Month: September 2019

Standing Together with the Global Youth Climate Movement

3D employees at the climate strike sept 20

On Friday, September 20th, I stood together with the youth climate strikers in Chicago. That day was likely the largest climate protest in world history. It was a historic moment in the youth climate strike movement as a groundswell of adults joined in solidarity to show their support and amplify the demand for transformative action to address the climate crisis. On a personal level, this timing offered a poignant reminder for me about the importance of intergenerational responsibility as we dropped off our youngest son at college.

SteveMcDougal-climatestrike-chicago

Steve McDougal at the Chicago climate strike 

As I think about the legacy we will leave behind for the next generation, I am filled with both optimism and concern. That particular blend of emotions has been a common experience for me in my roles as a parent and as a business leader. My optimism comes from what I see in my role as CEO of 3Degrees, a renewable energy and climate specialist. 3Degrees is committed to urgent action on climate change — our entire organizational ecosystem is built around that. It is inspiring to see the passion that our employees bring to their daily work and their commitment to achieving impact through groundbreaking work for our clients. So that definitely fills up the optimism bucket.

But on the other hand, as the youth climate strikers relentlessly remind us, we are still not on the right path to avoid the worst effects of climate change. We need more action to combat climate change – more urgent action – action that spans individuals, businesses, and government leaders.

As Greta Thunberg bracingly reminded us during her speech at the UN Climate Action summit in New York on September 23, “If you choose to fail us we will never forgive you.” 

When I reflect on my experience at the Chicago climate strike, I am energized by the incredible leadership the next generation is demonstrating. At the same time, I am deeply concerned about the trajectory of our collective actions to protect the future world that they will inherit. Today’s youth is clear that the status quo is unacceptable. But the open question remains: what more will we – business leaders and government leaders – actually do to combat climate change? 


3Degrees employees stand in solidarity with the global youth climate movement. Some used paid volunteer time to join local climate events, while others stayed in the office and continued our daily work of helping clients take climate action.

Climateaction-photos-3degrees

Lights, Camera, Action: Rolling up our sleeves at the B Corp Champions Retreat in LA

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Last week, I attended the 2019 B Corp Champions Retreat in Los Angeles, an opportunity to connect with people from B Corps in the United States and Canada whose companies, like 3Degrees, are united in using business as a force for good. The setting provided a backdrop ripe for discussing the power of storytelling — how that power has historically been used and whose voices have been underrepresented or even ignored. As we considered the current and future state of the B Corp movement, it also provided a reminder — both sobering and inspiring — that the B Corp movement is on its own journey to ensure that we are building an inclusive economy that works for everyone and protects the planet. So as we continue to write B Corps’ evolving story, here are some recent “takes” from the retreat to capture the work ahead.

Lights

The B Corp movement continues to shine the light on how business can be a force for good. Certified B Corporations are legally required to consider the impact of their decisions on their workers, customers, suppliers, community, and the environment. Indeed, the retreat noted that there are 1,200 American “B Corporations” certified by B Lab and 35 states plus the District of Columbia certify so-called benefit corporations. 

The broader B Corp movement is also spurring additional efforts to redefine the role of business. It was groundbreaking in August when 181 CEOs in the Business Roundtable, which represents some of the largest companies in the world, signed on to a new definition of a corporation akin to the B Corp model.

This was a historic acknowledgment that the economy is not working for everyone. Businesses (and government leaders) need to take on a new level of leadership to address the problems they have helped foster.

Camera

In the age of selfies and influencer vlogs, where do we direct our collective attention? The B Corp Champions Retreat was unequivocal that we MUST focus on climate action. For the past year, B Lab, together with B Corps around the world, has been working on a range of actions to galvanize action across the B Corp community, including plans to update the certification standards to more fully address greenhouse gas (GHG) emissions, policy advocacy, and employee engagement. I am especially excited about the upcoming B Lab launch of the Sustainable Development Goals (SDG) Action Manager, in partnership with the UN Global Compact – another tool to help organizations quantify their impact on SDGs #7 (affordable and clean energy) and #13 climate action.

