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Nearly 1 in 3 American adults has an arrest record that may appear on a routine employment background check, affecting their chances of being hired. This fallout from our mass incarceration crisis leaves millions of people struggling to find work, many with old or nonviolent convictions.

In 2003, a group of formerly incarcerated people and their families had enough. They formed All of Us or None, a grassroots civil rights initiative. The group pushed for equal rights for formerly incarcerated people, and one of its seminal undertakings was the Ban the Box campaign.

Not to be confused with those "don't block the box" traffic signs, "ban the box" legislation delays background-check inquiries in the hiring process. So, instead of checking a box on the initial application to disclose criminal history, an applicant can be reviewed on his or her qualifications first, proponents say.

"Ban the box is a way for employers to see people who have criminal legal involvement like we do, which is just like any other person," Kathleen Lockwood, an attorney with the Southern Coalition for Social Justice, told TriplePundit. "Once they’ve paid their debt to society, they should be able to have the same opportunities and be seen for the qualifications that they bring to the table and not for their criminal legal involvement."

Based in Durham, North Carolina, the Southern Coalition is a nonprofit that seeks to mobilize communities of color to "dismantle structural racism and oppression." In 2011, the group worked with Durham officials to ban the box on county and city job applications. It says the percentage of people with records hired by the city increased each year since.

And Durham is not alone. To date, over 150 cities and counties removed the question regarding conviction history from their employment applications. Seven states changed their public hiring practices to reduce discrimination based on conviction records. And President Barack Obama even banned the box on federal job applications last year.

Proponents say ban-the-box policies reduce recidivism by paving the way for legal employment -- which boosts the local economy and helps the taxpayer: In 2011, the Economy League of Greater Philadelphia found that hiring 100 formerly incarcerated people would increase income tax contributions by $1.9 million over the workers' lifetimes and save $2 million annually by reducing criminal justice costs associated with recidivism.

The policies can also give people a second shot at life -- people like Clarence Harris, a father of two from Southwest Philadelphia. Harris graduated from Bucknell University with a triple major and a high grade-point average. But everything changed when he and his wife started having financial problems and he was sentenced to 18 months in prison for writing bad checks.

After his release, Harris hit a brick wall when trying to find work. "I've been on a constant job search," Harris, then 46, told the Philadelphia City Council Committee on Public Safety as they considered ban the box in 2011. "I've struggled to find employment in keeping with my experience and training."

Considering the size of our prison population -- over 2.2 million people at last official count -- it's clear we can't leave ex-offenders out of the economic equation. And despite making up less than 14 percent of the U.S. population, African Americans represent nearly half of U.S. prisoners, so this is clearly a racial justice issue as well as an economic one.

Ban the box and discrimination in hiring

In short, ban-the-box policies are aimed at reducing hiring discrimination against people with records. "Ban the box creates an even playing field for people with criminal legal involvement as compared to people without that involvement," Lockwood said simply. She pointed to Durham, where the hiring of ex-offenders is now up nearly sevenfold, as evidence that the policy is working.

But over the summer, a wave of studies came out challenging the efficacy of ban-the-box initiatives, claiming such policies actually increase discrimination against another group: young black and Hispanic men without records.

In a multi-year study, two researchers from Princeton University and the University of Michigan sent out 15,000 fictitious online job applications to employers in New Jersey and New York City, both before and after they introduced ban the box.

Unsurprisingly given prior research, white applicants were more likely to receive a callback than black applicants. But the researchers insist ban-the-box policies widened this gap: "Before BTB, white applicants to BTB-affected employers received about 7 percent more callbacks than similar black applicants, but BTB increases this gap to 45 percent."

Another study, published in July and updated this fall, came to a similar conclusion: "BTB policies decrease the probability of being employed by 3.4 percentage points (5.1 percent) for young, low-skilled black men, and by 2.3 percentage points (2.9 percent) for young, low-skilled Hispanic men."

"This is consistent with the idea that when employers don't have more specific information about an individual's criminal history, they use race as a proxy for criminal status," Jennifer Doleac, lead author of the study and a professor at the University of Virginia, told TriplePundit in an email. "Clearly this group of men faced racial discrimination before, but what we're finding is that BTB increases employers' discrimination based on race (combined with age and education level)."

It's worth noting that these studies focused on ban-the-box policies which include a mandate for private-sector employers. The vast majority of such policies focus solely on city, county or state employees. All the same, ban-the-box proponents were quick to criticize the research. Lockwood put her argument simply in a September op/ed, saying: "Systemic racism, not ban the box, is the problem."

The National Employment Law Project published a point-by-point rebuttal to the studies in August. Maurice Emsellem and Beth Avery of NELP had plenty to say about the researchers' respective methodologies. But, echoing Lockwood, their concerns hinge predominantly on that last bit: using race as a proxy for criminal history. They say the researchers are too bogged down in traditional economic thinking to see what's right in front of them.

"The premise of the argument is that employers who profile young African-American men as 'criminals' should have access to the conviction history information of applicants to dispel the racial stereotype. Rather than identifying the root of the problem — which is both coupling criminality with being African American and the dehumanizing of individuals with records — the argument blames the reform," Emsellem and Avery argued.

"This distinctly economic framework, which views employers as entirely rational actors, fails to appreciate the extent to which negative racial stereotypes continue to plague the hiring process."

A long, ugly history of hiring discrimination

People of color, predominantly young men, have endured decades of hiring discrimination -- independent of criminal involvement. Ongoing research indicates white men with criminal records are still more likely to get jobs and callbacks than black and Hispanic men without records (see these studies from 2003, 2008 and 2014).

BTB proponents say extending protections to people with criminal records only pulls back the veil on this discrimination -- further underscoring our need to address it. "Even accepting the questionable conclusions ... at face value, they merely reinforce the need for stronger anti-discrimination law enforcement and further policy reforms to help eradicate the underlying discrimination, not a rejection of ban-the-box protections," argued Emsellem and Avery of NELP.

In 2012, the Equal Employment Opportunity Commission (EEOC) took what NREL calls a "significant step to address race discrimination in hiring" by updating its guidance on the use of arrest and conviction records. In announcing the change, EEOC Commissioner Victoria Lipnic (a Republican appointee) directly addressed employers who may be tempted to use race as a deciding factor for want of information about criminal history.

“Where, in fact, in the absence of a criminal background check an employer chooses to use race as a proxy for criminal history, that employer is patently violating federal civil rights law," Lipnic emphasized in her testimony before the U.S. Commission on Civil Rights. "Were such a charge brought to the Commission and found to be true, I would have no difficulty bringing the full force of the agency to bear on such a transgressor.”

