Why Food Waste Means Water Waste

About 21 percent of the water that’s used to grow our food is wasted because of the magnitude of food Americans toss each year. A new report outlines four ways to begin implementing solutions that will save food, water and energy. And California can start by passing needed legislation. Irrigation water runs along the dried-up ditch between the rice farms to provide water for the rice fields in Richvale, Calif. (Jae C. Hong. Associated Press) In recent months, food waste has been put more in the spotlight – with everyone from coffee chains, restaurants, supermarkets, governments and even pro sports teams making plans for cutting down on wasted food. It was even the cover story of National Geographic last month. From an economic, environmental and social standpoint, keeping food out of landfills is imperative. We waste 40 percent of the food we buy each year while one in seven Americans go hungry, and the global agriculture industry emits one-third of the world’s greenhouse gas emissions. But there’s another aspect of the food waste problem that gets much less discussion, one that is also critically important to water-stressed California: Saving food equals saving water. Much of the food we waste is grown in California, and taking steps now – including passing smart policies – to reduce food waste will help the state through our current water crisis and prepare for our more water-stressed future. In March, a new report from ReFED (Rethink Food Waste Through Economics and Data) details how sharply reducing food waste will also help with long-term water management. The Roadmap to Reduce U.S. Food Waste by 20 Percent details solutions and actionable paths forward to dramatically shrink wasted food and save much-needed water. I attended a day-long conference held at Stanford University to kick off ReFED’s Roadmap, and came away with a sense of both the size of the challenge ahead of us, but also the possible solutions and the different groups implementing them. It starts with understanding where food waste happens, and how that affects water waste. First, let’s note that everyone wastes at least some food. When I took a recent, last-minute trip cross-country, I left two tomatoes at home to rot (that’s about 13 gallons of wasted water!) It’s estimated that 21 percent of our freshwater use goes to grow food that is wasted. To better understand the magnitude of the food and water waste, the ReFED report notes that if we grew all of our country’s wasted food in one place, “This mega-farm would cover roughly 80 million acres, over three-quarters of the state of California. Growing the food on this wasteful farm would consume all the water used in California, Texas and Ohio combined.” ReFED’s Roadmap outlines four main areas for solutions to our food- and water-waste challenge, and each of these was detailed at the conference. A low flow water emitter irrigates part of the almond trees at the Stewart & Jasper Orchards, in Newman, Calif. A recent report shows that Americans' food waste means that 21 percent of water used to grow crops is wasted. (Rich Pedroncelli, Associated Press) Consumers: We’ve been taught to seek out only the most perfectly shaped, totally unblemished produce on grocery shelves, and this expectation sends huge quantities of food to landfill or compost. NRDC is launching a three-year-long consumer education campaign in partnership with the Ad Council to raise awareness among “moms and Millennials” about food waste reduction. Innovation/Technology: Turning food waste into value will create the incentives that are currently lacking to reduce food waste. At the conference, Thomas McQuillan from Baldor Specialty Foods highlighted the food delivery company’s goal of being food-waste-free by 2017. Baldor will achieve this by partnering with juice shops, livestock producers and waste-to-energy facilities to make use of foods of varying stages of freshness and visual appeal. Speaking of visual appeal, “ugly produce” is a trend you should expect to see soon, if you haven’t already. Farmers and food retailers are trying to rein in our expectations of produce perfection by embracing “ugly”: Supermarket chains Giant Eagle and Whole Foods are showcasing less-than-perfect produce, and startups and CSA produce boxes are also working to make ugly produce desirable. Investment: ReFED’s Roadmap makes clear that it’s going to take a lot of money to tackle food waste – as much as $18 billion in investments – but key to success is making it clear that we can make money by reducing food waste. Nonprofit organization Ceres is also trying to think about how capital markets can help tackle food waste. In partnership with the Interfaith Center on Corporate Responsibility (ICCR), Ceres started engaging its Investor Network on Climate Risk (INCR), a network of more than 110 institutional investors representing more than $13 trillion in assets, around the food waste challenge. Earlier this year a group of investors sent letters to leading food companies asking for information and to engage in dialogue about plans to assess, reduce and optimally manage their food waste. In addition, Ceres member, Trillium Asset Management, organized a shareholder resolution for Whole Foods Market requesting a report on company-wide efforts to assess, disclose, reduce and optimally manage food waste. Policies: One quick way to make big reductions in wasted food is to fix those confusing “best by,” “use by,” and “sell by” labels, which greatly increase food waste. Standardized date labeling requires minimal up-front investment and offers great potential dividends in waste reduction and cost saving. In California, we even have a policy proposal already on the table for standardized date labels. AB 2725, introduced by San Francisco Assembly member David Chiu, would standardize food date labels in California so the consumer can easily and consistently understand when a food item is at or past its peak freshness or when it is expired and could be a safety concern. California legislators should pass this bill in order to start moving California on a more sustainable food path. If we can unite to implement all of the recommendations in the ReFED Roadmap, we will be on track to conserve as much as 1.6 trillion gallons of water per year – an amount equal to 1.5 percent of the nation’s entire freshwater withdrawals – all while cutting our carbon emissions and saving huge amounts of money. That’s the kind of win-win-win solution that we can all get behind. Read the post at Water Deeply

'Sustainable' means different things in politics, but it's sound thinking in business

