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How a strong shared sense of purpose can help companies succeed

This is an excerpt from "Reimagining Capitalism in a World on Fire" by Rebecca Henderson. Copyright 2020 by Rebecca Henderson. Reprinted by permission of Perseus Books, an imprint of Perseus Books, LLC, a subsidiary of Hachette Book Group Inc, New York, N.Y. All rights reserved. The above is an affiliate link and we may get a small commission if you purchase from the site.Purpose in practiceThe way in which the combination of mission and the nature of work plays out in practice to support both architectural innovation and the generation of great jobs can be seen particularly clearly at King Arthur Flour (KAF), the oldest flour company in the United States. KAF’s best-selling product, the 5-pound bag of unbleached, all-purpose flour, is not a sexy product, and the market has been shrinking for years. Fewer and fewer people bake, and more and more flour is bought online, where brands often carry little weight. But KAF is thriving. Its customers love the company. KAF has over a million likes on Facebook and more than 375,000 followers on Instagram. (For comparison, General Mills, the current market leader with $3.9 billion in sales in "meals and baking," compared to KAF’s roughly $140 million, has about 85,000 likes on Facebook and 3,000 Instagram followers.) Sales are growing in the high single digits annually — an unheard of growth rate for a commodity product in a 200-year-old industry.KAF’s purpose is to "to build community through baking," and the three co-CEOs (!) have a very clear sense of just why and how home baking can make a difference in the world. Karen Colberg, the chief brand officer and one of the co-CEOs told me:Baking uniquely enables people to unplug. And as a mother of three teenagers, I’m constantly in this mode of wanting connection with my family and spending time together. And what we offer people is the ability to come together and do something.Ralph Carlton, co-CEO and chief financial officer, put it this way:When you think of baking as opposed to food, you give people gifts. The emotional connection people have, the notion of the smell of fresh baked bread, there’s something unique about baking that brings people together. And that inspires us ... [E]verything we do is centered around the baking experience.Suzanne McDowell, co-CEO and vice president of human resources, added:Well, everyone can bake. So if you just start there, and you think about how baking can level the playing field — it doesn’t matter how smart you are, or how wealthy you are, or any of the things that separate us: We can all come together and bake together. And spending time with people, baking and learning a life skill, no matter whether you are young or old, can be a remarkably unifying experience. You can bake with family, coworkers and neighbors. Baking is an amazing opportunity to build community. And we need community building. It’s really important in our world, always has been, always will be.As in the case of Aetna, the passionate embrace of this purpose has enabled KAF to identify a strategy that is classically architectural. KAF no longer thinks of itself as selling only white flour — instead it is selling an experience, and supporting its customers in becoming great bakers. In Ralph’s words:One of the challenges of baking, but one of the great things about baking, is to bake well you do need knowledge. And often you need inspiration. Very few people bake without reaching for a recipe or some other guidance. And baking is not that forgiving. It isn’t like cooking, where you just go in there, and it doesn’t matter what you do, something relatively good comes out. In baking, you have failure. [So] we started providing information on the web. And it has really grown from it being a small part of what we do to us being one of the leading sources of knowledge and inspiration for bakers around the country right now.And that’s a core piece of our strategy ... We’re making a big bet that future generations of bakers, when they have to choose products, are going to choose the products from companies where they learn the most from and they trust the most. And it’s not going to be because I barked at you and told you to go buy King Arthur. It’s going to be because we had a great recipe, or we taught you a technique that you value very highly ... [because] King Arthur is really a company that cares about me and cares about baking and cares about quality.This strategy is enabled by a deeply participative, fully empowered workforce that embraces it as a reason for working that extends far beyond a paycheck — and that makes it immensely difficult to imitate. KAF’s Vermont headquarters — now a major tourist attraction — includes a retail store, where visitors can watch baking demonstrations and sample baked goods (made with KAF products, of course) and a baking school, where hundreds of passionate bakers arrive to take classes from King Arthur’s master bakers. The company also offers online recipes and baking classes, and a fully staffed baking hotline, where customers can get answers to their baking questions from employees with thousands of hours of baking experience. Everyone is passionate about baking. Everyone goes the extra mile to help the company succeed. The latest financial results are shared with every employee, and everyone is offered training on how to read income statements and balance sheets. The company is very careful about the people it hires, and then equally careful about how they are treated.Karen expands:The culture is a very present part of the hiring process. So when we meet people, and we talk about coming to work for King Arthur Flour, we talk about it being participatory. We talk about it being collaborative. But what does that mean? I want people to show up and feel accountable for themselves, accountable to their teams, and to have a clear understanding of what they’re supposed to be doing. Also to be comfortable that they can challenge what it is they’re doing and challenge what others are doing. And ask us questions so we have a really productive dialogue around issues such as: Where’s the company going? Why did you decide to do that? Did you think about this?Ralph adds the following:It’s a culture where people reach inside themselves to do the right thing. Karen often gives the example, during our holiday season when business is crazy and we’re sending thousands and thousands of packages out of our distribution center every day. Word spreads around the building that there’s too much work down in Pick and Pack and the team needs help. And people just do it, they come downstairs to lend a hand, and not because the boss tells them to.Suzanne also commented on the positive work environment:People are engaged. They’re proud of our products. They are in it together. It’s not like you’re siloed, and here I am in my space. I’m going to do my job — it has no impact or effect on you. In fact (your job) has a lot of impact and effect on everyone. It’s fun. We love to celebrate. We love to bake. We generally are pretty psyched about coming to work every day.KAF’s competitive success is thus intimately linked to its willingness to empower its workforce — and this empowerment in turn means not only that it’s fun to work at KAF but that the company can pay over the odds and offer employees who vest a chance to build retirement savings. (KAF is a completely employee-owned company, which has potentially important implications.)Creating a strong shared sense of purpose in a relatively small firm like King Arthur Flour is one thing. Can it be implemented in much larger organizations? It can.Let's block ads! (Why?)

Episode 218: What’s next for sustainability careers, capitalism in a ‘world on fire’

Week in ReviewCommentary on this week's news highlights begins at 7:05.Downturn signals opportunity for climate-aligned investingAmazon's commitment to working forests and how businesses can really protect trees The state of the sustainability profession in uncertain times (commentary from John Davies, senior analyst at GreenBiz; Peggy Brannigan, senior program manager, global environmental sustainability at LinkedIn; and sustainability recruiting specialist Ellen Weinreb) FeaturesCapitalism is broken (31:15)Talk about timing. We talk with Harvard Business School professor Rebecca Henderson about her new book out this week, "Reimagining Capitalism in a World on Fire." "For me, a reimagined capitalism is a capitalism in balance," she says. Look for an excerpt in the GreenBiz Reads column.The role of sustainable finance in the COVID-19 recovery (44:05)Banks will be at the center of the economic recovery — ensuring that infrastructure investments consider the climate crisis is critical. James Davis, partner with management consultancy Oliver Wyman, chats about the potential.An opportunity to redefine value (53:40)Eileen Mockus, CEO of home textiles company Coyuchi, discusses how sustainable business practices — particularly circular economy processes — can help businesses strengthen their relationships with customers after the pandemic.*Music in this episode by Lee Rosevere: "4th Ave Walkup," "Curiosity," "And So Then," "I'm Going for a Coffee," "Here's the Thing" and "As I Was Saying"Virtual ConversationsMark your calendar for these upcoming GreenBiz webcasts. Can't join live? All of these events also will be available on demand.Are you ready for "absolute zero"? Experts from Quantis, Gold Standard and Microsoft discuss the latest in science-based sustainability strategy in this interactive session at 11 a.m. EDT May 5.What fringe consumers tell us. Marketing insights firm Shelton Group presents the latest findings about fringe ideas that could become mainstream expectations in the post-pandemic marketplace. Mark your calendar for 1 p.m. EDT May 7.Moving to a regenerative food supply. Pioneering companies, NGOs and policymakers will discuss tracking technologies, regenerative agriculture projects and new collaborations that could make food systems more sustainable. Sign up here for the session at 1 p.m. EDT May 12.In conversation with John Elkington. Don't miss this one-on-one interview featuring GreenBiz Executive Editor Joel Makower and well-respected sustainability consultant John Elkington, who recently published his 20th book, "Green Swans: The Coming Boom in Regenerative Capitalism." Register for the live event at 1 p.m. EDT May 14.Circularity goes digital. You don't have to wait until August for three great discussions on the circular economy. We'll debate "Reusable Packaging in the Age of Contagion," "Can Recycled Plastic Survive Low Oil Prices" and "Repair, Resilience and Customer Engagement." Register here for our half-day event starting at 1 p.m. EDT May 18.Scaling municipal fleets. Experts from the Port Authority of New York and New Jersey, ChargePoint, Smart City Columbus and the city of Oakland, California share tips at 1 p.m. EDT May 26.  This is climate tech. Join respected venture capitalists Nancy Pfund (DBL Partners), Andrew Beebe (Obvious Ventures) and Andrew Chung (1955 Capital) for a discussion at 1 p.m. EDT May 28 about compelling solutions and startups that address the climate crisis — and how big companies can play a role in scaling them.Resources GaloreThe State of Green Business 2020. Our 13th annual analysis of key metrics and trends for the year ahead published here.Do we have a newsletter for you! We produce six weekly newsletters: GreenBuzz by Executive Editor Joel Makower (Monday); Transport Weekly by Senior Writer and Analyst Katie Fehrenbacher (Tuesday); VERGE Weekly by Executive Director Shana Rappaport and Editorial Director Heather Clancy (Wednesday); Energy Weekly by Senior Energy Analyst Sarah Golden (Thursday); Food Weekly by Carbon and Food Analyst Jim Giles (Thursday); and Circular Weekly by Director and Senior Analyst Lauren Phipps (Friday). You must subscribe to each newsletter in order to receive it. Please visit this page to choose which you want to receive.The GreenBiz Intelligence Panel is the survey body we poll regularly throughout the year on key trends and developments in sustainability. To become part of the panel, click here. Enrolling is free and should take two minutes.Stay connectedTo make sure you don't miss the newest episodes of GreenBiz 350, subscribe on iTunes. Have a question or suggestion for a future segment? E-mail us at [email protected].Let's block ads! (Why?)

