Author: Steve McDougal

Steve McDougal is CEO and co-founder of 3Degrees. Steve oversees the company’s day-to-day operations while directing the development of corporate strategy.

Happy New Year from 3Degrees’ CEO

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Hopefully, all of you were able to enjoy some downtime with your family and friends over the holidays last month.  I know I was – and that means I also had some much-needed time to sit and reflect on the past year, as well as gear up for the year ahead.  First things first: I am tremendously grateful for the impact that our customers made last year with our help. Together, we transacted over 47 million MWh of renewable energy and 2.3 million MT of carbon offsets. Just to put that in perspective, that is similar to the carbon sequestered of nearly 400 million acres of US forests in one year.  I couldn’t be prouder of the important work we’re doing to advance our mission of helping our clients and their customers take urgent action on climate change.  Which brings me to my next observation…

While there has been a lot of news this year about how much worse climate change is getting,  I remain optimistic. We are part of a unique ecosystem with the power to make it possible for people to take action on climate change, meet their emission reduction goal and make real impact.  And we’re seeing it happen at a faster pace. 2018 gave us a lot to be hopeful for:

  • According to the most recent NREL report, release Oct 2018, The last reporting year saw a 28% increase U.S. voluntary green power purchases
  • We also saw a dramatic increase in the number of aggregated renewable energy contracts signed. Which is exciting not only for rapid acceleration of renewable energy development but also for allowing companies of all sizes unprecedented access to the renewable energy market.
  • Since 2008, the fastest creator of blue collar jobs in the USA and worldwide has been clean energy. Whether these are construction jobs in solar or manufacturing jobs in electric vehicles, clean energy continues to be the place people look to build lasting careers in the 21st century.

While these statistics are promising and inspiring, I raise these in no way to minimize the issue – climate change can absolutely feel big and overwhelming.  We are taking on giant challenges, that require bold action. However, from my vantage point, I see more organizations than ever before stepping up to commit to true leadership through this complicated challenge and I find that inspiring.

Thank you, to all of you, for your hard work and commitment to addressing this urgent issue last year. There is much work the world needs us to do, and I look forward to continuing to tackle that challenge together in 2019.

Steve McDougal

Footnotes
1. EPA Greenhouse Gas Equivalencies Calculator – https://www.epa.gov/energy/greenhouse-gas-equivalencies-calculator

3Degrees Takes on Decarbonizing Transportation at Global Climate Action Summit

Last week, the Global Climate Action Summit convened in our headquarters’ hometown of San Francisco, CA.  This historic event brought leaders together from all corners of the world to discuss decarbonization of the global economy – one of the most pressing and important topics of our time.

During the GCAS, I had the distinct pleasure of moderating a panel on Decarbonizing Transportation, with some of the summit’s leading minds on the topic:  Sam Arons, Director of Sustainability at Lyft; Holly Gordon, Sustainability Group Manager at BART; and esteemed Mayor of Portland, Ted Wheeler.  During the conversation, I asked the panelists for their perspectives on how disparate industries are – and should be – coming together to improve sustainability within our communities and make a real impact towards decarbonizing transportation, the sector responsible for the largest share of greenhouse gas emissions in the U.S.1  

While we covered a lot of ground in our discussion, there were a few key themes that emerged.

SMART PLANNING AND POLICY

Perhaps not surprisingly, the panel spent a fair amount of time discussing the nexus of smart planning and policy in guiding these efforts. One central theme is the importance of making intentional choices to co-site public transportation and affordable housing to enhance the quality of life and reduce the reliance on cars, thereby reducing emissions. BART and cities like Los Angeles have already started implementing such initiatives and Mayor Wheeler confirmed that Portland has been at the forefront of city planning initiatives that evaluate cohesive transportation, housing and climate solutions.

We also explored the role of new options like ride-sharing, scooters and bikes to increase access to public transportation to address the first mile / last mile conundrum. All of our panelists shared great examples of how BART, Lyft, and the City of Portland are working to build partnerships to reduce single occupancy rides and encourage greater use of public transportation. Case in point: Lyft is building out new in-app features to integrate with public transit, which are currently being tested in select markets.

