Why the ESG bandwagon must embrace adaptation

March 2, 2021 by  
Filed under Business, Eco, Green

Why the ESG bandwagon must embrace adaptation Peter A. Soyka Tue, 03/02/2021 – 02:00 With the explosive growth of environmental, social and governance (ESG) investing in recent years, it appears that we may be at or approaching an inflection point. As ESG investing becomes ever more prominent, it may be timely to ask whether, as currently practiced, it considers all issues of material importance to investors. In this commentary, we suggest that current ESG research, analysis and investing practices pay insufficient attention to one of most important issues of our time: how people, societies and companies will adapt to a changing climate, and what that portends for stock and corporate bond investments. The elephant in the room To their credit, the sponsors of several prominent initiatives to promote climate-related disclosure (such as CDP) expressly request information on organizational risks and plans to address them. Accordingly, there is at least some expectation that such disclosures would describe alternatives to business-as-usual conditions and how the reporting entity might respond to them. Perusing a typical annual report or 10-K will show, however, that even today most corporate planning and forward-looking disclosures reflect the assumption of stable business conditions. (Entities issuing securities — stocks or bonds — in the U.S. that may be purchased by the public must provide regular disclosure of important operating and financial information at defined intervals. These requirements include the issuance of an annual report and accompanying audited summary of key financial information [Form 10-K], as well as quarterly financial reports [Form 10-Q].) It’s time for ESG to consider how people, societies and companies will adapt to a changing climate, and what that portends for stock and corporate bond investments. This state of corporate reporting and disclosure poses a problem for investors. Science and recent events tell us that environmental, societal and economic conditions will look very different in 20 years than they have in historical memory. Among the increasingly likely effects predicted by climate scientists and analysts are the following: “managed retreat” — abandonment of major portions the coastline and other low-lying areas in the United States and countries around the globe; potentially severe impacts on water availability, agricultural production, human health, productivity and other fundamental support systems and processes underlying viable societies; vast numbers of climate refugees, including in advanced economies; and failed nation-states. In the face of these threats, it is clear that greenhouse gas (GHG) mitigation is necessary (to minimize future climate changes), but not sufficient. Now, and increasingly as these effects compound, adaptation to climate impacts must receive at least commensurate attention, promotion, support and funding to that dedicated to climate change mitigation efforts. (Indeed, this fact has been acknowledged in the 2016 Paris climate agreement.) Profound changes in climate and severe weather are locked in for the next several centuries and will comprise “the new normal.” Given this increasingly clear reality, mitigation is necessary to keep us from moving too far out into uncharted and very dangerous territory. Equally important though, is how well we will adapt to the inevitable changes. The practice of ESG must adapt If one accepts that climate change adaptation is vital, the next questions are how to make it happen and where to start. Fortunately, some productive steps have been taken, such as the guidance issued by the Task Force on Climate-Related Financial Disclosure (TCFD) regarding scenario planning. Attention to scenario planning as recommended by the TCFD can facilitate greater focus on the adaptation and resilience challenges faced by organizations and, in turn, inclusion as ESG factors. Careful planning and investment decisions that take account of climate impacts and include infrastructure that will better withstand these impacts needs to become standard business practice. Facility-siting decisions should further account for climate vulnerabilities and the adaptation steps that local governments are taking to address them. Similarly, a rapidly changing climate requires some rethinking of corporate sourcing. Many organizations will be negatively affected when previously reliable supplies of materials, energy, workers, components, sub-assemblies and other vital inputs are disrupted. Procurement and distribution systems will need to extensively integrate predicted climate impacts and more agile methods as supply chains become increasingly susceptible to climate change impacts. Thus, adaptation of the supply chain to increase resilience represents an important ESG consideration. Moreover, as the current worldwide COVID-19 pandemic has amply demonstrated, many companies already have over-extended their supply chains and have eliminated redundancies to the point at which they have become insecure and subject to failure, or not resilient enough to withstand additional shocks to the system. The number and scale of looming climate change impacts likely will appear with an uneven spatial distribution, so it will be essential for larger, multi-site organizations (multinational corporations) to evaluate and strengthen existing stakeholder relationships and perhaps form new ones. This, too, is a form of adaptation worthy of ESG consideration. These networks and collaborations will be particularly important in the context of the local communities housing company plants, distribution centers, headquarters, major offices and other facilities. Partnerships with other businesses and governments to encourage collective adaptation actions where they leverage complementary capabilities and are cost-effective also will be essential. At a more general level, the challenges posed by the need for climate change adaptation provide corporate and other organizations with an opportunity to examine important aspects of their current orientation and operations through strategic planning. Performed thoughtfully, such strategic planning efforts can yield a revised or clarified vision and mission; actions indicated through a business, portfolio or asset review; a realigned organizational structure; and an updated understanding of indicated management steps to address business and financial risks. Companies that accept and play this role effectively will prosper in the years ahead, while those that do not will experience increasingly limited prospects and eventual failure. To spur this necessary transition and, as always, provide asset owners with reliable positive risk-adjusted returns, professional investors must demand that corporate issuers provide evidence that they are actively managing their own adaptation to the new world that we are creating. This commentary is part of a series on emerging issues from Adaptation Leader. Pull Quote It’s time for ESG to consider how people, societies and companies will adapt to a changing climate, and what that portends for stock and corporate bond investments. Topics Reporting ESG GreenFin Featured in featured block (1 article with image touted on the front page or elsewhere) Off Duration 0 Sponsored Article Off Shutterstock

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Why the ESG bandwagon must embrace adaptation

Global Forest Watch can now see through clouds to stop deforestation

February 17, 2021 by  
Filed under Green

Last year, the Global Forest Watch tracking system starting allowing people to help monitor deforestation in far-flung parts of the world while sitting at home with their laptop. But the satellite program had a flaw: perpetrators could hide behind cloud cover. The system recently announced a new upgrade that uses radar to see right through the clouds. “Essentially, the satellites are sending radio waves to Earth and collecting how they come back,” said Mikaela Weisse, one of site administrators, as reported by NPR . Operated by the European Space Agency, the instrument is delivering sharper pictures than ever. “If we can detect deforestation and other changes as soon as they’re happening, then there’s the possibility to send in law enforcement or what have you, to stop it before it goes further.” Related: You can help monitor Amazon deforestation from your couch The software scans for changes, such as trees disappearing, and issues alerts when it detects something fishy. About once a week, the satellites re-scan each place that they are monitoring. Global Forest Watch has been popular with citizen scientists — ordinary people without training as data or climate experts — who want to do their part to slow deforestation. The app depends on a combination of artificial and human intelligence to monitor the world’s forests. Preliminary studies indicate that the monitoring is paying off. There’s been less forest -clearing in some places when people know their illegal actions are being observed. Eventually, evildoers figured out that clouds would cloak their deeds, so they would clear land under cover of rain, according to Weisse. This was an especially big problem in the tropics. “In Indonesia, my impression is, it’s the rainy season almost all the time,” Weisse said. “There’s almost always cloud cover.” Global Forest Watch is available for anybody to login and see deforestation in real time. Let’s hope that big companies that have pledged not to support deforestation will use this tool to live up to their promises. + Global Forest Watch Via NPR Image via Gryffyn M.

