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.

Thoughtful solutions for all as the global climate movement accelerates in 2022

It’s 2022. We’re two years into this decade, and it’s a critical time for the world as we accelerate action to mitigate the most disastrous effects of climate change. Time is running short. Time also has a tricky way of getting away from us (as this already turbulent decade has shown us); and as I look at the year ahead and beyond, I’m thinking about what matters most. What are the tangible actions that need to happen, now, today, to make the most positive impact on climate change?

At 3Degrees, we help businesses and their customers take urgent action on climate change. So, I’m thinking about how we can help more businesses take more urgent and impactful action to reduce emissions. To that end, I’d like to share three specific areas where our team is honing in to help accelerate corporate climate action in the year ahead.

Higher standards demand sophisticated solutions

Organizations around the world are increasingly pursuing more aggressive emission reduction goals. Many companies whose initial commitments focused on addressing Scope 2 emissions are now elevating their ambitions to match the urgency of the climate crisis. They are setting net zero goals or science-based targets that address a wider range of climate impacts, and are therefore seeking more comprehensive climate solutions.

In 3Degrees’ work with our customers, we’ve found that more robust decarbonization goals demand a more holistic approach and sophisticated solutions. From a thoughtful combination of human partnership and bespoke advice, to a broader suite of solutions that address all scopes of emissions, customers need and expect more support on their quest to deliver on every detail of their climate commitments. Additionally, technology solutions are becoming mission critical to help manage measurement, monitoring, reporting, and more — especially as companies get deeper into addressing their value chain emissions. I’m excited to leverage the 3Degrees team’s deep bench of experience and advance our technology suite this year to provide important tools to climate leaders to meet their aggressive goals.

Global solutions are needed to address global supply chains

As our customers set more ambitious climate targets, it is not uncommon for them to encounter increasingly complex challenges, particularly with respect to global supply chain emissions in their Scope 3 footprint. As organizations commit to these goals, they are looking for additional support and guidance on topics ranging from setting effective supplier engagement strategies, to understanding the market-specific tools available to implement these strategies for their transnational business operations.

As organizations embark on this journey to address their global emissions footprint, and encounter larger, more complex questions along the way, they need the support of an experienced global advisor more than ever before. At 3Degrees, our teams are scaling to support this increased need, building on our experience working in 80+ countries to pursue more innovative and impactful global solutions that meet the moment, as well as staying close to market-specific regulatory and policy shifts that can impact execution of climate plans.

Thousands join the movement for corporate climate action

Climate leaders are not the only ones pursuing accelerated climate action. The urgency of the climate crisis has also spurred a wave of new companies that are both setting initial goals and strengthening existing decarbonization commitments. For example, the number of RE100 member companies has more than doubled since 2019, and a record 6,000+ companies reported to CDP in 2021. And we know there are many more working to get there.

As thousands of companies get started on the path to reduce emissions, they’ll need more education and guidance to enable them to make a positive impact quickly, often with more limited resources and knowledge. Increasingly, companies are starting to treat their carbon emissions like they treat their taxes — calculable, auditable, and their responsibility. And similar to managing taxes, managing emissions reductions is a complex and opaque subject matter that is best left to expert partners. Our team at 3Degrees will be at the ready to meet these customers where they are on their sustainability journey and provide them with the necessary support, information, and decarbonization options to help them meet their goals.

I want to make one final, important point as we forge ahead into the new year: amid growing momentum toward climate action, my team and I have been reflecting and educating ourselves about our role in advancing a Just Transition to the low-carbon future. Traditionally marginalized groups are disproportionately affected by climate change, and not all climate solutions deliver benefits in an equitable way. 3Degrees is committed to integrating the principles of a Just Transition in the products and services we deliver, and are pursuing further focus here as we build for the future.

My hope is that we’ll look back on 2022 as the year of accelerated action and thoughtful impact in the global fight against climate change.