The 3 essential elements for the circular jobs of the future

If the fossil fuel-centered, "take, make, waste" economies of the last century are truly becoming passé, what shape should a circular workforce take? Natural capital has been front and center in much of the early evangelism around the circular economy, but a focus on human capital is beginning to emerge.One of the leaders in these discussions is the think tank Circle Economy, which recently issued a vision for what the circular economy can mean in a best-case scenario for people’s labor and livelihoods. The Amsterdam-based social enterprise began several years ago to explore more of the social angle of circularity, knowing that two magic words, "job creation," tend to turn heads.Its latest report, "Jobs & Skills in the Circular Economy," came out in March just as the coronavirus was making its stamp on the western hemisphere. The report originally was planned to kick off a Circular Jobs Initiative with events in Amsterdam, New York City and Brussels. It turns out that this progressive vision for creating circular-economy jobs looks even more urgent and relevant in light of the COVID-19 pandemic and its economic whiplash."Human labor — work — is different from the other renewable resources: creative, versatile and adaptable and able to be educated, but perishable if unused," said the report, which was produced following conversations with 60 public and private organizations in Europe, North America and Africa.How big is the opportunity for circular jobs? Some wildly ambitious, multi-trillion-dollar projections that made headlines several years ago have been picked apart for failing to take into account the increasing automation of labor as well as import and export flows. The European Commission has projected a somewhat modest .5 percent rise in circular jobs by 2030, which Circle Economy tends to side with."We can’t shoot ourselves in the foot, saying the circular economy will create jobs, and that’s the end of it," said Joke Dufourmont, lead of the circular jobs Initiative at Circle Economy and co-author of the report. "There’s tremendous potential in the labor market but we have to steer toward it." Developing that ecosystem is a huge talent management exercise. And if a circular boom with a global net gain in jobs isn't quite realistic, then high-quality work conditions and prospects are crucial. As Circle Economy fine-tunes what it looks like to design for the future, eliminate waste and rethink old business models, it maintains that business needs to view human labor as a resource rather than a cost, no longer excluding marginalized and at-risk workers.Circle Economy breaks down circular jobs into three categories: "core" circular jobs include work in renewable energy; waste and repair; and managing resources. These include repair technicians, agronomic advisors and materials process operators. The "enabling" jobs provide a supportive layer that helps to accelerate the core jobs, such as equipment engineers, building information managers and procurement professionals. Finally, "indirect" roles include work in education, logistics and the public sector, including teaching and delivery services.Circle Economy calls for an emerging circular labor market to drive growth in these three areas, with help from policy, trade unions and business. Here's what it's advocating for:1. Keep building skillsCircular job training and education is needed to "skill and reskill" the workforce, with access for all. Education itself moves away from a linear shape. A mindset shift must reward the fields and occupations that help to preserve natural resources, upending conventions and blurring the lines between so-called skilled and unskilled labor. "Soft skills for collaborating across sectors and service-related skills will be just as important as hard skills for programming, operating and repairing equipment," the report said.Dufourmont added that crises related to sweeping forces such as climate change, including the COVID-19 pandemic, make it especially necessary for companies to ensure adaptability and resilience."When facing a crisis you need to be able in an agile way to reorient your workforce," she said. "If that workforce has been trained to build one type of linear career path that’s going to cause a lot of difficulty. Developing that ecosystem is a huge talent management exercise." Just because work is circular doesn't mean it's better. All of that means that learning must become more of a circular than linear process. Education needs to be seen as a lifelong pursuit that enables an individual to evolve over time instead of preparing for one narrow career track. Companies need to invest in education for workers, assisting with ongoing trainings that keep skills fresh. Skill gaps need to be identified in fast-changing fields. Circular knowledge needs to be shared more widely beyond forward-thinking research groups, companies and cities.2. Ensure quality workCircular jobs must be of high quality and safe, with fair pay and employment security. People must think beyond the muscular "dirty" work that's often stigmatized, such as sorting recyclables by hand. Currently, protections for workers are inadequate — and not just within the high-hazard economies teeming in the trash heaps or construction sites of the developing world. It's also about the utter lack of consistent income and protections inherent in the gig economy. These "platform workers" may be enabled by high-gloss digital technology, but they barely benefit from it.Ideally, any kind of work should pay well, be safe and offer ongoing development for the person doing it. Companies must better value human capital and ingenuity, and allow for collective bargaining. Understanding workers’ experiences is critical, looking first at both the less-regulated and the nascent sectors.Finally, employers need to embrace circular, systems thinking, "from leadership to the workshop floor, so as to inspire workers with the role they play in the wider regenerative economy," the report said. "Together with fair pay and working conditions, this should help to increase job satisfaction of workers in the circular economy."3. Foster inclusive opportunitiesAn "inclusive labor market" must offer opportunities for all regardless of levels of skill, including those whose specialties risk becoming obsolete. Gender, ethnicity, immigration status, ability level and location should not determine who enjoys rewarding work. Success for white-collar information workers won't trickle down to others without a concerted effort among businesses and policymakers.And just because work is circular doesn't mean it's better. The many blind spots in globalized supply chains make it hard to understand how materials flows, including waste, affect people around the planet. In addition, leaving underserved communities out of the conversation also threatens to turn them off to the positive possibilities of a circular transition. What's important is that there are more opportunities on the other side they can win from, but it’s about installing these just transitions. There’s no one-size-fits-all approach to a circular transformation for the workforce, which must be examined locally and with education and social protections in mind. Special attention must be paid to the impacts of technology so that it doesn’t worsen the gap between workers of different skill levels.What does inclusion look like? Circle Economy has pointed to cities embracing circular employment (and it is working on a circular transition tool for cities). For example, a Waste-to-Wealth program in Baltimore is baking deconstruction into building demolition contracts, providing new job opportunities. The city works with the Urban Transitions Alliance to transition from its industrial legacy. Video of How businesses can employ their circularity and inclusion values at the same time (This is an excerpt from a Circularity 19 panel discussion about power, privilege and bias in the circular economy. Watch the entire conversation here.)As demand rises for labor in waste management and reverse logistics, repair and maintenance-related work also will grow, Dufourmont said. Yet it’s important to consider that when demand increases for repaired products instead of new ones, or for recycled feedstocks over virgin materials, former suppliers will lose out — just as coal workers are being left behind as renewable energy expands. "What’s important is that there are more opportunities on the other side they can win from, but it’s about installing these just transitions," she said.To ensure more positive change, therefore, people need to better understand how circularity is emerging economically in different countries, helping to prevent unintended consequences. Those in charge also must look toward frameworks such as the United Nations Sustainable Development Goal No. 8 around promoting "sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all."Intelligent policy is key, as is building partnerships among stakeholders and providing incentives to companies "to design products for multiple lifecycles."In this momentIn light of the COVID-19 pandemic, now would appear to be the time to build up an adaptable, safe and motivated circular workforce that operates within more resilient systems, including supply chains.For instance, the risks of the informal gig economy have become more obvious to hundreds of millions of housebound Americans. If grocery store clerks, farmworkers and delivery drivers are deemed essential workers, why do so few of them enjoy job security or health insurance?The possibilities also appear for a throwaway culture to embrace creative ecosystems of repair and reuse. With ventilators in short supply, for instance, independent inventors have shared open source designs for ad hoc ones and have 3D printed some missing pieces.The novel coronavirus crisis has laid bare some gaping holes in globalized supply chains, as hospitals lack personal protective equipment and grocery shelves are bereft of toilet paper and pasta. Looking to further future disruptions, Dufourmont believes that many circular jobs will be locally focused. If nurses and doctors in the United States can't obtain adequate masks or ventilators, partly because of distribution bottlenecks from overseas suppliers, why not reshore more factories closer to consumers?"There is a potential for the circular economy to keep our society healthy in these types of crises," Dufourmont said.Let's block ads! (Why?)