But therein lies another problem, say experts on both sides of the debate. After all, racial discrimination in hiring has been illegal on paper for decades, but research continues to show it still happens. Lockwood explains why: "When it comes to filing those claims with the EEOC or filing a federal lawsuit, it’s a huge undertaking for a person with a criminal record, a nonprofit that’s likely going to be serving these people or a pro bono attorney. For that reason, the federal accountability is really not there for employers."

Duleac took things a step further: "I know the folks at NELP mean well, but their conclusion that we can avoid the negative effects of BTB simply by increasing enforcement of anti-discrimination laws is naive and unhelpful," she told TriplePundit. "... Anti-discrimination laws have been in place for a while and are notoriously difficult to enforce."

The way forward

The arguments against ban the box seem to present a nightmarish game of Whack-A-Mole that's rife with contention for social justice advocates: Stamp out discrimination and oppression in one area, and it will only rear its ugly head in another. It's a cycle people of color know all too well.

So then what are we do to? When it comes to broader policies that stamp out discrimination, experts on both sides of the ban-the-box debate agree on more than you may expect. "The end goal isn't BTB," Doleac insisted. "It's improving labor market opportunities for disadvantaged populations. We need to keep our eye on that ball."

She suggests increasing the amount of information provided to employers rather than reducing it. For people with records, this includes job training, apprenticeship and other programs that result in a certificate -- which she says "communicates job readiness" to employers. She also touts the benefits of expanding access to record expungement, something NELP also supports, as well as court-issued "employment certificates."

NELP also makes no secret of the fact that ban the box was never meant to be a cure-all -- and that far more work lies ahead. "Ban-the-box reforms were never intended as a panacea for the severe employment barriers facing people with records, and certainly not for the entrenched employment challenges of young men of color locked out of the job market," wrote Emsellem and Avery of NELP. "Removing criminal history inquiries from job applications is only one part of a comprehensive fair-chance strategy," which also includes record expungement and increased enforcement of anti-discrimination policies, they say.

"Each tool individually is important, but they have to work together to actually make an impact," said Lockwood of the Southern Coalition. But she insisted a mindset shift beyond policy is necessary to truly move the needle on these systemic issues: "As a society, if we can’t come together to say, 'Once you’ve paid your debt in the criminal justice system, we accept you and we recognize that you still have value,' ... none of those efforts individually are really going to make an impact."

The bottom line

Independent of policy changes to correct it, the fact is that recidivism rates in the U.S. remain alarmingly high: More than half of recently released people will re-offend within the first year. And studies show that a lack of legal employment is the No. 1 reason people re-offend.

This unavoidable reality has policymakers on both sides of the aisle in search of solutions. And in that context -- what NELP described as the "rallying cry" of ban the box, originally voiced by All of Us or None -- has undoubtedly been successful.

The ban-the-box debate will likely rage on as researchers continue to analyze these fairly new policies. "After decades of mass incarceration with little emphasis on rehabilitation, it's our fault as a society that this group faces substantial challenges (low education, emotional trauma, substance abuse, untreated mental illness) -- not employers' fault," Doleac insisted. "If we're serious about helping people with records build stable lives, we'll need to invest serious resources to make up for decades of neglect."

But NELP warned that such research must be undertaken cautiously:

"The nation cannot afford to turn back the clock on a decade of reform that has created significant job opportunities for people with records. These studies require exacting scrutiny to ensure that they are not irresponsibly seized upon at a critical time when the nation is being challenged to confront its painful legacy of structural discrimination and criminalization of people of color."

One thing is for certain, forward-thinking companies aren't waiting for regulations when it comes to rooting out bias and discrimination in hiring -- and research shows they're reaping benefits on the bottom line.

Image credit: Pixabay

There has long been an argument that homes and buildings are reliant on 19th-century technologies. The result is that while home climate-control systems and features such has windows have improved over the years, homes and buildings are still inefficient.

One project that is trying to get ahead of the curve is the ReNEWW House, a partnership between Purdue University and Whirlpool Corp. The aim is to transform an existing home near campus into a green building research laboratory and sustainable living “showcase.”

Whirlpool says it is working with researchers at Purdue to develop next-generation appliances that will be more efficient, improve performance and mitigate their impact on the environment – which will benefit consumers in the long run as they will pay less to use and maintain them.

To learn more, TriplePundit spoke with Maureen Sertich, North America sustainability lead at Whirlpool.

TriplePundit: Who is working on this project, and what is the kind of feedback they've given after their experience?

Maureen Sertich: Since 2013, Whirlpool Corp. has been converting a 1920s home into a net-zero energy, water and waste home. And since its inauguration in April 2014, the ReNEWW House has [hosted] a total of five engineers and will welcome three new engineers for the 2016-2017 school year.

These three new Whirlpool Engineering Rotational Leadership Development (WERLD) engineers will be living in the house while pursuing their master’s degrees and continuing research work related to resource efficiency in the home. The engineers work on energy recovery and water systems design, along with monitoring data from the newly installed energy systems, including geothermal, solar electric and thermal systems, as well as new foam insulation infrastructure updates.

3p: What are some of the key learning points Whirlpool and its employees have learned from retrofitting this house?

MS: ReNEWW House is providing valuable insights for our homebuilder partners and customers on technologies that enable sustainable living. Our collaboration with Purdue researchers helps us to accelerate the development of the next generation of ultra-high-efficiency appliances that increase core performance, while lowering both their impact on the environment and cost to operate.

3p: How can homeowners address the challenges associated with moving into an older home like the ReNEWW House? 

MS: Low energy efficiency is a common challenge across the board. Replacing older, inefficient appliances with Energy Star-certified offerings is a common and beneficial place for homeowners to start, in order to dramatically reduce home energy use.

Innovation at Whirlpool is focused on delivering these energy-efficient solutions to homeowners. On average, the refrigerators, washers, dishwashers and freezers we make today are more energy-efficient than the ones we made five years ago and 10 years ago.

3p: The fact is that appliances are way more efficient than even a decade or 15 years ago. Add the low cost of energy, and there are huge headwinds confronting this sector. How is Whirlpool viewing this niche?

MS: The majority of the environmental impact created by an appliance occurs during its in-home use, so continued innovation for energy-efficient appliances remains an important need that we are focused on at Whirlpool Corp. Energy-efficient and Energy Star-certified appliances can make a big difference in reducing energy impact – which can also translate to costs saving on home utility bills. Whirlpool has received 38 Energy Star Awards since 1998 for continued commitment to energy and water efficient products -- more than any other appliance manufacturer in the U.S. and Canada.

3p: The ReNEWW House website also works as an educational tool. Can you tell us more about that?

MS: The data we post to the website shares our progress in reducing the home’s energy output, and is an important part of sharing our learnings from the program. We also use the website to go beyond the story of our own progress, by linking visitors to additional resources for managing the energy output of their own homes.

3p: Any other outcomes you've learned from this project?

