution center to a nearby Kimberly Clark DC and unloads the tail of the Colgate trailer.
3. Kimberly-Clark then fills that trailer with its products and ships to CVS.
4. The dedicated carrier invoices both Kimberly-Clark and Colgate based on the percentage of total pallets shipped by each company.

This and other examples highlighted in the Logistics Management report are compelling, but the best evidence to me about the growing interest in collaborative distribution is that I’m learning about other projects from publications outside the logistics/shipping field, including the academic journal Science.

Similar shipping needs = big opportunity

Proctor & Gamble was highlighted in a recent Science article about the “physical internet”–an advanced form of collaborative distribution practices. Through a physical internet, companies move goods through an open global logistics system that is significantly more efficient, sustainable, adaptable and resilient than today’s logistics system. The management systems needed to enable a mature physical internet are being developed at leading research institutions and in cross-company collaborations, such as between P&G and Tupperware.

Both companies have manufacturing facilities and distribution centers (DC) in Belgium. Both were also sending products to Greece from their Belgium DCs. The distances and routes in these moves were well-aligned for co-loading their shipments.

The products matched well too. P&G had heavier products that were using 95% of the weight capacity of each move, but only 50% of the volume capacity. Tupperware, however, had lighter product that was using 85% of the volume capacity, but only 30% of the weight capacity.

By co-loading this freight, Tupperware and P&G were able to avoid 200 tons of climate pollution, increased asset utilization and save 17% on total lane costs.

With big players like CVS and P&G embracing collaboration, it is clear that there are significant, near-term cost savings and emission reductions benefits to be gained by looking for opportunities to collaborate on shipping. If your company isn’t yet embracing these strategies, it is leaving money on the table.

Additional reading:

• EDF's Green Freight Handbook
• 6 MPG? We Can Do Much Better
• Co-Loading Your Way to Green

By astaggs

Deforestation can pose significant operational and reputational risks to companies, and we at EDF are seeing companies start to take action in their supply chains. Deforestation accounts for an estimated 12% of overall GHG emissions worldwide–as much global warming pollution to the atmosphere as all the cars and trucks in the world. In addition, deforestation wipes out biodiversity and ravages the livelihoods of people who live in and depend on the forest for survival.

Tropical deforestation in Mato Grosso do Sul, Pantanal, Brazil (Source: BMJ via Shutterstock)

Unfortunately, it’s a hugely complex issue to address. Agricultural commodities like beef, soy, palm oil, paper and pulp—ingredients used in a wide variety of consumer products—drive over 85% of global deforestation. Companies struggle to understand both their role in deforestation, and how to operationalize changes that will have substantive impacts.

When the drivers of deforestation are buried deep in the supply chain, innovative and collaborative solutions are required. In the past several years, we have seen many in this space make big commitments toward solving the problem, but gaining transparency into tracking against these commitments has been almost as difficult as gaining transparency into the supply chains themselves.  For many companies, the hope for making good on their promises may come in the form of powerful partnerships.

Change Starts with Commitments

In 2010, the board of directors of the Consumer Goods Forum (CGF)—a consortium of 400 companies with combined sales of around $3.5 trillion—committed to help achieve zero net deforestation by 2020, mobilizing the resources of the world’s largest companies to achieve their goal. This commitment is focused on the key commodity drivers of deforestation: soy, beef, palm oil, paper and pulp.

In the last four years, to encourage their members to implement this commitment, CGF has published commodity specific sourcing guidelines, created an Activation Toolkit, and launched the Tropical Forest Alliance 2020 in partnership with the U.S. Agency for International Development and the State Department. However, despite making many resources available, there has yet to be a concerted effort to measure or track against the commitment, leaving many in the NGO community skeptical.

Partnerships to Build Transparency

Enter The Sustainability Consortium (TSC®) with its membership of non-profits (including EDF), government agencies, university partners and consumer product companies with combined revenues totaling over $2.4 trillion. The Consortium’s goal is to create systems that accurately measure and report environmental and social impacts associated with particular product categories in order to help retailers–and eventually consumers–make smarter decisions about what goes onto shelves and into shopping bags.

To create common ways to measure and report impacts, TSC membership has developed Product Sustainability Toolkits for 110  product categories (and counting), including all of the major commodity drivers of deforestation. For the last two years, Walmart has been implementing these toolkits through their Sustainability Index. Walmart has been able to extrapolate the toolkits to cover over 700 categories and more than 2,500 suppliers.