As the climate crisis hits home, climate and sustainability professionals need new ways to stay resilient

A copy of a report sitting on a desk

We must support each other and advance equity to advance climate action

Much has been written about the last climate report from the Intergovernmental Panel on Climate Change. As you’ve probably heard, the news is not good. The world is warming, it’s human-caused, and the effects of this change are multiplying quickly. As a professional in the climate space for the past 18 years, I’ve gotten used to receiving bad climate news on a global scale. But as the effects of climate change accelerate into the daily lives of climate and sustainability professionals, we need new ways to deal with the personal impacts, both physically and emotionally.

In today’s world, it’s difficult to stay hopeful and resilient. Yet it’s all the more important for professionals working on climate change to stay the course. We must find better and more equitable ways to care for ourselves, each other, and our community in this next phase of the climate fight. 

The climate crisis is hitting home

The effects of climate change have always been difficult to watch and hard to comprehend. Until recently, they have largely been horrors that I’ve observed at a distance.

But climate change has finally arrived on the doorsteps of folks like myself, as well as my friends, colleagues, and 3Degrees clients. Just a few examples:

Much of this summer, my colleagues in the Pacific Northwest struggled to work from home through multiple deadly, record-setting heat waves. Many of them don’t have air conditioning at home, since they had little need for it before the last few summers of escalating heat and wildfires. 

Last summer, I was one of hundreds of thousands of Californians whose homes lost power. As wildfires raged, my utility conducted another public safety power shutoff. Despite the disruption to my day, I knew I was lucky to not be evacuating, as so many are forced to do each year. 

In recent weeks, many of my colleagues in the Western U.S. sent their children back to school and got a glimpse of what school officials are dealing with in choosing the lesser of two evils: should we open windows and suffer poor air quality from wildfire smoke, or close windows and diminish airflow amid continued COVID risks? 

There are countless more stories — across our team, our industry, and the world — that are contributing to growing stress and anger about what climate change is doing to our communities. While the personal disruptions I mentioned are unsettling, I recognize that stories like this — and some that are much more wrenching — are not new. Marginalized communities are experiencing the worst impacts of climate change, and are less able to adapt and recover from the devastation. Just as we need to do more faster to fight climate change, it’s critical that we make that progress with justice and equity at the forefront. 

Personal care and community to help us carry on

The climate crisis is a real threat to our mental health and resilience as climate professionals, and the personal effects of extreme weather compound the need to care for ourselves and each other to avoid burnout. It may seem counterintuitive, but this may be a “slow down to go fast” situation. So, what needs to change?

I asked the 3Degrees team to share ideas to stay connected and resilient during these difficult times. Their responses made a few things clear to me.

We need each other

Our teams are continuing to work from home where possible to stay safe as the COVID-19 pandemic stretches on. Remote work can be lonely, and the hope for a “new normal” return to in-person activities has faded into a new round of pandemic-driven distancing. In our discussion, many of my colleagues expressed a desire to reconnect with each other, meet new teammates, and strengthen cross-team connections. Intentional personal connection was a priority for us when the pandemic started, but I realized that effort had fallen off recently, and it was felt among our teammates. We have such a diversity of functions within our team — and we’re lucky enough to be growing. Yet the reality of continuous change combined with physical distancing is a tough recipe for community-building. 

I know that we must recommit to connection and actively nurture community at 3Degrees, both during this pandemic, and in the recovery process to come. I think the same can be said for our broader community of climate and sustainability professionals. It takes human connection and honest conversations to keep the home fires burning. 

We need time and space to care for ourselves – and employers need to support it

As climate change intensifies and more directly impacts the daily lives of climate professionals, I think we need to reposition our thinking around personal time and work-life balance. I heard from several 3Degrees employees that it is especially hard these days to deal with the stress of managing workloads before and after paid time off, and that some feel hesitant to take time off for mental health or personal wellbeing.