MS: In 2014, we unveiled the completed first phase of the project after it was retrofitted with the latest in energy-efficient and renewable energy technologies, including a geothermal heat pump, solar electric and thermal panels, triple paned windows, new insulated siding and metal roof, and spray foam insulation.

In summer of 2015, the focus was on achieving net-zero water. The work included a plumbing retrofit, the installation of 3,000 gallons of rainwater storage, installation of a rainwater and separate greywater treatment system. This is a project that allows Whirlpool Corp. to explore energy, water and waste efficiency within an active home environment.

3p: How is what you've learned with this house helping with the development of new products and services for your customers?

MS: We are proud to announce progress toward the goal of this project, which is to learn more about sustainable home systems and demonstrate how any home can become resource efficient with the right modifications.

At present, the home is capable of collecting over 100 channels of data every second, which serves both Whirlpool research and the research of our partners. As a continuation of these ongoing sustainability efforts, these results will also inform future product design throughout Whirlpool Corporation’s global portfolio.

3p: Could you summarize the benefits of the ReNEWW House project?

MS: The ReNEWW House is the first live-in, retrofitted net-zero energy, water and waste research home. We are committed to exploring new technologies and partnerships to address the large existing residential housing stock around the world. All of our partners play a critical role in helping us to accelerate the learnings from this project.

The ReNEWW House now has over 10 collaborators from various industries such as home building, plumbing and HVAC industries. And our successes have been shared with numerous home building, academic, architectural and designers around the U.S.

3p: Is Whirlpool considering more projects like this?

MS: We have recently joined the World Business Council for Sustainable Development’s Sustainable Lifestyles group to facilitate more cross-industry collaboration and make the ReNEWW concept global.

Image credit: ReNEWW House

In a high-profile announcement in Indiana last week, Donald Trump and Mike Pence celebrated that air-conditioning and furnace manufacturing company, Carrier, would not be shipping 1,100 jobs to Mexico after all; an announcement carefully staged to provide a congratulatory photo-op to Team Trump for saving American jobs, even before the new administration takes office.

It's good news for those whose jobs were saved. But Trump immediately received criticism for the deal, which offered tax breaks to save those jobs. Even the likes of Sarah Palin, a Trump advocate, weighed in and said the arrangement was both picking winners and crony capitalism.

Perhaps as a counter-punch to this criticism, or perhaps because Trump realized the Carrier deal might set a dangerous precedent for other firms looking for a similar tax break to stay put, the president elect took to Twitter over the weekend to assert a much more stern position:

“The US is going to substantially reduce taxes and regulations on businesses, but any business that leaves our country for another country, fires its employees, builds a new factory or plant in the other country, and thinks it will sell its product back into the US without retribution or consequence, is WRONG! There will be a tax on our soon to be strong border of 35% for these companies wanting to sell their product….” back into the U.S., Trump tweeted.

Prior to this Twitter onslaught, many other firms probably thought it might be worth negotiating tax breaks with the president elect to get a piece of the action. And why not? Under the terms of the Carrier deal, it appears the state of Indiana -- whose governor is still Mike Pence -- offered the company $7 million in tax breaks over 10 years in order to save what was actually 800 jobs. Likely, more was promised besides and so it was tax incentives -- rather than a big stick -- that saved those jobs. Despite picking up some favorable reviews over the job retention, Trump probably decided he needed to turn up the heat to head off would-be copycat deals.

And a 35 percent tax on imported goods certainly would turn up the heat. It may also give pause to companies deciding where to produce their wares, as Trump intends. But if the tax is implemented, would it actually work? And what about the unintended consequences?

Incidentally, before we dive into this, while Trump talks about a 35 percent tax at the border, he presumably means a 35 percent import tariff. During the election season, Trump made a big deal of the notion that America is being ripped off by other countries over trade arrangements. For example, he claimed that while China slaps tariffs on U.S.-made products, the United States does not reciprocate on imports from China.

But as this Politifact analysis shows, it is a misleading notion. Both countries impose import tariffs on each other's products already. Though it’s true that China does impose higher import tariffs than the U.S., it's a lot less asymmetric than Trump implies.

For example, using average rates for non-agricultural products, China levies a tariff of 5 percent on U.S.-made imports into their country, whereas the U.S. levies 2.9 percent on Chinese goods imported into America. China has higher tariffs for sure, but the difference is close to two percentage points, not a whole order of magnitude.

So, if all of a sudden the U.S. imposes a 35 percent tariff on all goods made in China -- or anywhere else for that matter -- America would be practically inviting a trade war. This is perhaps why Trump’s threat focuses on imports from U.S.-owned companies only, so as to avoid triggering international economic mayhem.

That being the case, what would be the effect of a 35 percent import tariff imposed only on goods imported from U.S.-owned companies?

By way of example, Apple iPhones would presumably be subject to a 35 percent tariff. But Samsung phones, made in China by a South Korea-based company, would suffer no such tariff. The result? People would have to pay higher prices for their iPhones, but not for their Samsung phones -- so fewer people would buy from Apple. This, to be sure, is no doubt the calculation behind the whole plan; a loss of sales would be the incentive for companies like Apple to bring jobs back to the U.S. But would they?

Likely not. The electronics industry has a highly Asia-centric supply chain that cannot be relocated in an instant. And even if that were to happen over time, doing so would not change the economic impact of lower wages in Asia versus the U.S.

Consequently, even if jobs eventually came to the U.S., the iPhone would still cost more when American wages are factored in. So, likely both in the short and the long term, Trump’s plan would reward foreign-owned companies over domestic ones.

Imagine the uproar from CEOs of American firms, who would quickly point out that the supposedly 'free' market is now instead skewed in favor of foreign firms. Such tampering of the market is about as far away from conservative ideals as you could possibly imagine from a Republican president, and it would help neither American companies nor American consumers.

So, to correct the uneven playing field, what might happen instead?

The administration could impose a 35 percent tax on all imports, as Newt Gingrich suggested over the weekend. Set aside for a moment the likely trade war, what would be the domestic implications of this?

Under these conditions, in our example, Apple and Samsung would compete on equal footing, at least from the tariff perspective. But assuming the tariff is passed along to consumers, now all smartphones are subject to 35 percent inflation. How long will it take before Americans feel ripped off when that happens?

Furthermore, when such price hikes are applied to all kinds of imported consumer goods, general inflation would result. And by chain reaction, that would induce higher interest rates, which would induce lower investment as the cost of money rises. And of course, as mentioned before, the country would invite the likelihood of trade wars.

So, in short: Inflation, high interest rates, reduced investment and a trade war would be a quadruple detrimental whammy. Even if over time jobs came back to the U.S., at the very least there would be short-to-medium term price shocks subsequent to a general import tariff of 35 percent. Americans would feel, and would be, worse off.

