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This is the first in a series on Cruelty Free Supply Chains.

Most egg-laying hens in the U.S. are housed in cages which are only about the size of a piece of paper. The Humane Society of the U.S. (HSUS) calls cage laying hens "among the most intensively confined animals in agribusiness." Hens raised in cage-free systems are allowed to walk, spread their wings and lay their eggs in nests. Most cage-free hens live on farms, according to the HSUS, that are audited by certification programs that mandate hens have areas for normal chicken behavior, namely perching and dust-bathing.

Aramark, a global food services company, is the latest company to announce it will source all its shell eggs in the U.S. from cage-free hens. The company's target date for going cage-free is by the end of 2014. Aramark buys about 30 million eggs a year in the U.S., so its commitment will have an impact. Presently, eggs from cage-free hens are available for Aramark's clients, but only as an option. As the company states on its website, "For quite some time, Aramark has offered cage-free eggs to any client that wants them, and in fact, has helped many of its clients make the switch to cage-free eggs at their locations."

Aramark also recently announced that it is committed to eliminating sow gestation crates from its U.S. pork supply chain by 2017. It is the largest food service company to make commitments to sourcing eggs from cage free hens and gestation-free pork. Both commitments were made in collaboration with the HSUS.

This commitment to source shell eggs from cage-free hens, along with our recent commitment to eliminate pork from animals bred in gestation crates, helps move our industry toward an even stronger commitment to animal welfare," said Kathy Cacciola, Aramark’s Senior Director of Environmental Sustainability.

We appreciate ARAMARK’s commitment to improve animal welfare through sourcing practices within its supply chain,” said Josh Balk, director of corporate policy for the Humane Society of the United States. “ARAMARK is further proving that creating humane-minded policies is good for animals, consumers, and business.

Au Bon Pain, an international bakery chain, also announced its commitment this week to sourcing eggs only from cage-free hens by 2017. Currently 25 percent of its egg sandwich purchases are cage-free. The company also committed to eliminating gestation crates from its pork supply chain by 2017. The company is already sourcing all of its pork sausage from a farm that is 100 percent gestation crate-free.

A congressional bill introduced in January 2012, would create a national standard for the housing and treatment of egg-laying. Called the Egg Products Inspection Act Amendments, the bill, if passed, would require that the space hens are housed in increase, and would also require that they have areas that allow them to do what is normal chicken behavior. The bill was referred to the Subcommittee on Livestock, Dairy, and Poultry in February 2012, where it languishes.

Image source: Flickr user, petercooperuk

The following is part of a series by our friends at CSRHub (a 3p sponsor) – offering free sustainability and corporate social responsibility ratings on over 6,500 of the world’s largest publicly traded companies. 3p readers get 25% off CSRHub’s professional subscriptions with promo code “TP25.″ 

As previously seen on the CSRHub blog.

By Carol Pierson Holding

After a year where wind producers sat on their hands, waiting until Congress decided whether the wind tax credits would be extended, it finally happened: on December 31, as part of the fiscal cliff deal, Congress extended the production tax credit (PTC) for wind and other renewables through the end of 2013.

But one year is not enough time to get a wind production facility up and running. There are plenty of wind operations — some 100 pre-operational wind projects in the Northwest alone — that are far enough through planning stages to break ground in time to qualify. But any longer-term projects are stalled because of the lack of predictability for tax credits. Wall Street can’t invest with that much uncertainty. Even operating concerns cut back. In fact, this year’s uncertainty caused turbine manufacturers including Siemens and Vestas to cut back in the middle of last year.

What galls Energy Policy Expert Fred Hewitt is that energy subsidies have been a fixture of American policy since the dawn of the fossil fuel era, and yet lawmakers refuse to make subsidies for wind anywhere near permanent. Some eighty years ago, special treatment in the tax, accounting and business formation codes, from special depreciation and federal resource leasing rules, was put in place to support building the electric power system. Similar subsidies were given to the nuclear industry fifty years ago in the form of legal shielding in case of accident. These special incentives still exist today.

And yet the renewable energy industry has to apply every one or two or five years to have their incentives renewed.

Wind has its negative impacts, of course. Wind patterns are disturbed. Loud whirring interrupts the bucolic quiet. Birds are decimated if they fly into a turbine. All energy sources have their impacts. Only renewables are free from carbon emissions.

Fossil fuel lobbyists argue that wind is not reliable and has yet to prove its financial viability. But wind is no longer an energy source that has to prove itself. It’s a bonafide industry, drawing in investments of $15.5 billion a year with 500 companies currently competing in the U.S. alone. Small wind turbines are being installed in factory locations to protect manufacturers from energy shortages and price fluctuations. And because utilities have requirements to source additional energy from emission-free sources, future demand is assured. See 90 of these companies’ CSR ratings on CSRHub.

Still, how will this new industry go up against the might of its competitors, fossil fuel companies determined to slow its progress?

Despite its drawbacks, the PTC extension is not all doom. The fact that it passed at all amidst the chaos of the fiscal cliff is remarkable. While wind champions are generally pro-environmental Democrats, support was bi-partisan. Central state Republicans like members of the Red State Renewable Alliance supported the measure on behalf of rural constituencies for whom wind development is an economic godsend. As Hewitt puts it, “This is an important political signal.”