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Global Forest Watch can now see through clouds to stop deforestation

EVs are just one part of sustainable transportation

February 17, 2021 by  
Filed under Business, Green

EVs are just one part of sustainable transportation Katie Fehrenbacher Wed, 02/17/2021 – 01:15 Want more great analysis of electric and sustainable transport? Sign up for Transport Weekly , our free email newsletter. While electric vehicles hold big promise in 2021, another aspect of decarbonizing transportation could get major support this year: reducing car driving. Cutting down on car trips isn’t about guilt-tripping folks into abandoning cars. Many of us need to use cars. It’s about providing much better opportunities, infrastructure and incentives for alternatives to driving including walking, biking, micromobility and public transit, as well as better options for remote work and urban housing. Two transportation-related silver linings of the COVID-19 era are: Many cities quickly adapted to shelter-in-place orders by offering new mobility opportunities. Slow streets programs opened up roads for pedestrians and bicycles, while cities opened up parking spaces for outdoor dining, helping small businesses.  Companies that can do so are making plans to embrace policies that could make remote work permanent for substantial portions of their workforce. For example, Salesforce announced last week its plan for flexible work schedules that offer some employees the opportunity to work entirely at home (wherever home happens to be). As transportation leader and general badass Janette Sadik-Khan put it last month during a conversation at Micromobility World :  The pandemic revealed the streets that we always needed. Back in the day, Sadik-Khan helped then-New York Mayor Michael Bloomberg successfully remove cars from Times Square, and launched New York’s bikeshare program, as Commissioner for the New York City Department of Transportation. Today, she advises mayors of cities around the world as a principal of Bloomberg Associates, a philanthropic consultancy created by the ex-mayor. Now that, strangely enough, 2020 has primed cities to make choices about better streets for people (instead of just cars), 2021 is a prime opportunity to keep the momentum going by building back with lower-carbon transportation infrastructure. And that’s not just about EV infrastructure. A lot of this work will be about creating better and more bike lanes, a major boost in funding for public transit (President Joe Biden is pledging $20 billion) and even encouraging city transportation incentive tools (such as congestion zones and tolls). In the world of transportation, sometimes it’s the non-tech ideas and solutions that could have a big effect on decarbonization. Sadik-Khan is bullish about the newly appointed federal Secretary of Transportation, Pete Buttigieg. And you should be, too. She described him as “a secretary that looks at streets as more than moving cars.” “This is going to be a new ‘road order’ and a new era,” she said.  Sadik-Khan also explained why having a former mayor as DOT Secretary is “extremely important.” “He understands what cities need,” noting that mayors get in the weeds on budgets and community buy-in for new infrastructure projects. Buttigieg also just nominated another former NYC Commissioner, Polly Trottenberg, as his DOT Deputy Secretary.  While I spend a lot of my time reporting on the rise of electric vehicles, and the emergence of new climate-tech innovations, in the world of transportation sometimes it’s the non-tech ideas and solutions that could have a big effect on decarbonization. Protected and expanded bike lanes are not a tech solution. Better-designed rapid bus routes are not a tech solution.  Sadik-Khan explained it like this: The smart mobility innovation of this century is not going to be using tech to reduce traffic congestion. It’s going to be about building a city where you don’t have to drive in the first place. At the Micromobility World event, I got to moderate a conversation focused on Scaling Unsung Climate Champions: 2-Wheelers (check out the video if you’re interested); it featured transportation leader Dan Sperling and Formula E driver Lucas di Grassi, among others. What stuck out to me from this conversation is that transportation options such as micromobility are not widely seen as climate solutions compared to electric passenger vehicles. And really they should be.  Yes, I’m caught up in the excitement and idea that the internal combustion engine vehicle is finally being replaced by the electric car. But a whole other set of solutions — some not sexy and some controversial — will help continue to decarbonize transportation and help us move more off of a reliance on all types of cars, too. Pull Quote In the world of transportation, sometimes it’s the non-tech ideas and solutions that could have a big effect on decarbonization. Topics Transportation & Mobility Featured Column Driving Change Featured in featured block (1 article with image touted on the front page or elsewhere) Off Duration 0 Sponsored Article Off A slow street scene from Oakland, California. Courtesy of City of Oakland

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EVs are just one part of sustainable transportation