Back, then, to the scenario Trump has promised -- in which the tariff applies only to U.S.-owned companies’ imports. Another possible unintended consequence might be a quickening of corporate flight. We’ve already seen many companies acquire foreign competitors only to announce they will adopt the homeland of their newly acquired firm by effecting a “corporate inversion.”

Under this boondoggle, an American company -- by claiming to move its headquarters overseas -- effectively invokes denial of its American citizenship to avoid paying taxes. Companies do this already to sidestep America’s relatively high 35 percent rate of corporate tax (Europe’s is 24 percent), so it's easy to suppose inversions might gain popularity as a tool to avoid paying the punitive new import tariff.

The argument would be: We’re no longer a U.S. company, so we don't need to pay the import tariff. These inversions are egregious, of course, and the Obama administration has been urging Congress to regulate against them for some time; perhaps it would be a good thing if this actually moved the needle on this issue.

Another possible risk may also stem from a later point Trump tweeted out: “These companies are free to move between all 50 states, with no tax or tariff being charged.”

In essence, this is fair as it allows states to compete with one another. But it might also be a signal that states which dismantle rules on organized labor -- to drive down wages -- won’t raise eyebrows in the White house. What seems highly likely, in any case, is if jobs are forced back to the U.S., the downward wage pressure will be great as American companies try to compete globally.

So these are at least some of the risks, but the question is: Will Trump get his way?

Firstly, would he have any willing support from business leaders? On some level, the pain of the import tariff would be softened by Trump’s overall tax proposals. He wants to reduce the corporate tax rate to 15 percent, and would support a "tax holiday" to allow American firms to repatriate accumulated overseas profits at 10 percent. This would free up capital and would, to some degree, offset the cost of bringing some jobs back to the U.S. for some companies.

But industrial leaders are likely scratching their heads to fully understand what is really at stake. And since Trump’s tweets are not fully-fledged policy proposals, there are more questions than answers.

For example: Does Trump mean to slap the 35 percent tariff just on products currently made here that are subsequently moved offshore when he takes office? Or does he mean he would also apply the tariff on products already made overseas today? No details are available on this.

Also unclear is how the penalties would apply if a company “fires its employees” as his tweet promises. Does this mean the tariff applies when American workers are fired only when those specific jobs can be identified as moving overseas? Or does he mean the tax applies whenever a company lays off workers, period?

We would no doubt see the impact during the next recession when a company has to reduce its workforce to survive. Would a company already in financial distress be hit by a 35 percent tax on top of that, making its position still more precarious? Perhaps to maneuver around this clause, companies will fast-track their efforts toward automation to safeguard against a "firing tax." No workers to fire, no tax to pay. No American jobs either way!

A lot more thinking-through is needed. But in any case, while we wait for actual policy, Trump may be setting up for fight with his own party.

Republicans in Congress are keen to stymie his import tariff plan. On Monday, House Majority Leader Kevin McCarthy, the No. 2 Republican in the the House, said of Trump’s threat, “I don't want to get into some type of trade war." He went on to say he would not commit to bringing the tariff proposal to the House for a vote, adding: “I believe in the free market. I don't think government should be picking winners and losers.”

Speaker of the House Paul Ryan also indicated he has no intention of handing policy decisions to the president elect, previously saying about Trump’s tax plans: “Congress is the one that writes these laws and puts them on the president’s desk.”

But since we know Trump doesn't have too much time for protocol, could he force his ideas through by executive order in the face of opposition? Worryingly, it seems he possibly could. There is precedent for executive order on such matters, Andrea Seabrook, a commentator on NPR, said on the broadcaster’s Marketplace podcast on Monday.

One path available is to use the Trading With The Enemy Act of 1917, which allows for unlimited tariffs during times of war, Seabrook said. Apparently, former President Richard Nixon used this provision in 1971 based on the Korean War, which at the time was no longer being fought. It appears the law doesn't require the U.S. to be at war with the specific country in question, in order to impose tariffs. But if this doesn't fly, it’s not Trump’s only recourse.

He could use the International Emergency Economic Powers Act of 1972, which might be invoked on the basis that jobs leaving the U.S. constitute an economic emergency -- another means of handing the authority to impose tariffs to the executive branch.

So, beware of laws that were passed to provide loopholes and exceptions during times of emergency! Perhaps Trump will try to use them.

Then again, possibly he is merely using his early-morning tweets, as is often the case, to build emotional momentum behind a general idea as opposed to actually promising to do what he says. If the United States is to remain competitive in the international marketplace, and wants to avoid trade wars, we must at least hope it is the former.

Image credit: Flickr/Matt Johnson

The constant fretting over the Donald Trump administration’s impact on the clean-energy sector and climate change mitigation may be seriously exaggerated, based on the progress one “establishment” company has made. This week, Google announced that all of its operations, including offices and data centers, will be powered 100 percent by renewables next year.

Urs Hölzle, Google’s vice president of technical infrastructure, said the company will be able to reach this milestone because it purchases renewable power directly: This is no achievement done by using other channels, such as renewable energy certificates (RECs).

Google has been aggressive on this front over the past several years, starting with its first wind power contract, a 2010 agreement to buy all of the electricity from a 114-megawatt wind farm in Iowa. Since then, the deals accumulated, including a recent 236-megawatt wind power contract that powers its data centers in Europe, the company says.

Now, Google bills itself as the largest corporate buyer of renewable power, with over 2.6 gigawatts (2,600 megawatts) of solar and wind power under contract.

Those investments result in what Google estimates is total spending of $3.5 billion worldwide in infrastructure -- two-thirds of that amount happening here in the U.S. Those funds in turn add millions of dollars in taxes to local governments’ coffers, as well as copious amounts of revenues in rural areas.

Meanwhile, renewables have fallen in price: Hölzle said the costs of installing and operating renewable power installations fell by as much as 80 percent since 2010. Smarter technologies also helped Google meet this renewables goal, as the company insists its data centers are 50 percent more efficient than the industry average.

More companies and government agencies are investing in renewables as both their increased efficiency and decreased costs make them cost-competitive with conventional sources of energy. But Google is far ahead of this pack. Data provided in a Google white paper shows the tech giant is far ahead of the organizations that round out the largest purchasers of renewables in the U.S.

Amazon is a distant second, with about 1 gigawatt of investments in solar and wind. The U.S. Department of Defense, Microsoft and Facebook round out the top five largest spenders on renewable power.

Google’s sustainability agenda is hardly limited to renewables. Earlier this fall, the company announced a “moonshot” initiative that seeks to make its data centers and the rest of its operations zero waste. More of the company’s oft-maligned Street View cars are fitted with air pollution sensors in order to gauge air-quality data. The company’s satellite data has also proven to become an effective tool in the global fight against overfishing.

While politicians deny climate change in order to boost their campaign funds and distract citizens who are nervous and skittish about the future, companies like Google charge ahead and are adapting to a 21st-century reality.

