Ingram Barge, Domtar make the case for integrated sustainability

Ingram Barge, Domtar make the case for integrated sustainability

Editor's note: Read Heather Clancy's report from the first day of GreenBiz Forum New York here, and overviews from Marc Gunther during Day 1 and Day 2 of the event.

All sustainability strategies reflect an intention to use water, soil and other resources — natural or manmade — more judiciously. But some companies are far more dependent than others on the success or failure of those plans.

On the face of it, marine transport operator Ingram Barge Group and paper company Domtar don't have much in common. But they do share the same core challenge: Their business models are intimately and inextricably linked to a natural resource. If it goes away, they go away.

In the case of Nashville, Tenn.-based Ingram Barge, it is the massive inland U.S. water system formed by the Mississippi River and its major tributaries. For Domtar, it is the viability of U.S. and Canadian forests.

You could argue that Ingram Barge, and the entire marine transportation industry, has had sustainable operations on its mind since 1989, the year of the devastating Exxon Valdez oil spill and its aftermath of tighter shipping regulations.

But the extent of that vulnerability has emerged front and center every year since 2005 in the form of at least one significant weather event that has disrupted the waterways, said Craig Philip, CEO of Ingram Barge, during a keynote discussion Thursday at GreenBiz Forum in New York.  

"We have begun to understand that systemically these problems are chronic. They are likely to stay chronic," said Philip during his interview with GreenBiz Group Chairman and Executive Editor Joel Makower.

One extreme to another

In the past two years alone, businesses and communities up and down the waterway have recorded both historic high and low water levels — which is a sobering revelation, considering that it has been used for interstate commerce since the days of President George Washington.

The privately held Ingram Barge, which generates about $3 billion in revenue annually, is the largest operator, controlling about 25 percent of the traffic. It hauls about 100 million tons of cargo every year across the United States using its roughly 5,000 barges. It would take approximately 5 million trucks to handle the same amount, Philip said.

While the spirit of public-private cooperation helped steer policy for the waterway in the past, now there are many different stakeholders vying for a say in its future — a "complicated intersection of Mother Nature and man," he said.

Recreational fisherman on the Missouri River in North Dakota, for example, aren't always sympathetic to shipping interests. Neither are power plants that need water to generate electricity. What complicates matters is the reality that the U.S. Army Corps of Engineers is mandated by decades-old water management policies.

"We don't have a way to bring those parties together in a noncontentious, nonlitigious way right now," Philip said.

That was one motivation behind the creation of the America's Watershed Initiative, which falls under the Great Rivers Partnership Program run by The Nature Conservancy. (Ingram Barge is a steering committee member).

Among the projects being considered are tactical projects for wetlands restoration that would mitigate water level extremes. Ingram Barge is also advocating new fees for transportation companies that benefit from the waterway — itself included — much like the gasoline taxes used to maintain the federal highway system.

"Washington is absolutely unwilling to consider this," Philip said.

For now, at least.

Montreal-based Domtar's commitment to sourcing sustainable harvested timber extends back more than 10 years ago, when it started using the Forestry Stewardship Council's sourcing guidelines. "Everyone is trying to catch up with our reputation," said David Struhs, vice president of sustainability for the company.

Domtar could be the biggest paper company you have never heard of: With approximately $5.6 billion in annual sales and more than 9,100 employees, it produces pulp used in everything from commercial office paper to adult incontinence products.

Struhs argues that U.S. forests are as abundant as they were 100 years ago and it is Domtar's intention to keep them that way. Right now, about 90 percent of its fiber comes from controlled sources, with approximately 20 percent certified to the FSC standard, he said. Its aspirational goal is 100 percent.

One factor complicating that quest is much of its supply chain is made up of family farms controlling 50 to 100 acres. To help those partners invest in sustainable forestry practices, without paying them a premium, Domtar works through Carbon Canopy. The program pays farmers credits for the amount of carbon that their forests help sequester, which helps subsidize their investments, Struhs said.

"We are not doing this to get a letter grade on someone's report card, we are doing this, because it creates shareholder value," he said.
 

Photo of puzzle provided by Markus Mainka/Shutterstock