Written by Former Rep. James T. Walsh (R-N.Y.) and former Rep. Bart Gordon (D-Tenn.) In politics, we are fond of saying "words matter." It's true. This can mean "how you say it, not what you say," or it can mean "which words do you choose" to describe an issue or situation. Words can mean one thing to a conservative and something very different to a liberal. Mention the word "sustainable" to a liberal member of Congress and you immediately have credibility, common ground with many. Mention the word "sustainable" to a conservative member and you might have a disagreement on your hands or, at a minimum, whatever you say after that will go unheard. Outside the realm of politics, it may mean something else again. In the business world, it means sound thinking. As Congress and the administration debate about climate change, companies that are the pillars of the U.S. economy are changing the way they do business, taking steps to make their businesses more sustainable and speaking out publicly about need for federal policy support. These companies and investors include Mars, General Mills, Kellogg Company, Nestlé and Unilever. But what does "sustainable" mean? Clearly, people ascribe different meanings to the word, so let's go to a neutral corner, "Roget's Thesaurus." SUSTAIN (verb) 1. To keep in a condition of good repair, efficiency or use; keep up, maintain, preserve. 2. To hold up; bear, carry, support. 3. To keep from yielding or failing during stress or deficiency: bolster, buoy, prop, support, uphold. That all sounds like conservation to us; the base of which is to conserve. What business wouldn't make this goal a part of their mission? Companies prodded by shareholders and organizations, like Ceres (a nonprofit sustainability group) have begun to take action. Initially, much of their action was internal, such as finding alternative sources of commodity groups to hedge against volatility in agricultural yields, or locking in renewable energy purchase agreements to shield against volatility in energy markets. But soon, companies realized that they could not unilaterally solve regional and global environmental problems. So they began to work together to create voluntary corporate commitments and standards that go beyond current government regulations and protections. These voluntary standards have proven impactful, but businesses soon realized that they aren't enough and that the government too must implement more robust policies to address climate-related challenges. This paradigm shift was caused by the realization that environmental protection and economic growth can be mutually reinforcing. A sustainable world — a world where countries have come together to solve the riddle of supply and demand — is now a prerequisite for a healthy and growing global economy. Businesses are stepping up and letting their voices be heard. While implementing sustainability goals and policies within their companies, they are either conserving our economic health and well-being, or they are creating a sustainable future for all of us. You pick the appropriate words. Walsh (R-N.Y.) and Gordon (D-Tenn.) are former members of the House of Representatives. They currently work at the law firm K&L Gates in Washington. The views expressed herein are those of the authors and do not necessarily represent those of K&L Gates, its partners or employees. Read the post at The Hill

Worms and Wine? Fetzer Vineyards First to Adopt Innovative Wastewater Treatment System to Save Water / Combat Climate Change

It takes a lot of water to make a glass of California wine, anywhere from two to 15 gallons of water, according to recent studies. And as the state moves into its fifth year of drought, many California wineries are rethinking how they use water and the way they do business. Fetzer Vineyards, founded in 1968, has long been concerned about water. As a certified B Corp company—which means it has achieved the highest standards for social and environmental responsibility in business—Fetzer Vineyards follows organic and regenerative winegrowing practices that sustain soil and water resources over the long term. Its latest step, announced today, is to become the first winery in America to employ an innovative, closed-loop biological wastewater treatment system that will process 100 percent of its winery wastewater using the digestive power of red worms and microbes. That’s right—worms! And billions of them. Fetzer Vineyard estimates the system will generate 15 million gallons of water annually, or more than enough to fill 22 Olympic-sized swimming pools, and the Mendocino County winery will reuse that water for irrigation of its vineyards. The new system is a big deal because wineries on average create six gallons of wastewater for every gallon of wine produced. Washing tanks, crush pads and floors takes a lot of water. Fetzer Vineyard has already reduced water used in its winery by employing a cleaning product that saves 200,000 gallons annually, but the new wastewater treatment system takes its water savings up a notch. What’s more, the new wastewater treatment system is a critical step in Fetzer Vineyard’s journey towards carbon neutral wine-growing practices. The closed loop system will reduce the amount of power it needs to clean its wastewater by 85 percent, saving it roughly 1 million kilowatt hours a year, or the amount of electricity needed to power about 143 California homes. Here’s why. Most California wineries use ponds to treat their wastewater and those ponds require large motors to aerate the liquid. It can take 60 to 90 days to remove the winery residues—plant matter and sugars—that would wreak havoc on waterways if released before treatment because of their high biological oxygen demand, or BOD. Fetzer Vineyard’s new closed loop system, in contrast, can break down the biological wastes in four hours. And its only by products are irrigation-ready water, organic fertilizer (worm castings), and animal protein feed (earthworms). The system, in fact, will produce 750 cubic yards of soil enriching worm castings that the winery can use to fertilize its vineyard. It “brings things full-circle with enhanced compost for our soils and clean water for vineyard and landscape irrigation. It’s a win-win,” says Josh Prigge, Director of Regenerative Development for Fetzer Vineyards, who adds, “Innovating to naturally manage our water footprint is an important step in our journey to become Water Positive, essential to our goal of Net Positive operations by 2030.” “It’s essential that we constantly ask ourselves if there is a better, more efficient and more regenerative way to approach our business, including the way we work with water, says Fetzer Vineyards CEO, Giancarlo Bianchetti. For more information on Fetzer Vineyard’s new wastewater treatment system, currently in operation in 130 plants worldwide, visit www.fetzer.com/water. Read the post at Water Deeply

