Author: Ruth Moorman

How One Multinational Food & Beverage Company is Reducing Global Emissions – at No Additional Cost

food-beverage-case-study

Company-goals
In 2017, a multinational, Fortune 100 food and beverage company engaged 3Degrees for assistance meeting an ambitious goal: reducing its absolute greenhouse gas emissions vs. a historic base year in each of its four global operating regions. This client thinks of emissions reductions in a virtuous cycle, progressing through usage reduction, onsite consumption from low and zero carbon sources, cost effective solutions that don’t require a change in the supply chain and, finally, off-site renewable solutions to help close any remaining gap. The client had been making steady progress through energy efficiency and other onsite solutions, but needed additional reductions to achieve their goals. 3Degrees was hired for a three-year engagement to establish a strategy to achieve the client’s goals across all regions and to support the regional teams’ resulting implementation.

Challenges

We knew the client’s needs were complex, but we were up to the task and readily accepted the challenge.  Their ambitious requirements included: the reductions needed to be in place for calendar year 2020 reporting; each region must meet the goal independently; each implementation solution must have a cost-neutral or cost-saving economic profile; and no unbundled instruments such as RECs or GOs could be used.

How we helped

3Degrees began the engagement by identifying emissions hotspots across the client’s global operations, then assessed specific countries where they could get the “best bang for their carbon buck”. For example, we looked for opportunities where one solution could address multiple issues, thus optimizing the client’s resources.  We honed in on four areas that looked to be the most promising in meeting our client’s goals:

  • Onsite solar
  • Green retail (in deregulated markets)
  • Combined heat and power solutions (CHP)
  • Off-site renewable solutions

For each one of these prospective solutions, 3Degrees conducted a comprehensive analysis that was specific to each region and its target reduction goals. The analysis also included an assessment of specific facilities in the region whose emissions profiles were sufficiently large to allow for a meaningful contribution to the goal should a reduction solution be pursued.  We then mapped solutions to each facility, taking into account regional policy environments, resource availability, vendor landscape, project economics and other factors.

“This was an ambitious assignment because the client’s needs were complex and global in nature. But we were up to the challenge and feel very positive about the global strategy road map we were able to deliver and the significant emissions reductions that will come as a result.”

– ERIN CRAIG, VP ENERGY AND CLIMATE PRACTICE, 3DEGREES

Results

3Degrees delivered a global strategy roadmap that will enable the client to meet their emissions reduction goals in all four regions by their 2020 target, with solutions that are cost neutral or better.  In some regions, multiple implementation options are available and the client’s regional teams are engaged in final alignment discussions; in other regions, implementation work has already begun. 3Degrees is supporting these implementations, as well as needed changes in the client’s greenhouse gas accounting practices to correctly quantify the resulting reductions.

More on Energy and Climate Consulting with 3Degrees.

How One Global Beverage Company Took Pure Water to the Next Level

Voss case study Norway pure water

company goals

VOSS LogoIn 2007, leading beverage brand VOSS set out on a mission to take a hard look at the holistic environmental impact of its exceptionally pure bottled water products.  Although VOSS offered some of the cleanest water products in the world, the company realized the process of sourcing, bottling and bringing its products to market in over 50 countries had a significant carbon footprint as the price for its success.  Inconsistent with their environmental values and detrimental to the very resources from which VOSS water flows, VOSS decided it was time to make a change.

VOSS approached 3Degrees to help it comprehensively address its carbon emissions, which were only going to grow significantly as the company achieved greater success.

Challenges

VOSS was looking for a thorough, meaningful solution to address its cradle-to-grave product life cycle carbon footprint from the moment it sources its water to the moment the bottle is recycled. VOSS entrusted 3Degrees to dive deep and come up with a methodology and approach that would be impactful, holistic and scale with the company’s global ambitions.

How we helped

There were three phases to 3Degrees’ engagement with VOSS.