Last Friday, more than 4 million people around the world took to the streets in what was likely the largest climate protest in world history. Internationally, B Corps are standing together with the youth climate strike in demanding government action. Climate change requires our unrelenting attention in the weeks, months, and years ahead if we are to truly fulfill the demands for real action – from governments, businesses, and individuals.

Action

At the core, the B Corp community recognizes that how a business operates and who is included are critical. More than ever, we need an economy that works for everyone (inclusive) and heals the planet (regenerative). For example, we cannot effectively combat climate change (or any issue) if we do not also take action to dismantle institutional and individual biases that perpetuate inequities. It’s a tall order. And one that inspires us to do better.

Throughout the retreat, there were examples mentioned on stage and within side conversations that highlighted the capacity of the B Corp community to push us to a new standard for inclusion. During the opening plenary, James Anderson from the Yerba Mate Co. highlighted the challenges for system affected individuals such as those returning home from incarceration who encounter barriers to finding employment, a critical step for rebuilding their lives. Yerba Mate is focused on providing 10,000 living wage jobs to system affected individuals throughout the world. The harder truth to acknowledge, as fellow attendees and I discussed afterward, is how system affected candidates might fare in our own companies’ application process. We have work to do.

 

The B Corps Champions Retreat was an intense experience: a place to reflect on what it means to be a B Corp, to deepen commitments to address climate change, and to make new connections about how to build a more inclusive economy for everyone. My marching orders are to transform these “takes” from the Champions Retreat to help to craft a new narrative here at 3Degrees and beyond.

 

Tackling the Decarbonization of Transportation

electric buses fleet

By now, many of us have heard the statistics and news reports: organizations need to be moving at a much faster pace to address the global climate crisis and meet the Intergovernmental Panel on Climate Change (IPCC) report’s warning of limiting warming to no more than 1.5 degrees Celsius.

While this information might feel overwhelming, we don’t interpret it that way for two reasons. First, there has already been good progress made reducing Scope 2 emissions with increased investment in renewable energy. From utilities taking action to switch to cleaner fuels for their power plants, to companies stepping up to invest in increasingly cost-competitive renewable electricity, emissions from electric power usage have been on the steady decline. Next, we know exactly where we need to turn our collective efforts to have the biggest impact on reducing GHG emissions: the transportation sector.

Put simply, we have the map and know the road to take – now it’s a matter of mobilizing and taking action.

The road to reducing transportation emissions

In 2016, the transportation sector surpassed the power sector as the larger emitter of greenhouse gasses (GHG) in the U.S. (responsible for 27% of emissions), driven by changes in both consumer and business market behavior. A confluence of activities is resulting in a larger transportation carbon footprint: the growth of e-commerce, including international shipping, increased business travel as a result of globalization, and more.

While solutions to transportation emissions are within sight, they come with challenges. Most will take time to become fully practical to implement on a large scale, and will require a significant amount of financial investment and policy support to get there. The good news is that progress has already been made in a few notable areas, including fuel efficiency (vehicle manufacturers have made significant improvements in fuel economy) and advanced aerodynamics. However, the solution that will have the biggest impact on emissions is undoubtedly the transition to low-carbon transportation fuels (including renewable electricity).

Incentives can accelerate the transition to low-carbon fleets

Although low-carbon fuels, such as renewable power and renewable natural gas (RNG), are gaining traction, the transition to these fuels will take time. New vehicles and fueling infrastructure require large capital investments that are hard to justify before the billions of dollars of existing vehicles and infrastructure begin to wear out. There are, however, some levers available to help support the acceleration of these transitions, such as incentive programs like California’s Low Carbon Fuel Standard (LCFS) and the federal Renewable Fuel Standard (RFS). Market-based incentive programs were designed with the goal of decarbonizing the transportation fuel mix and can actually help fund fleet decarbonization and infrastructure roll-out, which may otherwise be cost-prohibitive to many businesses.