While we offer unlimited paid time off to employees, it may be time to evolve from simply offering time off, to strongly suggesting it. It’s also critical for companies in the climate space to make it easy for employees to access mental health care and resources, and to balance workloads. I realized that we don’t talk regularly about our mental healthcare benefits at work, and it needs to be normalized for everyone. We must empower employees to take time regularly to recharge. 

We need new hearts and minds in the fight

As we face the future, there are more challenges to come. There will be more IPCC reports published. There will continue to be disruption in every corner of the world and in peoples’ lives as we work to draw down emissions faster and avoid the worst climate consequences. 

We need new recruits in this fight, and we need diverse perspectives to contribute and lead as we do this work. At 3Degrees, we have lots of work to do in this area. While we’ve made great progress on improving diversity in race and gender in our hiring, recent staff feedback shows we have more work to do in improving employee experience and ensuring our workplace culture is inclusive in the day-to-day. I hope many of the ideas above can contribute to that aim. And I’m thinking about how I can make more room for the emerging leaders of the climate movement as they step to the front. 

In the end, I encourage you to make space to care for yourself and your communities as you continue to pursue positive action on climate, because we must keep working to fight climate change. Our collective future depends on it. Please, take good care.

Getting Serious About Net Zero: Extraordinary Possibilities for Climate Action

Net Zero Banner

Last week, we celebrated the 51st Earth Day with our offices still shuttered due to a global pandemic. Yet, I see signs of hope that we are turning a corner. Vaccination rates continue to climb in the U.S., spring’s telltale signs are emerging, including baseball with masked fans actually in the seats, and the ongoing commitment from businesses to climate action just received a strong bolster of support from the U.S. government.

At a global virtual Earth Day summit on April 22, U.S. President Joe Biden announced that the United States would cut its global warming emissions at least in half by the end of the decade. The scope of this ambition is impressive as is the clear signal that global collaboration among governments and businesses is required to achieve this goal. Case in point: it was incredibly encouraging to see Japan, Canada, Britain, and the European Union committing to steeper emission reductions.

Pathways to net zero

The transition to net zero emissions continues to be a vital concern for organizations and governments. Net zero emissions are achieved when anthropogenic emissions of greenhouse gases to the atmosphere are balanced by anthropogenic removals over a specified period, according to the Intergovernmental Panel on Climate Change (IPCC). The 2018 IPCC special report highlighted the need to achieve net zero emissions by 2050, at the latest, to limit global warming to 1.5°C.

Since then, an increasing number of organizations around the world have been making net zero climate commitments and enlisting support in getting there. To date, more than 1,000 businesses are working with the Science Based Targets initiative (SBTi) to reduce their emissions. Meanwhile, 509 cities, 23 regions, 2,162 businesses, 127 of the biggest investors, and 571 Higher Education Institutions have signed on to achieving net zero carbon emissions by 2050 at the latest as part of the UNFCCC’s Race to Zero campaign. And over 800 B Corps including 3Degrees have pledged to reach net zero by 2030 (20 years ahead of the target set in the Paris Agreement).  

All of this activity around corporate climate commitments is an encouraging sign and is incredibly necessary. It is also not enough. We have to do more.

A moment for extraordinary possibilities

As the 3Degrees team assesses the announcement from the Biden Administration, we appreciate that achieving this goal will be a tremendous economic and political challenge. The scope of changes to the power and transportation sectors are monumental. It’s a refreshing and humbling reminder for all of us: addressing climate change requires ambition as well as the resolve and determination to make it happen. 

“This is a moral imperative, an economic imperative,” noted President Biden. “A moment of peril, but also a moment of extraordinary possibilities.”

At 3Degrees, our daily work with clients who are stepping up and taking bold action to address climate change inspires us. How will you and your organization rise to the occasion for extraordinary possibilities?