Now more than ever, it seems we can’t live without plastic

In September, more than 72,000 people gathered at beaches, streets, offices and parks in 51 countries around the world. At nearly 500 sites, they picked up plastic litter. Volunteers tallied the type of product, the variety of plastic and any brand names they could identify.All together the participants, working with a coalition of groups called Break Free From Plastic, collected more than 475,000 bits and hunks of plastic trash. Results from these cleanups appeared a month later in a report published by Greenpeace Philippines.Plastic is everywhere. It makes health care cleaner and safer, helps some disabled people live more independent lives, preserves safe and affordable food and — as it weighs less than many materials — can cut down globe-heating carbon emissions in transportation.But plastic trash, too, is everywhere. While tiny microplastics permeate the world unseen, larger pieces litter once-pristine beaches, kill iconic ocean animals such as sea turtles and undermine important ecosystem services, including tourism and fisheries — for a total marine economic impact of around $8 billion each year. On land, plastic particles pollute soil, sneaking into food chains and leeching toxic chemicals into groundwater. Persisting in the environment, most plastics never really break down on their own.Then there’s climate change. Most raw materials marshaled to make plastic are fossil fuels. Add in energy use for manufacturing, and plastic production alone accounts for 8 percent to 9 percent of oil and gas used worldwide. Disposal is a climate challenge, too. One report released last month analyzed plastic trash from four companies burned in six countries, which they found accounted for 5 million tons of carbon dioxide equivalent emissions.Break Free From Plastic snapshots one sliver of this challenge. The group’s effort looks at litter and pollution — the never-ending endpoint of plastic’s long life — and the report acknowledges that its cleanup sites weren’t spread evenly over the globe.Among the many brands identified at those sites, those of three multinational corporations top the list: Coca-Cola, Nestlé and PepsiCo. People buy products packaged in plastic, but businesses such as these put those products on shelves in the first place. The other companies in the report’s top 10 are Mondelēz International, Unilever, Mars, P&G, Colgate-Palmolive, Phillip Morris and Perfetti Van Melle. The global market for plastic packaging isn’t on track to shrink, but is in fact set to grow by an average of nearly 4 percent each year. Some of these companies have pledged to produce more recyclable plastic and cooperate with international efforts for sustainability. Other firms have been more mum. But as plastic keeps piling up around the world, prickly questions top the mounds of trash: Are these commitments genuine? Can voluntary moves by big business tackle the plastic problem?And if not, what on Earth can we do?Big promisesAccording to a report (PDF) from the World Economic Forum published in 2016, packaging is the biggest use of plastic, at 26 percent of the material’s volume worldwide.Coca-Cola, Nestlé and PepsiCo are among the more than 200 companies that have signed the voluntary New Plastics Economy Global Commitment (PDF), launched in 2018 as a partnership between the United Nations Environment Programme and the Ellen MacArthur Foundation. Under the commitment, companies selling packaged goods promise that 100 percent of their plastic packaging will be "reusable, recyclable, or compostable" by 2025. Three other companies in Break Free From Plastic’s top 10 list — Unilever, Mars and Colgate-Palmolive — also signed on.The commitment isn’t just a series of promises. It requires businesses to track their progress and report back. While the Ellen MacArthur Foundation did not independently confirm the numbers disclosed by signatories, Iulia Strat, a spokesperson for the foundation, says that its New Plastics Economy team "challenged companies on submitted information when it was unclear or incomplete.""This level of transparency on plastics has not been achieved previously," Strat wrote in an email to Ensia.These companies are making a lot of their packaging recyclable, according to the commitment’s latest progress report. PepsiCo, responsible for 2.5 million tons of plastic packaging each year, reports that 77 percent of that packaging is reusable, recyclable or compostable. For Nestlé, that number is 65 percent of the annual 1.9 million tons of plastic it uses to package products, including bottled water, chocolate bars and Purina pet food. Plastics are ingrained in our society, so sustainability is no simple task. These data are self-reported, though, and it’s not always clear exactly which part of a company’s product portfolio the published numbers apply to. In numbers disclosed to the New Plastics Economy team, Coca-Cola stated that 99 percent of its primary packaging is reusable, compostable or recyclable, a figure not meant to include transit packaging such as shrink films and later clarified to mean only PET plastic bottles.Coca-Cola spokesperson Scott Leith said the company is preparing to assess and disclose numbers for non-bottle packaging, but did not provide a timeline for that disclosure. Coca-Cola, which Break Free From Plastic identified as the company whose plastic showed up the most in the environment, produces 3.3 million tons of plastic PET bottles each year, making it the biggest plastic producer among the consumer goods companies that have signed the commitment.Big problemsBeing recyclable is not the same thing as actually getting recycled. A 2017 study in the journal Science Advances estimated that just 9 percent of all plastics ever made actually have been recycled. The rest has been burned or, mostly, left to pile up in landfills, spill into soil and stream into seas.As major signatories to the commitment make more of their packaging recyclable, they’re largely not using recycled material in their own production. Instead, when making bottles and wrappers and other packaging, these companies mostly rely on new plastics derived directly from fossil fuels. Per the commitment’s progress report, Coca-Cola’s plastic packaging contains 9 percent recycled content. For PepsiCo and Nestlé, that number is 3 percent and 2 percent, respectively. All three companies say they aim to use more recycled content over the next 5 to 10 years.Part of the problem is that it’s difficult to recycle plastic and get material that’s safe enough to hold food and drink. Most pieces of trash scooped up by Break Free From Plastic volunteers (at least of the chunks they could identify as a particular type of plastic) were polyethylene plastics, including the common polyethylene terephthalate (PET), with polypropylene — another plastic commonly used to package food — coming in a distant second place. While it’s possible to recycle polyethylene and polypropylene, special processing is necessary to ensure these materials are free from contaminants if they are to be used to store food. That comes with a cost."Some plastic suppliers are willing to invest in developing new processing capacity but are waiting for clear commitments from material buyers to do so," a spokesperson for Nestlé who asked not to be identified wrote in an email to Ensia. In January, the company announced that it would spend 1.5 billion Swiss francs through 2025 to "pay a premium" for food-grade recycled plastics. Scientists have yet to make the major breakthroughs needed to replace conventional plastics. Nestlé’s pledge, the spokesperson wrote, "creates a business case for our suppliers and secures their investment. Recycling PP [polypropylene] and PE [polyethylene] becomes financially attractive." Over the next five years, Nestlé says it will source up to 2.2 million tons of food-grade recycled plastic. The company did not disclose to Ensia any plastic suppliers it plans to work with.The New Plastics Economy Global Commitment also calls for companies to ditch "unnecessary" plastic packaging and move from single-use to reuse of plastic, although businesses aren’t held to any particular targets on those fronts."Signatories work to address the root causes of plastic pollution, and recognise that this vision will require significant effort and investment from both business and government," the Ellen MacArthur Foundation’s Strat wrote to Ensia. "We need to go beyond increasing recycling capacity, and match those efforts with similar investment and ambition levels across the full range of solutions, including elimination and reuse."Even companies that have joined the commitment have no current plans to abandon plastic entirely. For example, in January at the World Economic Forum in Davos, Beatriz Perez, Coca-Cola’s head of communications, public affairs, sustainability and marketing assets, said the company will not move away from single-use plastic bottles because people like them.Three of the top 10 companies identified by Break Free From Plastic have not signed on to the Commitment at all: P&G; Phillip Morris International; and Perfetti van Melle.P&G, an Ohio-based multinational that sells a range of consumer goods from Pampers diapers to Tide laundry detergent, is pledging 100 percent reusable or recyclable packaging by 2030.Neither Mentos-maker Perfetti Van Melle nor cigarette-seller Philip Morris have announced any specific targets for more sustainable plastic. In a statement to Ensia, Jens Rupp, head of environmental sustainability for Philip Morris International, highlighted the company’s environmental statement (PDF). Focusing on the actions of individual consumers, Rupp wrote that Philip Morris is "taking steps to reduce cigarette butt littering through ambitious anti-littering campaigns."Perfetti Van Melle’s group communications director, Stephanie Creech, wrote in an email to Ensia that many of the company’s plastic containers are recyclable, encouraging customers to properly recycle them. "We continue to seek alternatives to plastic packaging while ensuring that we still deliver product freshness to our consumers," she wrote.PepsiCo, which has signed the commitment, did not respond to repeated requests for comment on this report.Mondelēz International — whose brands include Honey Maid graham crackers, Chips Ahoy cookies and the candy Sour Patch Kids — previously had set its own goal of 100 percent recyclable packaging by 2025. The company signed the commitment in March.Government effortsEven with recent initiatives such as the New Plastics Economy Global Commitment, the world continues to make new plastic. Since 2010, petrochemical companies have invested some $200 billion in plastic production, and one market research firm estimates that the global market for plastic packaging isn’t on track to shrink, but is in fact set to grow by an average of nearly 4 percent each year through 2025."At the same time as you have some countries and companies working towards this voluntary initiative, you also have companies lobbying against legislation to restrict packaging, and you also have massive investments still being made in the industrial complexes that create plastic," says Elizabeth Kirk, a professor at the University of Lincoln who studies international law and marine governance. She says that voluntary commitments are not enough.In the past year, some countries have moved to mandate plastic reduction. In March 2019, the European Union voted to phase in a ban on many single-use plastic items including cutlery, straws and stirrers. The law includes a provision that plastic bottles must be made of at least 25 percent recycled content by 2025. In January, China unveiled a new policy to phase in a ban on single-use plastic bags, straws and packaging over the next several years.In the United States, some individual cities and states have passed legislation to limit certain single-use plastics. At least one major company supports one of these efforts: In Maine, Nestlé Waters North America is supporting a bill that would set legal minimums for recycled content in plastic bottles. At the federal level, legislators in February introduced a bill that, if passed, would phase out some single-use plastics and raise the required recycled content in plastic beverage containers. Last year during a visit to an under-construction plastics plant in Pennsylvania, President Donald Trump blamed other countries for the ocean plastics problem. But in March, the Department of Energy announced up to $25 million in funding for research and development on plastics recycling.A global challengeRich nations such as the U.S., the United Kingdom and Australia have shipped millions of tons of their plastic waste to Asia. China, once the destination for much of the plastic waste exported out of the U.S., severely restricted its waste imports in 2018. After that, the U.S. began channeling more plastic trash to Thailand, Malaysia and Vietnam.Last year the Basel Convention, a multilateral agreement governing international disposal and management of waste, was amended to include plastic waste. Under the new rules, countries seeking to export contaminated or unrecyclable plastic trash must get approval from the receiving country’s government before shipping the garbage to private disposal companies. The U.S. is not a party to the convention.To address the global problem of plastic, Kirk says that we need a global treaty specifically dedicated to it. A "plastics convention" with binding commitments for countries that sign it might provide a framework for fighting marine pollution and lowering greenhouse gas emissions. She points to other environmental treaties as examples of this approach: The Stockholm Convention successfully has reduced persistent organic pollutants (POPs), while the Montreal Protocol facilitated worldwide regulation of aerosols and effectively saved the ozone layer. The UN Framework Convention on Climate Change arguably has been far less successful so far, but Kirk notes that it probably has helped bring more media attention to climate change."A treaty can also provide a signal to industry," Kirk says. By phasing in global regulations, a plastics treaty could give companies the incentive to innovate more quickly.But Kirk cautions that a treaty, like any plastics policy, would need mechanisms to account for particular uses and needs. Plastics are ingrained in our society, so sustainability is no simple task.While many headlines point to strangled sea turtles and giant garbage patches, other harms fly more under the radar, including the fact that poor nations face the brunt of human impacts from the throwaway plastic of rich countries such as the U.S.At the same time, scientists have yet to make the major breakthroughs needed to replace conventional plastics. Plastics designed to be compostable or biodegradable often require special processing facilities, or at least particular natural environments such as warm waters, outside of which they’re often a persistent pollutant like conventional plastics. Plastics made at least in part from feedstock other than fossil fuels, meanwhile, might contribute to deforestation and other harmful land uses.It’s not as simple as ditching plastics entirely, either — not without massive, systemic changes in the global economy. Plastic packaging, for example, helps keep food safe over the long distances inherent in today’s supply chains. Single-use plastics also enable lab research by scientists: petri dishes; pipettes; vials; gloves; and more. Glass likely could take plastic’s place in some cases, but not without a difficult transition. Proposed solutions exist to up recycling in medical contexts, but it’s no simple task. And people with some physical and cognitive disabilities rely on plastic products, according to Andrew Jenks, a Ph.D. candidate in political science at the University of Delaware. He co-authored a recent policy studies paper that urges decision makers to consider how societies can address the problems posed by plastics without putting responsibility on individual consumers, particularly disabled people.Plastic straws, for example, are key in helping people with some physical and cognitive disabilities consume drinks and medicines, he says, while plastic food containers are essential for some disabled people to live independent lives."That is an issue that is in some ways not up to the choice of the individual consumer or user who has a disability," Jenks says. "Because in reality, they’re just trying to survive."Survival is also at stake in healthcare, where plastics appear in gloves, syringes, sterilization wraps and many medical devices.Recently, with the novel coronavirus spreading around the world, manufacturers are rushing to make more ventilators to treat Covid-19 patients — ventilators that use plastic in parts such as breathing tubes. In Italy, one company made headlines around the world when it used a 3D printer to produce plastic ventilator valves for a hospital that had run out of them.Proposed solutions exist to up recycling in medical contexts, but it’s no simple task, with one estimate saying that plastics account for 25 percent of waste from hospitals.As producers have made more plastic nearly every year since 1950 — with 420 million tons created in 2015 — the material has shaped the world we know. Today, plastic is everywhere.Tomorrow, if we choose, that might change. But such change will come with nuance and challenge. It will transform corporations and consumers, governments and citizens, producers and people.Let's block ads! (Why?)