CalPERS raises bar on corporate directors’ role in tackling climate change

Last month, the country’s largest pension fund, the California Public Employees Retirement System, updated its Global Governance Principles, which drive its efforts on corporate engagements, proxy voting and investment decision making. The principles now state that board members of companies that CalPERS owns should have “expertise and experience in climate change risk management strategies.” They also call on companies to assign oversight responsibility on climate change to “a board member, board committee or full board.” This move is hugely important, but it it shouldn’t be seen as a surprise. For the past two years, CalPERS and other major U.S. pension funds have been targeting U.S. companies to adopt proxy access rules that will give large long-term investors the right to nominate directors onto corporate boards. Among the reasons why is investors want “climate competent” directors on the boards of carbon-intensive companies. CalPERS’ action is especially noteworthy because it applies to all 10,000 companies in its $300 billion portfolio. By not linking its expectations on climate competent boards with any specific sector, CalPERS is effectively saying that climate change risks are pervasive and touch all parts of the economy. Ceres has long taken this position, but the investor community is now catching on. A Jan 2016 bulletin from by the Sustainability Accounting Standards Board noted that 72 of 79 sectors they analyzed are materially affected by climate risks. In other words, it isn’t just oil and energy firms that are affected by climate change. The risks are ubiquitous and cannot be diversified away. Efforts to address climate change should therefore be universal and involve all sectors. By focusing on how all company boards across the economy are managing climate risks, CalPERS has identified a way to jumpstart corporate climate action at the scale and urgency this colossal global threat warrants. As key influencers of company strategies, board directors are uniquely positioned to ensure meaningful consideration and action on climate risks and opportunities. Investors have long recognized this and over the past five years have filed more than 250 shareholder resolutions calling on companies to establish explicit board oversight systems for climate change and other sustainability issues. But, given their objective to achieve substantive climate action from companies, CalPERS and other investors need to look harder at whether the oversight systems they’re asking for are achieving the desired performance improvements. A recent Ceres report that I authored shows that board systems alone do not guarantee meaningful sustainability performance impacts. Based on interviews with three dozen corporate board members, company executives, investors and other experts, the report concludes that to be effective, board oversight systems need to be supplemented by other board actions, such as linking sustainability priorities to core business strategies and executive compensation. CalPERS’ revised Governance Principles call on companies to make climate change the responsibility of a board committee or the whole board. Creating such explicit oversight will help ensure that climate change is considered more systematically by boards. However, as the Ceres report notes, effective board discussions and decisions on sustainability need to be linked with board deliberations on business strategies and, ultimately, bottom-line revenues. This will help ensure that climate discussions do not take place in a silo, but have broader business performance impacts. One key way to drive sustainability through the business, is to make the connection between sustainability and executive compensation, which the Ceres report underlines is a way to motivate management and reward the right behavior. This year saw investors filing a record number of resolutions asking oil and gas companies, including Chesapeake Energy and Devon Energy, to decouple replacement of fossil fuel reserves from executive compensation packages. By calling on companies to recruit climate-competent board members, the principles identify another key gap. Our report found that even among companies with formal board systems for sustainability,  only 19 percent of board members had any meaningful expertise in environmental and social issues.  Onboarding an expert in climate change will go a long way in ensuring that key issues are raised and the right questions asked. Our report also recommends that companies level up all board members on sustainability issues — through board training, involvement in stakeholder dialogues etc - so that sustainability becomes a board-wide priority instead of falling all on one individual, thereby allowing for more meaningful impacts. While there’s always more to be done, CalPERS new Global Governance Principles draw an important, advanced line in the sand on this profound global challenge that will require far stronger engagement and action from all economic actors. Corporate board members could play a critical role to lead and achieve the low-carbon global economy we desperately need. Veena Ramani is a senior director of the corporate program at Ceres. She authored the report “View from the Top: How Corporate Board Engage on Sustainability Performance.”