4 climate finance priorities for the Biden administration

February 17, 2021 by  
Filed under Business, Eco, Green

4 climate finance priorities for the Biden administration Joe Thwaites Wed, 02/17/2021 – 00:30 Providing funding to poorer nations to undertake climate action is not only a moral and legal responsibility for developed countries, but also a strategic investment in a cleaner and more resilient world. Such support pays dividends by reducing the severity and costs of climate impacts for people, including extreme weather, ecosystem loss and societal instability both at home and abroad. Over the last four years (see our coverage from 2017 , 2018 , 2019 and 2020 ), Congress has sought to maintain U.S. finance for international climate action, in the face of repeated efforts by the Trump administration to drastically cut funding back. But while the United States has been treading water on climate finance, the rest of the world has moved ahead, and the climate crisis is only intensifying. In 2009, developed countries made a collective commitment to mobilize $100 billion a year in climate finance for developing countries between 2020 and 2025. As the largest cumulative greenhouse gas emitter , the United States has not been doing its fair share towards this goal. It is time for the United States to not just catch up, but to lead on climate finance — for the country’s own sake as well as for others’. Climate change is a global phenomenon with significant local implications. Over the past five years, the United States has suffered $600 billion in direct losses from climate and weather-related events. Yet just $2.5 billion, or 0.07 percent of the federal budget each year, supports international efforts to address climate change. It is time for the U.S. to not just catch up, but to lead on climate finance. President Joe Biden has made climate change a top priority, and this week his special envoy for climate, John Kerry, told the international community, “We intend to make good on our climate finance pledge.” Biden’s recent executive order, ” Tackling the Climate Crisis at Home and Abroad ,” charged his team to develop a climate finance plan in the next three months. There are four key areas of climate finance that the administration should prioritize to bolster U.S. influence and impact as it reengages in global climate action . International climate finance in the 2021 funding bill First, it’s important to look at what the fiscal year 2021 spending package passed by Congress in December did for international climate funding. This provides the baseline from which the Biden administration must build. $811 million in bilateral allocations for environmental programs addressing biodiversity protection, sustainable landscapes, renewable energy and adaptation: Congress directed that at least $811 million in bilateral assistance — given directly to other governments — be used for environmental objectives, a $5 million increase compared to fiscal year 2020. These amounts, which come primarily from the Development Assistance and the Economic Support Fund, are similar to the Obama administration’s spending. But whereas President Barack Obama voluntarily supported these areas, starting in fiscal year 2020 Congress enshrined renewable energy and adaptation as new mandatory lines in the spending bills (alongside existing lines for sustainable landscapes and biodiversity) to prevent the Trump administration from cutting them. $140 million for the Global Environment Facility: This international fund has financed projects that help developing countries meet commitments under a variety of global environmental agreements for 29 years, and has enjoyed long-standing bipartisan support in Congress. Despite the Trump administration’s repeated efforts to halve U.S. contributions, Congress has maintained Global Environment Facility funding over the past four years. $1.48 billion for multilateral development banks: These banks are significant sources of climate finance for developing countries, providing $46 billion in climate finance in 2019. The United States is a major shareholder in these institutions. Funding for 2021 was one area where the Trump administration and Congress were in full agreement. $32 million for the Montreal Protocol Multilateral Fund: This fund helps developing countries reduce their use of ozone-depleting chemicals, which include several powerful greenhouse gases . The United States maintained funding at the same level as last year. $6.4 million for the Intergovernmental Panel on Climate Change ( IPCC ) and the UN Framework Convention on Climate Change ( UNFCCC ): These United Nations entities support climate science and international negotiations, respectively. The United States provides around two-fifths of the IPCC’s total budget and one-fifth of the UNFCCC’s. The 2021 bill maintained funding at the same level as last year, but this amount is less than the $10 million previously provided under Obama. The US should take a fresh look at multilateral climate institutions. Media Source Shutterstock Media Authorship Cienpies Design Close Authorship Hard work by many members of Congress ensured overall U.S. climate finance did not significantly decline during the Trump administration. But as other countries have continued to scale up their funding, the U.S. has fallen down the rankings. The Biden administration must make up for lost time by rapidly scaling up climate funding and restoring the country to a leading role. Next steps on climate finance for the Biden administration U.S. reengagement on climate finance is not only a matter of how much, but also where unding is allocated. The complex landscape of climate finance has many possible channels , but some have more impact than others. Here are five top priorities for the Biden administration on international climate finance: 1. Fulfill and double the US pledge to the Green Climate Fund President Donald Trump stopped U.S. contributions to the  Green Climate Fund (GCF), which has a mandate to help countries build low-carbon, resilient economies and take ambitious action under the Paris Agreement. Biden has said he would “recommit the United States to the Green Climate Fund,” and it should be No. 1 on his list of international climate finance priorities. The fund gives developing countries an equal voice in decision-making, and it has some of the strongest policies of any financial institution promoting gender responsiveness and Indigenous peoples’ rights. It delivers funding through a diverse range of more than 100 organizations , from major U.S. investors to local businesses and nonprofits in developing countries. While the GCF has faced problems with slow decision making in the past, a new voting procedure instituted in 2019 has led to far more efficient delivery. Last year the fund approved a record $2 billion for 37 projects, more than any other international climate fund. Obama pledged $3 billion to the GCF in 2014 but only delivered $1 billion before leaving office, meaning the United States still owes $2 billion from that original pledge. In 2019, most other developed countries made a new round of pledges , with many doubling their original commitments. Resumed U.S. contributions to the GCF would deliver the most diplomatic bang for the buck. The GCF was a key part of the grand bargain that underpinned the Paris Agreement: that poorer countries would undertake more climate action but needed increased support from richer countries to do so. Developing countries, as well as the U.S. climate movement , have made clear that ambitious backing for the GCF is a key test of Biden’s recommitment to global climate leadership. The GCF has significant support in Congress: for the first time last year, the House of Representatives requested funding for the GCF. With Democrats also gaining control of the Senate, and members of the pivotal Appropriations Committee backing the Fund , the potential for GCF appropriations never has looked better. To get back up to speed, Biden should deliver the outstanding $2 billion from the country’s existing pledge and make a new, more ambitious commitment of $6 billion to match peers who already have doubled their pledges . 2. Contribute to other multilateral climate institutions The United States should become a first-time contributor to the Adaptation Fund , which helps developing countries adapt to climate impacts. Like the GCF, the Adaptation Fund has an official role in implementing the Paris Agreement . Developing countries are strong champions of the Adaptation Fund because of its track record in quickly delivering funding to small-scale projects that make tangible differences to people’s lives. The fund also has pioneered innovative ways to give developing countries more say over how climate finance is spent, including giving developing countries a majority in its board and granting funding directly to recipient country institutions . A U.S. contribution to the Adaptation Fund would signal to the world that the Biden administration will fully and actively support the Paris Agreement, and that it understands the priorities of vulnerable countries. The Adaptation Fund is much smaller than the GCF, receiving just over $1 billion in cumulative contributions over 12 years. Germany is the largest contributor, pledging around $60 million each year. A U.S. contribution on that scale would provide a massive boost to the Adaptation Fund’s important work. Similarly, the United States should make a new pledge to the Least Developed Countries Fund  — which provides adaptation funding to the poorest countries — at a similar level to the $51 million it pledged in 2015. In 2021, countries will begin negotiating the Global Environment Facility’s eighth replenishment, for 2022 to 2026. The United States should come prepared with an ambitious pledge that makes up for not increasing contributions at the last replenishment in 2018. Biden also should continue support for the Montreal Protocol Multilateral Fund, and restore full funding for the IPCC and UNFCCC. 3. Integrate climate throughout all development funding Biden promised to “fully integrate climate change into foreign policy.” To ensure a coherent approach, his administration must coordinate across the government agencies that extend development assistance to other countries, including the Departments of State and Treasury, the U.S. Agency for International Development and the U.S. International Development Finance Corporation. The administration should work with Congress to increase bilateral funding allocated in the annual appropriations bills for climate adaptation, renewable energy and sustainable landscapes. In addition to these specific allocations, the administration also should mainstream climate across all its development spending. This does not mean cutting spending from other priorities such as healthcare, education and gender equality, but that as part of an overall increase in the development assistance budget, all spending would take into account the impacts of projects on the climate — and of climate change on projects. This includes ending overseas financing for fossil fuels as part of the administration’s commitment to eliminate fossil fuel subsidies. Trump reversed previous efforts by the Obama administration to mainstream climate, so the Biden administration should work closely with Congress to ensure these reforms have longevity. 4. Push development banks to align with the Paris Agreement The multilateral development banks are major climate finance contributors . But they also have a long history of financing fossil fuels . In 2018, these banks committed to align their activities with the Paris Agreement, but they have made slow progress. The heads of both the World Bank and the Inter-American Development Bank are Trump appointees, so this is perhaps unsurprising. The United States is a major shareholder in most multilateral development banks. The banks’ leadership are likely to ask for increased funding from the Biden administration, which gives the United States significant influence. For example, last year House Financial Services Committee chair Rep. Maxine Waters (D-California) secured important reforms to increase accountability and transparency of the World Bank’s private sector arm as part of a U.S. capital increase. The Biden administration and Congress are in a strong position to push multilateral development banks to move faster toward Paris alignment , including ending funding for fossil fuels, and ensuring their pandemic recovery funding helps countries rebuild cleaner, more resilient societies. The administration should use all the tools at its disposal, including updating the Treasury guidelines for how U.S. representatives vote in development banks. Biden’s Jan. 27 executive order provides a mandate to deliver on all four of these priorities. The administration’s forthcoming climate finance plan should set out concrete steps for how the United States will meet its responsibilities and become a leader in supporting developing countries to take ambitious action, which benefits both the United States and the world. Pull Quote It is time for the U.S. to not just catch up, but to lead on climate finance. Topics Finance & Investing Policy & Politics WRI Featured in featured block (1 article with image touted on the front page or elsewhere) Off Duration 0 Sponsored Article Off The Paris Agreement is just one part of the puzzle. Shutterstock CienpiesDesign Close Authorship

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4 climate finance priorities for the Biden administration

Insights from green banking: What keeps customers from switching banks?

