October, 2012

October 22nd, 2012

Levi’s quietly announces Climate Change Strategy

This article was originally published on Triple Pundit on Monday Oct 22

When an iconic figure makes a bold statement, conventional wisdom suggests that the statement is meant to be heard. Lady Gaga didn’t don a meat dress to the 2010 MTV music awards because it was high fashion, just as Iran isn’t necessarily enriching uranium to advance their stock in nuclear energy.

So earlier this month when Levi Strauss & Company (LS&CO) released their 2012 Climate Change Strategy (view announcement or download the PDF), it seems counter-intuitive that so little media fanfare accompanied the launch. Shouldn’t Chip Bergh, LS&CO’s CEO, be out seeking airtime with Good Morning America and the talk show circuit for recognition?

The unfortunate reality is that climate change remains such a high voltage issue for people that addressing it as a corporation can no longer be effectively marketed as a benefit to consumers. If “green” is the darling of eco-marketing, then “climate-friendly” is the egghead sister that no one wants to date. People don’t want to be saddled with the world’s problems when they are out buying jeans. In fact, consumer brands are more likely to risk alienating politically conservative consumers (53% of whom deny global warming) than they stand to gain in boosting sales for demonstrating leadership in corporate responsibility.

Why then, if not for publicity, would an iconic American denim company even bother to publish a climate change strategy? As Chip points out in his opening message, LS&CO. faces “significant business risks, ranging from disruptions to our operations, to the availability of water, and to potential impacts to cotton supply, our core raw material.” This sounds very little like leftist hippie hyper-alarmism and more like an even-tempered, inward-facing business decision aimed at protecting the long-term interests of the company.

But wait; isn’t sound corporate management generally aligned with conservative values? Ironically, the country has become so intensely blinded by political ideals as to recognize that the business community –which drives more than a few of the big ticket items central to the November elections (jobs, economic prosperity, etc.)–has already moved on to the solutions piece of the climate change puzzle, while more than a third of the country continues to denounce climate science altogether.

For its part, Levi Strauss and Co aims to reduce greenhouse gas (GHG) emissions tied to offices, retail stores and distribution centers 25% by 2020, while increasing renewable energy purchases by 20% during that same time frame. Similarly, consumer products giant Reckitt-Benckiser, with over a 100 brands including Clearasil, Frank’s Red Hot and Lysol, has committed to reducing its overall carbon impact by one-third by 2020 as part of its “better business” initiative.

Even companies normally seen as competitors (Nike, Adidas, and Puma for starters) are banding together to form alliances like the Sustainable Apparel Coalition, or, in the case of the beverage industry, the Beverage Industry Environmental Roundtable (BIER). More explicitly related to climate change is the BICEP coalition – Businesses for Innovative Climate and Energy Policy – led by Ceres, a Boston-based nonprofit. And, just to drive the point home, major oil companies like Shell and Conoco Phillips are even developing corporate strategies tied to climate change.

Companies the world over are assessing climate change risks and costs in manners that are material to their business. If severe weather threatens to disrupt distribution channels, companies need to ensure against such risks in the same manner that rising energy costs would drive the business case for maximizing energy efficiency.

But again, while multi-billion dollar, multi-national players are increasingly addressing climate impacts that may affect their bottom line, there is little motivation to shout their progress from the rooftops. In a world where the customer is king, demand for low-carbon products and corporate climate leadership is trumped mightily by traditional demand drivers like price, product quality and brand image.

If climate change were considered hip, companies would be tripping over themselves to share their climate change strategies with consumers as a way to sell product. Until that happens, though, companies will rightfully go only as far as good business dictates, while we the consumer continue being spoon-fed a more marketable and more attractive version of eco-friendliness: more green.

Mike Bellamente is the director of Climate Counts, a national nonprofit aimed at bringing consumers and corporations together on climate change. Bellamente has written extensively on environmental sustainability in the private sector and has appeared on Huffington Post and GreenBiz.com. In February 2012, Bellamente was named to Ethisphere’s list of 100 most influential people in business ethics.

October 5th, 2012

Adding Perspective: Climate Counts To Pilot Context-Based Sustainability Approach

This article authored by executive director Mike Bellamente was first published by Sustainable Brands September 25, 2012. Sustainable Brands encourages companies to incorporate sustainability into their business and brand strategy.

This month Sustainable Brands has showcased a wide spectrum of innovative sustainability metrics that drive corporate profitability. Among others, we’ve seen balanced scorecards, the pursuit of zero waste, and the merits of sustainability ROI.