California, Oregon, and British Columbia have incentive programs for low-carbon transportation fuels, and several other states and provinces are considering them. California’s program requires providers of petroleum-based fuels to reduce the carbon intensity of their fuel mix by 20% by 2030, as compared to a 2010 baseline. The LCFS incentivizes low-carbon fueling in California by allowing alternative fuels, such as electricity or renewable natural gas, to generate credits that can then be sold in the LCFS market. Organizations already engaged in low-carbon fueling may be eligible to register those activities under what are referred to as LCFS “pathways”. For organizations that have yet to transition to low-carbon fuels, the LCFS can act as a financing mechanism to help fund the transition costs.

The role of carbon offsets

In addition to incentive programs, carbon offsets are another market mechanism that play a role on the road towards decarbonizing transportation. While they are not the end goal, carbon offsets can provide a funding mechanism for programs to decarbonize auto manufacturing, support the rollout of EV or biofuel infrastructure, or recycle vehicle waste.

 

We have a map of viable pathways for decarbonizing transportation. And there are many examples of organizations already taking action and mobilizing others to follow — but we’re going to need many more to start down this road if we’re going to make a true impact on lowering our transportation emissions. We hope that the growing availability of market-based incentives mentioned above encourages your organization to step up and take the wheel.

 

Best Practices for Voluntary RNG Programs

cows-biodigester-rng

What Gas Utilities Can Learn From Electric Utility Green Power Programs

As pressure to decarbonize our energy supply mounts, many gas utilities are considering how to integrate and scale renewable natural gas, and are considering a voluntary renewable natural gas (RNG) program for their residential and commercial customers.

While voluntary RNG programs are a relatively new development for gas utilities, these programs have many similarities to the voluntary green power programs that have been offered by electric utilities for decades. As such, there is much that gas utilities can learn from their electric utility counterparts in terms of best practices and risk mitigation as they consider whether and how to design and launch successful RNG programs.

Top ten key factors in creating a successful voluntary program

Thanks to the annual NREL Top Ten List, it’s easy to get a sense for which electric utility programs have been the most successful. But looking at those lists doesn’t tell you why those programs have achieved such success.

Here are ten specific lessons that will help gas utilities build a successful voluntary program:

1. Understand your customers

What customers value in a renewable product may surprise you, and in many cases it will vary by segment. Conduct market research to both validate demand and help you understand how different customers make price and value decisions. The most successful electric utilities often have different programs for commercial and residential customers.

2. Work with stakeholders

Environmental and rate-payer advocates can be staunch supporters or opponents of a program. Work with them early in your program design process to understand what they value, and help them understand trade-offs. The nationally renowned electric utility programs in Oregon were launched with the most robust stakeholder process in the country.

3. Certify

Voluntary certifications such as Green-e® Energy will soon be available for gas programs. Embrace the certification when it comes. Whether customers know about the certification or not, new markets need it to build trust.

4. Gain internal alignment

These programs will eventually require support from, or integration with, every department across the utility; anticipate this and make sure you have the cross-functional support you need.

5. Create value

Voluntary renewable energy programs create value for utilities in different ways, from customer satisfaction to, in some cases, direct profit. Internal stakeholders need to understand what value the program delivers initially, how to measure it, and whether it has the potential to deliver even more value over time. Electric utilities that extract value from their green power programs are more likely to invest in them; the same will be true for gas utilities.

6. Go local

Customers and stakeholders value local supply. While it may not be possible to start with 100% local supply, electric utilities have pioneered approaches that include program funding for small scale projects or a blend of local with lower-cost regional supply.

7. Include budget for start-up costs

Renewable programs tend to be funded by participants, which means start-up costs for items such as new billing system programming or the first year’s marketing and administration need an explicit funding strategy. Successful programs have found ways to ensure a good start through strategies like limited ratepayer funding, a shareholder investment, or accepting a long payback period.

8. Know your billing system

Updating your billing system to allow for an additional product can be very expensive. Be sure you understand what the billing system can accommodate at varying levels of investment early on in the process.

9. Engage customers

The utilities with the most successful programs give their customers many opportunities to learn about the programs and participate, and often lead with the green power program in their customer interactions. All of the top programs invest in direct sales and marketing channels, as well as awareness-focused marketing efforts.