February 17, 2021 by  
Filed under Business, Green

Insights from green banking: What keeps customers from switching banks? Diane Osgood Wed, 02/17/2021 – 00:05 ESG may be all the rage, but what about retail banking? The deposits you make at your retail bank for personal and business accounts sustain the bank’s ability to make loans and investments. Loans and investment fuel growth. Put simply, a bank’s capital can flow towards fossil fuels or renewable energy, towards local business loans or financing environmentally damaging projects. Imagine if all retail banks required environmental impact assessments for loan applications. Or committed a certain percentage of loans and investments for renewable energy projects. Certainly, this is a vision all climate-concerned citizens can support, and the opportunity to influence banking as citizens is large. Most U.S. households (93 percent) have a checking or savings account while only 52 percent own stock. Why don’t more people choose to bank with climate-friendly retail banks that have clear environmental investment and loan policies? So why don’t more people choose to bank with climate-friendly retail banks that have clear environmental investment and loan policies? Last February, I began empirical research to discover the reasons people don’t change to green banks. I narrowed the pool of participants to people who self-identify as either “climate activists” or “environmentalists.” The study was designed to hold a series of in-person focus groups in Europe and the United States. I finished two focus groups in Europe before pausing the project due to COVID-19. While more research is required, a few insights can be drawn from this small data set. I share here the interim results for the first time. In the opening discussion in both groups, the majority said that they’d not made clear decisions about where to bank. One participant in her early 20s, an ardent Swiss climate change activist, said that her parents had set up her banking account and she’d never questioned it. Others said they’d picked the least-worst option for service and didn’t think about the choice again. The most common responses from both focus groups related to a lack of information about good alternatives and how to find out more information about their current banks’ investment policies. Many participants expressed a sense of being overwhelmed at the thought of trying to find this information and make the change. What I heard aligns with published research. Many people only move bank accounts during a moment of transition such as starting college, moving to a new city, starting a new job or getting married, then remain there unless a disruptive event happens. Many folks simply begin with the most convenient bank and stay. The U.S. national average age of a checking account in the U.S. is 16 years. I am no different; I opened my first account where my parents banked and kept it there for more than a decade. As the conversations developed, emotive reasons surfaced as driving forces behind the inertia. Two of the younger participants (age 20-25) expressed frustration that they don’t feel that they have any power as a young client of a big bank. One said bluntly: “Who am I to ask them about the bank’s investment policies? The bank manager has all the power. My account is tiny.” Older respondents (in their 50s) expressed a different emotional factor: cynicism. In the first focus group, the conversation moved to how could they really believe anything a bank says, including the well-known green banks? The responses fell into three categories that correspond to Chip and Dan Heath’s Switch framework . This framework applies the image of a rider on an elephant trying to steer the elephant down a path. The elephant, symbolizing our emotional body, must want to go. The rider, symbolizing our mind, must want to go as well. Our minds are lazy, so the change needs to be easy. Finally, the path must be clear with no obstructions or unacceptable costs. If any of these three conditions aren’t met, change will be difficult. The customer will not change banks. Using this simple framework, we see focus group results hit all three types categories. Banks need to respond to all three types of barriers to enable more people to make the switch. In other words, providing only the information won’t suffice. Banks need to ensure the process of switching is low-friction and that feelings of loyalty, security and possible skepticism are addressed. Clients also need to feel welcomed as valued and equal partners. We’re itching to get back out when it’s safe to hold more in-person focus groups and build out this research. In the meantime, the lessons from banking can be applied to other products and services. How are you addressing: The rider: Do your customers know your climate-friendly, “green” product exists? Can they easily find relevant information? The elephant: How do you help customers believe your claims? How do you make them feel genuinely welcome? The path: Are your products really easy to find? Do you need to woo new customers away from “sticky” loyalty programs? Let’s keep the conversation going. Leave a comment here or reach out to me at diane@osgood.com . Pull Quote Why don’t more people choose to bank with climate-friendly retail banks that have clear environmental investment and loan policies? Topics Consumer Trends Banking Featured in featured block (1 article with image touted on the front page or elsewhere) Off Duration 0 Sponsored Article Off Shutterstock

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Insights from green banking: What keeps customers from switching banks?

Introducing GreenBiz.org, a new nonprofit for BIPOC professionals

February 16, 2021 by  
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Introducing GreenBiz.org, a new nonprofit for BIPOC professionals Joel Makower Tue, 02/16/2021 – 02:11 Last week, during GreenBiz 21, Jarami Bond — a new colleague but an old friend — announced the launch of a new nonprofit “that exists solely to nurture and empower BIPOC professionals to accelerate a just transition to a clean economy,” as he described it. It was a moment of deep pride for all of us. The nonprofit, spun out of the for-profit GreenBiz Group as an independent entity, was born of our longstanding efforts to counter the overwhelming whiteness of the sustainable business profession — and sustainability overall — but was energized by the events of last summer, as the topic of racial justice burst from the margins to the mainstream across the United States and beyond. GreenBiz.org is the response to a range of confounding challenges so many of us have voiced in both public and private settings. Among them: Why aren’t there more Black, Indigenous and people of color — BIPOC, in today’s argot — working in sustainability? Speaking on behalf of the predominantly white corporate sustainability movement, how can we, individually and collectively, better engage, serve and learn from communities of color, the tens of millions of our fellow humans who may not look like us? Where are the opportunities to lift BIPOC voices, to elevate and amplify the ideas and proven solutions from communities outside our sphere? Perhaps we need to create a bigger sphere. I believe that in light of the empathy that exists at the core of our work, we as sustainability professionals must continue to be linked arm-in-arm with BIPOC communities. I’ll let Bond describe the purpose of this new organization, pulling from his moving and passionate presentation at GreenBiz 21. (You can watch his entire 10-minute talk here . Click on the Tuesday keynote, starting at 41:00 on the video.) Bond began by sharing his own story, as his childhood love for the environment turned into a career path, starting at Interface, the iconic flooring company. Along the way, he said: I recognized that something huge was missing, something that I felt was integral to our field accomplishing the big, bold goals it was chasing after. And that missing link was people that looked like me, Black- and Brown-melanated souls. Throughout his time in both college and Corporate America, Bond said, “I grew used to being the only Black person in my class or on my team — the face of the race, navigating microaggressions and flagrant assumptions, wrestling with double consciousness, challenging those who wanted me to conform to majority culture, and trying to posture myself constantly to defy the stereotypes, even challenging those who tried to suppress my blackness to make themselves more comfortable, or make a caricature of it for their own entertainment.” Jarami Bond speaking to the GreenBiz 21 audience. Amid his personal struggles, Bond saw an opportunity to align his profession with his passion: I believe that in light of the empathy that exists at the core of our work, we as sustainability professionals must continue to be linked arm-in-arm with BIPOC communities, with the stakeholders at the front of the march advocating for equity and justice. We need all hands on deck. In parallel, as my colleagues and I at GreenBiz Group began to sketch out the vision for a new nonprofit, I knew exactly who to enlist to help. As a strategic adviser to GreenBiz.org, Bond is leading the efforts to stand up this organization and to articulate its purpose, as he did so eloquently last week: We envision a vibrant ecosystem of individuals, organizations and communities working symbiotically to transform our field culturally and dismantle environmental injustice. We will convene companies, nonprofits, activists and community stakeholders to bolster the resilience of disadvantaged and marginalized communities. We will foster belonging and support the career development of BIPOC sustainability professionals. We will help fund BIPOC social entrepreneurs spearheading startups and small businesses focused on innovating toward a clean economy through an intersectional lens. We will support creators of color telling stories about the emerging clean economy through that same intersectional lens. We will also create spaces for BIPOC sustainability professionals to build community fostering deeper connection and support. He concluded, as he began, on a personal note: “I am over-the-moon excited because I’ve been working to create what I and so many in our space have been dreaming of for so long. … I truly believe that our field will be different because this nonprofit exists.” We are over-the-moon excited, too — about the potential for this new organization to open the sustainability tent far wider than before to include voices and faces not traditionally heard and seen within the mainstream business community. And to — finally — harness a far broader swath of knowledge, wisdom and experience about what it means to live in a sustainable world. And how we can all get there together. Much more to come as GreenBiz.org takes wing. For now, we welcome interested parties: funders; strategic partners; and professionals excited about the new entity’s vision and goals. Sign up for updates here , or email Bond directly: jarami@greenbiz.org . I invite you to follow me on Twitter , subscribe to my Monday morning newsletter, GreenBuzz , and listen to GreenBiz 350 , my weekly podcast, co-hosted with Heather Clancy. Pull Quote I believe that in light of the empathy that exists at the core of our work, we as sustainability professionals must continue to be linked arm-in-arm with BIPOC communities. Topics Social Justice State of the Profession Featured Column Two Steps Forward Featured in featured block (1 article with image touted on the front page or elsewhere) Off Duration 0 Sponsored Article Off

