2017 was the year that …
It felt like it would never end. But, at long last, the curtain is closing on 12 extraordinary months that were strange and unprecedented, to say the least. For those in sustainability, it began with anticipatory dread and is ending with an odd mixture of horror and hope.
I mean, it can't get much worse. Can it?
True, the climate has been screaming at us to step things up. Hurricanes, droughts and wildfires may be the least of it. It’s the feedback loops, stupid: The teetering ice shelves, thawing permafrost, warming oceans, drying reservoirs — some of these are happening far faster than many thought possible. The time lost in political dogfights about climate action is beginning to add up as things out there get real.
That’s the bad news. The good news is that there was no shortage of, well, good news, at least at the intersection of corporate sustainability and clean technology. In spite of — or, in some cases, because of — the Trump administration’s hostility toward environmental and climate leadership, the private sector, in partnership with financial institutions and nongovernmental organizations around the world, stepped up as never before.
As 2018 dawns, there’s a renewed sense of commitment and forward movement on a range of fronts. For a growing corps of companies, cities and others, we are, indeed, still in — maybe more than ever.
In that spirit, here, in no particular order, are some of the story lines we covered at GreenBiz during 2017 that showed the promise and progress of sustainable business.
Investors got woke
For a quarter century, investors who led with their values were dubbed "socially responsible investors." Today, they’re just "investors." The reason: Some of the world’s largest investment firms, pension funds and banks are weaning themselves off fossil fuels, risky infrastructure and companies that simply aren’t prepared for the operational risks of a changing climate. One study found 60 percent of the world's 500 largest asset owners taking steps to recognize the financial risks associated with climate change. Another found that two-thirds of institutional investors plan to increase their level of investment in climate mitigation efforts.
Slowly but surely, both individual and institutional investors are overcoming the myth that sustainable investing requires a financial trade-off, according to a Morgan Stanley survey. It found millennials twice as likely as the overall population to invest in companies targeting social or environmental goals. Vanguard Group, the U.S. investment management giant, named climate risk and gender diversity as the two defining themes of its investment approach in the coming years. Swiss Re, the world’s second-largest reinsurer, has shifted its entire $130 billion liquid-asset portfolio towards environmental, social and corporate governance indices.
Clearly, there’s plenty of money out there. Long-term investors around the world are collectively sitting on trillions of dollars of liquidity. Trillions more is sitting in negative or zero-coupon securities. What’s needed is a new investment hypothesis that includes not just institutions but also "citizen investors" — an endless opportunity for capitalism to do its thing in the name of sustainability and resilience, not to mention profits and jobs.
Toxics got disclosed
Another longstanding issue — reducing what are euphemistically dubbed "chemicals of concern" in consumer products — took center stage in 2017, with commitments announced by Amazon, CVS, Home Depot, Procter & Gamble, SC Johnson, Target, Unilever and others. Walmart signed on to the Chemicals Footprint Project, which sets guidelines for companies to disclose and manage chemical inventories — disclosure being the first of a more-or-less 12-step program of corporate redemption.
Retailers are playing a key role here. In one study, seven of 11 retailers evaluated made significant improvements in their chemicals policies during 2017, moving their average grade from an almost-failing D-plus to a passable C — far from perfect, but progress.
For many companies, such commitments represent pure pragmatism. For example, several said they’d hew to California’s newly enacted Cleaning Product Right to Know Act, the first state law to require companies to disclose the chemicals in both commercial and household cleaning products. P&G and SC Johnson were among those saying the law would become their de facto standard. Two cheers for the Golden State.
Cleaner cars hit the road
True, this has been a recurring headline over the past several years, as internal-combustion engines have gotten cleaner and more efficient, and some have become hybrid-electric. But in 2017, the world's car makers hit the gas — a turn of phrase destined to become outmoded within a decade or so. The vision of ACES — Autonomous, Connected, Electric and Shared vehicles — is no longer a (tail)pipe dream. It’s our short-term future, arriving much sooner than anyone would have predicted.
Much of the action is being driven by cities. In June, 30 cities, including New York, Los Angeles, Chicago and Houston, said they would seek bulk-rate deals on EVs as part of an effort to jumpstart local markets. Cities are also embracing autonomous vehicles, due in large part to their enhanced safety benefits. San Jose, the largest metropolis in Silicon Valley, is making ACES central to its transportation planning for the next several decades.