Agriculture-Related Water Risks: Understanding the Threat

Growing competition for water, climate variability, pollution from agricultural runoff, weak water management and regulation, and aging infrastructure all contribute to a water availability crisis that was recently named the top global risk in terms of impact by the World Economic Forum. From farm to factory, food production is the most water-intensive business on earth, with 70% of the world’s water used to irrigate crops and raise animals. A staggering 15,000-plus liters of water are required for one kilogram of beef, 10,000 liters for cotton. Even the humble potato requires over 280-plus liters. Water Footprint of Major Commodities Abundant clean water is also essential to food processing — for cleaning and moving raw materials, as an ingredient, and as the principal agent used in sanitizing plant machinery. This high level of water use becomes even more significant in light of the fact that 56% of total food production is currently in areas of high or extreme water stress. Water Risks Are Not Coming Out in the Wash These water risks are already affecting corporate income statements and balance sheets in a variety of ways: Increased competition for water is leading to steep water-rate increases and rationing. In areas of Mexico, water demand is far outstripping groundwater supplies, leading to price hikes as high as 300%for industrial users and new regulations and water fees for food manufacturers (such as Kellogg (K), among others). Water shortages can lead to reputation risks and loss of ability to grow revenue for companies who are seen as competing with local communities for access to water supplies. This can lead to the loss of a company’s social license to operate, business disruption, and brand damage. The Coca-Cola Company (KO), for example, decided not to move forward with the development of an $81 million bottling plant in southern India due to resistance from farmers over the strain on local groundwater supplies and competition for water. Decreased agricultural productivity can impact procurement costs. Although few companies grow their own inputs, margin risks rise as commodities are affected by weather patterns and water scarcity. Weather-related price shocks are not new, but increased weather variability, coupled with growing competition for water in most major agricultural production regions, increases the risk of commodity price volatility. Unilever (UN) reported that natural disasters linked to changing climate decreased food security and reduced productivity in many parts of their agricultural supply chain, costing the company an estimated $400 million annually. Water risks can impact on company revenues and earnings. Landec (LNDC) recently revised its revenue growth forecasts downward due to the impact of crop disruptions in California on the company’s produce packaging subsidiary. The Campbell Soup Company (CPB) saw a 28% drop in its California carrot division profits recently due to variability in water supplies. The share price of Illovo Sugar Ltd. (JSE: ILV), Africa’s second-largest sugar producer, dropped 35% in the fourth quarter of 2015 due in part to lower earnings caused by drought. Although investors are increasingly aware of water risks in their portfolios linked to agriculture, there is still work to be done to improve risk analysis and mitigation strategies. Several investors have begun by simply asking companies for better disclosure of agriculture supply chain risks. Inability to Mitigate Risks Leaving Companies All Wet? Increasingly, companies are highlighting their exposure to water risks. For example, in 2015, 30% of large, publicly traded US food companies cited water as a material risk in their 10-K filings. Also, 43% of consumer staples companies surveyed by CDP in 2015 reported detrimental impacts due to water issues. Business and Financial Impacts of Key Water Risk Drivers in Agriculture   Source: Feeding Ourselves Thirsty: How the Food Sector is Managing Global Water Risks, Ceres Despite the increasingly open discourse by many companies that water risks exist, overall disclosure on how those risks materialize — and how they’re being mitigated for the future — remains poor. In a recent studyon how well food sector companies are managing water risks (see company rankings below) and disclosing information to investors, 38% of the 37 companies surveyed had not evaluated water risks at all, and two-thirds had not evaluated risks in their agricultural supply chain (or, if they had, did not disclose this information). Company Rankings on Adequacy of Water Risk Management* Source: Feeding Ourselves Thirsty: How the Food Sector is Managing Global Water Risks, Ceres Many investors in these companies are beginning to engage corporate management on these issues. For example, investor signatories of the UN PRI are actively engaging food companies on their water management strategies in their agricultural supply chains. Recently, 64 institutional investors managing $2.6 trillion in collective assets sent joint letters to 15 low-scoring food companies asking for additional information on their exposure to and management of water risk. Investor Ownership of Food Co’s with Weak Water Disclosure – Engagement Can Improve Disclosure *Where ownership is greater than 5%. Investor Engagement on Water Risk is Yielding Results But There Is Further to Go This letter illustrates the potential effectiveness of investor engagement: Roughly half of the targeted companies have since committed to improve their water risk management disclosure to investors in the coming year. While the water risk data drought is far from over, continued improvements in corporate supply chain water risk disclosure will help investors assess how their portfolios will withstand exposure to physical droughts — and other water risks. Read the post at CFA Institute

How Can We Ensure the Race for Clean Energy Doesn't Leave the World's Poorest Citizens Behind?