To that end, The Economist, long the leading voice of a global free market economy, acknowledges that while we do not know how exactly climate change will change the planet, investment in renewables such as solar and wind are an insurance policy to hedge against such future threats.

Furthermore, while petroleum has been cheap for over two years now, the only thing we can predict about oil and gas prices is that they can soar or slump on a dime. In the event energy prices spike – and it will not take much for a volatile event in the Middle East, Russia or East Asia to rile global markets – Google and other companies will be sitting pretty.

Google’s success with renewables will be one reason why they will continue to scale and fall in price, as companies become more comfortable in such investments -- whether or not Trump is in office for the next four or eight years.

Image credit: Leon Kaye

By Adam Wiskind

The owners of small- and medium-sized green businesses may hope for a higher price when they go to sell their businesses because of their exceptional brand value or reputation.  But they will be disappointed unless they can make a clear business case to potential buyers according to accepted valuation methods.

A common approach to business valuation, the Direct Market Data Method, estimates a company’s value by multiplying its modified annual earnings by a multiplier typical for the industry in which the business operates.  Businesses that, as a result of their green strategies, generate sustained higher earnings or merit a higher valuation multiplier will be worth more than conventional business of a comparable size in the same industry.

Many green business strategies have a detectable and positive financial impact on small- and medium-sized businesses.  At the time of sale, these benefits can increase earnings and thus enhance the value of the business.  Other benefits are non-financial or their financial impact is difficult to quantify in small- and medium-sized companies.  The non-financial benefits can also increase the value of the business, but only if business owners adequately define and track metrics that highlight these benefits to potential buyers.

Green business strategies can improve earnings

As the earnings of a business increase, buyers are willing to pay more for it based on a consistent history of cash flow.  Many green business strategies improve earnings.  Some of the strategies described below generate additional revenue while others reduce costs to the business:

Increased prices: Forty-two percent of North American respondents to a 2014 Nielsen survey said they are willing to pay extra for products and services from companies that are committed to positive social and environmental impact, with millennials being most committed.  Companies that sell products from sustainable sources (especially if they are verified by a third party) may be able to sell them for a higher price than conventional products. The increased income can translate into improved earnings.

Energy costs: Companies that focus on reducing their own energy consumption not only help the environment, but also reduce their costs in the form of lower energy bills.  According to EnergyStar, small businesses that invest strategically can cut utility costs 25 percent or more without sacrificing service, quality, style or comfort.  Energy-intensive companies like manufacturers may be able to save even more.

Cost of goods: Waste has a negative impact on a company’s bottom line.  Excess supplies and waste materials increase cost of goods.  When materials aren't used efficiently and become waste, companies have to pay again to collect and haul the waste away -- further eroding profitability. Preventing waste of energy, water and materials in a company’s operations not only saves resources and reduces pollution, but it also saves money.

Wage costs: Businesses that engage their employees and create a positive work culture tend to have more productive employees. And a positive work culture creates more productive employees. This does not necessarily mean these businesses provide more benefits for their employees. They simply provide more social, empathetic and respectful workplaces. Increased productivity can help green businesses be more competitive by lowering wage costs per unit of product.  The Center for American Progress estimates that replacing a single employee costs approximately 20 percent of that employee’s salary.

Capital expenditures: States and the federal government offer incentives to businesses in the form of tax breaks and credits. The Database of State Incentives for Renewables and Efficiency provides many state and local programs to help green businesses with energy costs and capital expenditures.  Companies that take advantage of these government programs are able to investment more resources to stimulate growth.

Green business strategies that systematically reduce costs or increase revenue improve overall company financial performance. If enhanced earnings are sustained over time, these green strategies will also enhance the valuation of the business.

Green businesses with strong brands sell at higher multiples

The other factor the Direct Market Data Method uses to determine the value of a company is the valuation multiple.

The multiple for a particular company typically falls within a range based on the size of the company and the industry in which it operates.  Businesses that are perceived to have weak brands, are unstable and more risky can expect to sell at the lower end of the multiples range.  Businesses that have strong brands, are more stable, and are less risky investments can expect to sell at the higher end of the multiples range.

Notable exceptions occur when a strategic buyer sees exceptional potential to benefit from an acquisition and offers a multiple that exceeds the range.  There are many cases when a conventional business has purchased a green business for an outsized multiple to improve its brand.

Often businesses that utilize green business strategies possess the intangible characteristics that would merit higher valuation multiples, but their strengths are not adequately tracked or highlighted.  Some of these strengths are:

Attract top talent and retain employees: There is strong evidence that green businesses are able to attract top talent and improve employee and customer retention, especially amongst millennials. More than two-thirds (67 percent) of respondents in Nielsen’s third annual global online survey on corporate social responsibility said they prefer to work for a socially responsible company. According to Edelman's Good Purpose report, 71 percent of global consumers said they would help promote products and services with a good cause behind them.

Reduce operational risk: Owners of small- and medium-sized companies are often most concerned about market risk, however these businesses also face significant operational and compliance risks.  Small- and medium-sized businesses that implement green strategies like local sourcing of materials tend to be more resilient to currency fluctuations and supply chain disruptions and are exposed to less regulatory risk.

Increase customer loyalty: A recent global study found that 94 percent of consumers would be more likely to trust a company with a strong social responsibility program, and 93 percent would be more loyal to such a company.  These findings underscore that consumers are increasingly shopping with their values, particularly when it comes to social responsibility.

Track metrics that justify value

Although the benefits for a business that implements green strategies may be real, a cursory assessment of the business will not reveal its strengths.  To justify higher multiples at the time of sale, green business owners must be diligent to define and track metrics that highlight these non-financial benefits to prospective buyers.

The important metrics will depend on the company and industry, but some to consider are:

Ability to attract and retain top talent

• Expressed interest from qualified candidates for open positions


• Overall employee retention rate


• High performing employee retention rate

Reduction of operational risk

• More uptime


• Fewer compliance fines


• History of employee safety records


• Records of certifications and third party audits

Customer loyalty and brand strength

• Repeat versus new customers


• Customer satisfaction and brand awareness surveys


• Longevity of key customer relationships

The owners of small- and medium-sized green businesses may hope for a higher price when they sell their businesses because of their exceptional brand value or reputation.  Green business strategies may improve financial performance which over time would logically result in a higher valuation.  However, the less tangible strengths of green businesses such as employee retention and customer loyalty will not be recognized in the valuation by potential buyers unless the owner, using defensible metrics, can make a clear business case for considering them.

Image credit: Pixabay

Adam Wiskind is a M&A advisor/Business Broker for green business owners at ExitGreen.

 

Food waste is a huge problem in the U.S. About 40 percent of all food grown in this country is wasted. It is costly for the economy and the environment. Every year, the U.S. spends $218 billion -- or 1.3 percent of GDP -- growing, processing and transporting good that is not eaten but thrown away. That amounts to 52.4 million tons of food sent to landfill a year.