Coyuchi, full circularity and the challenge of textile recycling

Home textiles company Coyuchi has been ahead of the curve on sustainable business practices since its founding almost 30 years ago."The original founder was really one of the pioneers in organic cotton, bringing organic cotton into textile supply," said Coyuchi CEO Eileen Mockus, previously a sourcing executive for retailer Williams-Sonoma. "Over the years, we have really focused on the pillars of the brand, which are organic and natural fibers."Coyuchi has adopted the Global Organic Textile Standard, the world’s leading processing guideline for textiles made from organic fibers, and gone beyond what that standard requires to make sure that it makes its products in a way that is safe for the planet and its customers, Mockus said.Now it is leveling up and working to reach full circularity, using various methods — take back, subscription service, textile recycling — to keep its products out of landfills and instead in the homes of customers. "I think there's an opportunity to cut down on some of the subsequent processing that has an environmental impact that will allow us to continue to take what's already here and use it again," Mockus said. I think there's an opportunity to cut down on some of the subsequent processing that has an environmental impact that will allow us to continue to take what's already here and use it again. Coyuchi wants to be a proof of concept that textile recycling on a larger scale is possible. "What I’d like to see us be able to do next is continue to work across the industry on how to do more of this and create some of the background systems that need to be in place," she said. "So that it is possible to recycle more of our textiles, whether they're Coyuchi organic textiles or some of the other products that are out on the market."So, what does it take to work toward reaching full circularity in textile recycling?How Coyuchi is getting it doneMockus said a conversation with a member of Coyuchi’s board of directors — who had reread the book "Cradle to Cradle: Remaking the Way We Make Things" and asked her what the possibilities were for the company — led her to think about how Coyuchi might introduce textile recycling."[I] was thrilled to discover that there was so much activity going on in the space. That it was very possible for us to kind of take a different look at how we wanted to view our business," Mockus said. "And so we started with Coyuchi For Life, because it's a way of engaging the customer right away."To achieve the goals of its circular economy efforts, including its subscription service Coyuchi For Life, Coyuchi has partnered with The Renewable Workshop, a company that provides circular solutions to apparel and textile brands. The Renewal Workshop has worked with other companies — for example, Carhartt, Mara Hoffman and The North Face — to launch similar programs.With Coyuchi For Life, customers can choose to receive new linens every six, 12 or 24 months. After the set period of time, customers can renew, exchange, buy out or return their products. When The Renewal Workshop receives a returned item, it inspects the product to figure out its best next life — renewing it by making a repair or recycling the textile for some potential future use. The inspector makes sure that there are no signs of wear or stains and, if it's necessary to repair, ensures that the fix wouldn't be visible on the product. "It's actually harder to do that with home goods than a jacket because we can hide a hole inside of an arm of a jacket. But when you have a sheet, you see all sides of it," said Nicole Bassett, cofounder at The Renewal Workshop, noting that it has a strict standard for what items can be renewed.If a product meets the standard, it is fixed as needed then sold in Coyuchi’s brick-and-mortar store in Point Reyes, California, through Coyuchi 2nd Home, a take-back program that works in conjunction with Coyuchi For Life. If the item isn't repairable, The Renewal Workshop keeps the material.The Coyuchi For Life program has had over 2,000 subscriptions, and Coyuchi said it continues to see growth. Additionally, it has diverted over 19,000 pounds of textiles from the landfill through its programs."We have intentionally only offered the renewed product in our own retail shop because we wanted to be able to understand what messaging the customer responded to and have that one-on-one interaction with being able to explain the story of what we're doing, rather than kind of going either to a third party's website or trying to do it online at all," Mockus said.While, at this point, Coyuchi cannot repurpose all items for their original purpose, Coyuchi and The Renewal Workshop came up with a new use for the returned items that are not in good enough condition to be refurbished and resold."We identified probably in late 2018, we had enough product collected over the years of items that were too damaged to actually get resold again, but that could become feedstock for new products," Bassett said. "It's one of the first stories of brands actually demonstrating circular within the textile space."Mockus said a fair amount of the legwork to figure out how Coyuchi could make a recycled product came from one of its production managers who also oversees its sustainability program. Coyuchi had to coordinate with vendors, manufacturers, recyclers and The Renewal Workshop to figure out how to make its programs work."I would say that those conversations went on for at least a year before we were able to ship the product to be recycled to the recycler. It's a lot of coordination," Mockus said, noting that there were a lot of variables to work out ahead of time to be able to increase their likelihood of success. Coyuchi had to make sure that every link in its supply chain understood its role and all the tasks that needed to be done — from figuring out the amount of materials that would be recycled to what the resulting product from the recycled textile would be.The feedstock that can't be repaired and resold for its original use is being turned into blankets that are the equivalent quality to what Coyuchi sells on its website today. Coyuchi plans to start selling the blanket — made from "a blend of new and recycled Coyuchi material" — in fall 2020, Mockus said. "We have a product that is poised and ready to be incorporated into a circular system," she said. "And what we're now taking the next step to do is be able to offer a product that is actually going to be made out of our fiber that was recycled."The challenges and future of textile recyclingCoyuchi is already starting from a baseline that is leaps and bounds away from other companies that want to adopt circular production processes. Unlike many companies that make apparel, Coychi’s products are more recyclable because they don’t mix materials and the materials they do use are organic."That's one of the core principles in circular design. And so that means that at the end of the life of that product, we could do something with it. Whereas when you have a ski jacket made out of nylon, polyester, it's much more complicated to actually recycle that piece," Bassett said.Improving textile recycling is a focus of a project called Accelerating Circularity, which receives funding from Walmart, Gap, Target and VF Corp, many of which are also part of the project’s working group. Mockus is a board member for the group, and The Renewal Workshop is a collaborator.In 2017, only about 15 percent of textiles were recycled, according to the U.S. Environmental Protection Agency, and an even smaller percentage is actually recycled into new fabrics. As it stands, it’s challenging to increase that percentage because there is a lack of infrastructure to recycle textiles. We might see more materials, more recycling entities come into commercialization, but I've been surprised how slow it has been. "I think it's less than 1 percent of materials that are recycled actually go into making new fibers and make new fabrics," said Karla Magruder, founder of Fabrikology International, a sustainable textile consultancy, and the lead for Accelerating Circularity. "A lot of waste textile waste that gets recycled gets turned into things like carpet padding."Bassett said that textile recycling has not improved much between 2016, when she co-founded her company and did an analysis of the sector, and 2020, when it ran another analysis. "If there's a lot more investment that happens in textile recycling over the years, we might see more materials, more recycling entities come into commercialization, but I've been surprised how slow it has been," she said.There is a lot of room for improvement when it comes to textile recycling, and Bassett says that companies need to start now, even if they won’t achieve 100 percent recyclability at first."What we find is about 75 percent of what was considered textile waste at the brand level — from take back or at the distribution center — can be cleaned and repaired and resold again," she said. "That's substantial because now we're at least diverting 75 percent out of the landfill and getting it back into sale."Let's block ads! (Why?)