RECAPTURING PUBLIC SPACES

Just imagine a world where fewer cars meant we could reclaim public spaces for other purposes, such as parks or dedicated bike/scooter lanes. I love that when I lead these discussions I always learn something new and this panel was no exception: did you know that in the U.S., parking lots take up more space that the entire state of Connecticut (there are roughly 2.5 parking spots for every car)?  And that BART is the owner of the most parking garage spaces west of the Mississippi? There is huge potential to transform these spaces. From Lyft’s Green Cities Initiative and vision of turning parking lots into parks, to BART’s public/private partnership for its carpool program with Scoop and Portland’s plan for the Green Loop, a six-mile interconnected park and active transportation path, we already see promising signs ahead for more sustainable communities that lower emissions and enhance quality of life. 

ELECTRIFICATION AND RENEWABLE ENERGY

The final theme that I observed during our panel discussion was the electrification of fleets and the role it does – and will – play in decarbonizing our communities.  While electrification is often discussed as a critical tool in the decarbonization toolbox, this solution obviously only works if we ensure we are powering those fleets with renewable power.   

Clearly, as renewables continue to march down the cost curve and electric vehicle adoption increases, there is tremendous opportunity to make a huge dent in transportation emissions.  In December 2017, BART signed wind and solar PPAs for a total of over 106 MW and will now meet their renewable energy goals ahead of schedule.  Lyft, too, is embracing this opportunity and recently announced that, in addition to becoming a fully carbon neutral company, they are purchasing enough renewable energy to cover the electricity consumption of every Lyft office space, driver hub, and electric vehicle mile on their platform. In addition, Portland has just begun exploring options for going beyond RECs and procuring bundled renewable energy for electricity use in City operations. It feels like we are just beginning to scratch the surface of what’s possible for the convergence of electrification and renewable energy adoption – and that is exciting.

Although the global climate challenge looms large, I found myself wholly inspired by the group’s discussion and focus on galvanizing action. As Mayor Wheeler noted, “We all have to be successful for the planet to succeed.” Indeed, partnering with like-minded organizations – businesses, NGOs, public agencies, government, including the 3,540 signatories of #wearestillin who are pledging to uphold the goals of the Paris Agreement – are a reason for us all to have hope. Join us in making that a reality.

 

 

1 https://www.epa.gov/ghgemissions/sources-greenhouse-gas-emissions

A pro-business success story: Why we need to protect the EPA Green Power Partnership

Fire Island

Scott Pruitt favors a major overhaul of the Environmental Protection Agency to create a regulatory environment that is friendlier to business. But if helping business is the goal, Secretary Pruitt should re-examine his agency’s excellent track record partnering with and supporting businesses, before defunding programs critical to their success.

A voluntary program that supports business

Voluntary purchases by corporate customers support job creation and project development, like this wind project on Fire Island in Alaska.

The EPA’s Green Power Partnership is one of several voluntary programs slated for elimination as part of the proposed unprecedented 31% roll-back in EPA funding. Launched by the Bush administration in 2001, the program has helped more than 1400 participants – Fortune 500 companies, small businesses, universities, municipalities, and other entities – achieve their clean energy goals. The program provides technical assistance to companies as they evaluate green power opportunities in the marketplace. It then rewards their leadership through public recognition of their voluntary procurement efforts.

By eliminating market barriers, the program enables forward-looking companies like Intel, Starbucks and Cisco to invest in smart solutions that reduce climate pollution and satisfy stakeholder demands for greater civic responsibility. For example, Starbucks accounts for 100% of its total electricity use – 970 million kWh annually – through green power generation and purchases. Altogether, participants in the Green Power Program use more than 36 billion kWh of green power annually, enough to power 3 million average US homes.

The Green Power Partnership: a successful model

The Green Power Partnership is a highly successful model for encouraging voluntary climate action that should be preserved, especially now that the administration seems determined to eliminate fossil fuel regulations and other climate protections. The National Renewable Energy Laboratory reports that voluntary purchases of clean energy account for more than 25% of total US non-hydropower renewable generation. The voluntary green power sector is a vital component of the clean energy industry, which is driving investment and job growth across the country at unprecedented rates. According to the US Department of Energy, clean energy investment in the US reached $45 billion by 2015. By 2016, solar job growth was 17 times faster than overall job creation. An administration that supports employment and economic growth should actively encourage corporations to leverage their size and buying power to accelerate clean energy development.

