2015 was the year that …
It’s been another stimulating and exciting year in the world of sustainable business — both breakthroughs and baby steps. Although progress can seem plodding, there’s a sense that sustainability, and particularly climate change, are on the ascendance, in terms of public interest and business engagement.
It’s not all about COP and the pope. Indeed, it’s easy to forget how much can happen during a 12-month period. So here, as a public service — not to mention a brief moment of celebration — is my list of 10 notable themes and memes of the year just passed. What would you add to the list?
1. The pope’s Encyclical started a conversation
It’s hard to beat the pontiff in terms of global impact. And while it’s difficult to discern any direct impact from the Holy See’s call for action on climate change, it helped bring worldwide attention, not to mention a moral dimension, to a cause that previously had been the concern mostly of activists, scientists and politicians. The encyclical likely had a ripple effect going into the Paris climate talks. At minimum, it spurred lots of thoughtful conversations parsing the papal proclamation — whether it hit all the right notes in terms of addressing the moral and other dimensions of a changing climate. That’s exactly what His Holiness likely intended.
2. COP21 created a turning point
This, of course, was the other big story of the year, in terms of global attention to climate change, and we covered it from numerous angles and perspectives. Regardless of what you think about the Paris Agreement, years in the making, the two-week negotiation — not to mention the hundreds of side events and the commitments made both in Paris and during the weeks leading up to it — marked a turning point in climate action and attention. It may even have muted the anti-climate forces in the United States, or at least made their cause harder to make. At minimum, they are finding themselves, post-Paris, as mere whispers amid a global chorus of concern.
3. Carbon pricing emerged from the shadows
It was barely a conversation a year ago; now, the notion of putting a price on greenhouse gas emissions has become — well, if not mainstream, at least more widely discussed. More than 400 companies were integrating some price on carbon in their investments or operating budgets, according to CDP data released in September. The notion of coal and oil as "stranded assets" — fossil fuels on companies’ balance sheets that can’t be burned without cataclysmic climate consequences — has gone from an abstract concept to a Wall Street conversation. And a growing chorus of companies have stepped up to say that the certainty that comes from a carbon-pricing scheme could accelerate their investments in low-carbon technologies, among other things.
4. Corporate partnerships became mainstream
Company hookups to address sustainability challenges are growing, both in number and sophistication. Such partnerships happen for a variety of reasons — and with a variety of consequences. Corporate mergers, such as the Kraft-Heinz mash-up announced last spring, can bring strange bedfellows together, in terms of harmonizing their disparate sustainability commitments and achievements. The partnership between Target and Walmart to make over ingredients in cosmetics and personal care products shows what happens when competitors combine their clout. And then there are corporate partnerships with cities, universities and others — not for philanthropy or other do-goodism, but to solve pressing problems. Nike, for example, launched a Materials Challenge with MIT to study the environmental and social impacts of the key materials used to make apparel and footwear. Clearly, "not invented here" is no longer a viable mantra for companies.
5. Pioneers marked 10-year milestones
This year, the sustainability journeys of two major companies hit the 10-year mark, milestones in groundbreaking journeys both companies set for themselves. They also illuminate both the challenges and opportunities awaiting brand leaders that set big, public goals for themselves. General Electric’s Ecomagination initiative — part marketing campaign, part corporate performance commitment — illustrates a reputational turnaround story, from a company highly disliked by environmentalists to one often pointed to as a leader. And the 10th anniversary of a sustainability speech by Walmart’s then-CEO Lee Scott offered an opportunity to assess how the behemoth from Bentonville is living up to the bold aspirations he set for the company. Together, they represent an opportunity by two very different companies to take stock in the promise of sustainable business.
6. Sustainable cities seized the limelight
For years, we’ve been covering the symbiosis of cities and companies — how sustainability needs cities as much as cities need sustainability, in the words of a 2012 report. This year, we saw that relationship come to life in several ways. In the United States, the White House announced a sweeping Smart Cities Initiative to bring together disparate government efforts to help cities, both large and small, adopt new technologies. New Orleans commemorated the 10th anniversary of Hurricane Katrina, showcasing how a devastated city can re-emerge stronger and more resilient. Detroit showed how economic devastation similarly can lead to an urban resurgence and reinvention. Los Angeles announced ambitious targets to increase sustainability even as it grows. All of this culminated in Paris at COP21, where hundreds of mayors from around the world announced ambitious carbon-reduction goals, a massive opportunity for both cities and business: investments in cities’ low-emission transportation, building efficiency and waste management could generate $17 trillion in savings by 2050, said one study.
