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The #CVSEffect in Action: Wagon Train Edition — IKEA, GM, Mars Stand Up for Climate Policy

Here’s my latest for Sustainable Brands.

Previous articles in this series talked about leading businesses taking bold steps on their own for the common good — because it’s the right thing to do — even if it costs the company financially in the short term.

This time I want to point to the latest wave of businesses working collaboratively on the urgent, common ground issues of renewable energy and climate policy. In America’s history of westward expansion and exploration, pioneer families came together in wagon trains for mutual support. In the same way, the examples below show that businesses are taking action, together, to ensure a more certain future that’s good for all of us and for business.

To start off, a June 2014 clean energy report by Ceres, WWF and Calvert Investments supports the idea that this trend is gaining momentum. The report makes the case that big US companies are already investing in renewable energy as a basic “business as usual” material issue, including UPS, Cisco Systems, PepsiCo, United Continental and General Motors. These and the other companies in the report have already saved a billion dollars in energy costs and upped their business planning certainty. Far from a fringe or boutique concern, renewable energy investment is about knowing where your energy is going to come from tomorrow, and having some sense of how much it will cost.

It’s worth noting that several cross-sector partnerships and multi-stakeholder groups for climate issues have been working on these issues for years. The UK- and EU-focused Prince of Wales’ Corporate Leaders Group first convened in 2007. And the US-focused group BICEP has been advocating for energy and climate legislation since 2008, with its Climate Declaration attracting over 700 corporate signatories to date. (For more examples of creative, effective partnerships on climate-impacting issues, take a look at Sustainable Brands’ collaboration and co-creation channel.)

But just in the past three months, there have been several high-profile announcements, as well as one intriguing low-key entry. These are four groups to watch:

1. March 2014 — Business Alliance for the Future Meets for First Time
The Business Alliance for the Future is a new alliance of alliances that’s being organized and supported by about 40 business affiliations including BSR, B Team, Ceres, World Business Academy, SVN, National Association of Women Business Owners, Young Presidents’ Organization and others to “to connect, magnify and exponentially accelerate, business’ role in building a world where business excels, people thrive and nature flourishes.”

The group first met in March in Santa Barbara, CA and it is scheduled to meet again in October at the Fowler Center for Sustainable Value at Case Western University. The Alliance is formulating its strategy around the intention to dramatically impact existing game-changing projects (to the tune of 5x in 5 years) by fostering action-oriented collaboration.

According to Alliance member Jeana Wirtenberg, co-founder of the Institute for Sustainable Enterprise, who is heading up one of the working groups, “There are several collaborative action team initiatives already well under way, including: amplifying and spreading a new business narrative; creating 100 percent renewable energy economy; participating, aligning around, and designing a grand economic strategy; and developing and implementing a new corporate scorecard and metrics.”

2. May 2014 — We Mean Business Coalition Launches
While we don’t have specifics yet about what this group will tackle, We Mean Business stated goal on their website is to call for “ambitious climate policy and bold climate action.” The group is like a super-pod of business action leadership, with partners from BSR, CERES, CDP, the World Business Council for Sustainable Development, the Climate Group, and the Prince of Wales’s Corporate Leaders Group, in conjunction with Nike and IKEA.

3. June 2014 — Small Business Poll Shows Support for Market-Stabilizing Rules
In late June, the American Sustainable Business Council released poll results showing that US small business owners support climate rules for market stability and predictability.

The survey found that “clear majorities of small business owners are concerned about how climate change will affect their companies, including its impact on energy costs, health care costs and the infrastructure they depend on. Survey respondents voiced strong support for government action to address climate change, specifically, efforts to limit carbon pollution from power plants which produce a third of all U.S. carbon emissions.”

I find this poll interesting because it shows that leaders from small US businesses are on the same page when it comes to wanting business certainty in the face of climate instability as many of their colleagues at global behemoths.

4. July 2014 — Launch of Renewable Energy Buyers’ Principles
And on July 11, the World Wildlife Fund (WWF) and the World Resources Institute (WRI) announced that 12 major companies — spanning communications, manufacturing, consumer goods and tech — are jointly asking utilities and energy suppliers to offer more renewable energy products.

The Buyers’ Principles provide a coordinated starting point for what these companies need in terms of options, financing, contracts and emissions levels. The inaugural signers are Bloomberg, Facebook, General Motors, Hewlett-Packard, Intel, Johnson & Johnson, Mars, Novelis, Procter and Gamble, REI, Sprint, and Walmart. I’m hoping that this will be an unmistakable unmet need signal to the energy market that yes, business wants more renewables and is willing to pay for them.

In my mind, these groups are coming together now for one profound reason. With government paralysis on one side and entrenched lobbying for the fossil fuel status quo on the other, the Cavalry isn’t coming. If renewable energy and climate action are going to be truly become Business as Usual for successful companies — as Ceres’ clean energy report posits — then business has to make it happen.

Together, I see all these efforts leading up to this September’s UN Climate Summit in New York City, where business will be asked to take on larger and more meaningful commitments. Just last week, the UN event’s organizers and partners called for business leaders willing to stand up for carbon pricing “as a necessary and effective measure to tackle climate change.”

And then, it will be time to take all this positive forward momentum to the COP21 meeting in Paris in December 2015. That’s where, once again, the entire world will attempt to agree on climate action and who is going to pay for it. I’m hopeful that, by the time we get there, collaborative efforts like these will have blazed the trail for business to be a major part of the solution.

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Green Shift: Would you buy the apples over chips if they were cheaper?

Can a discount change consumer choices for the better?

Walmart and healthcare insurance provider Humana are betting yes.