While Walmart’s achievements are very exciting for EDF, what’s even more exciting is that what was once only happening in-house at Walmart is now easily implementable by all TSC members and others across the consumer goods industry through the new SAP Product Stewardship Network –an online community that enables companies and their supply chains to efficiently exchange sustainability data.

This marks a major milestone in TSC and a huge opportunity for action.  TSC will deliver an updated version of its TSC Product Sustainability Toolkits, including Key Performance Indicators (KPIs), in October, which will offer even more harmonized and easily comparable metrics across commodities.

A Call to Action

Many companies have taken extensive steps internally to reduce their risk of deforestation, often, though, the efforts are disjointed in relation to supply chain activity and consequently do not easily ladder up to meet an umbrella goal like that of CGF. TSC’s KPIs provide a much-needed solution for this.

Alisha Staggs

TSC has developed broad, globally applicable, outcome-based metrics for tracking land transformation/deforestation. Because these metrics are nonprescriptive, they are compatible with a wide range of strategies. In addition, TSC has included specific KPIs to track the use of certification as way to address issues such as deforestation, including RSPO and FSC, both of which have been endorsed by CGF.

TSC is working to drive adoption of the toolkits within its own membership, which has more than 30 member companies in common with CGF—including Walmart, Ahold, Marks & Spencer, Tesco and Kroger. CGF and TSC officially joined forces in 2012 when they announced a partnership between the two organizations, but we have yet to see this partnership live up to its potential. CGF has recognized that they cannot stop deforestation by themselves and have called on governments around the world to “secure an ambitious and legally binding global climate deal” at the UN Paris Climate Summit in 2015 and to prioritize the implementation of REDD+ (Reducing Emissions from Deforestation and forest Degradation) policies, which will be the focus of our next blog in this series.

Call us optimists, but we see 2015 as the year that their combined efforts of setting industry goals and using key performance indicators to measure progress can take deforestation beyond commitment and towards broad measurement, reporting and progress for this issue.

Look for Alisha and her EDF colleagues at the TSC Member Summit in Berlin, Germany, September 30 to October 2, where they will be leading discussions on commodity-driven deforestation during the sector working groups.

By Victoria Mills

Last month, twelve major corporations announced a combined goal of buying 8.4 million megawatt hours of renewable energy each year and called for market changes to make these large-scale purchases possible. Their commitment shows that demand for renewables has reached the big time.

We’re proud that eight of the twelve are EDF Climate Corps host organizations: Bloomberg, Facebook, General Motors, Hewlett Packard, Proctor & Gamble, REI, Sprint and Walmart. The coalition, brought together by the World Wildlife Fund and World Resources Institute, is demanding enough renewable energy to power 800,000 homes a year. And while it's great to see these big names in the headlines, they're not alone in calling for clean energy: 60 percent of the largest U.S. businesses have set public goals to increase their use of renewables, cut carbon pollution or both.

Companies want renewable energy because it makes good business sense:  it’s clean, diversifies their energy supply, helps them hedge against fuel price volatility and furthers their greenhouse gas reduction goals. Renewables are now the fastest-growing power generation sector, and by 2018, they’re expected to make up almost a quarter of the global power mix. Prices of solar panels have dropped 75 percent since 2008, and in some parts of the country, wind is already cost-competitive with coal and gas.

Yet some market barriers persist in sourcing renewable energy. As Amy Hargroves of Sprint said, "We know that cost-competitive renewable energy exists, but the problem is that it is way too difficult for most companies to buy." Some utilities don't offer renewable energy electricity options, or put limits on how much a firm can buy. And a patchwork of state regulations creates administrative hurdles for companies with facilities across the country.

This shouldn't be so hard. What the companies are asking for is reasonable and attainable. The Corporate Renewable Energy Buyers’ Principles call for change in six areas:

• Greater choice in procurement options,
• More access to cost-competitive options,
• Longer- and variable-term contracts,
• Access to new projects that reduce emissions beyond business as usual,
• Streamlined third-party financing, and
• Increased purchasing options with utilities.

The good news is that EDF and other groups are working to bring about the market changes necessary to bring renewables fully into the energy mix. And there are some great success stories to share. For example, Verizon is currently investing more than $100 million in clean and renewable energy projects. One of the catalysts for these investments was the emergence of New York’s “Green Bank,” a state-run $1 billion initiative that will encourage private sector financing for clean energy projects in the region.

