General Mills just issued its 2014 Global Responsibility Report. I received an advanced review copy and spoke with Chief Sustainability Officer Jerry Lynch to get his perspective. The 121-page report is organized into five major sections: Health, Environment, Sourcing, Workplace and Community. These are consistent with the company’s mission of “Nourishing Lives- making lives healthier, easier and richer – for 147 years.”
Triple Pundit: One statement in the introduction really impressed me. “Our business depends on the availability of natural resources and the strength of the communities where we operate.” This neatly sums up the reason why companies should care about and invest in corporate social responsibility and sustainability. It’s the awareness that companies do not exist in a vacuum, and that in fact all of their inputs (raw materials) and outputs (sales) are in constant interaction with ecosystems that are subject to continuous change and are sensitive to factors that they themselves can have a significant impact upon.
Jerry Lynch: Thank you.We take the output of Mother Nature, then add value to it for our consumers. So if the front end of that business model breaks down, we’re in a world of hurt. The focus of our work is to conserve and protect our natural resources and the communities that our business depends on. So it’s really a hard-nose business imperative behind this.
3p: What do you see as your major challenges in achieving this?
JL: We’re looking at increasing demand for food as population grows and more people are moving into the middle class. This is happening at a time when Mother Nature is facing major challenges.
There was some strange news out of Indiana recently. A piece of legislation designed to dismantle the state’s energy efficiency law made its way to the desk of Gov. Mike Pence. The governor neither vetoed nor signed the bill, thus allowing it to become law by default.
The governor defended his action, or inaction, as follows:
“I could not sign this bill because it does away with a worthwhile energy efficiency program. I could not veto this bill because doing so would increase the cost of utilities for Hoosier ratepayers and make Indiana less competitive by denying relief to large electricity consumers, including our state’s manufacturing base.”
This seems a bit odd at a time when most states are taking action to reduce energy consumption, encourage the adoption of renewables, and enable technologies such as storage systems to facilitate the rapid integration of renewables into their utility grid.
In fact most of Indiana’s neighbors continue to move forward on efficiency.
- Illinois utilities are set to reduce annual electricity demand by 1.5 million MWh over the next three years. ComEd has saved its customers more than $700 million through energy efficiency.
- Michigan utilities are reducing their electricity usage by more than 1 percent per year through energy efficiency. These utilities saved a net of $800 million in the first three years of their programs.
- A group of manufacturers in Ohio including Honda, Honeywell and Whirlpool recently wrote a letter to the state legislature urging them to keep the energy efficiency standards in place.
- Minnesota, Iowa, Missouri and Wisconsin are all using energy efficiency as a resource and capturing the benefits for their customers.
Why did Indiana let this happen? Was it simply a matter of politics?
This is a question many of us have wondered about. Seeing how the local movement is so closely associated with sustainability, at least when it comes to food, does that same closer-is-better reasoning hold when it comes to other products, such as clothing?
For starters, Steve Sexton challenged the local food argument in Freakonomics, in a post that has drawn a lot of criticism from locavores, including this smart piece by Tom Philpott. But still, he lands a number of valid points including the economies of scale argument and the fact that some places are better for growing potatoes than others. But probably the most important point he makes is that there are other considerations besides how far a product is shipped when determining how sustainable it is.
When it comes to clothing, there are other considerations to keep in mind. For example, how long an item of clothing will last determines how many times it will need to be replaced in a person’s lifetime.
This is the argument made by a companies like Appalatch and Osmium, which puts a high emphasis on the craftsmanship in their goods and their resulting durability. Companies like Darn Tough are now selling socks with a lifetime guarantee. The company even has a sign on its factory that says, “Nobody ever outsourced anything for quality.”
Pride aside, it’s certainly not out of the question that quality goods can come from many places. Even China. Thanks to the International Standards Organization, which provides operating practices and principles for manufacturing quality in the form of standards, quality is on the rise. Because a number of major multinational companies will not buy from suppliers unless they meet ISO standards, that puts pressure on companies to clean up their act. Fine, you say, if you’re selling nuts and bolts to Boeing, but we’re talking about clothing here. Yes, and some clothing makers have done just that.