Still, the PTC will continue to be problem until it is extended for multiple years. The industry has come up with a compromise: through the American Wind Energy Association, the industry has offered a voluntary proposal to Congress to phase out Production Tax Credits over six years. Why six years? Because that’s how long it will take for wind to establish a stable base market in the U.S. and to invest in new innovations such as off-shore wind power.

Hewitt describes the kicker: they want all energy industries to do the same, phasing out special treatment of any kind. Over the same six years.

Many agree. The Environmental Defense Fund is quietly stirring support for getting all energy industry players agree to phase out subsidies, a goal that Obama touted in his State of the Union Address and which the G20 agreed to do for fossil fuels at their meeting last September.

How fitting that the wind industry, the youngest player and the one that really needs the subsidies, is the first to volunteer to give them up. Could it be that renewables are not only the most conservative environmentally, but fiscally too? You have to love the irony.

[csrhubwidget company="Vestas-Wind-Systems" size="650x100" hash="0f2d0b"]

 

Photo is courtesy of vauvau via Flickr CC.

Carol Pierson Holding writes on environmental issues and social responsibility for policy and news publications, including the Carnegie Council's Policy Innovations, Harvard Business Review, San Francisco Chronicle, India Time, The Huffington Post and many other web sites. Her articles on corporate social responsibility can be found on CSRHub.com, a website that provides sustainability ratings data on 6,700 companies worldwide. Carol holds degrees from Smith College and Harvard University.
CSRHub provides access to corporate social responsibility and sustainability ratings and information on over 6,700 companies from 135 industries in 82 countries. By aggregating and normalizing the information from 200 data sources, CSRHub has created a broad, consistent rating system and a searchable database that links millions of rating elements back to their source. Managers, researchers and activists use CSRHub to benchmark company performance, learn how stakeholders evaluate company CSR practices and seek ways to change the world.

 

You've probably heard that social entrepreneurship is on the rise, but what does that really mean? Let’s say you have an idea that will make the world a better place. Maybe it’s a new way to bring electricity to underserved villages in South America, or perhaps you want to start an organic, local food delivery service in your hometown. You’ve probably already done some research, at least enough to assure yourself that no one out there is doing exactly what you’re doing. Great start!

In 2012, approximately 10 million people were involved with social enterprises, generating more than $500 billion in revenue. Yet one of the key questions I run into as I work with social entrepreneurs is, how different are social startups from technology ones, or from other ventures in more established areas? Through a series of articles here at TriplePundit, I’m going to explore this question and provide some practical advice and tools to help social entrepreneurs to go from concept phase to launch and beyond.

Now what?

First, you need to answer some key questions to determine whether your idea can make it as a business.

• Who are your customers and what do they need that you can provide? Think about the demographics of the people who will want to buy your product or service, where they live, and how much disposable income they have. To answer this question, you’ll need to start talking to potential customers, do market research through surveys and focus groups (preferably with a prototype in hand), and continuously refine your customer segments. As you explore this question, remember to also think about whether there are enough customers as you’ve defined them to make your business viable—i.e. what’s the size of your addressable market?


• What is your value proposition? To answer this question, think about the benefits you are providing to your customers. You may also want to consider barriers to adoption, as well as possible substitutes that are already meeting their needs. And don’t forget to test your value proposition out with your target customers by doing more market research.


• Just as importantly, how is your value proposition communicated to your customers? This is a high level marketing question—don’t worry about whether it’s through social media or billboards or some other marketing channel yet. The key question here: what is the message that you need customers to understand when they see or think about your brand, agnostic of the channel? This may ultimately influence your brand values and even your product definition.


• How will you generate revenue? Assuming you don’t want to start a nonprofit that depends on donations and grants, you have to generate revenue to be a viable business. You may discover that you have multiple possible revenue streams. That’s great, but pick one to start with and phase in others (rule of thumb: no more than three revenue streams) over time. Also think about how much revenue can you generate in the first couple of years and how this may grow or change over time.


• Assuming you can generate revenue, is it enough to cover the cost of producing, marketing, and selling your product or service? Even if you don't know much about financial management, you can do a ballpark calculation of the costs needed to produce and sell your product. Subtract that from your expected revenue. If it’s positive, move forward; if not, go back and figure out how you can generate more revenue or how you can lower your costs. Easier said then done, of course.

Feeling overwhelmed?

Don’t worry, there are lots of resources that can help you to answer and organize these questions.

• Business Model Generation. This book, website, and iPad app (highly recommended) help you to think through and share graphically the nine basic building blocks of your business. In particular, it’s a great tool for non-MBAs to quickly get up to speed on what you need to think about as you’re creating a business. Other books to check out: Lean Startup and 4 Steps to the Epiphany.


• Find mentors. Mentors are usually experienced entrepreneurs who can help you figure out the answers to these key questions, provide feedback on your ideas, and connect you with other resources. Seek out mentors who may have a particular interest in and knowledge of your focus area through networking events, alumni associations, and by asking colleagues, friends, and family for suggestions. Mentors may also be good advisory team members for your startup!


• Join an incubator or accelerator program. Tech accelerators like Y Combinator and TechStars are booming, but there are also several that specifically focus on social enterprises. Greenstart works with clean tech businesses through its accelerator program and invests in exchange for an ownership percentage. Local Food Lab is an accelerator program focused on sustainable food business; they use a fee for service model, and they are also in the midst of setting up a seed fund for participants. Hub Ventures works with social enterprises, and is based out of a co-working community of social entrepreneurs in San Francisco.