Wind power is booming in Mexico. With more than 3,200 megawatts in operation, the country is on par with Japan. By 2018 it expects to have 10,000 MW installed as part of the government’s Climate Action Plan. Promising, right? Scratch the surface of that boom, however, and you’ll find uncomfortable truths: land rights conflicts and perceived inequities in access to the cheaper wind power that are fueling fierce resistance to the wind farms among indigenous communities in the southern state of Oaxaca, which provides more than 80 percent of the total wind-power output of the country. Mexico’s experience is a cautionary tale of how the global transition to clean energy can leave the world’s poorest citizens behind — and why we need policies, new business models and financing schemes to remedy the imbalance. Close to two dozen wind parks now operate on the Isthmus of Tehuantepec, a stretch of land in Oaxaca just 120 miles (193 kilometers) wide from coast to coast. Mountain formations there create a tunnel that whips the wind up to 60 kilometers per hour (37 miles per hour), and resource studies show the region could more than double its current output — currently at 2,700 MW within a 463-square-mile (1,200-square-kilometer) area. The scale of the development is staggering. In one cluster of parks north of the city of Juchitán, hundreds of turbines spin for miles along the highway, towering over cinderblock homes, schools and farm fields. And yet, “Not a single watt stays here in Oaxaca,” says Carlos Beas, director and founder of the indigenous rights group UCIZONI (la Unión de Comunidades Indígenas de la Zona Norte del Istmo de Tehuantepec, or the Union of Indigenous Communities of the Northern Zone of the Isthmus). More precisely, community residents don’t benefit from the low-cost wind energy, even though most Oaxacans are connected to the grid.   Companies like Walmart, Heineken, Cemex and Bimbo are tapping into the wind resource through power purchase agreements signed with wind developers and the Mexican Federal Electricity Commission, CFE. Plans are also in the works to add grid infrastructure that would allow the wind energy produced in Oaxaca to be exported to Texas in a cooperative venture between the U.S. Agency for International Development and CFE. For the indigenous communities, the Ikoots and Zapotec, who’ve suffered a long history of neglect and discrimination dating back to the Spanish conquistadors, equity is paramount. They contend it’s unfair that the low-cost energy (averaging 6.5 cents per kilowatt-hour) produced by wind turbines taking over their land should benefit the United States before it powers their own communities. A lack of transparency around the power purchase agreements fuels indigenous suspicions that companies are getting the energy for free, which is of course not the case. Indigenous communities also see minimal job benefit. Locals build the foundations, but when the parks are operational the only jobs they get are cleaning offices and picking up dead birds, Beas told me. Other community concerns span from loss of productive farmland, to bird kills, to the disruption of groundwater flows caused by the cement foundations, to farmers giving up their livelihoods to rent land to wind farms at rates too low to make a living. Most wind companies pay Mexican landowners 0.25 to 1.53 percent of the gross income produced by the wind turbines — about US$90 per turbine per month. Landowners in the U.S and Europe, in contrast, receive 1 to 5 percent of gross income, according to a study by the government-created Commission for Dialogue with the Indigenous Peoples of Mexico. More troubling are claims of land contracts negotiated in bad faith, of which there has been extensive reporting. Much of the land is communally held, and most indigenous landowners are illiterate and don’t speak Spanish, which leads to abuses. Of course, the issue is not uniquely Mexican. Kenya’s flagship wind project at Lake Turkana has similarly wrestled with claims of displacement from poor farmers, as has geothermal energy development in Kenya’s Rift Valley, where Maasai communities have lost access to vital grazing lands for their cattle. In northeastern Brazil, a 500 MW wind project sparked protests and roadblocks from residents of the fishing village Cumbe over “broken promises of employment and underfunded social projects” by the project developers, according to the Yale Tropical Resource Institute. Even in the U.S., concerns are mounting that the solar revolution is bypassing poor Americans and that deliberate efforts are needed to ensure that low-income households can tap into the economic benefits of solar energy. Certainly not all renewable energy projects neglect poor communities, but what can we do to ensure that the global clean energy race doesn’t leave anyone in the dust? Climate science urges rapid expansion of renewable energy, but hasty development can ignore the needs of poor communities that not only are the most vulnerable and least able to adapt to climate change impacts, but in some cases are being asked to give up their land and livelihood to meet the growing energy demands of people outside of their communities when their own energy needs are small. Clearly, countries need to develop legal and regulatory frameworks that encourage best business practices by energy developers. Oxfam, an international organization that works to fight poverty, recently published a brief describing best practices for environmental and social due diligence during the development of energy projects. Though focused on Africa, its principles of transparency and community engagement — where deliberate focus is given to addressing the needs of the “energy poor” — are universally applicable. Land use is often a flashpoint in these conflicts, and like many countries around the world, Mexico has weak laws and institutions protecting landowners, especially communal landowners. Laws and regulations are needed — defining land values and devising protocols for rights disputes on communal lands, for example — to ensure there is a clear path toward sharing benefits from these projects. Policy frameworks are also needed to ensure large-scale renewable energy projects can be integrated into regional and national grids and not channeled solely through private interests at the expense of surrounding communities. Power purchase agreements need to be more transparent. Mexico’s electric power regulatory framework and market rules have not caught up to the renewables boom. The country is working on some reforms, but they take time. In the meantime, investors can play a critical role by scrutinizing the social and environmental impact of large-scale renewable energy projects. The World Wind Energy Association’s own guidelines for social due diligence of projects state that the groups affected by a project should be the first to benefit. Project financers should press companies on this and other key points addressing community engagement and benefit. Stepping up environmental and social due diligence can also help investors hedge their risks. Indigenous activists already blocked one wind farm from being developed in Oaxaca; such actions can hurt a company’s bottom line. Finally, more attention is needed on business models and financing schemes that incorporate the needs of the energy poor and do not assume that benefits will trickle down from industrial projects. Cooperative ownership is one such model. Off-grid solutions, like solar lamps and biogas harvesters, and community renewable resources supported by micro-grids can supplement or replace large-scale projects. If we allow the clean energy revolution to bypass the poor, we can expect increased social unrest, violence and refugee crises on a hotter, less stable planet. Let’s make sure that renewable energy fulfills its promise of creating a livable and prosperous future for all. Read the post at Ensia

World's Leading Companies Agree: Clean Power Plan Is Necessary Part of U.S. National Climate Plan

  On Friday, the biggest players in technology and some of the largest consumer brands submitted separate friend-of-the-court briefs providing resounding support for the U.S. Environmental Protection Agency’s (EPA) Clean Power Plan, which the Supreme Court placed a hold on in February while the D.C. Circuit Court reviews the legality of the regulations. The amicus brief from the “Tech Amici” includes Amazon, Apple, Google, and Microsoft, and the consumer brands’ brief was led by Adobe, Blue Cross Blue Shield of Massachusetts, IKEA, and Mars Incorporated. These companies are demanding that policymakers move forward to implement the Clean Power Plan, which serves as the centerpiece of the U.S. national climate commitment made in Paris last December. The message is as clear today as it was in Paris: Business leaders welcome the ambitious climate commitments the United States made as part of the Paris Agreement. Many of these companies have taken action themselves and are pledging to do more. To date, more than 150 companies with US$4.2 trillion in annual revenue have signed the White House’s American Business Act on Climate Pledge. Fifty-four have committed to using 100 percent renewable energy through the Climate Group’s RE100 campaign. More than 550 companies and investors have made more than 900 commitments to reduce emissions, enhance climate resilience, and advocate for effective climate policies. By moving quickly and assertively toward implementation of its commitments, including the Clean Power Plan, the United States will capture the growing market opportunity to lead the world to a clean economy. Renewables represent an incredible market opportunity: According to Bloomberg New Energy Finance, in 2015, developing economies invested US$286 billion in renewables—up 19 percent over 2014. The United States needs legislation like the Clean Power Plan to catalyze growth in this country. Should the United States waver on its commitment, there is a risk that other countries may use this as an excuse to step back from their own Paris commitments. The state of U.S. climate policy is therefore critical to ongoing success around the globe. In the short term, the successful implementation of the Clean Power Plan is integral to significant global momentum. The company leaders raising their voices in support of the Clean Power Plan are doing so because they understand that the transition to the clean economy is happening now, and they are  seizing the market opportunity presented by the transition to a low-carbon world. In its brief, the Tech Amici—representing a sector that contributes 7.1 percent of the U.S. GDP, with a collective market capitalization of more than US$1.7 trillion—stated that the group is deeply committed to consuming power in an environmentally responsible way: This commitment reflects Tech Amici’s belief that delaying action on climate change will be costly in economic and human terms, while accelerating the transition to a low-carbon economy will produce multiple benefits with regard to sustainable economic growth, public health, resilience to natural disasters, and the health of the global environment. It also reflects their firsthand experience that developing and using renewable electricity generation is affordable, reliable, and consistent with sound business practices. These companies are significant purchasers of electric power in the United States: In 2015, they used more than 10 million megawatt hours of electricity, and they operate more than 50 data centers in 12 states. The four companies that submitted the consumer brand brief made a similarly compelling argument: The cost of doing business without a national carbon mitigation strategy subjects [us] to undesirable risks that are being appraised in the investor and insurance communities. As a result, companies are beginning to bear the economic and social disruptions surrounding carbon source uncertainty that would be alleviated by the court upholding the Clean Power Plan. Robust support for the Clean Power Plan is coming from companies representing a diverse swath of industries: As the plan was being finalized last August, 365 companies and investors signed letters encouraging governors across the country to support the plan. In addition, more than 20 U.S. states—including some that have expressed opposition to the Clean Power Plan—have indicated that they are going to continue with compliance planning. Several are on target to meet their emissions-reductions obligations. While the current challenge to the Clean Power Plan is a disappointment and may signal a delay, it is not a derailment of climate action. The resounding support coming as the D.C. Circuit Court prepares to hear oral arguments in June confirms what we already know: The clean economy future is undeniable, irresistible, and inevitable. We urge others in the business community to join the chorus of business leaders from the tech and consumer sectors calling for support of the Clean Power Plan. Read the post at BSR