9 Canadian startups tackling the climate crisis

If Canada’s political climate concern sounds like a sham to you, be assured that it often does to many Canadians, also.The irony was not lost on us when, in July, Canadian Prime Minister Justin Trudeau declared that we were officially in a "climate emergency" just one day before approving a massive new fossil fuel pipeline extension. Many of us also know that since July, our climate plans have been revealed to be among the worst in the G7, that none of our political parties in the most recent federal election had a plan good enough to meet our environmental targets, and that we’re still only projected to achieve about 63 percent of our 2030 climate goals. What seems to be lesser-known, however, is that our country is also becoming internationally renowned for some of the incredible new Canadian startups making contributions to sustainable technology. Including, for example, remarkable new advancements in clean energy tech, low-emissions alternatives to carbon-heavy industries — and feats of carbon capture that one day actually may help to reverse climate change. And that’s no joke. It may be encouraging for those only familiar with Trudeau’s double-edged politics to explore just a few of our country’s most innovative new climate tech companies gaining traction.Terrestrial Energy (Oakville, Ontario)Ever wonder what Canada’s previous Prime Minister Stephen Harper is doing these days? Wonder no more: News recently broke that Harper has been appointed to the advisory board for Terrestrial Energy, a nuclear energy company in Ontario working on advanced new reactors. The promise of nuclear energy is that it can run reliably 24/7, unlike our energy from the sun or wind — and it offers us a comparatively lower environmental footprint if well managed. The problem is that while nuclear energy can remove some of our concern with renewable intermittency, the process of harnessing energy through nuclear reactions can add several risks for us to consider. To help offset these concerns, engineers have made considerable progress with two safer alternatives: nuclear fission involving molten salts and the energy of nuclear fusion. As such, the Integral Molten Salt Reactor (IMSR) design being developed by Terrestrial in Ontario is one promising new lead.Terrestrial’s IMSR design swaps out the nuclear pellet-sized fuel components found in traditional reactors with liquid molten salt containing the nuclear fuel. Unlike traditional nuclear reactors, molten salt reactions take place closer to atmospheric pressure levels to reduce the risk of an explosive release of dangerous gases (molten salts also absorb much more heat than traditional liquid coolants, reducing risk further). Reduced risk means reduced cost.The design used by Terrestrial offers a dual-purpose grid backup support function, as well as potentially piping thermal energy to sites up to five miles away. Moreover, unlike many other molten salt reactor designs being developed, Terrestrial's IMSR uses uranium to tap into pre-existing supply chains. That "pathway to market," it believes, may allow the  company to beat out much of the competition with a functional reactor by the mid-2020s. General Fusion (Burnaby, British Columbia)The second alternative, nuclear fusion, also has made some promising new gains. And with direct investments from the richest man on the planet helping to back a Canadian operation, international readers might be surprised to learn that one of the companies making the most waves out there is on Canada's west coast. To clarify, "fission" is the type of nuclear energy many of us are familiar with. A fission plant is where Homer Simpson works. This brand of nuclear energy involves splitting heavier atoms into lighter ones, transforming energy in the process. Nuclear fusion, on the other hand, involves fusing atoms together — and, unlike fission, does not create nuclear waste in that process, materials that bad actors can weaponize for explosive reactions.The problem with nuclear fusion is that it's a complex process requiring immense amounts of energy and heat (think millions of degrees Celsius). Then, technically speaking, particles have to be in a state of close proximity with the associated plasma and contained within a controlled chamber.This engineering feat always has required immense amounts of energy to produce a smaller energy output. But incredible new advancements in superconducting magnets and computer analysis have enabled fusion researchers to close the gap on this equation. General Fusion is close to the forefront of these developments — with plans to reportedly bring a net energy positive reactor by 2025, very much on par with (or even surpassing) other industry leaders worldwide. Carbon Engineering (Squamish, British Columbia)Carbon Engineering, founded by Harvard-trained physicist David Keith, has developed milestone lows for carbon capture operating costs. Those cost reductions have changed industry assessments worldwide.When critics routinely railed against carbon capture as economically impossible, Carbon Engineering doggedly pulled down operating costs to a marketable level and set the foundation for many others. In doing so, it has helped to move carbon capture from techno-utopian pipe dream to budding new industry.Of course, Carbon Engineering is not alone in developing direct capture technology — and other factors have helped its efforts. The Trump administration in the United States miraculously approved the new tax provision 45Q, which incentivizes carbon capture and partially offsets initiatives such as those of Carbon Engineering.New technology is routinely allowing scientists to "upscale" the carbon being captured so emitters can sell it, incentivizing the capture business further. Academic teams are also consistently finding more efficient ways of performing key aspects of the capture process to help make it easier (one such milestone even came out of the University of Toronto just a few months ago).When fully operational, the first commercial plants designed by Carbon Engineering will capture about 1 million tonnes of CO2 per year apiece. In short: one facility will be able to perform the carbon-absorbing work of about 40 million trees, sequestering the annual emissions equivalent of over 200,000 cars.C2CNT (Calgary, Alberta)Keep an eye on this team, folks.Many industry experts believe that capturing carbon will truly take off only if someone can find an economic use for it all and create an applicable market. Because up until now, the first comment that capture critics typically voice is: Great, but who’s going to pay for it?The answer often has been that we, the taxpayers, may subsidize efforts to pull down carbon dioxide and then store it underground. But then, of course, critics reply: Great, but who’s going to pay for that? More recently, incredible new technologies have been developed to transform CO2 into marketable products. C2CNT, a new startup in Alberta, recently went a step further and demonstrated newfound capabilities in upscaling carbon dioxide into much higher-value carbon nanomaterials.C2CNT (CNT for carbon nanotubes) begins by splitting CO2 into its components of carbon and oxygen through a molten carbonate electrolysis process. The process is similar to the way aluminum is produced from its own oxide (aluminum oxide). Except in this case, carbon dioxide is the raw material driving the process and carbon nanomaterials are what is produced.The process is reportedly high yield and low energy, running largely on solar power — and the C2CNT team has published its process in reputable academic journals. It also has been recognized as a Carbon XPrize finalist, given that the process reportedly uses about 2 to 5 tonnes of CO2 per day.CarbonCure (Halifax, Nova Scotia)It might sound surprising, but the global concrete industry accounts for an astounding 7 percent of the entire world’s carbon dioxide emissions. Fortunately, as it turns out, curing concrete with captured CO2 instead of the water normally used can make the entire process less resource-intensive and become a nearly permanent housing for the carbon itself. No underground storage needed.The CO2 is essentially mineralized through conversion into calcium carbonate during processing — trapping it safely away without the typical concerns of it leaking from a subterranean storage site somewhere.Furthermore, the new mix of minerals within the concrete actually can make it stronger, creating an enticing market incentive for using fewer resources to make superior products. On top of that, manufacturing processes can be substituted into existing facilities and require smaller amounts of time to cure (about 24 hours, compared to the typical one to four weeks). CarbonCure is among the frontrunners developing this process. CleanO2 (Calgary, Alberta)Or consider a Canadian startup called CleanO2, which uses a much smaller carbon emissions reduction machine around the size of an air conditioner.Its device, CARBiNX, can be fitted to natural gas-powered boilers to reduce both energy use in commercial and residential buildings and lower greenhouse gas emissions in the process (up to around 10-20 percent).Did I mention that CleanO2 also then produces hand soaps and detergents with CO2 mixed in? It believes that we, as consumers, potentially can opt for products such as these in place of others to help contribute to creating a carbon economy.Svante (Burnaby, British Columbia)Another carbon capture company, Svante (formerly Inventys), markets its capture tech as fixable to pre-existing infrastructures where gases