3Degrees' Role

Phase One – Carbon Footprint Advising and Calculation

We kicked off our work with VOSS with a comprehensive carbon footprint analysis and recommendations on ways to reduce their overall greenhouse gas (GHG) emissions.  3Degrees calculated and accounted for greenhouse gas emissions from all stages of VOSS’s product life cycle, as well as all employee travel and business activities.  This “end to end” product life cycle assessment calculates the impact of the raw material extraction and processing, transport of raw materials, bottling processes, transportation of finished products and, finally, end-of-life management including refilling, recycling or disposal of the bottles and packaging. 3Degrees’ greenhouse gas emissions reduction recommendations spanned product life cycle stages.

Phase Two – High Caliber Carbon Offsets Purchase

To offset unavoidable greenhouse gas emissions, 3Degrees worked with VOSS to identify and select high quality carbon offset projects in the U.S., China and later Australia. The projects were evaluated and selected on the basis of VOSS’s criteria for desired project technologies, geographic locations, volumes, co-benefits, marketability and price point. VOSS then committed to an annual purchase of offsets from the selected projects to neutralize the company’s unavoidable carbon footprint.

Phase Three – Communicating to Stakeholders

Once 3Degrees and VOSS agreed on the strategy for the carbon offsets and implemented the purchase, VOSS wanted to communicate its plan to stakeholders in a compelling manner.  VOSS was proud of its environmental commitment and wanted to share that story, but was keenly aware of the need to message it accurately, humbly, and with integrity.  3Degrees’ marketing and design teams developed strategic and tactical communications recommendations, including an environmental mission statement, messaging for packaging, and press release and website copy.

3Degrees built a tremendous amount of trust with the VOSS team and our initial one-time engagement with the company turned into a relationship that’s lasted more than a decade. 

Results

Through the partnership with 3Degrees, VOSS was able to:

  • Calculate its cradle-to-grave lifecycle carbon footprint
  • Implement company-wide carbon reduction efforts
  • Mitigate the impact of its unavoidable product life cycle greenhouse gas emissions through the purchase of high-caliber verified carbon offsets
  • Powerfully communicate its environmental commitment to internal and external stakeholders

More on Energy and Climate Consulting with 3Degrees.

Why my work matters: Kathleen Nickerson

kathleen-knickerson

Kathleen Nickerson is a partnership manager in our utility practice.
OR-coast

Some of my favorite projects:

  • Worked with mayor, city council and the city’s largest employers to successfully promote renewable energy in a coastal Oregon city.
  • For a large western utility, supported a multi-million dollar grant program that funded renewable energy projects for non-profits and municipalities.
  • Based on feedback received from a utility’s customers, expanded our call center services to provide information about all renewable energy options available through the utility.
  • Helped to found and manage the 3Degrees corporate giving and volunteer program, getting buy-in for employee volunteer activities and a company donation match program.

 

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I work in this industry because I want to leave a legacy.

 Special skills & expertise

purchase-agreement teams  create-and-design switch-hitter
Skilled in building community support for renewable energy Proven ability to manage and motivate teams of seasonal and part-time workers Creates pilot programs and then takes them to scale Superpower:
A switch hitter, she is equally skilled at writing, number crunching and relationship building

 

Watch Kathleen’s video:

Apple, Akamai, Etsy and Swiss Re partner on largest renewable energy aggregation to date

Wind turbines in the field at dusk

PJM-summary-graphic

While many companies seek to make a demonstrable impact on climate change by bringing new renewable energy projects into their electricity supply portfolio, this aspiration has been challenging for companies with smaller or geographically distributed loads whose needs are too small to enable a project to come to fruition. Enter aggregation.

By joining together, smaller energy users can create enough buying power to make a material impact on a project’s financial outlook, attracting the attention of project developers and opening this impactful solution to a wider range of companies.  In addition, by bringing multiple companies into a single procurement, aggregation has the ability to reduce transaction costs and create economies of scale.

In 2018, 3Degrees supported Apple, Akamai Technologies (Akamai), Etsy and Swiss Re as they leveraged their collective buying power in the largest aggregated corporate renewable energy transaction to date . This aggregation resulted in six power purchase agreements – the largest one greater than 130 MW and the smallest less than 5 MW. The companies’ efforts demonstrate how corporate energy buyers of all sizes can successfully purchase renewable energy directly from new renewable projects.