2021: Resolutions for Action

Resolutions for Action

As I reflect on 2020 and our goals for the new year, I’m humbled by the enormity of the challenges we face. During his inauguration as the 46th President of the United States, Joe Biden’s remarks noted cascading crises, including “A raging virus. Growing inequity. The sting of systemic racism. A climate in crisis.” Throughout the past year, 3Degrees has been on our own journey to bring these issues to light.

Leadership through a global pandemic

When I’d imagined potential challenges I might encounter as CEO of 3Degrees, supporting employees through a global pandemic wasn’t one of them. Yet, here we are… working to keep employees safe and supported, including the pandemic transition to a 100% remote workforce. 3Degrees’ value of respect for our employees drove our decision to bolster the Families First Coronavirus Response Act (FFCRA) of partial paid time off for employees who qualified. We not only allowed employees who had exhausted Family and Medical Leave Act (FMLA) time off to use FFCRA, we also ensured that anyone who took the time off received full pay. The realities of the global pandemic, ongoing racial injustices, and remote work have affected everyone in different ways. Like many leaders, I’ve been looking for ideas for how to best support our employees as they navigate these overlapping crises. Case in point: we made the decision to close business from December 24 – January 1 to provide an opportunity for employees to recharge and rejuvenate. It was one concrete action we could take to support our hardworking team.

Our role in addressing systemic racism

I am reminded of the devastating impacts of systemic racism in the wake of the killings of Tony McDade, Breonna Taylor, Ahmaud Arbery, and George Floyd.

We — as organizations and as individuals — must recognize, address, and dismantle systemic racism.

Over the past year, we have been creating our diversity, equity, and inclusion (DEI) action plan, establishing an accountability team, and overhauling our recruitment process. During a recent meeting of our internal DEI Accountability Team, we engaged in a frank discussion about where we see progress and where we’re still falling short. As we reflect on how to prioritize action, I draw upon insights from Erasing Institutional Bias: How to Create Systemic Change for Organizational Inclusion by Dr. Tiffany Jana and Ashley Diaz Mejias, a book recommended by our employee-led DEI Business Resource Group. I remain committed to transparency and will continue to provide updates on 3Degrees’ progress and lessons learned as we dig into this work.

A new dawn for climate action

The catastrophic reality of climate change is becoming poignantly and terrifyingly clear. Last fall, many of our employees experienced evacuation orders related to wildfires in California, Oregon, and Washington. The historic size and spread of these wildfires was a frightening reminder about the impacts of climate change, and one that hit very close to home. Unfortunately, the U.S., the second largest emitter of GHG emissions on the world, continues to lag in our climate action efforts. While overall U.S. emissions fell below 1990 levels for the first time in three decades, these reductions reflect the pandemic’s economic and human toll, not significant structural changes in the carbon intensity of the U.S. economy, as noted by Rhodium’s recent report. However, last week, I got a boost of optimism when President Biden took action to recommit the U.S. to the Paris Climate Accord hours after taking office. With this renewed sense of urgency around climate action, we are more committed than ever to partnering with organizations that are establishing bold plans to achieve net zero emissions. 

As we close the first month of 2021, I am hopeful that all three of these critical issues are now a national (as well as global) priority.

If I’ve learned anything from 2020, it’s that we need the collective power of everyone — government, businesses, and individuals — to address these cascading crises.

Empathy, self-examination, and commitment to do better has come through during an incredibly trying year. Our resolutions for the new year include harnessing those qualities to lead us through to a brighter future. What steps are you taking to tackle the challenges ahead?

Inspiration and Accountability from the B Corp Movement

remote worker on video call b corp mug

Here’s how the B Corp movement guides businesses like ours in the necessary work to do better.

3Degrees was recently recertified as a B Corporation, and we’ve been part of the movement to use business as a force for good for eight years and counting. It’s hard to imagine a more poignant time to receive this news than September 2020, when 3Degrees’ employees and our neighbors are facing challenges that continue to mount. After six months of working remotely during a global pandemic, many of our teammates are also dealing with kids going back to virtual school, the immediate threats of extreme weather, and so much more. 