Last week, we talked about the latest report from the U.N. IPCC describing the impacts that have already been seen from climate change and some projections of what we might expect in the future. The report found that, “Climate change poses the greatest risks to the most vulnerable populations within all nations, and a potentially existential risk to poorer countries already struggling with food insecurity and civil conflict, as well as low-lying small island states.”
But most of us are not in that group, so we’re okay, right?
Not necessarily. The report “recognizes that risks of climate change will vary across regions and populations, through space and time, dependent on myriad factors including the extent of mitigation and adaptation.”
In other words, there is a great deal of uncertainty in predicting specific risks, and the results depend a great deal on the actions we take or don’t take.
Another report came out last month, this one by a cross-disciplinary group at NASA, based on the Human and Nature Dynamical (HANDY) model. The model was created by a team of natural and social scientists led by mathematician Safa Motesharrei of the National Socio-Environmental Synthesis Center, which is funded by the National Science Foundation. The study has been accepted for publication by the peer-reviewed journal Ecological Economics.
The study states that in the past a number of highly sophisticated, complex civilizations such as the Roman, Han, Mauryan and Gupta Empires, along with numerous Mesopotamian Empires, have collapsed, and it draws parallels among the conditions that made each of these susceptible.
Considering the growing awareness of our own vulnerability, we would be well advised to pay attention to these results.
Last week, Working Group II, the sub-committee of the U.N. Intergovernmental Panel on Climate Change (IPCC) that is responsible for assessing the impacts of climate change, revealed substantial portions of their latest report, the second in what will eventually become a series of three. Though not scheduled to be formally released in its final form until later this month, the report is already sending shockwaves throughout the world.
Climate change is not some abstraction, nor is it a theory. It is a new challenge that is putting considerable pressure on the already stressed areas of human existence, namely hunger, disease, drought, flooding, refugees and war.
Scientists have already observed numerous impacts from warming, including heat waves across the Southern Hemisphere. Severe floods, such as the one that displaced 90,000 people in Mozambique in 2008, are becoming widespread in the global South. In the North, intense downpours have increased in severity. Changes in the Arctic, where the heating is most pronounced, is affecting not only the polar bear, but the culture and livelihoods of indigenous people in northern Canada.
Why, you might ask, when the verdict is in, the scientists overwhelmingly agree, and the evidence is incontrovertible, are they still at it?
This pie chart sums it up pretty nicely. Of the 2,258 peer-reviewed papers that have been published on the subject of climate change between November 2012 and December 2013, representing the positions of 9,136 authors, exactly one of those, written by a single Russian scientist, rejected the idea that climate change is caused by human activity.
This summation was published in a review paper authored by geochemist James Lawrence Powell. Powell, who is a past president of Franklin & Marshall, Reed and Oberlin colleges, has posted a database listing every one of the articles online, and he invites anyone to examine the list. It would be interesting to see if they can draw a different conclusion from it other than overwhelming consensus.
Last month, Google paid $3.2 billion to acquire Nest Labs, Inc., the maker of upscale home gadgets with high-tech interfaces, most notably the Nest Learning Thermostat (NLT). Most observers feel the acquisition was to help Google participate in the home energy management market, which is becoming increasingly connected to the “Internet of things, which Cisco estimates to be worth some $14.4 trillion over the next decade.”
Nest had only recently announced it’s take on the smoke alarm, the Nest Protect, which is a combination smoke and carbon monoxide (CO) detector, done-up with the same kind of panache that made their thermostat stand out from the crowd.
The Nest Protect has a variety of features, providing the kind of performance that you might expect from a “smarter” smoke alarm.
Starting with the same kind of elegant styling as its thermostatic cousin, as well a similarly premium price ($129), it’s clearly aimed at a discriminating market. Here’s what your investment will get you.
Green Mountain Coffee has been a very busy place lately. For starters, the company announced a major deal with Coca-Cola which will focus on bringing single–serving, brew-at-home technology to the soft drink market — a story we covered last month. The company has now changed its name to Keurig Green Mountain, Inc., though it maintains the two brands, Keurig and Green Mountain Coffee Roasters on separate websites and product lines.
In last month’s story we wrote about some of the impacts of this single-serving wave that has been taking the world by storm, pointing out areas where they will clearly make things better, such as moving less water around, and places where there might be some added impact, such as more packaging. I had not seen a lifecycle analysis (LCA) of the Keurig system, so I could not quantify its impact.