What Next?

Once you answer these questions, you’re ready to explore some second order questions about your venture, like how fast you can and want to grow, what kind of investment you need to do so, who you’re competing with (and how you're different from them), and what strategies you’ll create to make your business successful. More to come on that in the next installment.

[image credit: The DEMO conference: Flickr cc]

This post originally appeared on the Green Money Journal blog.

By Lisa Hall, President and CEO of Calvert Foundation

Throughout the course of this year, I have found myself attending numerous conferences and participating in panel discussions where attention has been focused on impact investing. I believe that in 20 years we will look back and consider these past few years as the turning point in an economic movement. Looking forward to the next 20 years, there are many, myself included, who are convinced that we are experiencing a paradigm shift. A change in cultural norms and expectations that will result in all investors — individual and institutional — committing at least some portion of their investable assets to social impact and making investments that are in harmony with their values.

A true investment

When I joined Calvert Foundation in 2005, impact investing – investing for a financial and social return – was still a very new concept but was steadily gaining popularity. Back then we called it “community investing.” Call it what you will, this type of investing remains a core part of socially responsible or sustainable investing. What makes impact investing different is that we are not investing in publicly traded companies, but instead in organizations which help people to improve their lives through affordable housing, jobs, community services such as daycare and healthcare, and more.

When I say investment, I mean it in the truest sense. Calvert Foundation makes it possible for everyone – from individual investors in increments of $20 to large corporations in amounts as high as $20 million – to invest in low-income communities and provide capital where there is none. We enable Impact Investing through our Community Investment Note, which then directs capital to help finance affordable housing, charter schools, health centers, Fair Trade coffee co-ops, and job creation. These investments in the future of our country and our world are helping to transform the lives of individuals and families. At the same time, investors receive a return on their investment of up to 2 percent. This blended value investment generates both a social and financial return.

Thankfully, we are not alone in our efforts today. The idea that you can invest in socially responsible endeavors and get a return on that investment was radical when we initially conceived of it. Now it is a concept at the very forefront, influencing how investors think about risk, return and rewards. Calvert Foundation recently commissioned a study involving 1,065 financial advisors; 72 percent said they had interest in offering products that provide sustainable investment to their clients, while 38 percent expressed strong interest in being able to offer those products now. The advisers surveyed indicated that they were willing to recommend impact investments to one-third of their clients, dedicating 10 to 20 percent of their portfolios to this type of investing. Based on these numbers, the study estimates a sustainable investment market of about 2.5 percent of advisers’ assets under management, or $650 billion. The change that these dollars can make is both monumental and within the scope of our imagination, our expectations and our ability.

A role for everyone

Those of us working for this change are inspired and encouraged by the growing interest in sustainable investing within the business community. Large corporations are beginning to understand the power of uniting investment and social conscience. A great example is Starbucks. Earlier this year, Starbucks teamed up with the Opportunity Finance Network (OFN) to help create and sustain jobs. The Create Jobs for USA program provides capital grants to select Community Development Financial Institutions (CDFIs). These CDFIs, which include Calvert Foundation, provide loans to underserved community businesses. The goal of Create Jobs for USA is to bring people and communities together to create and sustain jobs throughout America. Not only did they initially seed the program with a $5 million contribution by Starbucks Foundation, they also made an important public statement about the potential of corporations – and each of us – to make a difference and be part of the solution to our current social and economic challenges.

Real-life examples

What does impact investing look like? For an investor, it looks much like the rest of his or her portfolio – until that investor understands the social impact they are making. “Calvert Foundation offered me a great opportunity to give food to my soul when it came to switching from Wall Street to an organization that is entirely devoted to helping the community, especially the needy, in a varied, fruitful, and meaningful manner,” said Marta Santiago, a New Mexico resident and Community Investment Note holder since 2005.

Over the years we have enjoyed great success in bringing new investors to the table by making multiple channels available to them. By working with financial advisors and transacting through multiple brokerage firms, we have enabled investors to hold the Community Investment Note in their investment portfolios. Through our partnership with Microplace, an eBay company started in 2007, we have made it possible for investors to purchase Notes online, starting as low as $20. Investors can also come to us directly, opening a Note through an application and simply writing a check. We know that we have to do more to engage and educate investors in order to grow our investor base beyond 10,000 people. In the years to come, we will continue to increase the distribution of our Note – and additional investment products as we develop them – through more and more mainstream brokerage firms. We are also developing strategies to bring new investors into the fold. For example, we want to engage the millennial generation through partnerships with colleges and universities, social media outlets and networking events. We are also embarking on efforts to connect diaspora communities and enable individuals to invest in their countries of origin. Other special initiatives that we envision for the future include regional initiatives. Imagine a program that allows anyone to invest in community projects that help to rebuild America, create jobs and improve critical services in distressed areas like Detroit.