I think it’s safe to say that all of us recognize a clear need to make things better. It’s clear that the devastating impacts of climate change are already here. It’s clear that workers need and deserve respect, care, and thoughtful leadership from their employers. It’s clear that we must build toward a better, more equitable future. 

The B Corp movement has been an important source of grounding, guidance, and inspiration for our company. Especially today, the commitment to positive action within our B Corp community gives me great hope for tomorrow.

Why B Corps Matter, Now More Than Ever

Sustainable Capitalism

The B Corp movement is about creating a new version of capitalism, one that sustains and even improves our society. The B Corp vision calls for more than financial gains for a few; Certified B Corporations commit to stakeholder capitalism, in which business serves not just shareholders but also stakeholders: customers, suppliers, employees, and communities. This is a vision recognized by nearly 200 Business Roundtable CEOs, representing major U.S. companies. And now is the time for businesses to commit to this vision.

3Degrees arrived at this vision partially because we started this business to create positive change. The climate emergency was clear to us when we founded 3Degrees, and when we learned about B Corp certification we didn’t hesitate to pursue it (read our full B Corp story here). Despite challenging financial times for our business, we invested in becoming a B Corp and were certified in 2012.  

As 3Degrees has worked to address climate impact around the world in recent years, we’re proud to see the B Corp model being embraced by global business leaders, and crucially, large companies as well. This month, four multinational B Corp companies launched the B Movement Builders initiative, challenging large companies with at least $1B in revenue to adopt the B Corp vision. It’s heartening to see other leaders stepping up in spite of, and because of, the challenges humans face today. 

As Hallvard Bremnes, Global Head of Sustainability at Givaudan, says: “The current situation has even more acutely shown the interdependence between performance and purpose and our need to play a role in changing the balance of this dynamic for Givaudan and beyond.”

Meaningful Climate Action

When your business becomes a B Corp, you declare that “business ought to be conducted as if people and place mattered. … and thus we are responsible for each other and future generations.”

3Degrees’ business is built around climate action, and we see the urgency for all businesses to do more to reduce their greenhouse gas emissions and negative climate impacts. That’s where the B Corp Climate Collective and its Net Zero challenge come into the picture. 

In December 2019, we joined 500+ B Corps in a pledge to reach Net Zero by 2030. That’s an aggressive goal for most companies – and 20 years short of the 2050 goals set in the Paris Climate Agreement. As if that wasn’t impressive enough, today the Net Zero by 2030 list is more than 700 companies long! We’re looking forward to the progress this strong coalition will make in the months and years to come.

Justice, Equity, Diversity, and Inclusion

There is no climate justice without social justice.

2020 is teaching us many lessons, and one of the most important lessons for me is that business leaders must fight for racial justice and equity.

The police killings of Black Americans, subsequent police violence at protests across the country, and so much more makes it impossible — and unconscionable — for people with privilege to ignore the continued racism and inequality in our institutions. 

At 3Degrees, we’ve been working to undo our own role in upholding inequitable systems. We’ve learned that meaningful climate action must be anti-racist and equitable. And now we’re learning how to practice these lessons. Once again the B Corp community helps guide us and hold ourselves accountable with climate justice resources, working groups, and more.

Businesses for a better future

If you’re still with me, and you’re in the business world, I want to challenge you to consider how your company can contribute to a better future. The turmoil around us makes it hard to see the forest for the trees, but it’s so important that you try. Because our current challenges only underscore the reasons why every business must take action now to be a part of something better. For 3Degrees, the B Corp community has helped us do that. Our B Corp certification has helped us achieve more than we thought possible, and we commit to doing even more in the future. 

I hope it can be a guide for you, too. The B Impact Assessment, a free tool to measure your business’s impact, is a great place to start.