Now, with the release of their 2013 Sustainability Report, we have some of those details, at least for the K-Cup coffee system.
The environmental impact of the clothing industry is large and varied. The most significant factors depend highly on the energy, toxicity and water life cycle of the material in question. In general the largest contributions occur in the material production phase (e.g. agriculture), clothing production phase (factory) and usage phase (washing and drying). These are in the form of energy, water and chemical pollution.
A number of companies are taking steps to produce clothing more responsibly and with a lower impact on the planet. Perhaps best known is the selection of low-impact materials, such as organic cotton, which greatly reduces pesticide use. Other materials that have one or more sustainable characteristics include soy, bamboo, hemp and recycled plastic.
Then there are trends that reduce consumption such as recycled clothing, where scraps, rags and pre-worn items are refashioned into new forms. New designs that are multifunctional, like the Versalette, which can be worn 30 different ways have also come on the scene. The idea here is allowing you to pack lighter on your journey through life, with a few items that can meet a variety of needs.
General Motors announced the opening last week of its latest LEED Gold engine factory in Joinville, Brazil — the first LEED Gold automotive plant in South America.
The plant features a 350 kW solar CHP array that provides enough electricity to handle all the lighting for both the factory floor and the offices. That’s equivalent to powering 220 homes. At the same time, it heats 15,000 liters (3,962 gallons) of hot water per day. Together, the heat and power generated provides a combined savings of 28 tons of CO2 per day: 10.5 tons from the electricity and 17.6 tons from the hot water heating.
The plant, which is GM’s sixth LEED-certified plant worldwide, also contains a reverse-osmosis water purification system that recycles wastewater for industrial purposes such as cooling towers. This filtration system, an automotive first, saves an estimated 22.9 million liters (6 million gallons) per year, enough to fill nine Olympic-sized swimming pools. The plant also harvests natural light and utilizes plantings to pre-filter wastewater.
The plant’s completion was delayed by strong rains and floods in the area.
Santiago Chamorro, president, General Motors do Brasil, said: “The environmental performance of this plant has been on our minds since Day One of construction. This operation embodies GM’s outlook on integrating sustainability into every decision we make – from building efficient facilities to designing efficient vehicles.”
Giant corporations such as McDonald’s and Walmart cast a long shadow across the planet with the enormous amount of resources that they use, process, consume and sell. McDonald’s flips and bags 70 million hamburgers every day and is responsible for a full 2 percent of the world’s beef consumption. So when you consider the impact that beef production has on the environment, particularly with regard to climate change, a move by them to sustainable beef could be a really big deal.
After all, according to a 2009 article in Scientific American, the meat industry was, at that time, responsible for somewhere between 14 and 22 percent of all greenhouse gas emissions. So, the article says, if you drove your 3,000-pound car five miles to buy a hamburger, the emissions given off by producing the meat for that burger were equivalent to those given off by your car as your drove there and back home again.
That report, which came from the U.N.’s Food and Agriculture Organization, turned out to be significantly understated. An updated analysis performed by the World Bank, which was published in Forbes of all places, showed that the more accurate number is closer to 51 percent. That means you’d have to drive somewhere between 23 and 36 miles to equal that patty’s footprint.
In fact, the article goes so far as to say that replacing meat with with alternative foods such as dairy products and soy analogs, for people around the world would, “have far more rapid effects on greenhouse gas emissions and their atmospheric concentrations — and thus on the rate the climate is warming — than actions to replace fossil fuels with renewable energy.”
So McDonald’s pledge to switch to sustainable beef production starting in 2016 could have a huge impact, depending, of course, on what they mean by sustainable and how different emissions figures would be compared to those produced today. Considering the fact that Walmart is also making similar noises the stakes are even higher.
Nuclear power has long been controversial in this country, due to concerns about safety. Those concerns were exacerbated after the Fukushima disaster, whose impacts are still not fully understood. A lot of attention has been focused on the Indian Point nuclear plant, in Buchanan N.Y., on the east bank of the Hudson River, just 38 miles from New York City. The license for Unit 2 actually expired last September, and New York Gov. Andrew Cuomo would like the plant closed. But the Nuclear Regulatory Commission (NRC) is evaluating it for a possible 20-year extension.