Challenges

News in the corporate renewable energy space is often dominated by announcements of mega-purchases, where a large energy user strikes a deal with the developer of a large wind or solar project.  These announcements send an implicit message that the economic and environmental benefits of contracting with large renewable energy projects are only available to the largest of electricity users. Fortunately, the market is evolving to serve buyers of all sizes. Aggregated purchasing is one effective option gaining traction among buyers with diverse needs.

“Etsy is excited to be a part of a project that will benefit both the planet and our customers. This agreement will help Etsy to meet our goal of powering operations with 100% renewable electricity while also innovating by paving the way for small companies to participate in the renewable energy market.” 

–Rachel Glaser, Etsy Chief Financial Officer

This aggregation came together when four prospective energy buyers – Apple, Akamai, Etsy and Swiss Re – decided to act jointly to purchase renewable energy in the PJM energy market.1 The participants recognized their common aims through their already-active work in the energy sustainability space – variously as buyer-supplier companies, peer-to-peer colleagues, and as clients of 3Degrees. They also shared a desire to help prove new renewable energy purchasing models so as to enable other companies to secure renewable supply more quickly and easily. These four companies, dubbed The PJM Gang, had diverse energy needs but also had corporate renewable energy goals with similar timing requirements and a consistent view toward the importance of making an impact with their purchase.  

After the team of buyers was in place, 3Degrees was tasked with finding the perfect blend of projects in terms of size, technology, location, economics and timing. While generally aligned, each company had unique needs. It was also essential to ensure that all four buyers were ready and willing to move cohesively through the procurement to contract execution.  

“Through this aggregation and 3Degrees’ support, Swiss Re is able to reduce its carbon footprint, which helps us to live up to our goal of making the world more resilient. We hope that this deal will encourage other organizations with smaller energy consumptions to join together and switch to renewable energy.”

–Dr. Lasse Wallquist, Senior Sustainability Risk Manager at Swiss Re

How we helped

3Degrees led the procurement process, resulting in individual PPAs for each company, while providing stakeholder education and support to each company individually, according to their differing needs.   

The first stage of the process consisted of quick market price discovery and analysis to gather the facts necessary to engage, educate and align company stakeholders. This early market analysis was critical to ensure all companies had a green light for the procurement, as well as gained approval on contract length, acceptable pricing, general terms and conditions, and offtake amounts. Each buyer made a go/no-go decision regarding  participation in the second stage.

After all four companies gave the thumbs up, 3Degrees solicited proposals from project developers, validated project development assumptions and completed rigorous risk and financial analyses. For the shortlisted projects, a deep-dive qualitative due diligence was conducted to provide the four companies with a holistic picture of each project’s viability, the reputation of the developers, as well as background on the developers’ engagement with the local community to date.

“Our collaboration with 3Degrees, Apple, Etsy and Swiss Re resulted in a superior outcome than we could have achieved on our own, and gives us confidence that we will achieve our 2020 global renewable energy goal.”

–Dr. Nicola Peill-Moelter, senior director of environmental sustainability at Akamai

For the top ranked projects, 3Degrees evaluated numerous project pricing options to determine the best possible financial offers, then navigated the intricate process of allocating the offtake available from several projects still under consideration among the four buyers – balancing differing project characteristics and financial specifics across the buyers’ needs and aspirations. Next, a custom calculator was developed to compare prices across multiple project combinations, considering a variety of hypothetical wholesale energy market price scenarios which would affect the purchase’s overall economics. Ultimately, the buyers selected an Illinois wind project and a Virginia solar project, agreed upon the final offtake allocation and entered into the contract negotiation phase.

3Degrees supported the buyers throughout the contracting process – acting as a unified voice for the group during negotiations, advising on contract terms and making recommendations based on each client’s unique needs and priorities. In spite of varying risk tolerances and needs for specific terms, the PJM Gang negotiated from a single set of commercial terms which were ultimately translated into side-by-side PPAs for each buyer and project.