Meaningful climate action must address anti-racism and equity

2020 has been a year of disruption. The ongoing, systemic oppression of Black Americans, including police violence, highlights how much work needs to be done to bring true equity to our society. This has been an awakening for me. We all must do more, and we all have to do better. And, as 3Degrees’ CEO, I have an obligation to do everything I can. Here are some of my reflections:

As a U.S.-headquartered company in the clean energy industry – which is historically dominated by white men 3Degrees is part of a messy, complicated, and unjust history of systemic racism. White supremacy has been woven into the fabric of the United States and, whether we’ve even realized its existence or not, white people like me have benefited from it. We all have an urgent responsibility to recognize the characteristics of white supremacy culture and help dismantle it. That will require a constant, unyielding devotion to racial justice, inside and outside of our business. We have a part to play in changing the future, and as CEO I am committed to making changes — both in our organization and in our industry.

Diversity is one of 3Degrees’ company values. This June, the 3Degrees team has been discussing what it means to be an anti-racist organization, particularly in the context of our mission to make it possible for businesses and their customers to take urgent action on climate change. Last Friday, we paused business for a day to provide employees with a day of reflection and action in honor of Juneteenth. The fight against climate change is intertwined with dismantling the racist systems in America and indeed throughout the world. As we shared in a public statement earlier this month:

We recognize that climate change has a disproportionately negative impact on Black people, Indigenous people, and other people of color. Urgent action on climate must also acknowledge, explore, and advance equity and inclusion in marginalized communities. Our efforts to date have fallen short. The lack of racial diversity at 3Degrees and throughout our industry, especially in leadership positions, contributes to a void in recognizing problems and developing solutions. This is one reality (among others) that we are committed to changing.

I am on my own journey to be an anti-racist leader, which includes learning more about the history of racial oppression and unpacking my own biases. When an employee-led group focused on diversity, equity, and inclusion formed in 2016, I enthusiastically supported the concept, but I didn’t really know where it was headed or what my real investment would need to be. Suddenly I found myself in discussions on new topics, terminology, and a requirement to define what diversity means for our company. These discussions frequently pushed the boundaries of my comfort zone and tested my decision-making, risk aversion, and commitment to doing the tough work. 

As our work continues, I’m more aware of why I get uncomfortable and I’m pushing myself to share openly. I’m learning to be a better listener and to accept feedback. I’m ready to invest more of my own time and company resources to make change happen. I know the team at 3Degrees is with me in this work, and I look forward to what we will do together — within our organization, our industry, and with our partners and clients — to dismantle white supremacy and build an equitable future for people and the planet. I invite you to join me.

Staying Connected on What Matters

bench overlooking nature

We’ve all probably heard the phrase, “If you don’t have your health, nothing else matters”. Given the current global pandemic situation, this phrase has never felt more true. 

We want to let you — our trusted clients, friends, partners, and colleagues — know that 3Degrees is committed to staying connected with you on what matters.

Right now, we understand that most of you are grappling with new workplace and home realities. So are we. Following guidance from CDC and local authorities, 3Degrees closed our physical offices in March. Like most of you, we are adjusting to working remotely, sometimes with pets and/or children making cameo appearances on video calls. Many of us are also managing other stresses, such as worrying about elderly loved ones, being unable to visit sick and elderly parents, or having to cancel once-in-a-lifetime events like weddings, graduations, and memorials. The effects are far-reaching and deeply personal. 

While these are unsettling times, they’re also a heartening reminder how individuals and communities can pull together to confront a common challenge. We’ve already seen examples of how this global pandemic is spurring amazing creativity and innovation that should provide lasting benefits long after we are on the other side of the current crisis. Many of the same characteristics that are critical to an effective COVID-19 response, such as compassion, perseverance, and care for vulnerable populations disproportionately affected, are also critical to addressing the longer-term, ongoing challenge of climate change. 