that normally would just be released into the atmosphere by heavy emitters.With the help of Svante’s equipment, carbon emissions are routed through a proprietary filtration system first and separated thereafter. The market forces driving companies to adopt a system such as Svante’s arise in avoiding carbon taxation and potentially adding a revenue stream for "upscalable" CO2.Moreover, Svante also claims that it, too, can capture roughly a million tons of carbon per year — again about the carbon equivalent of taking roughly 200,000 cars off the road. One of its newest partners, Chevron Technology Ventures, is studying whether to use the Svante approach in one of its facilities in California.Opus One Solutions (Toronto)Many of today’s electric grids were not designed to handle what we want from our energy systems. Rather than having just one main source of power such as a coal-fired plant somewhere, we now want a multitude of distributed energy resources such as solar panels on buildings and wind turbines all contributing to our grid at once.We also want energy transmissions that don’t just go one way (from the coal plant to us), but for owners of energy resources to be able to sell and commercialize their energy — to contribute to the grid or other local users.That kind of two-way, machine-to-machine communication and bidirectional power transferring requires smarter grids. Smarter appliances. Smarter metering. We require advanced machine learning and artificial intelligence-driven automation to manage thousands of distributed energy sources into larger and larger collective units.Opus One produces an advanced grid operating platform capable of gathering all these integrated energy sources together, providing transactive energy functionality (where possible) and more in what it calls "our changing electric ecosystem."These operations are not easy, but Opus One has cultivated growing renown for an intelligent energy management platform that combines two future essentials for the industry: energy decentralization and intelligent automation.Terramera (Vancouver, British Columbia)The amount of crops we lose to pests presents us with a staggering amount of spent energy, capital and the environmental costs of growing lost food around the world. In fact, Project Drawdown estimates that wasted food accounts for about 8 percent of all global CO2 emissions.Eliminating crop pests is a challenge, therefore, being worked on by academic teams all around the world. One compelling concept has been to substitute natural materials dangerous to pests (but not for us) into pre-existing pesticides to make them more attractive for consumers. The concept is similar to how chocolate contains chemicals dangerous for dogs but not for us — and sounds much more palatable than the witches’ brew of chemicals normally used in typical pesticides. This is where Vancouver-based Terramera ("Our Earth") comes in. Inspired by the Indian practice of using extracts from tropical neem trees as a natural pesticide for bedbugs, Terramera has developed a mix of natural ingredients for deterring crop pests, gaining the attention of worldwide agricultural giants. Which, if adopted around the world, could help slash agricultural emissions considerably.Let's block ads! (Why?)

Why the electric vehicle wave is still coming

If you look at the 2020 annual estimates for global electric vehicle sales, it sure seems grim.Wood Mackenzie predicts that because of the pandemic and resulting economic disruption, sales of EVs around the world will drop by 43 percent this year. Automakers that sell vehicles to consumers tend to be hit hard by macroeconomic trends, and with a dramatic recession emerging, potential buyers are likely to buy fewer cars in general — let alone electric models that are newer to the market.So we're looking at an EV industry that could see a contraction by almost half in a crucial year that was formerly expected to be an important breakout year for EVs. Yeah, that's not good. But let's all take a deep breath and look at the bigger picture. The longer-term forecasts are much, much brighter. Core industry, technology, environmental and policy shifts have been happening over the past decade that will continue to ensure that electric vehicles continue on their trajectory to eventually reach the mainstream car buyer.  Core industry, technology, environmental and policy shifts have been happening over the past decade that will continue to ensure EVs continue on their trajectory to the mainstream. Here are four trends to remember that will keep EVs moving forward, and ultimately, yes, still, one day dominating transportation:1. Economics: The price of lithium-ion batteries — which power the bulk of electric vehicles — dropped by 87 percent between 2010 and 2019 and is expected to continue to drop below $100 per kilowatt-hour by 2024, predicts the researchers at Bloomberg New Energy Finance (BNEF). These price drops are due to ever-larger factories that benefit from economies of scale, manufacturing efficiencies and innovations, fierce competition in the battery industry and new battery chemistry technologies.Once lithium-ion batteries reach below $100/kWh, all types of electric vehicles will be cheaper than they are now. More important, that will ensure that EVs more effectively will compete with fossil-fuel-powered vehicles. The same type of manufacturing innovation and factory scaling that turned solar panels into one of the cheapest forms of electricity is doing the same thing to batteries for electric vehicles. Partly because of this economic and tech trend, automakers already have committed $140 billion to electrification initiatives through capital spending on factories. These initiatives have been led by global automakers such as VW Group, Hyundai Kia, Changan, Daimler and Ford. Auto manufacturers are not going to abandon these investments because of the coronavirus. 2. Policies: While EV sales in the U.S. and China are expected to drop this year, sales in Europe could still grow. Why? Many countries in Europe already have enacted strong mandates and incentives, while some European cities have banned fossil fuel-powered vehicles from city centers. BNEF predicts that Europe's EV sales could be up by 50 percent this year despite the COVID-19 fallout. Other markets need equally strong policies to maintain EV sale trajectories.That's where the potentials of a green stimulus come in. A recent Politico Pro article reported on an Ipsos-Mori poll for 14 G20 countries that found that the majority of respondents agreed that an economic recovery should prioritize climate change. Expect some significant recovery funds in European countries and progressive states such as California for clean economy industries that can create jobs such as solar panel installations, building weatherization and electric vehicle factories and infrastructure.3. Electric fleets: While consumers might be less eager to buy cars in a recession, many fleets are already moving toward low-carbon and electric formats to meet mandates or corporate sustainability goals. Public and private fleet managers need to replace older vehicles and continue to buy the most efficient and cost-effective vehicles. Part of the push behind green fleets, again, is strong policies. For example, in California, the Advanced Clean Truck (ACT) rule appears to be continuing to move forward in the face of the pandemic, although a recent hearing was pushed to June. The ACT rule is a world-leading manufacturing (and eventually fleet-purchasing) mandate in California that significantly will boost the amount of zero-emissions trucks on California's roads. California is also already requiring all of its transit buses to be ZEVs within a little over two decades. But it's not just about policies. For many fleets — delivery vehicles, transit buses and school buses — it can be cheaper to operate an electric vehicle than it is to operate a diesel-powered vehicle. Why? Because for specific routes, in targeted regions, electricity is cheaper than diesel. Another checkmark for the economics box. Electric fleets have such potential staying power that startups are still getting funding in this space. Amply Power, which sells charging solutions to electric fleets, just closed on a $13.2 million funding round, led by George Soros' fund and power company Siemens. Amply CEO Vic Shao says that while consumer appetite for EVs might be down this year, "the same is not true for fleets."4. Clean air: We've been in a global transportation experiment since late March. With much of the world's transportation halted, the air in many cities has been cleaner than it's been in decades. The big hope is that this moment in history will galvanize all of us to continue to push toward what's needed to accelerate and scale zero-emission vehicles. But even without this grand experiment, clean air has emerged as a major driver for ZEVs in the past couple of years. School district transportation leaders such as Tim Shannon, who manages the transportation for Twin Rivers Unified School District in Sacramento, California, points to "clean air for kids" as the No. 1 reason to electrify school buses. Likewise, protests around shipping distribution centers in Southern California — which have large numbers of idling trucks — have helped shine a spotlight on the need for ZEVs within the context of the ACT rule and around Amazon's fulfilment centers. It's gonna be a rough year, folks, but don't abandon all hope. This article is adapted from GreenBiz's weekly newsletter, Transport Weekly, running Tuesdays. Subscribe here.Let's block ads! (Why?)