Finally, Clean Energy Opportunities Meet the Risk-Return Requirements of Investors. Now What?

The global climate agreement adopted in Paris in December is far more than just a roadmap for tackling climate change. It’s also a blueprint for rethinking how we bring energy to 1.3 billion people who live without electricity—a significant barrier to eradicating global poverty. On both of these fronts, clean energy, not fossil fuel energy, is a critical linchpin. If we cannot solve these twin challenges—reducing our global carbon footprint and bringing the energy impoverished into the global economy sustainably—dangerous climate impacts and wide-ranging economic disruption are unavoidable. This explains why an unprecedented number of corporate and investor leaders pushed for a strong climate accord in Paris and why many will be celebrating at the United Nations next month (April 22, 2016), on Earth Day, at the formal signing ceremony of the historic climate agreement. The agreement forged by 195 countries aims to limit global temperature rise to well below 2 degrees Celsius (3.6 degrees Fahrenheit) and reduce net greenhouse gas emissions to zero by the second half of the century. So why is energy access in India, Africa, and other parts of the world so critical to achieving this 2-degree goal? Barring major changes, energy-related carbon pollution in developing countries will be more than double that from developed countries by 2040, according to the U.S. Energy Information Administration. And the biggest growth will likely be in countries that are working hard to provide electricity—whether from dirty diesel and coal generators or carbon-free solar and wind power—to vast populations who have no access to power today. More than ever, increasingly cheaper renewable energy is becoming a viable solution over traditional fossil fuel energy sources. Take the example of India. The country has nearly 400 million people without electricity and India’s Prime Minister Narendra Modi has made clear he wants to change this. He’d strongly prefer the electricity come from solar and wind power. In advance of the Paris climate talks, he announced an eye-popping goal to develop 175 gigawatts—175,000 megawatts—of solar and wind power by 2022. “India has pledged to protect the environment. When I say in front of the world we have targeted 175 gigawatts of renewable energy by 2022, the world remains amazed,” Modi said, speaking last fall after inaugurating a solar-power facility. Countries across Africa are thinking the same way. Hundreds of millions of Africans— including more than 75 percent of the populations in countries such as Ethiopia, Sierra Leone and Uganda—are still living without power. And increasingly, governments are looking to clean energy to plug this gap. Ethiopia, for example, is striving to become carbon neutral even as it plans to lift 25 million people out of poverty by 2025. The good news is that clean energy is gaining traction across Africa and other emerging markets. Fueled by cheaper technology, renewable energy investments in developing countries grew 10 times faster than the equivalent investments in developed countries. Last year’s global clean energy investments were a record $329 billion, with the biggest growth being in countries like China, South Africa, Morocco, and Mexico, according to Bloomberg New Energy Finance. Still, these numbers are significantly lower than investments needed to meet the goal of ensuring the world stays well below 2 degrees Celsius of warming that scientists say is necessary to avoid the worst effects of climate change. The truth is we need far more investments in the low-carbon economy—well over $1 trillion every year, not just the few hundred billion dollars we’re seeing now. So what will it take to get global investors, including pension funds, insurance companies, and endowment funds, to open up their wallets to this enormous clean energy opportunity, which can help solve climate change and energy access at the same time? Here are a few of the keys that emerged at the recent Investor Summit on Climate Risk: Advancing the Clean Trillion, co-hosted by Ceres and the UN Foundation, at the United Nations: Supportive national regulations: The 187 countries that made specific carbon-reducing commitments in Paris must follow up by establishing supportive rules and regulations that will catalyze projects and attract capital. Countries such as Morocco and Mexico, which are phasing out fossil fuel subsidies while offering incentives for renewable energy, are providing road maps for other developing countries to follow. Just last month, Morocco turned on the switch to what will be the largest concentrated solar power plant in the world. The $9 billion project in the Sahara Desert is already generating 160 megawatts and, as more phases are completed, will eventually provide 1.1 million people with clean power. More investment products: Investors are constrained in their ability to invest in clean energy because there are not enough low-carbon investment products for them to invest in. The $2 billion low-carbon index fund announced in December by the New York State Comptroller and Goldman Sachs is an encouraging step. The fund will exclude or reduce investment in high-carbon sectors such as coal. Another promising product is the fast-growing green bond market, one of the most popular ways investors are backing clean energy projects in emerging markets. A record $42 billion of green bonds were issued in 2015, including first-ever green bonds inChina and India. But we need more. Additional products that would enable off-grid rooftop solar projects to be bundled and sold to investors would be enormously helpful, for example, in places like India and Africa. It’s easy to quibble that more must be done to make it easier to invest in the emerging markets, but evidence is growing that clean energy is gaining ground and opportunities exist that meet the risk-return requirements of major investors. But financing exponentially more clean energy projects will require more hard work—from developing countries, which must have the necessary supportive policies, and the global investor community which must recognize the urgency of opening their wallets to help solve the twin challenge of climate change and ending global poverty. Read the post at The Cynthia & George Mitchell Foundation