For people in need of help and opportunity, it looks like hope and a way to serve needs across all different types of communities. Take, for example, children in Minnesota. When the state experienced the longest state government shutdown in our nation’s history last year, the hardest hit were non-profit organizations that depend on funding from state grants. Where did Minnesota-based non-profits turn when they could no longer count on their primary source of funding to continue providing critical services? The Nonprofits Assistance Fund (NAF), a Calvert Foundation borrower, stepped in to offer emergency bridge loans, providing credit to cover cash flow delays for groups like Northern Lights Community School of Warba, MN. A well-managed and incredibly successful school catering to students who have faced difficulties in traditional public school settings, Northern Lights got a loan from NAF to fill the school’s financing gap. Since 1980, Nonprofits Assistance Fund has provided over $75 million in loans to more than 1,700 non-profits. Impact investors working through products like Calvert Foundation’s Community Investment Note are a key part of this process. “Years ago, we came across an opportunity to fund a project and were unable to get the financing we needed from anyone but Calvert Foundation,” said Kate Barr, NAF’s Executive Director. “NAF is now serving this role for the communities of Minnesota when it’s needed most.”

Calvert Foundation’s work and Impact Investing as a sector has a global reach. Consider Lucy, who lives in a small village in Northern Kenya. Lucy wakes up bright and early, nudges her kids out of bed, and prepares a meal to start their school day. While it sounds like a scene played out in homes across America, it bears no resemblance at all. Lucy’s day begins at 4:30 am. That’s when women in the drought-ravaged region of Meru begin an hour-long trek to collect water from a stream. On this day Lucy feels lucky since back at home she finds enough wood to start a fire. It also means a five-kilometer walk to collect wood can be put off until tomorrow. Thanks to our partner The Paradigm Project, which we provide an opportunity for investors to invest in through our Community Investment Note, Lucy and others like her are receiving relief through clean-burning stoves that reduce wood consumption and toxic smoke, saving women long and often treacherous journeys to collect wood. Although the stove is a solution to just one problem, Lucy views it as a way to restore dignity to women for whom mercy has been in short supply.

Aligning our money with our values

Taking part in this movement is not simply our individual and collective responsibility; it also creates mutual benefit for investors and the recipients of these investments. It’s time to align our money with our values – to have our money working in harmony with what we believe and not against what we believe.

Anyone can do so by investing as little as $20 in women’s economic empowerment on Microplace. You can serve as a mentor to an entrepreneur just starting out. You can give to a community organization providing job training. At Calvert Foundation we believe that Impact Investing represents the best of what we can be as a society — not for the 99 percent or for the 1 percent, but for the 100 percent. Economic recovery rests on ensuring sustainable access to capital, both to grow existing businesses and to finance new ventures and innovation. Through groundbreaking mechanisms, promising models are actively supplying much-needed capital to small businesses and economic development projects. In some cases, these models are also demonstrating new and sustainable ways to grow wealth and to help communities adapt to a changing economy.

At Calvert Foundation we spend a lot of time explaining what we do – I hope in this article we have been clear about what we believe. We believe in economic justice. Impact Investing in economic justice means that families in Cambodia and other emerging economies can send their children to school – providing an education that prior generations didn’t receive. It means being able to stay in your home after being a victim of predatory lending. The numbers of people left behind by traditional financial systems is growing – but over the next 20 years we can reverse this trend. Our current financial systems are just not enough to meet the challenges and needs of these turbulent times. Calvert Foundation offers a solution through our Community Investment Note. We encourage everyone to take part and participate in this simple solution that creates economic opportunity for all.

Article by Lisa Hall, President and CEO of Calvert Foundation ( www.calvertfoundation.org), a nonprofit that has pioneered impact investing, a type of investing that delivers social and financial returns. When Lisa joined Calvert Foundation in 2005, she took on management of a $76 million loan portfolio as Chief Lending Officer. Over the years, Lisa more than doubled that portfolio to nearly $190 million, while keeping losses under 1.2 percent during one of the most economically challenging periods in recent history. Follow Lisa on Twitter @LisaGreenHall

[image credit: wonderwebby: Flickr cc]

By Michael Ashcroft

The world shoulders a heavy burden when it comes to shifting our stuff. Could new approaches lighten the load?

Despite growing enthusiasm for local products, most of the items that end up in your shopping basket or in your wardrobe will have journeyed through a global cargo system that is as complex as it is carbon-intensive.

Indeed, according to most estimates, moving things (including people) around accounts for 15 percent of global carbon emissions. Shipping, according to the International Maritime Organization, represents more than 80 percent of global trade – and is the most efficient means of transporting large quantities of goods over significant distances. The World Shipping Council points out that if all the containers from an 11,000TEU [twenty-foot equivalent unit] ship were loaded onto a train, it would need to be 77km long.

Nevertheless, the 50,000 merchant vessels on the world’s seas and oceans at any given time are responsible for emitting 1 billion tonnes of CO2 each year. Cross-continental traffic is set to increase with population growth and urbanisation, so the race is on to rethink each stage of the global supply chain. Can industry find a way to transform this heavy load into an efficient system of exchange?

The first step has to be finding out where the inefficiencies lie. You might start by looking for the worst performers – but that’s not always easy, says Peter Harris, Director of Sustainability, EMEA at the logistics firm UPS. The complexity of the supply chain makes it “very difficult to measure sustainability performance objectively between two companies, even in the same sector,” he says.

One beacon of hope in all of this is the trend towards transparency. If data hackers are able to make sense of supply chain impacts, retailers and consumers will come to expect a new level of accountability. This should help to drive improvements in performance and ultimately enable more sustainable decision-making for business and, in particular, procurement.