In the meantime, Con Edison of New York, commonly known as ConEd, and the New York State Energy Research & Development Authority (NYSERDA), have developed a program to reduce demand, which would help reduce the need for generating capacity, making the prospect of eliminating the plant more feasible.
The program, which is called the Indian Point Energy Center Energy Efficiency, Demand Reduction and Combined Heat and Power Implementation Plan, is looking to cut out 125MW of demand through the three types of measures named in the title.
Tim Cook, Apple’s CEO and successor to Steve Jobs, is generally known as a man who, unlike his predecessor, has a cool head and does not let his emotions influence his decisions or his behavior on the job. But that is apparently not the case when it comes to global warming. Nothing seems to get him steamed up more than a group of climate deniers, like the group that recently attended Apple’s annual shareholder meeting last Friday.
In attendance were representatives from the National Center for Public Policy Research (NPCCR), a self described “conservative think tank and policy institute,” that issued a statement before the meeting suggesting that the company renounce any environmentally-based activities that don’t contribute directly to the bottom line.
The proposal, which was submitted by NCPPR General Counsel Justin Danhof, said: “We object to increased government control over company products and operations, and likewise mandatory environmental standards. This is something [Apple] should be actively fighting, not preparing surrender.”
Danhof went so far as to suggest that this proposal be taken up as a pledge to be voted on by shareholders in the meeting. The proposal was voted on and soundly rejected, but not before Cook took the opportunity to comment. “We do a lot of things for reasons besides profit motive,” he said. “We want to leave the world better than we found it.”
Those objecting to the company’s principled stand on the environment, said Cook, were welcome “to get out of the stock.”
We have seen the level of income and wealth disparity in this country reach unprecedented levels. The reasons for this are numerous. Many of them, as documented by Robert Reich’s book “Aftershock,” have occurred as the direct result of policy decisions that were made regarding tax codes and the deregulation of Wall Street.
Wall Street speculation has had a huge impact on the distribution of wealth. With a constant barrage of new, sophisticated derivatives, high-speed trading algorithms and don’t-try-this-at-home tricks that are only available to those with huge portfolios, they have turned investing into a spectator sport for the rest of us. All the big action and the big money goes to the big guys, while a few percentage points fall through the cracks for everyone else. This is what the players proudly call a free market.
It’s no longer just stocks and bonds. In order to feed this greedy machine’s enormous appetite, new opportunities must be found with ever-higher returns. Things like real estate, home mortgages and now “private equity assets,” which used to be within the reach of ordinary working-class people as a way to enhance their earning power, are being scooped up and dragged into the Wall Street coliseum. We can only sit and watch as these are devoured, their prices driven up beyond the reach of ordinary mortals. Home mortgages are the most recent example. Everyone has seen how this game led to the complete collapse of the world economy, with millions feeling the brunt of it, many of them still recovering. The players, who made this all happen, got off with a slap on the wrist, much as football, baseball, and basketball players get away with their misdeeds.
Now their scouts have eyed another target: farmland. According to a study conducted by the independent policy think tank Oakland Institute entitled “Down on the Farm,” the first years of this century saw an enormous land grab in the developing world: 500 million acres, an area eight times the size of Britain, was bought or leased by speculators. This often occurred at the expense of food security and land rights. When the price of food spiked in 2008, this was a buy signal to investors, screaming out, “Farmland is valuable now and will be even more so in the future.” This, of course, is exactly what they are looking for–a big growth opportunity (no pun intended).
It’s an old management truism that says you can’t manage what you can’t measure. Certainly if companies hope to manage their impact on the planet, then they’d best start measuring it. Novo Nordisk, the Danish pharmaceutical giant that was named the world’s most sustainable company in Davos 2012, just announced another step in that direction, by publishing their first Environmental Profit & Loss (EP&L) account. This, for a company that has steadily been reducing their carbon footprint and water use, and who’s CEO pay is already tied to sustainability indicators, further integrates sustainability into its core business practice.
Novo Nordisk, best known as suppliers of insulin, is the first pharmaceutical company to do this, the second major corporation, after Puma to take the step. Both companies worked with natural capital analyst Trucost to develop their EP&L accounting process.
What this means, in a nutshell, is that environmental impact, as defined by the process, will have equal footing with other business concerns, as a criteria for driving business decisions. It will help each company to focus their efforts on the biggest supply chain and operational risks and opportunities associated with environmental issues.