We remain passionate about our mission to help businesses and their customers take urgent action on climate change — which remains a critical issue. And, people’s health, their families, and their livelihoods are what’s currently weighing on everyone’s mind. Focusing your attention on these important concerns right now is understandable. And 3Degrees will continue to be here when you’re ready to re-engage in efforts around renewable energy, transportation decarbonization, and other climate solutions. 

Looking ahead, we’re working on many ways we can stay connected remotely. On the immediate horizon, we’ll be participating in an April 14th webinar with Bloom Energy on GHG Accounting and Emissions Reduction Techniques. If you’re ready to engage, we’d love for you to join us. And yes, kids and pets are welcome to make cameo appearances.

Here’s to staying connected on what matters.

New Year, Renewed Ambition — A Note from our CEO

future-corporate-renewable-trends-transporation

First, let me wish each of you a happy new year.  I hope everyone was able to recharge over the holidays and feels ready to jump into 2020 at full force. Though we’re only a few weeks in, I can already tell the year ahead is going to be a whirlwind as organizations across the globe continue 2019’s positive momentum on climate action.  Why do I believe that? Here’s a quick story for you…

When Dan Kalafatas and I started 3Degrees over a decade ago, I was spearheading sales and I honestly thought my phone wasn’t working (sadly, it was). I would make dozens of calls a week, and literally nobody called me back. Fast forward to today, January 2020, and it’s a completely different world. Corporate and utility organizations alike are proactively reaching out to us for help with their renewable energy, transportation, and climate solutions work. In fact, 3Degrees added nearly 30% more staff in 2019, including new international hires, and had to move offices to accommodate this growth.

While much of the climate news these days can be disheartening, I offer this as a piece of good news. This growth is a direct reflection of an increasing number of organizations holding themselves accountable and stepping up to take climate action — which, as we all know, is desperately needed. I see no signs of this slowing down in 2020.  

Here are a few examples of developments that I find most promising right now:

  1. Accelerating corporate commitments. From the historic pledge taken by over 500 B Corps – including 3Degrees –  to get to Net Zero by 2030 (20 years ahead of the targets set in the Paris Agreement), announced in December at the UN Climate Change Conference COP25, to tech giant Microsoft’s recent headline-grabbing announcement that it will be carbon negative by 2030, as well as launch a $1B carbon innovation fund, we’re seeing an acceleration of companies willing to step up and take meaningful climate action.
  2. Increased focus on transportation emissions. In 2016, the transportation sector surpassed the power sector as the largest emitter of greenhouse gasses (GHG) in the U.S. We clearly have our work cut out for us to address this rather significant challenge. That said, it’s been encouraging to see companies such as Lyft and Etsy take initial steps to address their Scope 3, transportation-related emissions by investing in carbon offsets in the near-term, while they work on longer-term solutions. Our team is also working with more clients on broader transportation-related solutions, including fleet electrification strategies, and incentive programs such as the Low Carbon Fuel Standard (LCFS) in California.
  3. Utilities are also stepping up to the challenge. As highlighted in this article from Greentech Media last week, several major electric utilities are setting carbon-free targets, which is an important step forward. While there is still huge variation in how the country’s biggest utilities are addressing climate change, these bold commitments are a positive sign.
  4. Inspirational youth movement. As I wrote in a blog post following the Global Climate Strike last September, I’ve been thinking a lot about the legacy that we will leave behind for the next generation and I’m energized by the incredible leadership that this generation is already demonstrating.

Here’s wishing you and your organization a sustainable and action-oriented new year and decade, with a renewed passion for doing all we can to address the climate challenge.

Steve McDougal
CEO, 3Degrees

Fueling a Cleaner Future — Reflections from VERGE 19

Verge 2019

Last week, I was part of the Low-Carbon and EV Fleet workshop at VERGE 19. Katie Fehrenbacher from GreenBiz did a great job bringing together thought leaders across business and policy to dive into the opportunities and challenges around decarbonizing transportation.