Take, for example, Green Freight Europe. This consortium of more than 65 carriers, shippers and logistics firms monitors and reports on the carbon performance of road freight companies. It’s facilitated by the (neutral) European Shippers’ Council and the Dutch Shippers’ Council, and the London-based Energy Saving Trust has been contracted to develop the methodology and operate the platform. The aim is to help logistics companies pick the carrier best placed to boost their sustainability credentials – while saving them money on fuel. This also drives best practice by rewarding carriers that invest in energy-efficient technology with new business.

“We intend to use Green Freight Europe to get a better understanding of the environmental performance of our subcontractors,” says Harris of UPS. “And it will give us an opportunity to demonstrate our capabilities to our customers.”

It’s all very well for road freight moving across defined and well-regulated geographical regions. But how would it work for shipping? At the moment, sea freight works something like this: the organisation with goods to transport subcontracts to a logistics company, and the logistics company, in the majority of cases, charters a ship.

Demand for efficiency could reward those who do maintain a clean fleet.

Here’s the hitch: as the cost of a ship’s fuel is paid for by the charterer, the ship’s owner has no incentive to install efficiency measures. One way to overcome this could be to increase the demand for efficient ships, and make sure they are available to charter, thereby rewarding those owners who do maintain a clean fleet.

An initiative spearheaded by the Carbon War Room seeks to do just this, by providing a database of a large proportion of the world’s shipping fleet, complete with efficiency data. When charterers need to procure a ship, they can search the database of over 60,000 vessels and select an efficient one. Each ship is assigned a rating using an A–G rating system, the Existing Vessel Design Index [EVDI], developed by Melbourne-based ship vetting specialist RightShip. When an owner upgrades a ship, they are encouraged to update the details on the database.

This initiative is already being used by some major players. Cargill, one of the world’s leading agribusinesses, is one of 180 organisations globally to have signed up to RightShip’s EVDI rankings service. “We endeavour to charter the most efficient vessels operating in the shipping market,” says Jonathan Stoneley, Environment and Compliance Manager at Cargill. “This is a significant commitment as it marks a first in the industry.”

At the same time, ship owners, charterers, builders and engineers, as well as the insurance and logistics sectors, have teamed up with Forum for the Future and WWF to launch the Sustainable Shipping Initiative [SSI]. It aims to set the industry on course to be resilient, socially and environmentally responsible, and profitable – by 2040. Making transport more efficient is the most pressing challenge facing the industry right now, and the most attractive from a savings point of view, and so the SSI is exploring everything from better planning of shipping routes to enhanced ship design to slower (and therefore cleaner) traffic.

Making the vessels themselves more efficient is just a start, admits Sam Kimmins, who leads the SSI at Forum for the Future. More pressing over the longer-term, he explains, is the need to make the logistics chain, as a whole, more sustainable, something which requires a major rethink of not just how goods get from A to B, but why they are sent in the first place. Indeed, would it be best to just cut out the need for global transportation completely?

Not necessarily. According to the Low Carbon Leaders Project, an initiative supported by the UN Global Compact and WWF, transport can be part of the solution rather than part of the problem. Its Chasing the Sun initiative, which has the support of Maersk, imagines a more holistic approach to transport and logistics, going way beyond new hull designs and fuel-efficient routes. Take fruit and vegetables. While produce grown locally may, to European consumers, appear to be the "green option," Chasing the Sun asks whether shipping fruit and vegetables from regions of high solar input such as Africa may be more sustainable. The fertiliser and pesticides needed to grow such crops in colder climes have a greater carbon footprint than that of a fuel-efficient container ship, the reasoning goes.

Kimmins would like to see the speed of travel given the same public profile as the distance, where environmental impact is concerned. Any possibility of moving freight by sea rather than by air should be explored as a priority, he maintains, replacing the culture of getting the product from A to B as quickly as possible with one where it journeys as sustainably as possible. “Both consumers and importers need to ask themselves, ‘Can I wait a few more days and get this shipped rather than sent by air mail?’” he says.

Patience is one thing; financial incentive another. To create change at scale, sustainable cargo options have to be attractive to business. “It’s a case of constantly looking for ways to bring things into the space where economic and environmental intersect,” says Harris. “Sustainability is a commercial thing. Ultimately, organisations cannot function on a dysfunctional planet.”

Michael Ashcroft is an energy technology and policy analyst and freelance writer.

Green Futures is the leading magazine on environmental solutions and sustainable futures.

Photo: UPS

By Christina Andersson Medina

Being European, living in the U.S., I often credit myself for being from a more climate change-savvy continent. The flagship program of Europe’s climate politics is the Emission Trading Scheme for carbon credits (EU ETS). Although somewhat dysfunctional in the first years (2005-2008), it set stringent goals to reduce carbon emissions by 20 percent by year 2020, compared to 1990 levels. Until 2010, the goal seemed to be on its way to being met as reductions reached 17 percent, but after 2010, something happened. Emissions started to rise again.

Politicians in Europe could not foresee the downturn in the economy, which caused a decreased demand for carbon credits and built up a large surplus of emission allowances. However, since the worst recession, carbon prices have not raised in line with the rest of the economy, or with the emissions. Prices still hover around €5-7, half below the market price where they actually need to be.

