Month: February 2020

Urgency and Inclusion, Justice and Humanity in B Corps’ Fight Against Climate Change

Climate Justice Now

What can businesses do to counteract climate change? How do we ensure a commitment to climate justice, equity, and inclusion guides our action? And how do we persevere through difficult setbacks in this all-important fight? These are some key questions I considered with over 65 business leaders at the 2020 B Corp Climate Leadership Summit.

In February, representatives from U.S. and Canadian B Corp companies convened in Taos, New Mexico for the second annual Climate Leadership Summit. The Summit built on climate activism momentum across the B Corp community, while also elevating climate justice to the center of our collective efforts.

A historic moment for B Corp climate activism

Over the last year, the B Corp community has increasingly focused on climate action. Certified B Corporations like 3Degrees must consider the impact of business decisions on their employees, customers, suppliers, community, and the environment. B Corps around the world are working on all of these areas of impact, but the clock is ticking on the environment. As we look ahead at the dire implications of global warming, B Corp leaders have agreed: we must prioritize climate leadership in the way we do business. 

The B Corp community recognizes it has a unique role to play in setting a new standard for how businesses operate. Consider that in December, more than 500 B Corps across 33 countries announced a commitment to Net Zero by 2030, which is 20 years ahead of the 2050 targets set in the Paris Agreement. As noted by B Lab colleagues, it was a historic moment for climate activism and for the B Corp movement. And the work is just beginning.

Centering action around climate justice

The 2020 B Corp Climate Leadership Summit focused on how much more work is needed, particularly to ensure that inclusion is at the core of how we address climate change. Simply put, when we take climate action, climate justice concerns must be at the forefront. But what exactly is climate justice? 

“Climate justice focuses on people,” said Dr. Ellonda Green, B Lab Director of Equity, Diversity, and Inclusion, in her presentation at the Summit. Green explained that climate justice is a human-centered approach that links human rights and development by recognizing the disproportionate impact of climate change on the the world’s most vulnerable people. The Summit highlighted the voices of climate leaders from underrepresented communities. These courageous leaders are pioneering a new model for transformational climate leadership, as noted by Dr. Katharine Wilkinson of Project Drawdown who shared her reflections with us. I am deeply appreciative of the wisdom and insights from these new voices who challenge us to reconsider how we frame the problem and the solution. 

Throughout the Summit, we discussed practical ways to assess our actions through the lens of climate justice, whether it’s big picture policy advocacy questions or the daily behavioral norms that create workplace culture. For example, while we feel an understandable sense of urgency to act, it’s critical that we take the time to cultivate inclusive practices and approaches that heal, rather than perpetuate systemic injustices. Otherwise, we’ve missed the opportunity to make  actual progress. Stay tuned for more in the coming months from the B Corp community on this topic.

Modeling gratitude

It’s intense to fully immerse yourself in discussions about the existential threat to all life on Earth posed by accelerating climate change and ecological breakdown. While attendees were deeply committed to this work during the Summit, there was also an underlying level of stress and fatigue. This is a lesson for any practice focused on supporting effective climate leadership. For any success we may see around galvanizing action to address climate change, there are other disheartening setbacks. Whether they occur at international, national, organizational, or personal levels, these setbacks can be challenging for even the most optimistic among us. That’s one (of many reasons) why taking time to be inclusive and demonstrate gratitude is so important.

Research has found that individuals underestimate the impact of expressing gratitude. It’s not just polite; it’s also good for your own well-being and the well-being of others. Throughout the Summit, the event organizers created space for people to express gratitude. And, we had an especially poignant opportunity to put that insight into action. 

Elementary school students from a neighboring town had been told that “important business leaders” were convening in Taos to talk about climate change. These first through fifth grade students created artwork to ask us to help protect the environment. It was both an uplifting and grounding reminder of the importance of the work we have to do. On one hand, it might have been easy to just look at the pictures and then get re-consumed with our own “busy-ness” in replying to inboxes that had filled in our absence from the office. Instead, attendees took a moment to write notes to each class to thank the students for their amazing artwork and to let them know that we hear them. It was one tangible action we could take. 

As we go forward in the weeks and months ahead, may all of us continue to heed this call to both focus on the urgency of the climate crisis and to ensure a deeply inclusive approach. Want to join the B Corp community in this crucial work to bring urgency, inclusion, justice, and humanity to address the climate crisis? Learn more about the B Corp Climate Collective.