Real world fleet transition challenges

I had the opportunity to moderate a panel with three leaders who manage their organizations’ fleet transitions: Julie Johnson, National Business Development-Advanced Vehicle Techs, Ryder System, Inc.; Michael McDonald, Director of Maintenance and Engineering for Sustainability and Government Affairs, UPS; and Mike O’Connell, Vice President of Supply Chain, PepsiCo.

Steve McDougal Verge 19

Steve McDougal with panelists (L to R): Michael McDonald, Julie Johnson, and Mike O’Connell

The panelists were candid about the challenges of overall vehicle reliability — even as the technology for low-carbon and EV fleets continues to make significant progress. While all the panelists value reliability, it presents a different degree of risk to their respective business models. Case in point: Mike O’Connell noted that PepsiCo’s vehicles deliver and restock its distributors’ inventory. However, even if there’s an issue that delays the vehicle, consumers will likely still be able to get their drinks and chips. In contrast, if/when UPS experiences an issue with vehicle reliability, customers don’t get their packages. Similarly, Ryder’s customers expect reliable uptime when they lease fleets from the company. There is no back-up inventory for the delivery of packages or uptime of leased vehicles.

Perhaps it’s not surprising that each panelist emphasized the diversity of their fleets’ alternative fuel portfolio to include both alternative fuels and EVs. Maintaining fuel diversity has been an important approach to mitigate the challenge of reliability. Consider that UPS has announced plans to add more than 6,000 compressed natural gas (CNG) trucks that can run on both renewable natural gas (RNG) and conventional natural gas. Given these plans, UPS is the largest consumer of RNG in the transportation industry.

And the potential impact is significant: RNG yields up to a 90 percent reduction in lifecycle greenhouse gas emissions when compared to conventional diesel, as noted by UPS.

Scalability was another theme as these panelists shared insights from their experiences in managing fleet transitions. Their vision is to move beyond demonstration projects and pilots. Mike O’Connell from PepsiCo shared, “We can all do five or ten of something but it doesn’t make sense unless it can scale to 100 or more.” And the panelists noted that it can take time to build up infrastructure and vehicles for these other fueling options.

The role of market-based incentives in accelerating the transition

Jennifer Cohn

Jennifer Cohn with 3Degrees, speaking about incentives to transition to low-carbon fleets

In another session, my colleague Jennifer Cohn provided an overview of “How Incentives Can Accelerate the Transition to Low-Carbon Fleets.” She focused on the low-carbon fuel standard (LCFS) as a key example of an important market-based instrument that organizations can leverage. This program is relevant for anyone operating fleets in California, Oregon, and/or British Columbia — particularly organizations with electric vehicles in their fleets or charging infrastructure on their campuses.

Run by the California Air Resources Board (CARB), the LCFS aims to reduce the carbon intensity of California’s transportation fuel pool. LCFS is based on life-cycle emissions of the fuel — from production to consumption. The lower the carbon intensity of alternative fuels — ethanol, bio-diesel, electricity, etc. — the more LCFS credits can be generated. While EVs may have zero tailpipe emissions, you can make the inputs greener by purchasing renewable energy certificates (RECs) to match charging output.

The total value of LCFS credit transactions exceeded $2 billion in 2018. Credit prices are driven by market supply/demand and have been historically volatile — but they are now at an all-time high of ~$200 per credit. As these are “market-based” incentives, there is an element of risk that is important to manage. 3Degrees advises our clients on this and sometimes even hedges that risk on their behalf.

An interesting finding – when Jennifer asked the workshop attendees who had heard of LCFS, almost every hand in the room went up. But when she asked who was actually taking advantage of the LCFS program, only two hands remained.

The takeaway? Many organizations are leaving significant money on the table — and also have an opportunity to make an even larger impact on the decarbonization of transportation.

I look forward to seeing many more businesses make greater headway here in the near future, for their own benefit — and that of the climate.