Results

1 PJM is a regional transmission organization (RTO) that coordinates the movement of wholesale electricity in all or parts of 13 states and the District of Columbia.

 

More on Renewable Energy Procurement services from 3Degrees.

Why my work matters: Lisa DiMartino

Lisa DiMartino is a senior manager in our utility practice.
seattle

Some of my favorite recent projects:

  • Serving as a founding member of the 3Degrees diversity and inclusion team with responsibility for leading D&I training, including our first ever company-wide, in-person training.
  • For a northwest utility, managed several large, multi-city community challenges, working with community leaders to promote renewable energy through events, outreach and other marketing tactics.
  • Helped a utility client bring together separate but related marketing initiatives around energy efficiency and renewable energy, resulting in improved customer experience.

 

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I’m passionate about inspiring clients and their customers to choose renewable energy, and in doing so, help transform the industry.

 Special skills & expertise

sustainability   spanish-speaker teams
15 years of sustainability experience Identifying client needs and building solutions to address them Data driven approach to marketing and outreach Conversational Spanish Superpower:
Facilitates and inspires teams through collaboration, inclusion, transparency and heart.

 

Watch Lisa’s video:

Why my work matters: Kelly Rytel

kelly-rytel-photo

Kelly is a director in the energy and climate practice at 3Degrees.
data

Some of my favorite recent projects:

  • Using both quantitative and qualitative research tools, developing a sustainability baseline and helping to prioritize sustainability opportunities for a high tech transportation company.
  • For the past several years has helped a large data center provider develop and report on their sustainability work, integrating GRI frameworks into all reporting initiatives.
  • Helped a large, multinational firm on a major initiative to engage their suppliers in 100% renewable energy goals. Developed end to end engagement process and created educational materials that provide actionable information on renewable energy options in multiple countries.

 

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I believe climate change is our generation’s largest challenge and it’s gratifying to be part of the solution.

 Special skills & expertise

reporting  financial-analysis  global creative-thinking
Broad knowledge in sustainability reporting and footprinting Skilled in creating custom financial models, including feasibility and sensitivity analyses Deep knowledge of renewable energy landscape in Asia Superpower:
Equal parts creative and analytical (both left and right brained)

 

Watch Kelly’s video:

Wind and solar PPAs allow BART to meet renewable energy goals ahead of schedule

BART-case-study-PPAs

bart-logo

Bay Area Rapid Transit (BART) is the 5th largest rapid transit system in the US, serving San Francisco and its surrounding communities. BART riders take approximately 430,000 trips each weekday on the system. To transport those riders, BART uses approximately 400,000 MWh every year, making BART one of the largest electricity users in Northern California. With nearly 90% of riders agreeing that BART is an environmentally responsible form of transportation, BART leveraged this support to sponsor a bill in 2015 that would allow it to buy wholesale renewable energy directly. This bill’s passage allows BART to directly support California’s climate change goals by buying cost-effective, zero-emissions renewable power and further support their eco-conscious riders.

Challenges

While BART now had the legal authority to buy its own renewable energy, several challenges remained. First, the organization needed to create a new wholesale electricity portfolio policy that included new renewable energy goals. This policy needed to be approved by the publicly-elected Board of Directors. Second, the Board also needed to approve any renewable energy contracts prior to their execution. And third, BART needed to find long-term renewable energy supply at stable, competitive prices, with minimal risks, and do so in the complex wholesale California energy market. California’s recent solar boom resulted in a high concentration of solar development which has impacted power pricing and changed the value and risk profile for both buyers and sellers. Lastly, regulatory changes both in California and at the federal level, and the looming solar panel tariffs, complicated the risk and financial analyses.

“Price was only one of the factors in our decision-making. 3Degrees helped us understand the relative risks and benefits across a number of projects, allowing us to find a cost-effective solution that also minimized our risk.”

–Holly Gordon, Sustainability Group Manager at BART

How we helped

whatwedid

BART partnered with 3Degrees to help navigate through these challenges, from developing their renewable energy goals to final PPA contract execution. Following the approval by the Board of the wholesale electricity portfolio policy, 3Degrees developed a customized RFP to meet BART’s special procurement needs and was responsible for organizing the full procurement process from hosting a bidders’ webinar to final project recommendations.