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Introducing GreenBiz.org, a new nonprofit for BIPOC professionals

We need to talk about consumption

February 15, 2021 by  
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We need to talk about consumption Lauren Phipps Mon, 02/15/2021 – 01:30 Want more great analysis of the circular economy? Sign up for Circularity Weekly , our free email newsletter. I know, it’s not the most popular of subjects. But on the heels of last week’s GreenBiz 21 conference, the annual gathering of corporate sustainability professionals, I can’t help but address the elephant in the room. (Or as the World Resources Institute appropriately dubbed it, the latest elephant in the boardroom .)  “We need to do a heck of a lot more than change the ways that we create and consume,” said Sherri Mitchell, an environmental and Indigenous rights activist, teacher and founding director of the Land Peace Foundation . “We need to actually change our relationship with consumption.”  Mitchell’s words, and the keynote panel, “All We Can Save: Why We Must Learn from Indigenous Wisdom” on which she sat, have rattled around in my mind all week between breakouts on the nuts and bolts of the corporate sustainability profession. Consumption often remains unspoken or unacknowledged.  To be fair, we are getting increasingly better at the way we make things. Across industries, companies are beginning to prioritize recycled and renewable materials, powering manufacturing with clean energy, and (sometimes) embracing circular design principles of durability, modularity and reparability. The path forward for better products is relatively clear.  We’re even getting a bit better at the way we enable sustainable consumption and get the most out of what we already have: Repair, remanufacturing and product life extension; resale and recommerce; sharing and rental are quietly gaining momentum.  But making better products and extending their useful lives won’t be enough.  When your entire value system for society is based on notions of commerce and consumption, how do you get away from that? Mitchell continued, “We have to reevaluate our entire value structure so that consumption is not holding a primary role within the [framework] that we’re operating under. When your entire value system for society is based on notions of commerce and consumption, how do you get away from that? We commodify ourselves in nearly every aspect of our lives. We need to start looking at changing the ways that we apply value.” The roots of overconsumption — culture, values, worldviews, capitalism — are some of the most unpopular and uncomfortable topics of conversation at any company. And for good reason: they threaten the fundamental premise of the sustainable business community and its theory of change (see: ” Winners Take All ” by Anand Giridharadas).  Frankly, corporate audiences don’t often take seriously value-driven inquiries about consumption, writing them off as aspirational or totally unrealistic.  Mitchell spoke on stage alongside Tara Houska — tribal attorney, land defender, former adviser on Native American affairs to Bernie Sanders and founder of Giniw Collective — who stepped indoors from the Line 3 pipeline resistance camp to participate in the conversation. She had some things to say about how many business leaders typically respond to these calls for reflection by indigenous leaders.  “Native people make up 5 percent of the population globally and hold 80 percent of the biodiversity. I think we know something and have some information to share,” Houska said. “We’ve been around for thousands and thousands of years. We’ve learned something in our time here on this planet that we all share. Obviously, those connections and that deep interconnectedness with nature [enabled us to] have 80 percent of the world’s remaining biodiversity.”  Despite the virtual format of the event, you could hear a proverbial pin drop.  “So please listen and please do your best to take our words to heart instead of just putting them into some ‘Oh that was inspiring and made me feel good, but back to business.’ This should be the business. The business of life is critically important to life. We care about life and we want life-givers and life to continue on this earth because we owe it to the next generation to come.”  So yes, we need to talk about consumption. But we also need to listen, particularly to Indigenous leaders, on addressing the symptoms of a systemic problem and on reframing the definition of business itself.  I invite you to listen to Mitchell and Houska’s entire conversation here .  Pull Quote When your entire value system for society is based on notions of commerce and consumption, how do you get away from that? Topics Circular Economy Social Justice GreenBiz 21 Environmental Justice GreenBiz 21 Featured Column In the Loop Featured in featured block (1 article with image touted on the front page or elsewhere) Off Duration 0 Sponsored Article Off Image: Shutterstock/Oneinchpunch Close Authorship

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We need to talk about consumption