Eliminating the Green Power Partnership and other voluntary programs like Energy Star and Combined Heat and Power, would clearly signal the administration’s intent to thwart the rapid transition to clean energy. In this case, the administration would be wildly out-of-step with the business interests it purports to serve.

The Green Power Partnership includes many of the nation’s most profitable enterprises, largest employers, and most trusted brands. They understand that business can profit while safeguarding the planet for future generations.

We can expect these companies to continue to lead on climate, but they need the help of federal agencies to provide data and technical support, sound science and public policy. Partnership is a two-way street. The private sector has shown its willingness to rise to the challenge of climate change. It is now time for the Trump administration to do its part.

Sustainability Is Not Dead: It Is In Your Hands

holding globe in sunlight

In speaking to 3,000 climatologists recently, Governor Jerry Brown said, “California will launch its own damn satellites” to study climate change if the Trump administration pulls back on research on the topic. This dogged determination is shared by many around the country in light of the recent election results and cabinet choices that are decidedly anti-environment.

At 3Degrees, this is not our first rodeo. The day after George W. Bush was reelected in 2004, the manager of a small print shop called, looking to buy renewable energy. This customer said, “Well, if the government is not going to do anything, it’s up to the rest of us.” For many people, that sentiment runs even deeper today. The day after the most recent election, our call center experienced a 20% increase in calls from people wanting to buy renewable energy. We couldn’t wait around for federal government leadership to stimulate action in 2004, and we can’t wait now.

For those of us committed to sustainability, these are unsettling times. But here are four reasons why I see hope:

1. Renewable energy is more affordable than ever.

Market forces and government initiatives have driven investment in renewable energy production, and it is paying off. Global electricity produced by solar has doubled seven times and wind power has doubled four times since 2000. Meanwhile, prices for clean energy continue to tumble.

The Department of Energy says that solar-generated electricity is price competitive with traditional energy sources in 14 states.

2. We have traction.

With a decidedly anti-environmental political climate deterring policy action in 2004, several states created policies requiring utilities to purchase a specified level of renewable energy. Just a few years before, early adopters like Kinkos and Johnson & Johnson kick-started the voluntary renewable energy market with some of the earliest purchases of renewable energy certificates (RECs). Massive purchases by the likes of Intel, Kohl’s and Starbucks followed. Since then, other progressive companies have expanded the market in both volume and variety. In fact, Google just announced that by next year it will offset 100 percent of its energy needs from renewable sources. Following the election, 365 notable U.S. companies signed a letter to president-elect Trump recommending that the new administration stick with the Paris Agreement.

They contend that taking action to build a low-carbon economy is imperative for American prosperity.

3. States and cities are taking action.

No one knows what this administration will do about policies that affect climate change. What we do know is that many state and local governments are poised to play a critical role in addressing these issues. For some states, this is nothing new. Before 2004, only 11 states had renewable energy goals in place. During Bush’s second term, 22 additional states plus the District of Columbia passed them. We are now witnessing a number of states strengthening these policies.

Today, states and cities are maintaining the momentum on climate change and clean energy. Illinois, led by a Republican governor, recently passed one of the most comprehensive state clean energy policies. California, having some of the strongest greenhouse gas legislation on the planet, will continue to play a leadership role. In addition, hundreds of cities, including San Francisco, New York, Atlanta and Chicago have established greenhouse gas reductions goals of 80 percent or higher by 2050.

4. We have more tools than ever before.

Regardless of federal, state or local policies, many organizations will push ahead with plans to reduce their carbon footprints. And today, they have more options to achieve their greenhouse gas reduction goals than they did a decade ago.

Ultimately, federal government leadership on climate change is needed in order to affect massive change, and that appears unlikely for the next four years. Nonetheless, I remain optimistic that we can accelerate progress on climate change in the U.S. through a groundswell of action by determined people and organizations that refuse to sit idly by.

