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In corporate America, sustainability has evolved from business cost to business driver
By Matt Alderton
T’S A BUSINESS TRUISM: You have
Ito spend money to make money. For decades, however, the perceived cost of sustainability was too great and the return too little. Even though many companies understood the need for eco-friendly practices, they turned a blind eye to one type of green — conservation — in the interest of another type: cash.
A 2009 study by MIT Sloan Management Review and The BCG Consulting
Group surveyed more than 1,500 corporate executives and found that more than 92 percent of companies were addressing sustainability in some way, but that the vast majority of efforts were limited to satisfying regulatory requirements. Nearly 70 percent of survey respondents said their company had not developed a clear business case for sustainability, and many cited cost as a major barrier to implementing sustainable practices.
“Sustainability issues normally need huge and expensive investments first,” wrote one survey respondent. “(It’s) not clear how to monetize sustainability,” wrote another. “(It) puts us at a cost disadvantage versus competition,” shared a third.
Although they weren’t entirely wrong — eco-friendly materials and practices often come at a premium — the economics of sustainability are rapidly changing. And more importantly, so are consumer attitudes, suggests a 2020 study by IBM and the National Retail
Federation . The study found that nearly 8 in 10 consumers (78 percent) prefer to do business with environmentally responsible brands, and that nearly 6 in 10 (58 percent) are willing to change their shopping habits to reduce environmental impact.
Because sustainability is becoming more affordable and more popular, instead of viewing it as a business cost, corporate America is increasingly seeing it as a business driver. Here, four company executives explain how their businesses embrace that mindset:
WERNER ENTERPRISES:
DELIVERING A HEALTHY PLANET
Anyone who’s driven behind one knows that trucks are major polluters.
If you ask transportation giant Werner
Enterprises, however, the time has come for trucks to deliver not only cargo, but also a healthier planet. That’s why it
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unveiled last year its first electric truck , which was tested in Los Angeles.
“We have always been conscientious about trying to consume less fuel. What’s changed is some of our motivations,” explains Derek Leathers, Werner’s vice chairman, president and CEO . “Early on, it was about saving money by not spending more fuel than you have to. Now, we understand that there are other factors we need to embrace relative to the environment.”
That realization resulted in the electric vehicle pilot program as well as the company’s first corporate social responsibility (CSR) report , which it plans to publish this year to share its environmental, social and governance (ESG) initiatives and achievements. Since 2007, for example, Werner reports it has eliminated more than 300 million gallons in fuel consumption, improved fuel efficiency by more than 29 percent and reduced more than 3.3 million tons of carbon-dioxide emissions.
“Most of our ESG initiatives are things we’ve been working on a for a long time. What we didn’t fully appreciate until now was the need to articulate our strategic plans in that area to our associates, as well as our investors and customers,” continues Leathers, who says both internal and external stakeholders now demand sustainability. To satisfy them, Werner’s forthcoming CSR report will include forward-looking goals to easily measure progress. For example, Werner wants to reduce its carbon footprint by 55 percent by 2035 . “We’re drawing a line in the sand by measuring our efforts,” Leathers says. “Because if you don’t measure it, it’s hard to improve it.” FRANK & EILEEN: FORWARD-LOOKING FASHION
When she launched fashion brand Frank & Eileen in 2009, founder and CEO Audrey McLoghlin didn’t set out to make the business sustainable. However, that’s exactly what it became, thanks to her obsession with quality.
“My focus was 100 percent on making the best products,” says McLoghlin, whose inspiration for Frank & Eileen was a luxurious fabric sample she found in a swatch book; although the fabric was for menswear, she wanted to use it to make women’s workwear. “I found the Italian mill that was responsible for making this fabric, and they’ve been my partner for 12 years. We inadvertently became committed to sustainability and traceability because that’s how they did business already; it just happens to be how you make the most beautiful product in CORPORATE CITIZENS
Frank & Eileen’s sustainably sourced clothing is produced without the use of harmful chemicals.
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the world.”
Every fabric Frank & Eileen sources from Italy can be traced to its field of origin and is certified for the absence of harmful chemicals . This, along with other responsible practices, recently helped the company attain B Corp certification from the nonprofit B Lab, which according to McLoghlin will help the company tell its story to consumers who care about the Earth.
“We started out as a wholesale business, but thanks to e-commerce we have been transitioning more and more to becoming a direct-toconsumer brand,” continues McLoghlin, who says social media has created a direct line between brands and buyers. “Consumers have a much louder voice now. They can speak to companies about what they want, and what they want is transparency, traceability, sustainability and authenticity. ... Because of that, we see a larger opportunity and responsibility to communicate what we’re doing to our customers.” COLGATE-PALMOLIVE: PURPOSE-DRIVEN PRODUCTS
Colgate-Palmolive is more than 200 years old. One reason it’s survived so long is that it has learned to tell the difference between passing fads and future fundamentals . Sustainability, it believes, is the latter.
“We’re the oldest consumer goods company in the United States, and we fully intend to be around for another 200 years,” says Chief Sustainability Officer Ann Tracy . “We recognize that if we want to keep going, (sustainability) is a barrier to entry.”
When Tracy joined Colgate-Palmolive 30 years ago, sustainability was focused on compliance with environmental regulations. Now, the practice isn’t about things the company has to do, but rather things it
FRANK & EILEEN An Italian mill provides much of Frank & Eileen’s fabric. CONTINUED
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CORPORATE CITIZENS
— DEREK LEATHERS, CEO, Werner Enterprises
DOLE FOOD COMPANY Dole uses solar panels to achieve carbon neutrality in its operations.
aspires to be.