From raising cows to growing veggies: ranchers go vegan

February 11, 2021 by  
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Richard and Cindy Traylor are part of a growing number of ranchers who have made the surprising switch to plant-based agriculture . In 2018, Honey, Cindy’s favorite cow, was injured. Cindy had become so attached to Honey that she didn’t want the cow to go to a slaughterhouse. She got in touch with Renee King-Sonnen of Rowdy Girl Sanctuary , who introduced the Traylors to a whole new way of living. The Traylors shared their experiences with Inhabitat about making the change to a vegan diet and livelihood on their Huntsville, Texas ranch. Related: Why American ranchers are feeding Skittles to their cattle Inhabitat: What have been the reactions of neighbors, family members and others in your life to halting ranching and switching to veganism? Cindy: Everyone we have talked to has been supportive. When we explain that we now eat vegan and how good we feel, they seem curious; however, so far we have not heard that anyone has tried to change their diet. We do have a young friend who was wowed when he sat and ate spaghetti and “meatballs.” Richard: When I was first confronted with veganism, I get the same ignorant response from others, which is “I’m carnivorous. I’m a meat eater. I need the protein. I’m healthy enough. It doesn’t hurt the environment that bad. There are other things that hurt the environment just as bad.” Inhabitat: Tell us a little bit about why Honey the cow was so special to you. Cindy: Honey was my “baby.” She would eat out of my hand and was a really gentle creature. When she gave birth, she immediately would let me know and show me her calf . I would ooh and ahh and tell her what a beautiful baby she had. She was the youngest of the mothers and she would let the other calves nurse off her. Our connection was really deep, and I hated to see her hurt! Richard: When she was a little over a year, I built a five-strand barb wire fence, one strand at a time, from the bottom up. In essence, I taught her, albeit accidentally, how to jump the fence. Each strand I put up, I thought would be the last one she would jump. The top strand, the fifth strand, she would still jump it. I have never seen a cow that could jump fences like her. She did that for several years. Inhabitat: What have been the best benefits to going vegan? Cindy: Personally, I had wanted to go vegan in my twenties. I asked my doctor, who immediately told me that I couldn’t. You see, I have Crohn’s and for decades, I was back and forth to the hospital. Now, I jumped at the chance. Not only to see how it may help me health -wise, but to do my part in ending cruelty to animals. I cannot remember feeling this good! It has really helped me with Crohn’s symptoms and my arthritis doesn’t hurt anymore. I have neuropathy in my feet, and now I don’t have that tingling all the time…it is gone! I love creating meals — everything is delicious. Richard: I don’t have knee or back pain, I have more energy that individuals half my age envy. The first thing I tell people is how good I feel! I have no muscle cramps from working and sweating. Inhabitat: What are the hardest things about going vegan? Cindy: I had been dairy-free for decades, because I have a milk intolerance, so that was not a problem for me and Richard followed suit, because I do the cooking! There were a couple of things for me that were difficult. First, it was putting together enough recipes and understanding what veggies provide essential vitamins, minerals and protein. Then, it was finding a substitute for eggs! Baking without eggs kind of stumped me at first. Then, as I read more, I found several products to solve that problem. We now use for breakfast, Just Egg and Just Fold, which we love! Another problem for Richard, was thinking that veganism was boring, tasteless and bland. He soon realized that spices can do wonders! We both wish we had pursued this decades ago. The amazing thing now is that there are so many new plant-based products in the grocery stores and in the fast-food markets. Inhabitat: Tell us a little bit about what the RAP Summit is and your involvement in it. Cindy: Well, we attended the first Summit in November, as ranchers in transition. Right now, we do not have our cattle on our property, so in order to have an agriculture exemption, we need to find our “niche” for the future. There are a lot of options, and our state is specific as to what we can grow. The Rancher Advocacy Program (RAP) is helping us find our way. Renee and Tommy [Sonnen] are there to help us with any questions and find experts in whatever direction we choose to go. We have held Zoom meetings with everyone to brainstorm and talk about what we need to do. Renee and Tommy have been incredibly supportive. Inhabitat: What are some of the new uses you’re considering for your land? Cindy: Right now, we have several ideas: growing hemp for CBD oil, peas and fava beans for protein sources (this was something that vegan cheesemaker Miyoko Schinner mentioned at the Summit), as we want to produce a product that will be marketable and beneficial for the environment. Bamboo is another option we have been considering; however, this may not be doable for us at this time. Inhabitat: How do animal and plant-based agriculture compare as far as making a living? Cindy: Well, animal agriculture is less intensive during the warm months, as the pastures provide most of the cattle’s feed. We have two ponds for drinking, so that is also taken care of. There is fencing to repair, cattle to take to the market (which I always hated!), hay to buy and store. Plant-based agriculture will be more work-intensive. Irrigation, picking the produce, weeding, marketing, packaging, talking to vendors. The list goes on and on. However, it will be more fulfilling to know that we are not sending an animal to market to get slaughtered. And we are helping the environment. For example, peas and fava beans give back nitrogen to the soil. Other plants will be rotated to put back other nutrients into the soil. That way, less fertilizers are needed. Richard: We hope to give back to the soil , rather than take from the soil, which we have done for decades. We want to have a healthy environment for the future. Inhabitat: What else should others know about transitioning from raising cows to plants? Cindy: There are lots of people out there who are knowledgeable and willing to be mentors to help ranchers transition to another industry. I can attest that changing over to plants is emotionally freeing, because I used to dread when the calves got to a certain age/weight. I don’t think anyone “likes” to have their animals slaughtered. Richard: The environment is most important to protect our planet. The entire process of methane gases causing rising temperatures, growing hay, grasses equals less trees and less oxygen, the runoff of the fertilizers that end up in the creeks, bayous, rivers and oceans is poisoning the planet. + Cindy and Richard Traylor Images via Adobe Stock

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From raising cows to growing veggies: ranchers go vegan

The social cost of carbon could help shape stricter climate policies

February 4, 2021 by  
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On President Joe Biden’s first day in office, he ordered a review of an obscure but important number: the social cost of carbon. According to climate economist Gernot Wagner, this is “the single most important number that nobody has ever heard of. It’s one of the most important questions in public policy that will define life on this planet.” Everybody knows that transitioning the entire world to run on sustainable energy will cost a lot of money. But the social cost of carbon is what it will cost for us not to make these important changes. If we keep destroying the planet’s habitability with rising temperatures and seas, extreme weather that decimates crops, and pollution that ruins the air and water, eventually humans will pay much more. Related: Princeton study shows possibility for a carbon-neutral US Former President Barack Obama assembled a working group to figure the social cost of carbon after a 2007 Supreme Court decision allowing the EPA to regulate greenhouse gases. In 2010, the group calculated its initial range of estimates. When Obama left office, the estimated social cost of carbon was $52 per ton in 2020 dollars. But in one of Trump’s many reversals of Obama policies, he axed the working group. His administration came up with its own way to calculate the social cost of carbon involving only the U.S. instead of taking a global view. By the time the Trump administration’s experts had finished massaging the numbers, the social cost of carbon was down to somewhere between $1-7 per ton. This allowed for many of Trump’s regulatory rollbacks to make economic sense. Biden has called for a new working group to set an interim social cost of carbon within 30 days and a final figure by the beginning of next year. Some experts say the number could shoot up as high as $125 per ton. “The social cost of carbon in the United States has already influenced other countries,” said Tamma Carleton, an environmental economist at the University of California, Santa Barbara. “ I’m confident that if we put in the time and energy to update that number and bring it closer to the frontier of science and economics, that other countries will do the same.” Via National Geographic Image via Pexels

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PepsiCo CSO on embedding sustainability into ‘day-to-day business’