This shocking volume of food waste “has enormous consequences,” said JoAnne Berkenkamp, senior advocate for the Natural Resources Defense Council's Food & Agriculture Program. She cited “all of the water and energy” used to grow the food that is wasted as an example of an environmental consequence. But it's not just about money or even the environment: Two million Americans are food insecure, lacking a steady supply of food to their tables, she told TriplePundit, so wasting all of that food has clear social consequences as well.

But assessing food waste can be difficult, as it often happens up the supply chain. About 10.1 million of food tons are estimated to be either discarded or left unharvested on farms and in packing houses. That mountain of waste increases up to two times when you add in other food fit for people that is composted, converted into animal feed or discarded in other ways.

If all of the wasted food was grown in one place it would cover about 80 million acres, or over three-quarters of California. It would take up all the water used in California, Texas and Ohio combined and would harvest enough food to fill a 40-ton tractor every 20 seconds.

“This not only represents a major financial loss, but also saps precious natural resources: This food waste utilizes 18 percent of our cropland, 19 percent of fertilizer, and 21 percent of our freshwater supply,” Eva Goulbourne, associate director of programs and communications for ReFED, told TriplePundit. “It’s also responsible for  21 percent of landfill volume, and represents 5 percent of [greenhouse gases] emitted in the US – a major contributor to climate change.

 

"Food waste is an absurd and unnecessary reality of our food system highlighting major inefficiency, yet it is completely solvable in our lifetime.”

Getting food from the farm to our tables takes up 10 percent of the total U.S. energy budget, according to a 2012 NRDC report. It also uses half of U.S. land and accounts for 80 percent of all freshwater consumption. Meanwhile, food thrown into landfills accounts for the biggest component of U.S. municipal solid waste, where it gives off methane emissions when sent to landfill. Methane is a greenhouse gas with a warming potential 23 times that of carbon dioxide.

 

In 2015, the U.S. government targeted a national 50 percent food waste reduction by 2030, its first national food waste goal. ReFED, a collaboration of over 30 business, nonprofit, foundation and government leaders, formed the same year to support the initiative.

ReFED formed the Roadmap to Reduce U.S. Food Waste, the first national economy study and action plan driven by a multi-stakeholder group committed to tackling food waste at scale. With the Roadmap’s solutions in place, the U.S. would be on track to reduce food waste by 20 percent within a decade and to achieve the 50 percent goal by 2030.

Consumers can play a huge role in reducing food waste

Homes and consumer-facing businesses account for over 80 percent of all food waste in the U.S. And food wasted in homes represents about two-thirds of total lost economic value.

 

Food waste solutions that prevent waste in both homes and businesses have the greatest economic value per ton and net environmental benefit, according to the Roadmap. It goes on to identify three solutions as having the greatest economic value per ton: standardized date labeling, consumer education campaigns and packaging adjustments.

“If you look at where food is wasted, more than 40 percent occurs at the consumer level,” Berkenkamp of NRDC said. “So, that means that us as individuals and families in our homes are a major contributing factor to the amount of food that gets wasted.”

And there are “simple, practical things consumers can do at home,” Berkenkamp said. One of those is to make a shopping list before going grocery shopping. “About 55 percent of grocery purchases in the United States are unplanned,” she explained. “Having a grocery list is a critical step. We need to be realistic about how much we are going to cook and eat.”

 

Apps can help people plan what they will buy at the grocery store. Android users can check out Shopping List, which allows people to list and organize what they plan to buy, plus share it with others. iPhone users can look to:

• AnyList is similar to Shopping List, but allows users to add items via Siri.


• The Groceries Shopping List is available as both an iPhone and Android app. It has the same features as the other apps, but allows a user to keep track of the key ingredients in their favorite recipes.

Goulbourne of ReFED cites a number of simple things consumers can do to reduce food waste: One of those is to buy ugly or imperfect produce. Up to 24 percent of produce is discarded before it reaches store shelves because the size, shape or color is imperfect looking, the NRDC found in its 2012 report. 

 

And stop throwing out foods based on expired or near expired date labels, Goulbourne advised. When consumers see an expired date label on food, they often think it means the food is not fit to eat any longer, but the dates don’t necessarily refer to food safety. Goulbourne suggests using “your sight, smell and (if you’re brave) taste to determine if food has gone bad.” She pointed out that there is not a federal regulation to dictate the quality and safety labels of foods in the U.S., “so labeling is left up to manufacturers.”

Food waste is a problem all of us can work on reducing. And just by doing a few simple things we can all reduce our own food waste. By doing so, we make it possible to halve food waste by 2030.

School lunches were the butt of many jokes and reaped plenty of scorn from both the left and right over the years. Some conservatives went so far as to suggest free school lunches contribute to a “cycle of dependency,” though the real beneficiaries of the U.S. Department of Agriculture (USDA) program have historically been the huge food companies that score copious revenues from selling products directly to school districts across the country. Even snacks sold at full value earn school districts a federal subsidy. Nevertheless, cash strapped school districts do not have much financial wiggle room when it comes to serving these lunches, eaten by at least 31 million schoolchildren annually.

But more school districts are offering better fare, both in taste and sourcing. The chicken nuggets and pizza still make an appearance, but at least the chicken is increasingly baked and the crust may be whole wheat. Plus the growing interest in gardening, composting and knowing where our food comes from has given the pallid mid-day meal a shot in the arm. Even the USDA got into the act, with programs such as Farm to School that aim to link farmers with school districts.

Here are five innovative and sustainable school lunch programs and businesses that garnered our attention, ranked in no particular order:

Red Rabbit, New York: Launched by a former Wall Street equity trader in 2005, this made-from-scratch school lunch supplier grew into a huge success. As recently profiled on Forbes, Rhys Powell changed his strategy after he secured a $500,000 investment -- shifting from a focus on private schools to public school districts, which require food costs to remain below $3 a meal. Now the B Corp certified company prepares over 100,000 meals a day for schools in New York City and Westchester County. Red Rabbit also educates students, parents and teachers about nutrition and wellness. Recipes include a multi-veggie slaw, mashed sweet potatoes and no-cook oatmeal.

Good Earth Natural Foods, Marin, California: Yes, it sounds like a cliché, but a school district in posh Marin County, just north of San Francisco, turned heads when its school lunches became all organic in 2013. While the county is home to some of the wealthiest Bay Area citizens, the Sausalito Marin School District educates those kids in the district whose parents don’t have the means to send them to private school: 95 percent of its students qualify for free- or reduced-price school lunches.