I don’t feel so proud of Europe anymore. Coal is re-emerging as a dominant fuel source.

This dirty fuel is the most polluting of all energy sources, there is plenty of it, and it’s cheap – at least in Europe. The low carbon price has made coal even more profitable. The root of the new golden age of coal in Europe is the shale gas boom in the U.S. Without getting into any discussions about shale gas, let’s just face the fact that Americans are turning their backs on coal, as the less-polluting natural gas over here has become so cheap. Combined with a slowing Chinese demand, marketers of American, as well as European coalmines now see Europe as its primary market.

Renewable energy such as wind and solar have been able to grab great market shares and will continue to grow. But as it looks now, coal seems to be replacing (in Europe, the more expensive) natural gas, and Germany is phasing out nuclear power, not coal. In Germany, RWE generated 77 percent of its electricity from coal in 2012, compared with 66 percent in 2011. In the UK, coal has surpassed gas. Electricity generated from coal in Q3 2012 was 50 percent greater than in the same period in 2011.

Perhaps the coal boom is just temporary, as new legislation needs to be met for all coal-power plants by 2016, or maybe not, as new plants are being built to replace some of the old ones. Even Sweden, the “environmental haven” is investing in new coal-power plants via state-owned Vattenfall.

There needs to be more certainty around the carbon price for the long term. The EU Commission has proposed to withhold some emission allowance for some time in order to even out the surplus and boost the price (i.e. set-aside), but no one knows for sure if it will be implemented, or how much it will help. I have been following the debates for some time, and know the bureaucracy and lobbying in the EU Commission. What EU needs is not a quick fix, but a longer-term fix to the system in order to restore trust for businesses to invest in renewable energy and abatement technologies and to overcome coal.

Since ETS is a leading symbol of the effort to tackle climate change and reach Europe’s environmental targets, it is critical that the European institutions take decisive action with either price-based or quantity-based instruments, or a mix of both.  2013 emission allowances will be auctioned for power utilities, but as long as the surplus exists, it's doubtful if prices will take the neccessary jump. Restoring the ETS with firm and consistent actions would enable EU to achieve its emission goals and force the energy markets to change, and it would allow Europe be the emission reduction leader it once was.

[Image credit: Public Domain Photo, Flickr]

Christina is a sustainability, climate change and carbon emission trading consultant and advocate. She is Swedish and lives in New York City. For more insights visit nullam at Wordpress.

IKEA Group releases its 2012 sustainability report today. The 58-page document attempts to answer a question many ask themselves at the site of the ginormous blue and yellow temples of retail prowess: can a megastore selling cheap furniture and home furnishings in 300 stores around the world become a beacon of sustainability?

IKEA believes its global force of 139,000 employees have an important role across the world, according to Steve Howard, the company’s Chief Sustainability Officer. Sitting next to IKEA’s CEO, Mikael Ohlsson, Howard has had a central role in transforming the company’s supply chain, products and the retailer’s focus on becoming an even more values-driven company. I went into our phone conversation highly skeptical. After all, how can a company known for particle board furniture, exurb locations--not to mention the giant bags of frozen Swedish meatballs--change supplier's and consumers's hearts and minds to think more sustainably? The answers lie everywhere from energy efficiency to supply chain management to improved design.

“We’re not just buying RECs or ‘green energy,’” Howard said as we started our phone conversation. IKEA has been strategically investing in solar and wind energy. Over 300,000 solar panels are on top of IKEA’s stores and distribution centers; while, at best, a solar installation can provide up to 15 percent of an individual store’s needs, they can come close to meeting 100 percent at a warehouse. Add the additional punch of wind power to the point where some of IKEA’s wind farms qualify as small or medium power installations, and the company now generates 34 percent of its energy needs via clean energy. By 2015 IKEA will invest $2 billion (€1.5 billion) in renewables--but the path is hardly easy. What Howard described as “policy uncertainty” and the permitting challenges IKEA faces means the company would otherwise be 20 to 30 facilities ahead of schedule. The quest to use more clean energy affects IKEA’s supply chain, too.

With over 1200 suppliers, IKEA has a complicated global supply chain. IKEA is encouraging those vendors to move towards renewables as well. With a goal to reduce its suppliers’ total carbon emissions 20 percent from 2011 levels by 2015, the company works with suppliers to meet their goals, even offering financing for solar projects if necessary.

Compliance is also central to IKEA’s supply chain, too. Over 80 internal auditors verify data suppliers send to IKEA, and the company terminated business with at least 60 suppliers recently to a point where some stores had shortages of certain products. Howard, however, insisted during our talk that the company seeks to go above compliance and toward “shared value.” Transparency is part of the conversation: IKEA is helping suppliers build capacity so they have the capability to report on their own progress and develop their own long term strategies.

So can a lean supply chain offer value for customers? “We want to price innovation low,” Howard said, and to that end, IKEA is pushing the envelope on a bevy of products, from LED lights to white goods such as dishwashers to even shelving. Newer and more innovative products are usually more expensive and priced out of many consumer’s price range. But IKEA’s goal, insists Howard, is to roll out more efficient products so that the world’s emerging middle class, and even the poorest consumers, can afford them. Among developments in the pipeline are induction stoves that can cook twice as fast with half the heat; a cost-effective product line of LEDs meeting IKEA’s goals of eliminating all other types of bulbs by 2016; and new shelving such as the Besta (pictured above right) that uses less wood but is actually lighter and more durable.