February 1, 2021 by  
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PepsiCo CSO on embedding sustainability into ‘day-to-day business’ Heather Clancy Mon, 02/01/2021 – 02:00 The number of companies proclaiming their intent to go net-zero by 2050 has expanded exponentially in the past 12 months, but the ones short-cutting that commitment by a decade are a rarer breed. In mid-January, PepsiCo joined that club with a strategy to reduce its greenhouse gas emissions by 40 percent across its entire value chain by 2030 and to reach the elusive net-zero emissions status 10 years before it’s called for by the Paris Agreement. The latter commitment is one touted by members of The Climate Pledge, orchestrated by Amazon and Global Optimism, although PepsiCo isn’t a member of that campaign as of this writing. The same week that PepsiCo announced its new ambition, the company’s foundation extended the terms of its 14-year-long relationship with the Inter-American Development Bank — with initiatives including a fund meant to promote the inclusion of women in regenerative, sustainable agricultural models in Latin America. The extension will see $6 million more invested through 2026, initially in the Dominican Republic, Ecuador and Guatemala. Even though the foundation is a separate entity, there is a close link between its mission and the company’s sustainability goals, according to senior executives. These initiatives, for example, are thought of in terms of years rather than months. “We have to have the certainty that the community will invest the time and willingness to go on with a program for several years, and we need to create awareness,” said PepsiCo’s Latin America CEO, Paula Santilli, when I asked her about how communities are selected. “We choose mathematically and analytically and concentrate on those communities on the wrong side of the poverty line.” I’ve got history in sustainability, but I’m a business guy. In addition to Santilli, I recently chatted with PepsiCo Chief Sustainability Officer Jim Andrew about the link between sustainability and community development, as well as the strategy behind some other developments announced as part of its updated climate strategy — such as its new Sustainable from the Start product development philosophy and two new internal carbon pricing programs meant to embed climate-centric thinking into everyday business decisions. Andrew, an avid scuba diver who joined PepsiCo about 4.5 years ago after heading strategy and innovation at Royal Philips, took over as CSO after Simon Lowden retired last fall. “I think speed is of the essence, not just for PepsiCo, but for the whole world, for the planet and all the people in it,” Andrew told me when I asked for the motivation behind the accelerated goal. Following is a transcript of our discussion, edited for clarity and length. The Frito-Lay facility in Modesto, California. PepsiCo accelerates efforts to build a more resilient and sustainable food system, reducing absolute GHG emissions more than 4 percent by 2030 across entire value chain and pledging to net-zero emissions by 2040. Photo courtesy of PepsiCo Heather Clancy: The goals were finalized alongside the response to the COVID-19 pandemic. Did that experience influence the final shape of the climate goals? Was anything adapted or reconsidered because of what was going on? Jim Andrew: Certainly COVID-19 has been a challenge for everyone on multi levels. But what I think it’s done, it’s really shone a light on the need to be even bolder and move even faster. What has it done? It has, I think, sharpened the focus on the need to move urgently. We all saw that the food system is probably more fragile than we thought. We saw that the need for a food system that is sustainable, that is regenerative, that is inclusive, it’s probably bigger than we thought. In that respect, it didn’t influence what we wanted to do, but it probably helped re-emphasize the need to be big and be fast. Clancy: You mentioned a couple of interim goals to the 2040 one. I’m just curious if you have other short-term milestones that we should expect or watch for. What should we watch for? And how will PepsiCo disclose them? Andrew: You should watch for transparency, consistency and regularity in our reporting. We are completely open in that. Any goal we set, believe me, there’s a lot of work behind coming up with those goals. We put as much work into ensuring transparent reporting because it helps us be accountable — both internally and externally, candidly — and also helps us track progress. We’re a company that likes to set a big objective out there and then go get it. One of the big parts of my job is mobilizing the organization. I’ve got history in sustainability, but I’m a business guy. I didn’t major in environmental science. I’m a business guy working to drive in partnership with our CEO, Ramon Laguarta, and the rest of my executive peers to really drive the organization forward. Having clear goals, having really good data integrity, is at the heart of all of our ESG reporting. That’s important because then we know how we’re doing. It also builds trust. That’s something that we take really importantly. So what are you going to see from us? We’re going to report our progress annually in our sustainability report. We have one coming up in a few months and will be happy to talk to you again, when that comes out. Anytime we can provide real-time updates, we will. All of the reporting entities, we’re in alignment with — the Global Reporting Initiative, the CDP, the Task Force on Climate-related Financial Disclosures. We just issued our first [TCFD] report. So, we are going to be transparent; you’re going see it on a regular basis. Our objective is set some bold goals, and then go get them and hold ourselves accountable. Clancy: Since you brought it up, how will you engage the PepsiCo organization to deliver, especially when we’re all in this new age of remote work? Andrew: It’s been incredibly exciting to me to see just in four months the level of excitement in our organization. We’re 260,000-odd people around the world, 200-plus countries and territories. We’re a big complex organization, but there’s a level of interest and excitement. People get it. You ask me, how am I going to engage? There’s three things that you’ve got to do. The first is you’ve got to excite people. With PepsiCo, when you announce an ambitious goal, like our climate goal, people get excited and they get energized. Honestly, a lot of our partners — our bottlers, our co-manufacturers, our suppliers — I’ve had a lot of people reach out to me and say, “Hey, this is really exciting. How can we help? We’re in on it.” So the first thing you got to do internally and also externally is excite and a big goal does that. You know, make no small plans? I think that’s one of the real keys to make sustainability work. You got to embed it in the business strategy, the business processes and the actions everybody takes every day. The second is, there is a level of education that’s important. When we talk to people internally about regenerative agriculture, Scope 3 emissions, those are terms that to most people are new. So we need to introduce those terms. We need to educate people on why the goals matter, but most importantly, how are we going to achieve them. Because that’s what it’s all really about, and we’re doing that across the company. Because we’re Scope 3, it’s got to be across your whole supply chain. We’ve rolled out, as part of the climate goal, a really well-done employee training program specific to our employees to help them understand the role of us as a company, and then the role of them as individuals. What can they do to mitigate climate change? And then finally, it’s about engagement, it’s how do we take that excitement, take that education and then really engage people to drive real action. Because ultimately, it’s about action, it’s about results, it’s about moving the needle. And so that’s everything from, how do we give people the tools? How do we put it in their incentives? How do we talk about it on a regular basis? How do we measure it clearly, because what gets measured gets done, all those things. So: Excite, Educate and Engage. Clancy: How will the Sustainable from the Start Program be implemented, and which product divisions will be first to adopt it? Andrew: That’s a great question, because this is one of my real beliefs and one of my real emphases, which is how do you get sustainability not as something that happens “over there,” but that is really part of the day-to-day business, part of the day-to-day work. Because if it’s part of what we do every day, then it happens and that’s how you really drive action. So, we’re looking at where there are business processes where we can embed sustainability. New product development is a great example. Everybody, every part of the company is interested in and cares about what happens in new product development. So we started this program called Sustainable from the Start, and it really puts sustainability at the heart of product design and new product development, because what it does is it encourages, but it also enables product development teams to make environmental impact a part of their decision-making from the very beginning as they think about the whole product life cycle. We’ve rolled out some tools that really help, because you’ve got to make it simple. The less friction that we can introduce, the easier it’s going to be. So we gave people a set of tools, so that they can estimate, for example, the carbon and the water footprint of products and development, and what are the choices that they make early that are going to affect those footprints. And then they can compare that data to some best practice benchmarks that we’ve built in, so they know what good looks like and they can make more informed decisions. Things like recyclability impediments. If people don’t know, they will not be able to make the kind of decisions that they will if they’re informed. That gets back to the education point I was making as well. If they’re informed and they’re energized and they’re motivated, then they’re going to make decisions that will have big impacts as we move through the life cycle. A big focus of the Sustainable from the Start program is reducing GHG emissions, sure, but also things like discouraging the use of non-recyclable packaging, because that’s really important. So we’ve conducted life-cycle analyses, carbon footprints. We’ve done it for about a quarter of all of our brands now, and we’ve got plans to get all of them done. When you’re a company as big as PepsiCo, you’ve got a lot of brands, so it takes a little while to go through. We’ll have more to share on this — again, transparency, openness. But it’s a great business tool that we’re actively embedding, so that people are thinking about this, from the beginning, as a part of their day-to-day jobs. Because I think that’s one of the real keys to make sustainability work. You got to embed it in the business strategy, the business processes and the actions everybody takes every day. A farmer gives her livestock water in Cucungara, Peru. The success of infrastructure projects piloted by PepsiCo and the IDB in these rural communities has attracted additional support from international public sector partners that has been used to fund new infrastructure, including pipe systems and treatment plants. Photo courtesy of PepsiCo Clancy: Can you share more detail about the internal carbon pricing