The state of the sustainability profession in uncertain times

At the close of 2019, we were optimistic about the growth of the sustainability profession. We looked back at 10 years of research and reflected on how far the profession had come.When we published our first such research, in 2010, the Great Recession had ended but unemployment still stood at 9.6 percent. Only 28 percent of organizations planned to add dedicated sustainability resources. Ten years later, companies both large and small reported increased budgets. Nearly six in 10 organizations planned to add to the sustainability team’s headcount.December 2019 now seems far away. The data collected for our biennial State of the Profession report, released today, is based on a survey conducted in late 2019, long before we were hit with the COVID-19 crisis and its associated impacts. From our current vantage point, it is difficult to make predictions, as crises can create both challenges and opportunities. As sustainability practitioners, though, we are almost genetically engineered to take a long view.When there are discussions about the three P’s — people, planet and profit — most sustainability conversations revolve around people and planet. When profit is discussed it’s mainly in terms of funding the other two P’s. If nothing else, the COVID crisis shines a light on the importance of a strong balance sheet.It seems almost certain that sustainability programs at highly leveraged companies will either disappear or have the sum of their efforts become a glossy corporate responsibility report. For those public companies, our only advice is to proceed at your own risk: A new level of scrutiny will await you on the other side of this crisis. As sustainability practitioners we are almost genetically engineered to take a long view. Whether it’s the last couple letters from BlackRock CEO Larry Fink or an increasing awareness of climate change risks (and potential opportunities), the environmental and social data that sustainability teams have been publishing is starting to get read. Much of the focus has been, and will continue to be, from an environmental perspective, with a specific focus on climate change.The current pandemic makes clear that environmental risks are almost always social risks as well. Post-COVID, public companies will be evaluated in terms of their broader ESG strategy, with an increased emphasis on their social actions, initially in terms of how they treated employees, supply chain partners and other key stakeholders during a global pandemic.Of course, we’re at an inflection point. There’s the potential that this current crisis exhumes the still-fresh corpse of Milton Friedman’s shareholder primacy. Certainly, some CEO signatories of the Business Roundtable’s statement on the purpose of a corporation don’t seem to be "promoting an economy that serves all Americans," much less leading their companies for the benefit of all stakeholders.Our research points toward a different direction. We asked survey respondents to rate how involved their CEO is in the organization’s sustainability program on a scale from 1 (openly dismissive) to 7 (owns it, very engaged).It is encouraging that none of this year’s respondents view their CEO as openly dismissive. The real change in 2020 is that 43 percent rate their CEO’s engagement at either a 6 or 7. That’s an 8-percentage point increase from 2018, and it’s evident in the news cycle, whether it’s support for LGBTQ rights, stricter gun laws, a price on carbon or resisting employee furloughs longer than they would probably like.Mind the (narrowing) gapWe also saw a job market that prioritized new skills as we partnered with LinkedIn to understand key opportunities for sustainability job seekers. Circular economy topped the list of the 10 fastest-rising skills among LinkedIn users; corporate sustainability was fourth. For sustainability professionals, the fastest rising skill is data analysis, with statistically significant year-over-year growth of 18 percent.Other encouraging signs are in the report. Not only are there more women in the profession, the pay gap between genders has narrowed over the past decade. Sustainability resources are increasingly embedded in core business functions such as supply chain operations and facilities management. More sustainability executives report directly to the CEO, and a much larger percentage of sustainability leaders are being asked to regularly inform the board of directors.We don’t know what changes will come as a result of the current crisis, so we defer to baseball playing sage Yogi Berra, who advised, "It's tough to make predictions, especially about the future.” What we do know are the trends that brought us here.Join John Davies and two experts on sustainability careers April 28 for a free, one-hour webcast to discuss the State of the Profession report.Let's block ads! (Why?)

Hard Rock CSO reflects: Where will COVID-19 take sustainable capitalism?

In the late 1990s, throngs of protestors regularly rose up against the International Monetary Fund, World Bank, governments and multinational companies. Global meetings of multilateral bodies — such as the 1999 World Trade Organization gathering known to history as the "Battle of Seattle" — faced street occupations by thousands, sometimes tens of thousands of angry citizens.Concerned with poverty reduction, workers’ rights, sustainability and the perceived ills of neoliberal trade policies, these loosely allied activists feared and decried what they saw as totalizing corporate power. Direct-action clashes with police, enervated by volleys by water cannon and tear gas, raised questions about corporate accountability, which helped those of us working in corporate social responsibility (CSR) at the time. This moment ended abruptly in 2001, with the terrorist attacks of 9/11. As governments and public fears spun toward terrorism and security, large-scale demonstrations related to CSR and sustainability strategy largely disappeared.While CSR did not die, its immediate priority waned. Economic uncertainty led companies to contain costs and cut CSR budgets. Those companies (there were many) focused solely on facile reputation management, without committing to improving real impacts, quietly welcomed the recess of vociferous dissent. Media lost curiosity over corporate social and environmental malfeasance. Labor market power shifted to employers, and consumers’ taste for green and conscientious options flickered. But advances from this period survived: Forward-thinking companies began to align environmental, social and governance (ESG) performance with long-term business planning. These standards guide investors who seek companies that manage impacts on the environment, employees, customers, suppliers and communities, while controlling company leadership, executive pay, internal controls and shareholder rights.Accountability regimes continued as the economy ticked up until the next crisis — the 2008 financial meltdown. Cue images of traumatized Lehman Brothers employees lugging bankers’ boxes from office towers. Markets and asset valuations cratered, and business leaders white-knuckled their firms into survival mode, laying off masses and cutting spending. Through the post-COVID-10 moment, successful companies will renegotiate supply chain arrangements, restructure debt, keep customers and retain top talent. What happened to corporate responsibility? In the immediate 2009-2010 period, spending on community and philanthropic programs and internal capacity-building definitely dropped. But a next wave began. Wall Street financiers, blamed for triggering the crisis, infected a reputational malaise across big business. Smart companies seeking substantive action to repair public and stakeholder trust adopted ESG disciplines.The push to embed sustainability into operational models was boosted and normalized by investor commitments. ESG analysis became data-driven, goals-based, measurable and focused on disclosure. Corporate governance became a preoccupation, shifting the language of social responsibility from feel-good chatter about "doing the right thing" toward definable visions for social purpose and impact, articulated as a constituent to business success.More than a decade later, what is the legacy of 2008 crash? ESG became established practice, not a fleeting fad. And we knew it, unlike 2001 when we weren’t sure new methods would last.So how will ESG, social impact and purpose ride off the COVID curve?If the worst predictions for economic seizure prove true, many businesses will be worse off than in either 2001 or 2008. Those companies who retrench to starvation fundamentals almost certainly will freeze continued investment in impact and purpose for some period.What will happen at companies most committed to progress? And what shifts might occur within areas of social purpose and sustainability? Here are but a few thoughts and questions.Are your priorities right? Crises tend to clarify what matters when budgets command "keep" or "drop." For those leaders who have done formal materiality assessments for sustainability and impact, those frameworks should guide decisions. If you find they aren’t, reconsider how you rank issues and stakeholders. Any new priorities, such as employee and customer health and safety, moving up in the matrix?What actions should be re-framed? COVID-19 could redirect current plans. For example, I have been working on sustainability standards for health and wellness for our employees and guests, which relate to indoor air quality and physical environments. What will pandemic threats change here?Will social-distancing hit community investments? Companies prepared for virtual connectivity, both technologically and culturally, will be better poised to shift not only their work-from-home arrangements but their community partnerships. Virtual volunteering is emerging as an efficient way to expand employee volunteerism with nonprofits: Should it grow in the future? Will it work for all companies and their relationships? Is the carbon emission collapse temporary? Unsurprisingly, if you shut down the economy, energy usage and carbon emissions will drop. But, when things recover, will emissions return to pre-COVID-19 levels? Will lowering them be a priority that shapes preferences for more virtual meetings and less business travel?Will progressive companies prosper? In 2019, some key voices challenged the primacy of shareholder-driven capitalism, namely the U.S. Business Roundtable and Black Rock CEO Larry Fink, who argues that purpose and profit are inextricable. Belief in a new "sustainability" model of capitalism is growing — will it endure? Or will mad scrambles to save profitability and market capitalization stall or kill a new paradigm? The proposition — that top performing, durable companies also embrace sustainability — is about to be tested again.  Trust and brand value, elements viewed by some as intangible, could help prove that profit and purpose cohere. Through the post-COVID-10 moment, successful companies will renegotiate supply chain arrangements, restructure debt, keep customers and retain top talent. Money, people and commitments will flow to the trustworthy — companies known to have discipline, transparency and consistency.Those same qualities underpin ESG success. So I predict that companies committed to purpose and sustainability will preserve and build on past action. Why? Because they are invested, and they think long-term.  Let's block ads! (Why?)