Calling On Big Business to Step Up and Help Solve California’s Water Woes

Long before the California drought became a national crisis, multinational berry company Driscoll’s knew it had to organize a solution to the water problem its grower partners were facing. Groundwater was being over-pumped in its major California growing region in the Pajaro Valley, and as a result saltwater was seeping into farmers’ wells from nearby Monterey Bay, threatening berry growers and other farmers in the valley. Finding another sourcing region was not an option for Driscoll’s, even though the company represents community growers in 21 countries around the world. “There’s a very specific climate for strawberries,” said Driscoll’s then-CEO Miles Reiter at a drought forum last year. “... and none of the growing environments is quite as perfect as California. That means we need to fix the water situation.” And that’s what Driscoll’s set out to do. In 2010, it launched the Community Water Dialogue, a bold public/private partnership with local landowners, growers and the Resource Conservation District of Santa Cruz. The dialogue brought disparate and often competing factions together to forge collaborative efforts to solve the valley’s water woes. Driscoll’s is one of a growing number of companies with large water footprints that are striving to be part of the solution in solving local and global water scarcity challenges. They’re beginning to collaborate at the watershed level in their sourcing regions. They’re enlisting their employees, supply chains and consumers in their conservation efforts, and they’re even stepping into the policy arena to advocate resilient water solutions, such as through Ceres’ Connect the Drops Campaign in California. Today, at a World Water Day Summit, the White House is recognizing Connect the Drops and its five newest members — Anheuser-Bush InBev, Annie’s, Eileen Fisher, Kellogg Company and Xylem — for their contributions toward building a sustainable water future in California and beyond. Like Driscoll’s, Anheuser-Bush InBev, whose brands include Budweiser and Stella Artois, is collaborating with stakeholders in the communities where it operates. The beer giant has worked to improve its water efficiency and management, reducing its water usage rate by 23 percent from 2009 through 2015 in the U.S. resulting in water savings of over 2.5 billion gallons. Among its many water saving initiatives, it reuses its effluent, reclaimed water, in auxiliary operations to reduce needs from local sources in many breweries such as its Los Angeles brewery, and supplies its effluent to local communities at nearly forty of its breweries globally for agricultural irrigation, watering public parks and soccer fields, street cleaning, fire-fighting and other community needs replacing the fresh water that would otherwise be used. Other companies, like Levi Strauss & Co., are engaging their peers in water cutting initiatives. Today the iconic jeans brand is making its innovative Water<Less™ finishing techniques publicly available to spur water conservation across the apparel industry. The techniques reduce water use in garment finishing by up to 96 percent and have helped the company save more than one billion liters of water since 2011 - or the equivalent to 10.56 million 10-minute showers. Levi Strauss & Co. also engages it consumers in water conservation because its water footprint analyses show that of the nearly 3,800 liters of water used in the lifecycle of a pair of jeans, consumer care has the second-highest impact on consumption, after cotton. In order to help consumers better understand their environmental impact, LS&Co. created the “Are You Ready to Come Clean” quiz. But are the collective actions and policy advocacy of these companies making a difference in California? Steven Moore, a member of the California State Water Resources Control Board thinks so: “Businesses have a unique bully pulpit to put pressure on policy makers. More and more we need that voice at the table as we contemplate sustainable water policy.” In 2014, for example when Driscoll’s Reiter spoke out in favor of California’s historic Sustainable Groundwater Management Act, it helped to break the logjam in the state to pass the critical bill. Looking ahead, there are still a number of critical policies that California needs to put in place in order to right many years of unsustainable water use. One such policy is removing perceived barriers created by Prop 218 to implementing tiered water pricing, a system for charging water guzzlers increasingly higher prices at higher volumes of water use. Tiered pricing can be very effective at incentivizing water conservation. Another is AB 1755, which proposes to bring California closer to having good water data, and being able to act on it. The proposed legislation would create an online water data information system that could set the stage for a well-functioning water market in California. And for California’s critical groundwater reform to move forward, sustainability plans must be developed at the sub-basin level. Food companies that source from California’s fertile agricultural lands can and should help to develop and implement those plans, following Driscoll’s lead in the Pajaro Valley. As increasingly more companies realize the critical role the can and must play in the effort to create a sustainable water future, I believe that we will make great strides. As General Mill’s Ellen Silva put it, “We firmly believe that in order for Californian citizens, businesses, farmers and the ecosystem to thrive, we must all work together to manage the water supply sustainably.” This post is part of a series produced by The Huffington Post in conjunction with World Water Day (WWD), which has taken place annually on March 22 since 1993. The awareness day is an opportunity to learn more about and take action on water-related issues. It has a different theme selected by U.N. Water each year; in 2016, WWD focuses on water in relation to jobs. To see all posts that are a part of the series, click here. Read the post at Huffington Post

Is Your Mutual Fund a Climate Change Denier or Climate Champion?