At the heart of these metrics lies the connected goal of creating value at once for the organization and for the environment. The general idea is that if we can get enough of the brightest minds in business to turn the production/consumption paradigm on its ear, we may one day be able to harmonize society’s appetite for goods within the limits of the natural world, even as population continues to soar.

But how far have we come and how far have we left to go? For those of us at Climate Counts, an organization that rates major consumer brands on their commitment to climate leadership (or, more precisely, on how well companies are measuring, reducing and reporting their greenhouse gas emissions), the question becomes, “What does a good score really mean?”

In 2011, Unilever, Climate Counts’ top-scoring company, was awarded an unprecedented 88 out of a possible 100 points for GHG targets set forth in their Sustainable Living Plan. By 2020, Unilever aspires to double the size of its operations while reducing by half the GHG impacts of its products — a daunting if not awe-inspiring target. If the company were to achieve its goal of halving its emissions, the result would be an output of 2,785,882 metric tons of GHG emissions for the year 2020 alone. Compared to where Unilever’s emissions would otherwise be without these reductions, 2.7 million metric tons seems attractive — but compared to, say, zero, it’s still a considerable amount.

Similarly, Bank of America has demonstrated great progress in reducing Scope 1 and 2 emissions by 9.7 percent to 1.7 million metric tons from 2010 to 2011 — a feat that garnered recent praise from the Carbon Disclosure Project in the form of being named to the Carbon Performance Leadership Index (CPLI) for a third straight year.  But if every emissions-producing entity on the planet achieved such reductions, over time would it be enough to prevent further climate change?

Herein lies the problem. Although ratings organizations such as Climate Counts, CDP, and the Dow Jones Sustainability Index offer investors and consumers an easy-to-understand snapshot of sustainability performance, they offer little in the way of context that can be tied to the bigger picture. If the goal is to establish an accurate reference point as to whether or not the private sector is succeeding in mitigating society’s impacts on climate change, it stands to reason that science should be better represented in the ratings.

As Bill McKibben noted in his recent Rolling Stone article, scientists estimate that humans can get away with emitting no more than 565 additional gigatons of CO2 into the atmosphere by 2050 if we expect to keep the planet from warming by more than two degrees Celsius. Admittedly, this is one of many scientific projections, and although this particular target may have its flaws, it gives us a much-needed starting point with which to gauge our progress as a society.

As the climate conversation has ebbed its way almost completely from the public vernacular, in its place has seemingly emerged a tendency for sustainability professionals (private sector and NGO professionals alike) to validate our successes in terms of the competition rather than within the context of the limitations afforded to us by the earth’s carrying capacity.  We employ metrics to rate our performance as individual organizations and, in cases such as the Higg Index, to give an entire industry a framework to identify the environmental costs of using certain input materials. Where the private sector has struggled, however, is in squaring its collective progress on sustainability with an ambivalent public that prefers business as usual to the misguided prospect that carbon neutrality would necessitate higher prices and lower quality goods.

So where do we go from here? In 2013, Climate Counts plans to conduct a pilot rating under the context-based sustainability framework being spearheaded by Bill BaueMark McElroy and their cadre of sustainability practitioners, academics and industry thought leaders. The rating will comprise a sample set of companies representing a diverse group of industry sectors. The goal will be to measure corporate progress toward true sustainability, using the latest scientific data and climate models as the bar to be measured against. Instead of measuring companies on voluntary targets, which are typically derived from business cases tied to costs, risks and reputation, this rating will measure companies on their performance compared to where the science dictates we need to be as a society.

Understandably, as the bulk of private sector GHG emissions continues to be in the form of Scope 2 purchased electricity, there are bound to be limitations on how well companies can score that are beholden to a grid dependent on fossil fuels. As the goal of the project will be to further the concept of context-based sustainability, and not to unfairly judge companies on criteria beyond their control, we will be looking to engage with companies that demonstrate: 1) a willingness to be on the forefront of next-generation sustainability practices; 2) that recognize the need for mechanisms that will phase out carbon-intensive fuels over time; and 3) that have demonstrated a high degree of competency related to carbon accounting and reporting.

With the development of the GHG Protocol and organizations such as the Global Reporting Initiative, carbon accounting and reporting are no longer seen as an abstract concepts, but rather as fundamental components of 21st-century corporate citizenship. Standardization has been embraced to the point that companies use the data as a barometer of performance and operational efficiency. The next logical step, it would seem, is to mash up corporate sustainability targets with climate science to gauge how far we have left to go on the road to achieving true sustainability.

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