One of the district’s vendors is Good Earth Natural Foods, which says it feeds 1,300 kids a day across Marin. Individual plastic containers are eschewed for serving out of steel catering pans in order to reduce waste. The company describes its choices in painstaking detail: Tortillas are made with organic corn but not organic oil; oven roasted turkey from Diestel is not fed organic grain; in sum, local ingredients are preferred over staying true to 100 percent organic. Judging by the menu items, however, this is a huge step up from the dull and even inedible school lunches of the past.

The Munchie Machine, Boulder, Colorado: Food trucks are a rage that will not go away. And considering the economic opportunities and creative fare they have provided, that’s a good thing.

One of them, the Munchie Machine in Boulder, serves grub that it says is USDA (ahem) school lunch compliant. The menu may be pricey for many students, but administrators figure having a truck parked outside Boulder High School is better than kids wandering off to buy junk food and fizzy drinks. And because the truck follows USDA rules, kids are allowed to (gasp) nosh on options such as quesadillas, burgers and quinoa salad in the school cafeteria.

Oakland Unified School District: Oakland scored attention in recent years for having one of the more sustainable school lunch programs in the country. Over 21,000 students are served lunches with ingredients that can be found at the local Whole Foods. A creative procurement team is able to source meat from a Central Valley free-range poultry producer and by-catch from local fisheries that otherwise would have gone to waste. The district also follows standards set by the Center for Good Food Purchasing, which is emerging as the “LEED” of school lunch supplies.

Baltimore City Public Schools: Since 2009, Baltimore has offered “Meatless Monday” options for its students. (Hard-core carnivores, however, can still chose a meat option if they insist.) The district also has a partnership with a nearby farm in suburban Catonsville. Great Kids Farm and its 33-acre spread offers several health, nutrition and farm to fork educational programs for Baltimore students from pre-Kindergarten through high school.

Who else should be added to the list? Share your ideas in the comments section.

Image credit: Boulder Valley School District/Facebook

Consumers in Europe already bombarded with labels such as “organic,” “fair trade,” “cruelty free” and “contains GM ingredients” may soon start seeing another label on products – and a politically loaded one at that. France recently announced that it will require goods made in Israeli settlements to have a clear label on their packaging.

The decision by the French government comes a year after the European Union issued an “interpretive release” that advises member states to be clear about how products from lands occupied by Israel are labeled. So far, no other member state has actually implemented such a labeling policy. France’s decision took all sides within this ongoing Middle East dispute by surprise.

Under the EU’s new guidelines, goods from regions occupied by Israel since 1967 -- to which Palestine also claims rights -- must include labeling that reaches beyond the location of where they were made. The regions in question include the Gaza Strip, Golan Heights and portions of the West Bank including East Jerusalem. Labels such as “product from the Golan Heights” or “made in the West Bank” are no longer acceptable. Instead, these goods must include text such as “product from the Golan Heights (Israeli settlement).” Goods from Palestine that are not originated from any settlements can continue to say “product from Palestine.”

EU policymakers claim such labeling would clear consumers’ confusion over a given product's true origin. They insist products that simply say “made in Israel” mislead consumers and are inconsistent with EU legislation. Much of this decision lies in the fact that the EU does not recognize Israel’s sovereignty over the territories it occupied after the Six-Day War in 1967.

The EU also said it is clear that it does not support the boycott of any goods from the region, and that products made in Israel will continue to benefit from preferential tariffs upon their arrival to Europe. Products made in Israeli settlements, however, do not receive that preferential trade status, which is why the EU said a clearer labeling policy was needed. EU ministers also suggest such a move became necessary in order to move Israelis and Palestinians closer to a peace agreement.

Israel’s government, however, was incensed by the EU’s new labeling standards, which affect products such as fresh produce, wine, honey and cosmetics. When it passed last year, the Israeli government assailed the decision as “disguised anti-Semitism.” The country’s foreign ministry was quick to express its displeasure with France’s most recent move, accusing it of “advancing measures that can be interpreted as encouraging radical elements and the movement to boycott Israel.”

Meanwhile, the Palestine Liberation Organization has long welcomed the EU’s labeling directive and called for increased European involvement.

Whether this will cause a massive change in how labels from this political tinderbox are scripted is doubtful. The EU is Israel’s largest trading partner, with an estimated $30 billion in annual trade; but products from Israeli settlements make up less that 1 percent of the $14 billion in goods that Israel ships to Europe each year. The EU also leaves it up to member states to ensure they are following Brussels’ guidelines, but when questions arise about enforcement, the EU’s response is: “This is the competence of the member states.” A decision that has caused a diplomatic row over the past year may in the end become buried by other EU directives.

Image credit: Anthony Baratier/Wiki Commons

By Vivek Kopparthi

Imagine Apple trotting out this marketing strategy: For every iPhone 7 unit sold, the company sends a small computer to a child in rural Africa. It’s a way to strengthen a customer’s connection to your product, which is the exact appeal of the one-for-one business model.

The one-for-one method counts retail companies such as Toms and Warby Parker among its success stories. But the model can — and should — be applied to other industries, such as healthcare and education. One-for-one companies generate a profit, despite these donations, because the bill for materials is small for most products.

In business terms, the marketing advantages of the one-for-one model — such as the tax rebate donated products receive — vastly outweigh the minimal profit lost to donations. As the Apple example points out, when customers purchase these goods, they feel like they’re doing good for the world.

Customer connection and satisfaction play a vital role in a business-to-consumer (B2C) company’s attempts to build credibility with its audience. It would be wise of businesses in industries that put a high premium on customer engagement to consider this approach.

Give in order to get

Despite its good intentions, the one-for-one model has its detractors. The most commonly cited argument is an economic one: If Toms is handing out shoes for free, what happens to the cobbler who’s trying to sell them?

There’s just one hole in that argument: scale. In most cases, one-for-one businesses target the poorest of the poor, customers unable to afford shoes because they live on less than $2 a day.

While these critics get hung up on one-for-one’s potential negatives, perspectives in other industries are much different. Let’s take, for example, healthcare. I have a sponge in my office that takes around $3 to produce, but it’s sold to hospitals for $1,500.

Sure, an incredible number of other factors go into the pricing of the sponge when it’s sold to hospitals — research and development, operating expenses, and marketing costs all need to be covered. It’s this mix of variables, however, that produces the opaque prices of medical products that frustrate patients and doctors alike.

But imagine if the company that produces those sponges adopted a one-for-one model. The impact would be huge. The cost of the donated sponges would be minuscule compared to the potential value added to the company.

Instead of being seen as greedy for charging high prices, the company would be viewed in a much more benevolent light, which plays right into the image healthcare customers want to portray. They are some of the most empathetic people in the world, and they would gladly choose to do business with a company doing a great deal of good for the world.

Education is another field in which a little help does a lot of good. With new online possibilities, the face of education is changing, and there are new opportunities to provide it to those in need.

Ed-tech companies are growing at a rapid rate. Advances in technology are moving the education industry beyond its outdated model into realms that can assist the people who need it most.