Hence a scan through IKEA’s newest sustainability report is full of goals the company wishes to achieve. Some may scoff at all of the 2020-based initiatives, but as Howard reminded me, companies, and the people working within them, are driven by goals. And never mind the 100 percent goals: “They give you no wiggle room,” Howard said. And some goals are harder than others. Howard said the company could not step up to its promises to improve on its sourcing of sustainably sourced wood--currently about 23 percent of it is Forest Stewardship Council (FSC) approved.

So as the global middle class grows, IKEA will increase its “sustainable” product line fourfold over the decade. Can this big box store really encourage sustainable consumption and improve the health of the planet and well-being of people? A lot can happen in seven years: the affordability-sustainability nexus will be an intriguing one to watch.

Leon Kaye, based in Fresno, California, is a sustainability consultant and the editor of GreenGoPost.com. He also contributes to Guardian Sustainable Business; his work has also appeared on Sustainable Brands, Inhabitat and Earth911. You can follow Leon and ask him questions on Twitter or Instagram (greengopost). He will explore children’s health issues in India next month with the International Reporting Project.

[Image credit: IKEA]

 

Eco-friendly cars, peer-to-peer mortgages and loans that help the environment, collaborative consumption programs that inspire cleaner technology: The sharing economy is obviously inspired by a global concern for the environment.

Or is it?

There’s no doubt that sharing promotes collaborative exchange and that husbanding our natural resources is good for the environment, but will this trend of “what’s mine is yours” continue to promote sustainability?

Inspiring a sustainable Sharing Economy

The answer to that question, say researchers, is as old as human history itself. What motivates our concern for the environment is personal need and survival.

Assistant Professor Cait Poynor Lamberton at the University of Pittsburgh and her team examined the motivators for 369 licensed drivers who used car sharing as a form of transportation. The participants were asked to rate the importance of various factors in choosing a car-sharing program. The fear of “scarcity” - defined as an apprehension that a given service or item wouldn’t be available - came out on top as the key motivator to using a sharing program, not the environment.

"It's important to convince people that it is a safe decision to switch to sharing,” Lamberton said in an interview with the university’s business e-zine, PittBusiness. Lamberton pointed out that this data would help sharing-oriented businesses figure out how best to reach their customers.

But does that mean that concern for the environment will eventually go by the wayside? An ecologically sound environment is, after all, critical to our personal needs and survival. And programs that are responsive to those demands are essential in today’s urban environment. Ergo, car sharing programs that can shuttle people short distances in bad weather, communal dinner programs that use fewer local resources, home rental listings that turn empty bedrooms into short-term (and inexpensive) lodging, etc.

The Shared Economy to the rescue

Nowhere has there been a better example of the value of a local sharing community than in New York, as victims of Hurricane Sandy’s destruction last November found out. Car-sharing helped get stranded people back on the road and back to work; online accommodation-sharing services connected victims with temporary housing; coworking spaces became essential backups for those whose offices were damaged during the storm.

But how environmentally sustainable really are co-sharing programs and services? Sure, they may be helpful during hurricanes or earthquakes, but do they really help lessen our carbon footprint on the environment?

Does renting a private room in a home for a few nights instead of in a hotel automatically save wear and tear on the environment? It fills a bed that would otherwise be temporarily empty, but, of course, it may diminish other services that would be provided in a hotel: an extra washing of linens, the supply of soaps and other complementary items during the stay, and electricity usage and other services needed for cleaning the room after the stay.

Supporting sustainability through selective choices

Similarly, it’s not the use of a car-sharing service that reduces smog on urban highways, but how that service is used.

Katie Stafford, corporate communications manager for Car2Go, stated that research has found that car-sharing services are most successful at reducing carbon footprint when they are used for short essential hops, such as from the light rail station to the place of employment. This "first- and last-mile" service concept allows drivers to share resources and reduce the number of cars actually used on the road.

"While people can use a car to go out for days at a time, our service is really meant for short trips ... and sharing a network of cars with their neighbors,” Stafford said.

Interestingly, the collaborative consumption idea also works best when there is a large variety of shared services.

"You can't just have one thing shared," said Stafford. "There have to be many different things shared for the sharing economy to really work."

That means also having a good selection of public infrastructure such as light rail, bus, train or other supplemental services to interlink with its services. Car-sharing programs like Car2Go, ZipCar and peer-to-peer car rental services work so well in Seattle, Washington D.C., San Francisco and Vancouver, B.C. Canada because residents are able to access a variety of public services and fill in the short jaunts with car sharing.

Smart choices or smart regulation?

Finally, the San Francisco-based nonprofit organization SPUR points out that municipal and state laws need to stay abreast of the increasing demand for shared services in order for their demand to grow. Examples include modifying tax laws to encourage shared use programs and adjusting parking regulations to allow for car drop offs and pick ups on downtown streets.

But regulations may also be needed to guarantee that shared services are environmentally sustainable, not just economical. As Lamberton’s study points out, users may be motivated by need and comfort, but the true beneficiary of a shared economy is still Mother Nature.

[Images courtesy of Guerrilla Futures/Jason Tester]

By Andrew Kuyk

Innovation and technology can help make what we eat tastier and more sustainable, says the Food and Drink Federation.