There’s still a long way to go before 'circular economy' becomes widely understood, let alone implemented, but the movement stands to change business forever.
7. Corporate renewables became commonplace
The promise of a renewable-energy future seemed to hit its stride in 2015, as company after company announced clean-energy goals for both themselves and their suppliers. The upswing resulted from a combination of technology innovation and corporate climate concerns — the former lowering prices with the latter increasing demand. Add in the growing intelligence embedded in energy systems — so-called smart grids and the Internet of Energy — and what seemed audacious not that long ago has become commonplace: companies and communities operating entirely on renewable power. Apple began the year with an $848 million solar deal in California. Corporate renewables purchases ramped up elsewhere, too, thanks in part to efforts such as the Business Renewables Center, an effort by the Rocky Mountain Institute to make the procurement process more straightforward. A group called RE100, created by the nonprofits Climate Group and CDP, enlisted companies as diverse as BMW, Coca-Cola, Goldman Sachs, IKEA, Mars and Swiss Post to commit to 100 percent renewable power. (The dates for achieving this goal vary from company to company.) Once again, the year was capped by COP, where even more companies stepped up to tout their renewable-energy cred and helped shepherd in a new era of low-carbon technologies.
8. The circular economy ramped up
This is another term that even a year ago was barely spoken and had little currency. But that changed during 2015, as the notion of a closed-loop economy, where products, materials and ingredients are kept in service through multiple, endless production cycles, went from a pipe dream to budding movement. Thanks in large part to the Ellen MacArthur Foundation, which organized a group of "Circular Economy 100" companies — along with designer William McDonough, whose Cradle-to-Cradle methodology long ago paved the way — the conversation about how to create closed-loop systems of commerce took off in earnest, even in Davos, where a circular-economy working group engaged some of the world’s largest companies. There’s still a long way to go before the concept becomes widely understood, let alone implemented, but the movement stands to change business forever.
Even before COP was gaveled into business, many of the world’s largest financial institutions made (or doubled-down on) multibillion-dollar commitments to clean energy and other low-carbon technologies.
9. Connected cars kicked into gear
The drive to create sustainable forms of transportation picked up speed in 2015. Both legacy car makers and upstarts — including such well-heeled giants such as Google and Apple — are seeking to accelerate, if not disrupt, still-nascent markets for electric and autonomous vehicles, as well as business models that eschew individual vehicle ownership. Technology is helping, as incumbents such as Ford and Mercedes-Benz began to place bets on what not long ago were futuristic visions of sharable electric pod cars and other "smart mobility" solutions. Terms such as "micromobility" and "mobility on demand" may not yet be uttered beyond a small group of researchers and visionaries, but if the past year is any indication, they are quickly moving into public discourse.
10. Sustainability financing gained currency
Among the biggest achievements of COP21 — besides getting 195 countries to agree on anything — were the financial commitments that emerged both directly and indirectly from the Paris Agreement. Even before COP was gaveled into business, many of the world’s largest financial institutions made (or doubled-down on) multibillion-dollar commitments to clean energy and other low-carbon technologies. Early in the year, Citi announced a plan to deploy $10 billion to such things, and was joined by Goldman Sachs, Bank of America and others, each with its own multibillion-dollar plan. Bloomberg New Energy Finance reported that investment in clean energy in Brazil and Chile more than doubled in just a year. In the U.S., as federal monies for renewables dried up, states began turning to the private sector to nurture their renewable energy markets, which is proving to be a boon to business.
There’s a lot more good news I could have added to this list of 2015’s most hopeful stories, from advances in sustainable food and agtech to toxic chemical reductions to the rise of zero-waste initiatives. Feel free to weigh in with your own.
All in all, it was (another) very good year.