Making the market work for renewables is a critical step in the transition to a low-carbon energy system. What will it take to get us across the finish line? In a word: collaboration. Realizing the potential of renewables will require the active engagement and partnership of all the players in the energy system: large energy users, nongovernmental organizations, utilities and policy makers.

Hats off to these twelve companies for their leadership in sourcing and promoting clean, renewable energy and to WWF and WRI for bringing them together. Learn more about the Renewable Energy Buyers’ Principles and how you can add your company’s name to the list.

Further Reading: Wal-Mart, GM, HP Lobby to Boost Renewable Energy

By Elena Kocherovsky

Credit: Plastic Disclosure Project

Take a moment to think about the things you use and throw away every day that are made from plastic: an empty shampoo bottle, the container from your salad at lunch (and the little container for the dressing), that pen that won’t work. And what about those things you’re holding on to in the depths of your closet, inevitably destined for the dumpster? That overused pair of sneakers, your old broken flip phone, a keyboard that hasn’t been used in a decade?

Plastic has transformed the way we live and enabled innovation in countless sectors, but simultaneously has contributed to one of the largest waste problems facing the planet. The challenge right now is that it’s no one’s responsibility to track plastic. The material just gets passed from production, to building products, to consumers, and ultimately to waste facilities or worse, into ecosystems like the ocean.

The United Nations Environmental Programme (UNEP) has developed one initiative to tackling this enormous problem, called the Plastic Disclosure Project. The project’s goal is to encourage companies to track the amount and types of plastic used in their operations and supply chain in order to optimize and reduce the related environmental impact.

Why should companies take the responsibility of tracking their plastics? To answer this question, UNEP published a report in partnership with Trucost, which quantifies the full cost associated with plastic used in the consumer goods industry. That amount is more than $75 billion per year. Yes that’s billion with a "b," and per year.

This number incorporates things like direct environmental harm (e.g. damaging the ocean and fisheries), the loss of valuable resources when plastic is sent to landfill instead of being recycled, and the costs from carbon pollution in the plastic manufacturing process. That is a huge economic loss that companies are not accountable for, which instead gets absorbed by us all.

While there has been impressive growth in the amount of companies reporting their carbon emissions to third party groups, it turns out very few companies are currently disclosing information about their plastics use. Out of the 100 companies analyzed in the report, only about half tracked any sort of information about the plastic utilized in their business. One large benefit for an organization to collect data on how it uses plastic is that it illuminates ways to decrease waste and become more efficient in its operations. Additionally, it allows it to identify effective ways to reduce the economic and environmental impacts mentioned above.

Another clear take-away from the report is that companies have a compelling business opportunity to take a leadership role in managing their plastic use. Increasing numbers of consumers are choosing products that are earth conscious, investors are asking more companies about how they’re managing environmental risks, and optimizing the amount of plastic going into products improves efficiency and cost-effectiveness.  The report identifies the largest natural capital costs:  the biggest areas for improvement are in the food, soft drinks and non-durable consumer goods industries. However, managing the quality and quantity of their plastics use does not have to be a financial burden.

Finding solutions to the plastics problem is a massive and complex undertaking.

There are numerous angles to approach this challenge:

• Not all plastic is created equal, so companies should be looking for ways to incorporate more recyclable and bio-based plastics into their packaging and products, whilst also looking for ways to reduce the absolute amount of plastic used.
• Companies can develop their own recycling and take back programs for tough-to-recycle items such as electronics and furniture. They should look at the plastic use in their supply chain and choose their suppliers strategically.
• Some companies can even take the lead in supporting the development of better recycling facilities within the regions they operate in. It is estimated that 85 percent of plastic waste is not recycled globally. That is an astounding amount of wasted valuable material that could be reused!

Not only are these actions the responsible thing to do, they are also becoming financially smart decisions for businesses.

Plastic enables us to do so much, from preserving our food, to keeping us connected, to saving our lives using medical devices. It would be unreasonable to cast plastic as the villain in our world, but its role has gone from innovative to abusive. I challenge companies think systemically about how to eliminate plastic waste from their products and recognize its impact on the planet. One step forward would be to begin reporting via the Plastic Disclosure Project. By doing so, companies have an opportunity to put us on track to developing a more restorative, regenerative economy, which is critical in an increasingly resource-constrained world.