programs? Why are you embracing them now? Did they take effect? When will they take effect? Andrew: That’s another great example of where we’re trying to take environmental sustainability considerations and just put them in the normal flow of business. So, we’re going to have to collaborate and get employees involved, and also partners and suppliers and everything. There’s a couple that we mentioned. One is, how do we eliminate the carbon impact of employee business air travel? A lot of people travel; a lot of people may or may not fully understand what the implications are of that. What we have done is we have said that anytime any employee is going to travel by air for business, we’re going to put a price on that. And then we’re going to take that money, and we’re going to deploy it with a third party into our supply chain. It’s not something that’s out there, it’s put into our supply chain, to fully eliminate the impact of the emissions from that flight. And it’s flight by flight. And it allows every employee, every time they book a flight, to see that their choice has an impact and also that we as a company will do something. Again, it’s about how do you excite people because people get excited about, “Hey, I can do something.” It’s about how you educate them, because it’s right there, it’s going to be in the booking tool. We are programming it, as we speak. Then it’s ultimately about how you engage them, so they go do something. So that’s one. We’re rolling it out now. By the middle of this year, it’ll be up and running, full go. Then we’re also looking at how we build the carbon impact into carrier selection for third-party logistics. We’re working with our procurement team, so that the climate goals are a part of the consideration when they’re choosing carriers. Because what this will do is it will help you enforce, again, climate considerations and business decisions, which will help drive GHG reductions. And then we’re going to learn from these things, and we’re going to look for where can we continue to expand across other business processes, ways to just embed this into the everyday thinking in activities. Clancy: Those are great examples. Thank you for being so specific. Andrew: The carrier selection is being piloted right now. The employee air travel right now, obviously, we’ve got to do a little programming and not a lot of people are flying a whole lot right now. But the carrier selection program is being piloted right now. Clancy: The pandemic has underscored the fragility of the recycling infrastructure around the world, as well as the food system. What new investments is PepsiCo making to improve collection? And what steps are you taking to increase the use of recycled content in your packaging? Andrew: We have a very clear vision, and that’s a world where packaging never becomes waste. That is front and center for everything we do in packaging. There’s really three things that we have to [enforce that policy]. The first is reduce plastic use. The second is improve recycling, and the third is reinvent our packaging. Let me talk about those now and answer your question. To improve recycling, especially as you say, given some of the challenges, this is a systemic change that is necessary and it requires a lot of partnerships across the full value chain. It requires collaboration between the public sector and the private sector. And it really is how do we work together end-to-end for a circular economy for plastics? We set goals, and then we go and we work really hard to go achieve them. But you’ve got to be transparent along the way about what’s working, what’s not. Specifically to your question, in the last three years, we’ve pledged more than $65 million globally for recycling and collection. A little over a year ago we issued our first green bond. It was a $1 billion green bond. We’ve allocated just about half of that, I think it was $447 million, of the proceeds to projects that advance sustainability. Roughly $200 million of that was specifically to procure recycled PET in our North American beverage packaging. You want to talk about creating a market, that’s creating a market. We have brands, whole brands that are [using] 100 percent recycled PET in Europe. We’ve targeted 100 percent recycled PET in nine countries for our lineup of Pepsi-branded beverage bottles by the end of 2022. We’re working to both support the recycling infrastructure in partnership with other people in the supply chain, public entities, competitors, because this is something that we all have to work on. And then we’re also working at driving demand because if we drive demand and make clear what our commitments are, that helps support the investments that people need to make all along the chain. [Editor’s note: PepsiCo brands using 100 percent PET for their packaging include LIFEWTR, Tazo Tea and Naked Juice.] Clancy: The PepsiCo Foundation has invested considerably in cultivating economic growth and opportunities for women and disadvantaged communities around the world. How does the PepsiCo corporate sustainability team collaborate on those projects? How do they shape the execution of your strategy? How are they aligned? Andrew: We work very closely with the foundation. Again, this is a great example of where we work to use the scale and the reach that PepsiCo has to have a positive impact really across communities around the world, where we operate and to really show some leadership in helping to build a food system that’s sustainable, regenerative and inclusive, to your point. So what we’re always trying to do is work on both people and planet. The foundation and the business have very much those objectives. A good example of collaboration — in addition to the climate news we announced — was the announcement where PepsiCo, in particular our Latin American operations, with our CEO there, Paula Santilli, and the PepsiCo Foundation announced that they are expanding the social and environmental impact partnership that we have with the Inter-American Development Bank. We will go another five years through 2026. It’s a nearly $6 million investment. It builds on the heels of what has been a very successful investment in a partnership over the last 14 years. Over the last 14 years, we’ve supported about 19 million people across Latin America and the Caribbean, on five big pillars of things that are really, really important: water access; nutrition; sustainable agriculture; inclusive recycling; and disaster relief programs. There’s a great example of where the business, the foundation and third parties have been able to collaborate in ways that are more powerful. It’s one of those one plus one plus one equals probably seven. A lot of people have had been helped by a partnership that none of the organizations could do by themselves. Clancy: What’s on your mind right now that I haven’t asked about that you feel like we should talk about more? Andrew: This is something I’ve been thinking about a lot. The challenges that the world is facing, when it comes to climate — again, go back to our recent climate announcement, which is top of mind — are challenges where no company, no government, no NGO can do it themselves. The need for collaboration, for partnership, for working together, has never been higher. These are difficult challenges. These are not things that can be solved by any one entity, and they’re not things that are there to be solved overnight. But they are also things that we can’t wait on. The science is clear, the need is clear; the time to act is now. All of us have to find partners to move forward. There’s going to be some mistakes, there’s going be some things that won’t work but together, we have to work together, find those areas of common interest and where we can complement each other, and then move forward with urgency. That’s why we looked and said: “We want big goals, we want goals that will motivate not only ourselves internally, but also other folks externally.” I’ve gotten a lot of calls from people saying, “Hey, great, how do we team up? I see you’re interested in this; how can we work together on that?” That’s what we need. I wake up every day, I wake up every morning, and I worry about what’s going on and sustainability and how PepsiCo is going to drive forward and meet our goals and move the needle on things. But I also think about, how can we do that with others? So, to me, that’s so important and I’m not sure that is fully appreciated by everybody who needs to work together. Clancy: There is a certain amount of skepticism about some of these big alliances right now. How do you keep them relevant and authentic? Andrew: You have to be open, transparent; you’ve got to build trust; and then you’ve got to show results. I think if those things happen, a lot of problems are going to take care of themselves. Back to the question you asked about milestones, transparency. We don’t set goals that we don’t think we can achieve. We don’t know always how we’re going to achieve them because they are big goals, and they’re bold, and they’re aggressive. But that’s what’s needed. But we don’t set ones just to get a headline or, as much as I love talking to you, we don’t set big goals just to be able to go do interviews. We set goals, and then we go and we work really hard to go achieve them. But you’ve got to be transparent along the way about what’s working, what’s not. How are we doing? Clancy: I just have one last question. What’s your most important priority as a chief sustainability officer at this time? Andrew: Oh, that’s easy. I’ve probably got the best job in the company because I get a combination of the chief sustainability role, and also some business responsibilities, which are all about sustainability. But the most important thing is easy, which is achieving the goals we’ve set. That’s hard to do, but easy to say. But that’s the priority. Ultimately it’s about how do we make the planet better for both the planet and for the people on the planet. How do we drive forward results around climate? How do we reduce emissions? How do we increase our renewable electricity to 100 percent globally? How do we end up at net-zero? That’s what is the most important part of my job. That’s what motivates me, because that’s what ultimately will show up and create real change. I need to work with a whole lot of people internally — 260,000 people have all got to be pulling in that direction. It starts at the top and goes all the way down to our frontline workers, but it also is true externally. But that’s my priority 1, 2, 3, working in every way that I can, with everybody to help us achieve the results that we know are necessary for the planet and the people on it. Pull Quote I’ve got history in sustainability, but I’m a business guy. I think that’s one of the real keys to make sustainability work. You got to embed it in the business strategy, the business processes and the actions everybody takes every day. We set goals, and then we go and we work really hard to go achieve them. But you’ve got to be transparent along the way about what’s working, what’s not. Topics Corporate Strategy Corporate Social Responsibility Net-Zero Carbon Pricing Collective Insight The GreenBiz Interview Featured in featured block (1 article with image touted on the front page or elsewhere) Off Duration 0 Sponsored Article Off PepsiCo CSO Jim Andrew

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PepsiCo CSO on embedding sustainability into ‘day-to-day business’

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