Plastic waste became material
The attention paid to plastic waste — and, in particular, ocean plastics — ramped up last year as the idea of a circular economy was embraced by more and bigger companies.
The conversation certainly was vibrant. In January, Procter & Gamble, TerraCycle and Suez joined the Ellen MacArthur Foundation, the circular economy think tank, at a World Economic Forum panel in Davos to talk about a plan to increase plastics recycling to 70 percent within three years; it’s currently around 14 percent. At that same event, 15 global brands recommended replacing three widely used chemicals — polystyrene (a.k.a. Styrofoam), expanded polystyrene and polyvinyl chloride — as packaging materials globally due to their toxicity to people and the environment.
The year was just getting started. In June, the United Nations convened the first global summit on the state of the world’s oceans, and plastics played a starring role. In November, more than 150 organizations, including some of the world's best-known brands, issued a call for governments to ban degradable plastic packaging due to its harmful effects on marine and land environments. In December, Dell, General Motors and other companies launched an initiative to bring their collective market power to build a supply chain to turn ocean plastics into everything from packaging to furniture to bicycle parts.
It’s all still just a drop in the ocean, but these and other efforts are starting to shift the conversation — and to make a dent in the 8 million tons of plastic waste that reach the ocean each year, and millions more that clog landfills and litter the landscape.
The blockchain began to count
Yes, it’s hard to explain, much like the Internet was about 25 years ago. But, much like the Internet, the virtual ledger called the blockchain is about to revolutionize how many things are done — and even notions of what’s possible to do.
Some examples from 2017: Toyota partnered with the Massachusetts Institute of Technology to explore how blockchain technology could speed up self-driving car research. Nestlé, Unilever and Tyson Foods teamed up with IBM to explore how blockchain can help strengthen the global food supply chain. A taskforce announced in December will see Unilever, the British supermarket chain Sainsbury and packaging company Sappi team up with global financial giants BNP Paribas, Barclays and Standard Chartered to develop a system to track and verify contracts for farmers in Malawi that supply tea to multinationals.
Startups are getting into the action, too. One, bext360, is tapping into an existing blockchain-based transaction network in emerging economies to enable wholesale coffee buyers to more closely track the source and quality of the beans they’re buying while speeding up payments for local growers.
And then there’s energy, where blockchain is just beginning to switch on, and where vast potential exists to accelerate smarter, distributed, more secure and lower-carbon energy markets. Both startups and multinationals are already plugging in.
Several energy applications currently use blockchain technology, for things such as automated bill payments, electrical vehicles charging and renewable energy transactions. In May, for example, several companies joined forces to manage electricity grids in the Netherlands and Germany, working with EV owners to make electricity stored in car batteries available to the grid when needed. Blockchain could also help thwart cyberthreats to the grid, no small matter in an age of rising digital terrorism.
Banks saw a change of climate
At last, the world of banking and finance appears to be embracing the sustainability opportunity. With the world's dual targets in place — under 2 degrees Celsius global temperature rise and the Sustainable Development Goals — the question has moved to the cost of implementation.
Banks, of course, are where the money is, and in 2017, several made significant moves to help fund some of the needed transitions. JPMorgan Chase said it would invest in helping other companies and governments accelerate the shift to a low-carbon economy, facilitating at least $200 billion in such financing by 2025. Citi, HSBC, Barclays and others made nine-figure commitments to finance renewable energy, green buildings, electric vehicles and other sustainable and clean technologies.
Bonds — green, climate, sustainable and other types — also grew during 2017, as both cities and companies discovered the benefits they bring to financing capital improvements and infrastructure. For example, Apple’s new Silicon Valley campus was built partially with green bonds. The proceeds of Starbucks’ sustainability bond were used to invest in its coffee supply chain, protecting coffee suppliers against environmental risks, such as water inefficiency, soil degradation and deforestation.
The financial pipeline is just getting primed: There's lots more money and financing mechanisms coming.
And yes: It’s not enough. The rate of change by companies continues to underwhelm; we’re simply not moving at a scale, scope and speed that reflects the magnitude of the global challenges. There’s no time to rest on one’s laurels.
But let’s stop and celebrate these largely untold stories — and all of the unsung heroes who made them happen. Against considerable odds, with insufficient political cover and precious little fanfare, companies are moving forward.