New proxy voting data showcasing how mutual fund companies voted on climate change resolutions in 2015 reveals a major divide in their thinking on this mega issue that will have wide-ranging ripples on investment portfolios. Among 42 mutual fund companies whose voting we analyzed, nine companies, including the world’s largest mutual fund company Vanguard, failed to support a single climate-related shareholder resolution in 2015. The other eight are American Funds, American Century, Blackrock, Fidelity, ING (Voya), Lord Abbett, Pioneer and Putnam. In stark contrast, seven fund companies supported 70 percent or more of the 73 climate-related resolutions that were included in our analysis, including AllianceBernstein, Allianz, Deutsche (formerly DWS), GMO, Oppenheimer, Schroder and WellsFargo. The resolutions filed by investors request that companies take such actions as: set greenhouse gas (GHG) reduction goals; disclose the risk of assets such as fossil fuel reserves and coal plants being unusable—“stranded” in Wall Street parlance—due to weakening global demand for fossil fuel products; disclose political lobbying expenditures related to climate change; and issue sustainability reports describing material business risks from climate change. These common sense requests are believed by investors to be financially material to many of the companies receiving the resolutions and to mutual fund companies who have a fiduciary duty to vote in the best interests of their clients. For example, an electric utility that is upgrading a coal-fired power plant that lasts 40 years (rather than, say, investing in solar projects or energy efficiency programs) is taking on significant risk considering that 196 countries worldwide recently approved an historic climate agreement in Paris aimed at dramatically reducing greenhouse gas emissions. The U.S. has specifically pledged to reduce its carbon emissions by 26 – 28 percent by 2025, with a key centerpiece being the U.S. Environmental Protection Agency’s Clean Power Plan aimed at reducing power plant carbon emissions. Under these scenarios, a recently upgraded coal plant will probably have to be retired well before the end of its planned life, which risks financial losses for the utility and its shareholders. Shareholders need to know how power companies are planning to avoid such losses and to adapt their business models to the transition to a low carbon economy. Further underscoring their responsibilities on these proxy votes, some of the mutual fund companies, such as Vanguard, are members of the UN’s Principles for Responsible Investment (PRI), meaning that they have publicly committed to six principles, including: Principle 2 “active ownership,” which entails actions such as supporting resolutions on environmental, social and governance (ESG) issues; and Principle 3 to “seek appropriate disclosure on issues by the entities in which we invest.” Simply put, climate change is among the most critical ESG issues intended to be addressed by PRI signatories, and failing to support any climate resolutions brings into question whether some PRI members are adhering to the principles. Some mutual fund companies are themselves publicly traded, and investors have begun to file shareholder resolutions asking mutual fund companies to disclose why they fail to support financially material climate resolutions. For example, Zevin Asset Management filed shareholder resolutions with Franklin Resources and T. Rowe Price Group during the 2016 proxy season because it appears that both firms’ proxy voting records are inconsistent with proactive approaches to climate change. Walden Asset Management co-filed the T. Rowe Price resolution, which will be voted on at the company’s annual meeting in May. Sonial Kowal, president of Zevin Asset Management, explained to us: “Proxy voting is one of the principal ways in which investors can engage in active management of portfolio risks and opportunities related to climate change, so inconsistency on climate poses a reputational risk to Franklin and T. Rowe, especially given the proactive record of many of their competitors. Given the severe threats of climate change to human societies and economies, clients may start to wonder if their investments are in good hands. We also hope that other investment companies will now become more thorough and transparent in making decisions when voting on climate related resolutions.” Adding to such reputational risks are campaigns such as a petition, launched by U.S. PIRG, asking Vanguard to vote in favor of resolutions regarding political spending disclosure. More than 65,000 people have signed the petition so far. Walden Asset Management recently sent a letter to Vanguard zeroing in on climate-related voting (some of these resolutions ask companies to disclose lobbying expenditures) and received a response that includes this defense of Vanguard’s approach: “… while we believe that some of the issues animating these proposals are worthy of attention and may have long term implications for a company, we have not been convinced that the prescriptive framing of the proposals will address the risks in a way that drives long term value. Our aim is to influence change that is clearly linked to value creation, and in some cases a simple vote “for” or “against” a proxy proposal doesn’t get to the heart of an issue.” Vanguard’s explanation is inadequate. For climate change alone, resolutions filed in 2015 covered approximately 20 different types of requests, with many requesting disclosure of risks and others asking for comprehensive sustainability disclosure. Vanguard failed to support even a single one of this broad variety of resolutions. Vanguard’s claim that they are all too “prescriptive” is disingenuous. The U.S. Securities and Exchange Commission (SEC) has rules against filing resolutions that are “ordinary business,” or that seem to micromanage a company. A number of the resolutions Vanguard failed to support have survived SEC scrutiny on this very question. As financial, environmental and societal risks from climate change escalate, it is important for shareholders to know if their mutual funds are taking one of the simplest steps to address the risks—voting for climate resolutions. If your fund company is failing to do so, it is time to give them call, write them a letter or sign petitions such as the one sent to Vanguard. These flawed myopic approaches, such as Vanguard’s, need to change. Rob Berridge is director of shareholder engagement at the nonprofit sustainability group Ceres. Jackie Cook is founder and curator of the Fund Votes and Climate Risk Disclosure Projects. Read the post at EcoWatch