Built On Belief, Bettered By B Corp

Earth Odyssey
My life changed in 1999 when I read Mark Hertsgaard’s book, Earth Odyssey: Around the World in Search of Our Environmental Future. At the time, I was managing strategic marketing for a tech media provider. While the work was intellectually challenging, something was missing. My time at work (which was significant) was not addressing what I saw as the fundamental challenge for my generation: how to meaningfully address climate change. That is why I made the career shift into renewable energy.

Dan Kalafatas and I founded 3Degrees in 2007 with a simple mission: to connect people with cleaner energy on a massive scale. Whether it is engaging with a homeowner about community solar options or helping Fortune 500 companies implement their renewable energy strategies, our goal is to accelerate the transition to a low-carbon economy.

Perhaps just as important, though, we sought to establish 3Degrees as a company centered around values based on two fundamental notions. First, we believed then (as we still do now) that many people in this country are willing to direct their money and time to support renewable energy programs. Second, we believed we could hold ourselves to a higher standard in how we built and operated the business, including creating prosperity for all of our stakeholders — our employees, the community and the environment.

Moments that Matter: Impact Investing
As Mark Twain said, “Tough times teach trust.” The character-revealing moment for 3Degrees occurred in 2011 when we found ourselves in a challenging financial situation. We were seeking our first outside investor at a time when no one was investing in renewable energy. Solyndra had failed. The fundamentals of the renewable energy industry were being pressured by low energy prices and policy uncertainty.

It was a tremendous relief when we met ARB (the Halloran Family Office investing company). To make the risk/reward proposition of the proposed investment in 3Degrees better for ARB, however, we needed to convert debt to company equity. Dan and I talked through what this restructuring and re-commitment would mean for the company.

We agreed that if we moved forward, we wanted to officially make our company a Certified B Corporation to ensure we had the legal protection to balance shareholder and non-shareholder interests when making decisions.

Now, all we had to do was convince ARB this was a good move.

While ARB had made it clear that they were interested in us because of our renewable energy industry focus, culture, and values, we were anxious about how they might respond to our plan to become a Certified B Corporation. We had no idea that Harry R. Halloran, Jr., CEO of ARB and founder of Halloran Philanthropies, was also a founding sponsor of B Lab, a nonprofit organization that serves a global movement to redefine success in business by building a community of Certified B Corporations. Harry was thrilled by our plans. We high fived, and ARB moved forward with its investment in 3Degrees.

Bcorp

3Degrees employees volunteering

Walking the Talk
In August 2012, 3Degrees officially became a Certified B Corporation in California. What does this mean in practice? Every year, we publish a B Corp Impact Report which takes stock of the public benefits we create beyond shareholder value. We participate in B Lab’s Impact Assessment, a biannual, independent evaluation of our social impact that helps us to focus on what we can do next and how can we do it better.

We match 100 percent of the firm’s electricity usage with renewable energy certificates as well as offset emissions from employees’ transportation. While those actions may be easier for us given the work we do, we also continually seek opportunities where we can live our values. Case in point: 3Degrees provides socially and environmentally-focused 401(k) investment opportunities to eligible employees; supports up to eight hours of paid volunteer time with an environmentally-oriented organization; and gives preference to local, sustainable and fair-trade suppliers.

Why do we do all of this? We do it because we think it is the right thing to do, but also because in the long term, we think it is good business and reinforces our corporate strategy.

Join Us
When I was asked to write this blog, I, in turn, asked Harry to reflect on what stood out to him when ARB decided to invest in 3Degrees and how we have met his expectations. Harry shared, “In making our investment decision, we saw that you and Dan, as founders of 3Degrees, clearly articulated and modeled the company’s values on a daily basis in big and small ways. So, it is not surprising that 3Degrees is a success on many levels — certainly as an investment, however importantly, also as a model of what is possible when a clear vision, a good business model, and respect for all partners align.”

Today, 3Degrees is one of nearly 1,800 B Lab Certified B Corps in the United States.

If our own experience can offer any insight to others, it is that leading by your values just makes good business sense over the long term — in good and challenging times.

Originally published on HuffingtonPost.com