The Role of Carbon Offsets in Corporate Sustainability (part I)

corporate buildings among trees

Part I

Exploring how, when, and why carbon offsets are important – as well as their limitations

As more organizations around the globe heed an urgent call for climate action, carbon offsets are one tool they can use for near-term emission reductions. While the impact of investing in carbon offset projects is sometimes debated, these instruments can play an important role in bridging the transition to net-zero emissions. 

In this first article of a two-part series, we’ll explore how, when, and why offsets can play a vital role in companies’ broader sustainability efforts, as well as examine some limitations.

As defined by virtually all market participants, including the Climate Action Reserve, a carbon offset is a third-party verified, greenhouse gas (GHG) emission reduction, removal, or avoidance equivalent to one metric ton of carbon dioxide equivalent (CO2e). Carbon offsets are a funding mechanism to support emission reduction projects within non-regulated sectors, including within an organization’s supply chain. From an environmental integrity standpoint, all verified emission reduction projects must meet the notion of “additionality” – meaning, these reductions would not have been achieved without funding from the sales of carbon offsets. 

There is a rigorous and conservative quantification of the actual emission reductions achieved through a verification process that includes detailed due diligence by third-party verifiers. These verifiers operate under approved methodologies detailing these processes, and must maintain accreditation under relevant standards bodies in order to maintain their status as verifiers. These entities ensure that the carbon offsets generated do, in fact, represent the emissions reductions or removals that are being claimed. 

While there are many different project types, carbon offset projects are often categorized as follows:

  • Carbon removal: Carbon removal projects include nature-based solutions that actually remove carbon from the atmosphere, such as certain types of forestry projects, as well as carbon capture and storage (CCS) projects.
  • Carbon reductions: These projects focus on avoiding greenhouse gas emissions (such as capturing the methane that normally would be released from a dairy farm). While these projects don’t actually sequester existing carbon, they reduce the amount being released into the atmosphere.   

So what is the role of carbon offsets in corporate sustainability initiatives? And why are some detractors concerned?

An offset is not a long-term, singular solution for decarbonization. Yet, some critiques of offsets anchor on an “either/or” premise – i.e., organizations are either going to purchase carbon offsets or pursue longer-term solutions to reduce their emissions footprint. In reality, it’s more nuanced, as explained below….

Do offsets provide permission to “pay-to-pollute”? 

Detractors of carbon offsets often claim that offsets provide permission to “pay-to-pollute” — so businesses purchase offsets but do not actually change their behavior. These critics say that since offsets reflect emission reductions, companies can continue to postpone the systemic change that is required to address climate change and continue to buy offsets instead. 

It’s important to note that most supporters of offsets (3Degrees included) do not believe they are the ultimate tool to address climate change. First and foremost, organizations need to reduce their direct emissions wherever they can. However, it is nearly impossible for an organization to completely avoid Scope 1 and Scope 3 emissions (e.g., emissions from transportation and/or supply chain), which are also difficult to address. In these instances, carbon offsets are an appropriate tool to employ and provide a funding mechanism to support emission reduction projects — including projects that directly address those transportation or supply chain emissions. For many organizations, carbon offsets can also serve as a bridge while they work on developing the necessary long-term solutions, which can be complex and take time to come to fruition. Case in point: Etsy was able to immediately offset their shipping emissions for less than a penny per package using carbon offsets while simultaneously working on a broader strategy that includes collaboration with industry leaders, shippers, and policymakers to lead the shipping industry toward decarbonization. The company is supporting immediate emission reductions and galvanizing action for more systemic, long-term solutions.

But carbon offsets don’t address societal inequities.

Climate change magnifies deep societal inequities: the most vulnerable populations disproportionately experience the negative impacts of climate change. Some groups criticize carbon offsets because the impacts of the offset projects are often not linked geographically, socially, or economically to the environmental impact of the offset-purchaser’s operations. However, by definition, carbon offsets are not mechanisms for addressing all environmental impacts, only climate-related (e.g, greenhouse gas) emissions.  