This was no small task: BART received proposals from over 50 projects with over 300 price and contract variations. 3Degrees led the qualitative and quantitative evaluation of all the proposals in close coordination with the BART team. The joint team created an initial shortlist for deeper analysis. We interviewed the shortlisted developers to gain a more holistic understanding of the projects and the teams, and through this process uncovered key project nuances that had a material impact on project viability and competitiveness. In parallel with the qualitative analysis, 3Degrees performed additional quantitative analysis on the shortlisted projects including carefully constructed “stress tests” to evaluate project performance under a variety of market conditions. By creating a range of scenarios that incorporated the unique needs of BART as well as the challenging characteristics of the California market, 3Degrees was able to identify and reveal clear trade-offs between the proposals. We ranked the projects based on their implied REC value, thus allowing for an apples-to-apples comparison of proposals of sometimes-widely varying characteristics.

Our comprehensive approach to analyzing the proposals culminated in the creation of a weighted scorecard which provided a transparent tool to assist the BART team in making their final selection. The combined BART and 3Degrees team came to an unexpected decision: BART would move forward with contract negotiations for two projects. In order to ensure this approach didn’t over complicate the process or add unnecessary time, 3Degrees led the commercial negotiations in close coordination with BART and their legal counsel, negotiating the two contracts in parallel.

With an eye to long-term value, BART took the opportunity to create a diversified supply portfolio that would both save BART money and allow BART to meet their renewable energy goals early.

Results

results_bart

 

More on 3Degrees’ Transaction Center of Excellence

Why my work matters: Sarah Penndorf

sarah-penndorf

Sarah Penndorf is a director in the 3Degrees energy and climate practice.

Some of my favorite recent projects:germany-europe-wind-energy

  • Helped a global luxury brand to magnify the impact of their renewable energy purchase by developing and validating project options with significant co-benefits such as community resilience with a focus on women. Currently implementing the selected project.
  • For an international food manufacturer with a footprint spanning 40 countries, developing country-level and regional strategies and implementation plans to meet the company’s aggressive carbon reduction goal.
  • For a European-based financial services firm, worked with the head of sustainability to build stakeholder alignment and the business case for a virtual power purchase agreement (VPPA).

 

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This work requires a lot of creativity because every client has a unique set of goals, challenges and opportunities.

 Special skills & expertise

sustainability excellence purchase-agreement global identify
Head of 3Degrees Sustainability Center of Excellence 15 years in sustainability and environmental consulting Skilled in educating and building alignment across stakeholder groups Experienced in developing carbon reduction and renewable energy strategies in North America, South America and Eastern Europe Superpower:
Broad sustainability expertise allows her to identify hidden opportunities

 Watch Sarah’s video:

Why my work matters: Tyler Espinoza

tyler-espinoza

Tyler Espinoza is a manager in the 3Degrees energy and climate practice

Some of my favorite recent projects:onsite-solar-rooftop

  • For a global defense contractor, managing financial and risk analytics for a large-scale virtual power purchase agreement in the eastern US that will help it meet its sustainability goals.
  • Served as an expert external reviewer to verify the financial modeling and projected valuation of a large virtual power purchase agreement in Kansas for a major consumer products firm.
  • For a large telecom company, conducted a portfolio-based technical and financial on-site solar analysis to identify the best opportunities and most lucrative markets for investment.
  • Helping a leading high-tech firm address their scope 3 emissions by creating a tool that will allow their suppliers find the most cost effective renewable energy options available in the US and Asia.

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I love the challenge of decarbonizing the largest machine on the planet–the electric power grid.

 Special skills & expertise

onsite-solar bullshi-meter knowledge focus-on-goals
7 years of onsite solar experience in the US and Asia Valuation and risk analysis for large offsite renewable energy projects Encyclopedic knowledge of renewable energy opportunities and risks Superpower: In reams of data, can quickly tease out the key decision making criteria

 Watch Tyler’s video