10. Consider all procurement options

When designing RNG products, consider all options for procuring renewable natural gas. Similar to renewable electricity, it is most important that you obtain and retire the environmental attributes associated with RNG (“RNG attributes”). RNG attributes represent all of the environmental and other generation benefits that differentiate a unit of RNG from a unit of conventional natural gas. Procuring unbundled RNG attributes can offer the flexibility needed to get started and validate demand, while you work through the hurdles of physical supply.

 

Though there are some key differences between green power and RNG programs, such as the higher cost and lower availability of supply, as well as less customer awareness, adhering to these best practice principles will better equip gas utilities to successfully navigate these differences, lower their risk, and increase the likelihood of program success.

Many gas and electric utilities are already demonstrating real leadership in decarbonizing our energy supply. Offering voluntary RNG programs is one potentially powerful path forward that I’m confident will lead to benefits for customers, utilities, and the climate.

How Mondelēz International is Achieving an Ambitious Goal to Reduce its Global Greenhouse Gas Emissions

Roadrunner-construction

Photo: Enel Green Power North America’s Roadrunner project

In 2015, food and beverage giant Mondelēz International set an ambitious goal to reduce its absolute greenhouse gas emissions versus a historic base year in each of its four global operating regions. The company had already made good progress through energy efficiency and other on-site solutions, but these actions alone were not going to be enough to reach its aggressive emissions reduction goal. It needed to invest in additional initiatives in order to close the gap.

To help guide its efforts, Mondelēz International enlisted 3Degrees to conduct an in-depth renewable energy strategy assessment and deliver a global roadmap to achieve the company’s goal, as well as support any resulting implementation work.

Challenges

Mondelēz International had outlined two important criteria:

  1. The company was interested in impact;
  2. There was a strong preference for cost-neutral, or cost-positive, solutions.

After an intensive assessment, 3Degrees presented Mondelēz International with the global strategy roadmap and, within it, highlighted a variety of renewable energy pathways that would meet both of the defined criteria. After reviewing all of the options, there was clearly one solution that was best suited to meet the company’s goals: a virtual power purchase agreement (VPPA) for renewable energy from a new project. 3Degrees quickly got to work to begin the next phase of implementation.

Mondelēz International was interested in impact with a strong preference for cost-neutral, or cost-positive, solutions.

How we helped

To kick off the implementation, we issued an RFP to find the most attractive VPPA for Mondelēz International. By the end of the response period, 48 developers had submitted proposals for a total of 126 projects. 3Degrees carefully vetted each one of these projects, which included:

  • Performing a full qualitative analysis of developer qualifications, which leveraged 3Degrees’ in-house knowledge of the renewable energy developer community;
  • Creating a project evaluation scorecard to gauge each project in terms of project development risk metrics, including permitting, interconnection, financing, and others; 
  • Conducting a deep quantitative analysis to select the project that would offer Mondelēz International the best long-term value, while limiting any potential downside.

At the end of the extensive analysis process, 3Degrees recommended Enel Green Power North America’s Roadrunner project, a new 497MW solar farm in Texas, which best met Mondelēz International’s need for an impactful and cost-competitive solution. We then helped the team at Mondelēz International navigate its broad, global executive stakeholder network to gain the necessary alignment and approvals to proceed with the project.

Results

  • Mondelēz International signed a twelve-year virtual power purchase agreement (VPPA) under which the company will purchase the energy delivered to the electricity grid from a 65 MW portion of Enel Green Power North America’s Roadrunner project.
  • The VPPA is Mondelēz International’s largest renewable energy transaction at a global level and its first renewable energy PPA signed in the U.S.
  • The transaction enables Mondelēz International to make substantial progress against its sustainability goals by reducing 80,000 metric tons of carbon dioxide emissions – that’s 5 percent of the company’s global manufacturing emissions.
  • The VPPA will help pave the way for subsequent renewable energy procurements of any kind to help achieve Mondelēz International’s long-term sustainability goals.

“The signing of this VPPA is a major advancement towards achieving our aggressive global emissions reduction goals. We are thrilled about this partnership with Enel Green Power North America to help bring new renewable generation online, and appreciate 3Degrees’ strategic guidance and implementation support that helped make this transaction possible.”

–Erika Schunk Vasconcellos, Global Environmental Manager, Mondelēz International