Downturn signals opportunity for climate-aligned investing

With global stock markets having plunged into bear market territory, the conventional wisdom is that the coronavirus storm sinks all boats. Or does it? While it’s true that equity funds experienced severe losses pretty much across the board, some fared better than others.According to research by Morningstar, sustainable equity funds did better than their conventional counterparts. In the first quarter of 2020, the returns from more than 200 open-end and exchange-traded funds (ETFs) in the United States with a sustainability theme were over-represented in the top quartile and top halves of their broader category, such as for indexes comprised of large cap value or small cap growth stocks.Furthermore, Morningstar research also confirms 24 of 26 environmental, social and governance (ESG) index funds outperformed comparable conventional index funds. As described, sustainable investing — otherwise known as ESG investing, socially responsible investing or impact investing — is a strategy that considers environmental, social and governance factors in investment decisions and active ownership.Demand for sustainable ETFs has grown since the market downturn. Recent analysis from BlackRock highlights how sustainable ETFs keep attracting assets, in comparison with traditional ETFs, which are experiencing outflows in light of the market selloff. As of March 24, net inflows to sustainable ETFs had reached $14 billion, exceeding half of the 2019 total amount.ESG funds are not simply doing better as a result of the economic downturn — several of the largest sustainable mutual funds beat the market even prior to the financial meltdown. Here we will look at the outperformance of sustainable investing and how we can reach beyond its existing mandate as we look to rebuild the economy.Why the ESG advantage?The pain of the economic downturn has hit energy companies particularly hard. Due to vanishing demand for fuel and an oil price war, oil futures contracts collapsed into negative territory for the first time in history. This accounts for part of the reason why sustainable funds balanced away from fossil energy would outperform the market. In fact, sustainable equity funds with the lowest exposure to energy funds have experienced the greatest returns. However, according to John Hale, head of sustainability research at Morningstar, a bigger reason for the outperformance of sustainability funds is due to the "selection effect": the fact that the higher ESG scores that formed the basis for inclusion in these funds are correlated with other characteristics that make these companies more resilient to systemic shocks such as coronavirus. These factors could include corporate policies pertaining to fair wages, labor standards, board diversity and/or stringent environmental policies — all seemingly resulting in greater company resilience.  Aligning entire portfolios and loan books with long-term decarbonization trajectories of companies and industries, is the way forward. Signs indicate that this shift is already underway. MSCI attributes the financial resilience of ESG companies to their higher risk control and compliance standards, and highlights as a result, significantly lower volatility in these investments. Other studies (PDF) have attributed the strong performance of ESG investments to the companies’ ability to secure high-quality workers, their management of stakeholder relationships potentially mitigating negative regulatory, legislative or fiscal action, or that these policies simply enhance a company’s reputation.And while investors could not have predicted the financial repercussions of COVID-19, they have been warned, year after year, about the potential economic consequences of a high-carbon future. Not only are ESG funds demonstrating their economic resilience in light of market upheaval, but the proactive preparations they are making for a low-carbon transition will help them be more resilient to that transition while easing the global and economic repercussions that ultimately would result from runaway climate change.Strengthening the 'E' in ESGEven before the economic downturn, ESG investing was catching on, with total assets in sustainable investments more than doubling (PDF) between 2012 and 2018. But while interest in sustainable investing may not be lacking, standardization certainly is. Investors use a range of definitions and a variety of factors in their investment analysis.A lack of standardization has resulted in an ambiguous kitchen-sink approach, with ESG funds comprising a range of securities based on a slew of policy considerations from board diversity and executive pay, to how they treat laborers, to their policies pertaining to waste and water. As a result, a fund can still be designated as ESG and include holdings in the oil majors, such as Exxon Mobil or Chevron, as is the case for the S&P 500 ESG Index, or holdings in the largest lenders to fossil fuel companies, such as constituents in the FTSE All-World Green Revenues. To provide more clarity regarding investment standards relating to climate-friendly securities, several frameworks are emerging, such as the EU Sustainable Finance Taxonomy (PDF), which sets performance thresholds identifying economic activities that align with the Paris Agreement emissions reduction targets.  The EU framework provides the most comprehensive guidance to date on environmental standards for sustainability investments, creating a common language that ESG investing otherwise lacks. However, even with growing momentum in this space, lack of decision-useful data and lack of standardization in disclosure and methodologies continue to be the investment bottlenecks.Climate alignment as the new standardWhile economists debate whether the recovery from coronavirus will be shaped like a "V," a "U" or a "W," resilient planning requires that the economy we rebuild must be different from the one we’ve been trying to decarbonize.While the outperformance of ESG funds is an important indication for investors, scaling up ESG allocations, as loosely defined today, is insufficient in moving the needle to drive deep decarbonization and impact in the real economy. The growing investment risk due to climate change and other ESG factors will require capital reallocation, which will have a significant impact on the pricing of risk for every asset across capital markets.We’re at a crucial turning point when investors who are rebalancing portfolios in light of the current market conditions — and are simultaneously facing growing pressure to take a more holistic approach to portfolio composition — face an opportunity to reconsider their portfolio structure. A climate-aligned approach to investing, aligning entire portfolios and loan books with long-term decarbonization trajectories of companies and industries, is the way forward.Signs indicate that this shift is already underway, and financial institutions representing $17.2 trillion in investments have committed to align their portfolio emissions with the carbon reduction goals of the Paris Agreement. The dominant banks in the shipping industry became the first to adopt a climate alignment agreement — the Poseidon Principles — that will guide their lending decisions for years and decades to come.However, moving toward full climate alignment is a difficult journey, not a quick fix. Rocky Mountain Institute has mapped out five barriers to climate alignment for the financial sector and how a sectoral approach can help overcome them. One of the most critical barriers today is the lack of truly climate-aligned investment options in equities markets. But it is already evident that investors can do far more than screen carbon-intensive options out of their portfolios. In fact, financial institutions wield powerful tools to help critical industries support a transition to a viable low-carbon future.While ESG investing may have proven its worth, in good times and bad, a further, more holistic shift is required in which climate-aligned investing becomes the new universal standard to support the transition to a low-carbon economy. The shift in paradigm towards climate alignment is a structural one that comes with the promise of a more secure, more resilient future, better able to withstand the weight of crises to come.Let's block ads! (Why?)