Even though carbon offsets themselves are not designed to address local impacts, companies can link the selection of emission reduction projects to the major geographical, social impact, and/or economic impacts of their GHG footprint or overall operations. They can also select specific offset projects that provide environmental or social benefits (e.g., local air pollutant reduction, water quality improvement, women’s empowerment, job creation, biodiversity, poverty reduction, etc.) that align with their overall sustainability goals. The impact of these projects extends beyond the carbon benefits. And it’s a step – though many more steps are still needed – to ensure a just transition to a low-carbon economy.

The process around carbon offsets is too complex. 

Carbon offset projects often require complex accounting and in-depth verification to uphold the environmental integrity of the GHG reductions. Critics sometimes point to possible margins of error in carbon offset accounting as a justification for discounting their overall value as an instrument for carbon reduction. This rationale, however, forgets that carbon offset methodologies always err on the conservative side of greenhouse gas accounting, and it also misses the intent of offsets as a tool in a larger sustainability strategy. 

Offset funding acts as an incentive for implementing carbon beneficial changes in industry practices. When an organization selects projects directly related to its industry or supply chain, this impact directly connects to the source of the emissions. For example, when Lyft sought to make all its rides carbon neutral, it invested in projects that offered reductions in transportation sector emissions, like automotive manufacturing and waste oil recycling. Projects like these have a direct connection to the automotive supply chain (and Lyft’s Scope 3 emissions).    

Carbon offsets exist in a complex and intertwined world of corporate sustainability goals, and offset methodologies are inherently complex as they require analysis from technical, policy, and economic perspectives. While critics may highlight shortcomings of carbon offsets as a comprehensive solution, these mechanisms play an important role for organizations who want to take immediate climate action, while also pursuing the long-term work needed for more systemic decarbonization solutions.

Next up: In part two of this series, we explore carbon offset best practices.

How Verisk is Successfully Addressing Emissions from its International Energy Load

Sunset with transmission towers

verisk challengesVerisk is a leading data analytics provider with a focus on the insurance, energy, and financial services industries. Since several of the company’s business lines involve analysis of the effects of climate change, Verisk is highly attuned to the urgency of this challenge and has a strong commitment to environmentally responsible business practices. In 2017, Verisk approached 3Degrees to help it develop and execute a plan to address its global greenhouse gas (GHG) emissions through investments in energy attribute certificates and carbon offsets.

Challenges

Though the company is headquartered in New Jersey, Verisk’s energy load is heavily decentralized among offices in approximately 20 countries. The offices are leased not owned, often relatively small, and frequently situated in multi-tenant buildings, which makes it very difficult to address renewable energy needs directly. To add a layer of complexity, several of the company’s international locations are in markets with very limited, or newly developing, renewable energy instrument options. Finally, Verisk saw that a renewable energy purchasing commitment was consistent with the expectations of its stakeholders, and had the potential to positively influence employee job satisfaction, retention, and attraction. To strengthen this connection to employees, Verisk specifically requested that at least some of the projects be located in places where many of its 7,000+ employees would appreciate the connection.

3Degrees was undaunted by these criteria. With extensive experience navigating global energy markets and tailoring solutions to fit our clients’ specific needs, we were confident we could craft a high quality, cost-competitive renewable energy purchasing plan to achieve Verisk’s goals.

How we helped

We began by conducting an in-depth assessment of all available EACs in each market where Verisk’s various businesses have load. Because many of these markets offered limited or new, and therefore less familiar, options, 3Degrees performed detailed due diligence down to the project level.

After assessing the best options in each market that balanced cost with quality, we were able to propose and transact on a diversified portfolio approach of EACs and carbon offsets (when renewable energy was unavailable or did not make strategic sense in a market) that allowed Verisk to address its electricity emissions in each of the following countries:

Verisk world map

Results

By executing a portfolio of high quality EACs and carbon offsets, Verisk achieved its goal of supporting renewable energy in the areas around the world where it conducts business and where the vast majority of its employees live and work. Importantly, this investment also enabled the company to demonstrate its commitment to climate action to its stakeholders, including its employees. Verisk has now made this commitment for five years (2017-2021), and expects to continue exploring renewable energy options beyond that.

“We were happy to work with 3Degrees to create a portfolio of EACs and carbon offsets to address our electricity emissions around the world. Given our decentralized footprint, it was important to us that we work with an experienced advisor. The team was highly knowledgeable and we felt very comfortable with the recommendations they proposed.”

— Pat McLaughlin, Senior VP and Chief Sustainability Officer, Verisk

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.