Putting science and food in the same sentence makes many people feel a bit uncomfortable, but we see nothing scary about the innovation and technology in instant coffee, or tomato ketchup, or any of the hundreds of familiar processed food products the safety, convenience, quality, consistency and shelf-life of which we take for granted every day. We have even come to assume that it is "natural" to have fresh fruit and vegetables all year round, without any thought about delayed ripening, artificial atmospheres and extended growing seasons. We are simply used to buying what we want, when we want it, without any real idea about how it gets to the shelves – or whether it will be there tomorrow.

In part, these assumptions are a result of the growing disconnect in modern urban societies between what we eat and where it comes from. Some children don’t know that milk comes from cows, let alone what pasteurisation is. Some adults would be at a loss to say what does or doesn’t grow on trees or come out of the ground. Another factor is the success of the food industry in providing us with effortless choice and abundance, come wind or weather. But what if the weather is repeated drought, and the wind a hurricane? What if climate change helps spread new animal and plant diseases with the potential to devastate yields – the food equivalent of ash die-back? What would we give then for resistant crop strains and effective animal vaccines – or for varieties that can be grown with less water and in poorer soils? Or for food technologies that extract every ounce of goodness from what can be grown, and help make products last even longer – so that we can eat them all up, without throwing half away when they spoil?

A sustainable supply of food isn’t our only concern. We also want our food to be healthier and taste good with less salt, fat or sugar, and ideally give us additional nutrients as well.

How do we think all this can be achieved if we leave science out of the equation? And why should food be the one area of human activity where we turn our backs on how to achieve our aims more efficiently? Where would we be in transport, medicine or communications if we had stopped investing in research and development? In a world where we need to produce more from less, and with less environmental impact, we cannot afford to close our minds to what new technologies may have to offer, or to imagine that business as usual will do.

For countries under severe pressure to produce more food, getting smarter with science to meet future demand is simply common sense, not vested interest on the part of big business. China, for instance, has around 20 percent of the world’s population, but only 9 percent of global arable land and 6 percent of water resources.

We need to build trust before empty shelves start dictating our choices

Of course, safety has to come first, for people and for the planet. There should be rigorous assessment, and decisions must be founded on evidence. If we are to make progress before empty shelves or empty pockets start dictating our choices, we need to build trust and engage in rational public debate. That is a task for government and the whole food chain. And for scientists and consumers, too.

Andrew Kuyk is Director, Sustainability Division at the Food and Drink Federation. Green Futures is the leading magazine on environmental solutions and sustainable futures.

[image credit: Joseph Robertson: Flickr cc]

Climate change is one of the most serious issues of our day. Take the Arctic sea ice, which covers an area about the size of the U.S. Between 1978 and 1996, Arctic sea ice decreased by an estimated six percent, losing an average of 345,300 square kilometers a year, an area larger than the Netherlands, according to Worldwatch Institute. The average thickness of Arctic sea has thinned also.

From the 1960s to the mid-1990s, Arctic sea ice thickness decreased from 3.1 meters to 1.8 meters, a 40 percent decrease in less than 30 years. The Arctic Greenland Ice Sheet, the largest land-based ice mass outside of Antarctica, has thinned over a meter a year on average since 1993 along parts of its southern and eastern edges. Loss of Arctic ice means polar bears lose their habitat.

Enter the World Wildlife Fund (WWF) and the Coca-Cola Company which launched a partnership in 2011 to help preserve an area of the Arctic sea ice. The WWF created a management plan for an area in Canada and Greenland that has a "safety net" of ice that many scientists think will last longer than other places. The WWF calls this place the "Last Ice Area," which covers about 500,000 square miles, or twice the size of Texas. The management plan covers many needs, including:

• Conserving the habitat for Arctic ice-dependent species, including polar bears


• Protecting the cultural heritage of local people


• Improving livelihoods

Coca-Cola launched the Arctic Home campaign in 2011 to raise awareness and funds. In the fall of 2011, Coca-Cola launched a limited edition Arctic Home Coke can, and added white bottle caps on Coke and other Coca-Cola products. The limited edition Coke cans and white bottle caps, in stores from November 1, 2011 to February 2012, featured a mother polar bear and two cubs trekking across the Arctic. The company re-launched the Arctic Home campaign on December 1, 2012. As part of the second phase of the Arctic Home campaign, Coca-Cola has brought back the memorable Coke cans with the mother polar bear and her two cubs. The cans will be on store shelves until February.

As part of the first phase of the Arctic Home campaign, Coca-Cola invited its customers to donate to WWF by texting the package code. Through its customers' donations, and its matching funds, almost $1.8 million was raised. The company is doing the same thing this year, and is committed to matching up to $1 million in donations through February 15, 2013. Coca-Cola almost committed to donating $2 million over a five-year period.

This is not the first partnership between WWF and Coca-Cola. Since 2007, WWF & Coca-Cola have worked together to improve the company's water efficiency and reduce greenhouse gas (GHG) emissions within its manufacturing operations. The company set the goal of reducing GHG emissions five percent in developed countries by 2015, a goal it has already exceeded. In 2011, the GHG emissions levels from the company's operations in developed countries were nine percent below 2004 baseline emissions.

Image source: World Wildlife Fund