In a program touted as a first-of-its-kind partnership, Humana customers will get a 5% discount on healthy food choices at Walmart.

Via PRNewswire.com:

Walmart and HumanaVitality Partner for First-of-its-Kind Healthier Food Program Designed to Incentivize Wellness in America

Beginning on Oct. 15, more than one million HumanaVitality members who shop at Walmart will be eligible for a new program which offers a five percent savings on products that qualify for Walmart’s Great For You icon, including fresh fruits, vegetables and low-fat dairy.

This program is asking, will consumers buy more healthy food if we reduce the price barriers?

Which brings up what I think it a far more interesting question.

Why is it that apples are costlier than chips in the first place?

It’s not that the apples are expensive, really. It’s that the chips are cheaper, because of subsidies.

The question I’d like to see answered is:  What do consumer buying choices look like when incentives for making healthy food affordable are evenly matched with subsidies that allow  junk food to be so cheap?

While this is a little afield from my normal Sustainability posts, bear with me.

What if the question were instead, “Can a discount change consumer choices for the greener?”

It takes us to the same place.

Like, say, with renewable energy sources.

We could just as easily ask : Why is clean, renewable power costlier than fossil-based fuels in the first place?

The answer is, it’s not. Fossil-fuels are cheaper because they are subsidized.

Worldwide, fossil-fuel is subsidized at six times the rate for renewables, according to the 2011 World Energy Outlook.

But grid parity–the point when renewable energy costs less than fossil-based fuels is coming, due to rapid advances in renewable energy technologies. It’s already a reality today in India, Spain and Italy.

(Update! Solar is cheaper than fossil in Massachusetts too.)

The playing field will look different once apples–I mean renewables–are on an even playing field with less-healthy, less-sustainable choices.

So, back to Walmart and Humana. What’s in it for them to discount apples?

If the bet pans out (and the research says it will): healthier, happier, loyal customers all around.

I support most anything that encourages consumers to buy healthier food. (If today’s Mark Bittman column linking Alzheimer’s disease to junk food doesn’t turn you off corn chips, I don’t know what will.)

I’m hopeful that the research that comes out of this partnership will help move Americans to buy more apples.

And by extension, support a shift towards supporting economically prudent, sustainable choices in other arenas, like energy.

Thanks to Jonathan Low for his post that alerted me to this story.

 

 

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Green Business: Walmart’s Sustainability Report

In a passionate opinion piece, GreenBiz editor Senior Editor Marc Gunther examines Walmart’s just-released 2012 sustainability report and asks: Is it good enough?

I’ll add: Is it the right way to go?

Via GreenBiz.com:

How Much of a Difference Can Walmart Really Make?

Read the report, and I think you’ll agree that Walmart is “greener” and more responsible than it used to be (that’s Duke’s claim), that the company does a lot of good (by delivering value to its customers and providing employment to 1.4 million people in the U.S. alone) and that it is a powerful driver of efficiency throughout the global economy (that’s at the core of Walmart’s business model, and its peculiar genius as a company).

And yet.

As I read the report, I was reminded of that even Walmart — which is arguably the world’s most powerful company — can only go so far when it comes to protecting the planet.

Gunther gives Walmart well-deserved praise for its ambitious, far-reaching improvements in 10 focus areas last year:

  • *Reduced waste by 80 percent
  • *Expanded locally grown produce (up by 97 percent)
  • *Pledged to source $20 billion from women-owned businesses in the U.S.
  • *Saved customers $1 billion on fresh fruits and vegetables
  • *Announced a “Great for you” icon that will help shoppers identify healthier food items.

Not to take anything away from these accomplishments, but I think Walmart benefits this year from the fast-start and low-hanging fruit.

If you double your locally sourced produce from none to one, that’s a 100% increase.

And what’s more, Gunther reminds us to keep an eye on the ball: the carbon emissions ball. For all the Walmart is doing business better, it’s doing more business and increasing its overall global carbon impact with each CFL bulb it sells.

Gunther says that the power to change Walmart’s course ultimately rests with us–not as consumers, but as engaged citizens.

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Green Business: Whither Walmart on Sustainability

Walmart is one of the biggest ships in the Sustainability seas. Wither goes Walmart, goes a big swath of American commerce, production,  and consumption. For good or bad.

TriplePundit.com reporter Jeffrey Hollender agrees, saying:

I believed and still believe, that no organization on the planet has more power or potential to very quickly effect positive social and environmental change than Walmart. More fuel-efficient trucks is easy low-hanging fruit, but when Walmart starts telling P&G to reformulate and redesign their products – we’re moving into uncharted territory.

Hollender goes on to say that Walmart’s ship was steering into greener waters in the late 2010s under the leadership of then-CEO Lee Scott. Several years after Scott’s departure, Hollender reports, Walmart has wandered off course:

Via triplepundit.com and MotherJones.com:

Walmart’s Sustainability Efforts Stall Under New Leadership

And even where Wal-mart has made its [sustainability] goals, questions linger.

Wal-mart concedes that the use of murky subcontractors is widespread in China, Africa, the Middle East, and Bangladesh. They won’t provide details about how they have achieved their goals, whether suppliers were asked or compelled to share factory information, and whether any suppliers lost orders or were fired for unsatisfactory responses.

Hat tip to commenter CBKSK for highlighting Walmart’s issues as a Principal-Agent scenario.

This means that when you hire someone to help you, they may or may not do things in a way that matches up with your best interests.

Effective Sustainability practices hinge on paying full freight for all the costs and impacts incurred by a business.

This looks to me like a case of missing and broken accountability links.

Whither Walmart? I’m hopeful the retail giant will veer back on track to results that benefit all parties in their business, including and especially its customers.