Ghana, for example, is a country in which only 50 percent of students complete the fifth grade. In most cases, getting to school is difficult, while tuition costs and other related expenses are too great a burden. Again, situations like these are ripe for one-for-one partnerships because most people believe education is one of the worthiest causes to get behind.

Ed-tech companies that start one-for-one pacts with disadvantaged communities around the world will lead the way for educational philanthropy. Donating portable devices or useful software can have a powerful impact on communities that lack those resources.

Move outside the store

The one-for-one approach was born out of retail. Shoes and eyeglasses are consumer goods that most people are familiar with, and customers can clearly understand how those items would benefit people who don’t have them.

Utilized properly, the one-for-one strategy can provide so much more to industries outside that sector. In industries like healthcare and education, the products might not be as familiar to the average consumer — but the effect could be much more powerful.

Image credit: Pixabay

Vivek Kopparthi is the co-founder and CEO of NeoLight, an empathy-driven technology company primarily focused on lean medical devices for newborn care. With a background in electronic engineering, he and his team developed the world’s fastest, most powerful treatment for infant jaundice. As an entrepreneur, Kopparthi oversaw organizations of more than 100 employees, served as a startup advisor, and consulted for global corporations.

By Tom Idle — As we prepare for the cold days of winter, we might fondly recall the hot days of summer – some of the warmest on record for the season.

The warning signs were there, in a spring ‘warm up’: May was the 13th consecutive month to break global temperature figures, according to data compiled by the National Centers for Environmental Information. And autumn set or broke records for high temperatures in many locations around the globe.

And that has got scientists and academics extremely worried. Prof Stefan Rahmstorf at the Potsdam Institute for Climate Impact Research suggests the world is “catapulting…out of the Holocene, which is the geological epoch that human civilisation has been able to develop in, because of the relatively stable climate”.

Adam Scaife at the UK’s Met Office says that the spikes in surface temperature are “unprecedented” and “really stick out like a sore thumb”.

The hot weather experienced this year – which saw tarmac melting over people’s shoes in some parts of India – means 2016 will be recorded as the hottest year ever. And it has ignited much debate and commentary as to the influence that greenhouse gas emissions continue to have in fuelling climate changes – creating a threat that is no longer just applicable to the future.

The bleaching of the Great Barrier Reef, flash floods across the UK and rapidly disappearing Arctic sea ice offer evidence that global warming is taking its toll already. “The impacts of human-caused climate change are no longer subtle – they are playing out, in real time, before us,” says Prof Michael Mann from Penn State University in the US. “They serve as a constant reminder now of how critical it is that we engage in the actions necessary to avert ever-more dangerous and potentially irreversible warming of the planet.”

What is currently clouding the climate debate is the fact greenhouse gas (GHG) emissions are falling in many parts of the world. In Europe, for example, GHG levels are at their lowest since 1990, dropping 4.1% in 2014 and sitting almost 25% lowered than 1990 figures, according to European Environment Agency data. Clearly, the growing share in the use of renewables, the use of less carbon intensive fuels and improvements in energy efficiency, are helping to stem the tide.

But with much of the damage already done and many regions failing to curb their GHG output – China’s emissions increased by 0.5% in 2014 despite closing many coal plants, according to the Oslo-based Center for International Climate and Environmental Research – the science might be against us.

Bold New Alliance

At the heart of this debate is a business community, encouraged by a robust Paris Agreement that establishes national targets to reduce GHGs, and under increasing pressure to find ways of producing goods and services and transporting them that has a lower carbon footprint.

And a group of leaders have emerged, establishing goals to de-carbonise their processes and cut their reliance on dirty fossil fuels entirely. There is so much demand from corporates looking to buy green energy right now, it could ‘rock the grid’ in the US.

Now, a bold new alliance of businesses has emerged, keen to revise their carbon-cutting goals in a way that has the greatest impact on the planet. More than 150 companies have committed to science-based targets which, if met, will keep the world on course to keep global warming well within the 2°C limit, as outlined by the UN’s Fifth Assessment report.

The likes of Ben & Jerry’s, Carrefour, Honda, GlaxoSmithKline and BT have promised to establish such targets using the UN Global Compact’s initiative – known simply as Science Based Targets – as a framework. Among the companies that have already done so are Dell, General Mills and Sony.

The food company General Mills, for example, has promised to reduce absolute emissions by 28% across its entire value chain – from farm to fork to landfill by 2025, using a 2010 base-year. Sony has set both short-term (to reduce GHG emissions from its operations by 42% by 2020) and long-term (to reduce its environmental footprint to zero by 2050, requiring a 90% reduction in emissions) targets.

Using models and factors developed by the UN initiative, companies can examine things like their global gross domestic product to explore what they should include in calculating their actual and projected emissions over time, and steps to reduce them. They can choose from seven target-setting methods, designed to allow flexibility depending on the realities of specific industries.

The initiative then reviews and approves the targets set by participating companies, which have two years after signing up to come up with a game plan. The alliance of companies can also use the platform to share ideas and learn from one another – whether it’s BT’s Carbon Stabilization Intensity target work, or Mars’ Planetary Boundaries modelling work.

“In the past, companies would set targets without the necessary information or a solid point of reference,” says Galya Tsonkova, the environment manager for Coca-Cola HBC, another of the companies committed to the initiative. “They would just pick a round figure and aim for cuts of 20, 30, 40 percent, with no further justification, other than generic aspirations.

“Now, we have a target that is approved by external, credible experts, verified through relevant scientific methodology. That makes a big difference, both for external stakeholders, as well as to our management.”

Cynthia Cummis, deputy director of the GHG protocol at the World Resources Institute (WRI), one of the initiative’s partners, believes that science-based targets are quickly becoming the “litmus test used to determine whether a company’s climate action plan is credible”.

“Companies with cautious targets tend to pursue low-hanging-fruit energy efficiency upgrades. They may cut emissions, but they will ultimately remain carbon-dependent,” she says.

Start of the Journey, Not the End 

Of course, setting ambitious targets is one thing, meeting them is quite another and whether companies are able to meet these bold, new voluntary targets remains to be seen. NGOs and campaigners will no doubt continue to put pressure on companies reporting poor carbon performance and missed targets, however ambitious.

As Aditi Sen, a climate policy advisor at Oxfam America, points out: “The pace at which climate science is evolving [means] current methods of science-based target setting represent the beginning of the journey and not the end.”

She points to the fact the tools for setting such targets do not account for the lower 1.5 degree Celsius threshold adopted at COP21 last December.

As recent weather events evidence, time is running out in the fight to put the brakes on the most dangerous impacts of climate change and the world’s carbon budget is constantly shrinking. The situation demands innovation. And strong, climate-based targets might just stimulate creative new ways of doing business even further