On that note, last November Colgate-Palmolive introduced a 2025 Sustainability & Social Impact Strategy to pursue environmental objectives across its brands. Among its ambitious goals are transitioning to 100 percent recyclable, reusable or compostable plastic packaging by 2025; promoting water conservation awareness to 100 percent of its global consumers, also by 2025; sourcing 100 percent renewable electricity by 2030; and achieving net-zero carbon emissions by 2040.
“This new strategy is about applying sustainability across all functions in the company to drive business growth,” explains Tracy.
One example is Colgate’s new recyclable toothpaste tube, which it launched in July 2020 after five years of research and development . “Investors, retailers like Walmart and Target, the consumers who buy our products and our employees are all getting more vocal about sustainability. ... There’s a clear recognition that we need to be a purpose-driven company, because purpose-driven companies are companies that will win and succeed in the future.”
DOLE PACKAGED FOODS: PROMISING PROGRESS
Although the fruit it grows on its plantations is sweet, its history of colonialism and greenwashing have sometimes earned Dole Food Company a sour reputation. After being acquired in 2012 by Japanese firm Itochu, Dole’s packaged foods business decided to reinvent itself around the Japanese business philosophy known as sanpo-yoshi , which translates to “three-way satisfaction.” Conceived in the 18th century by Japanese merchants, the idea is to do business in a way that benefits the buyer, the seller and society at large.
“We found ourselves in a space where ... volumes and profits and revenues were declining. So we decided to transform our business and
DOLE FOOD COMPANY Workers distribute meals in Jackson, Miss., as part of Dole’s Sunshine For All program, which provides fresh and packaged produce to underserved communities.
reset the company for growth,” says Pier Luigi Sigismondi, president of Dole Packaged Foods . “That transformation requires us to create a completely renewed brand that is focused on consumer needs. And those needs today are all about being sustainable.”
The embodiment of Dole’s transformation is an ESG initiative known as The Dole Promise . Launched in June 2020, it encompasses tangible goals in the areas of sustainability, social responsibility and nutrition. Objectives include reaching zero fruit loss from Dole farms to markets by 2025; moving toward zero fossil-based plastic packaging, also by 2025; and achieving net-zero carbon emissions by 2030.
“As a food company, we believe not only that we have an obligation to be carbon-neutral, but that we have an obligation to actually sequester carbon from the environment,” Sigismondi explains. “If we do that by helping communities and working harmoniously with partners, startups, suppliers and customers, we can satisfy the interests of our shareholders for the long term, which will trigger a virtuous circle of growth that makes us sustainable and successful for many years ahead. That’s the Dole Promise.”
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Silver has a complicated but key role as a renewable energy source
WERNER SLOCUM Silver is a key component in solar arrays like these near Poncha Springs, Colo., that pivot to produce power from both sides.
BY CARLI PIERSON
hen people think of mining
Wprecious and semi-precious metals, they don’t usually associate it with solar panels and electric cars. But, in fact, silver is a critical element for the construction of renewable energy sources, including solar energy, because it shares electrons easily, making it a highly conductive material for the flow of electricity.
Mining has gotten a bad reputation because of historically dangerous working conditions and its contribution to environmental degradation. For example, the industry has been criticized for excessive use of water and destruction of natural habitats. But mining today isn’t what it was a century ago; it is now heavily regulated and those working in the mining and green energy industries are quick to point to technological innovations created in response to the environmental challenges the two sectors have faced.
Silver and other metals like gold and copper are vital to the future of renewable energy sources that in turn are critical for managing the climate crisis. For many governments around the world, including the U.S. — with President Joe Biden looking to the Green New Deal as part of his plan to provide clean, sustainable energy for a growing population — the private and public sectors are working together in what is a necessary pact between the mining and solar industries. MATERIALS OPTIMIZATION
According to Yogi Goswami, director of the Clean Energy Research Center at the University of South Florida , “For solar energy systems, you need materials that are mined. You also need energy to mine and refine them to bring them to a level to be used in those technologies. In solar panels, we use silver for metal mesh on the cells to collect electrons and channel
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them into the grid. As we increase the production of these panels, we will need an increased amount of silver.”
Keith Neumeyer, president and CEO of First Majestic Silver Corp., a Canadian mining company with operations in Mexico , points out, “Silver is in practically every appliance and technology you use on a daily basis: Your microwave, cellphone, computer, car, refrigerator and lots of other items use this metal.” Neumeyer also notes that worldwide, government demand for renewable technologies exceeds the amount of silver currently being mined.
Researchers are working on optimizing the use of materials such as silver in renewable energy products.
“The photovoltaic (or solar) industry has had success in what’s called dematerialization,” says Garvin Heath, a member of the Resources and Sustainability Group in the Strategic Energy Analysis Center at the U.S. Department of Energy’s National Renewable Energy Laboratory , where he researches the environmental and health impacts of energy technologies.
Heath says solar modules have grown in size, but the volume of materials used per unit of power output has been drastically reduced in the past 20 years thanks to dematerialization and increased energy conversion efficiency. In other words, we are using less of a given material as well as getting more energy out of it for a longer period of time. RECYCLING FOR RENEWABILITY
Today, a typical solar panel’s payback period — the output that equals the energy that went into producing it — is about a year, but a typical lifespan of a panel is 20 to 30 years. To extend the payback period, Goswami says, “Recycling will be the sustainable way, and since silver is costly, economics will tell the industry that they should recycle.”
“A lot of factors go into what we consider sustainability,” says Heath. “The circular economy speaks to an efficient use of resources. We think about ways to reduce the quantity of materials or reduce toxicity of materials we choose. At the end of life, we can also think about whether the technology is still usable to be sold or given away. Can it be repaired? Can it be remanufactured? When there is no more use for its intended function, we have a choice between recycling and landfilling and of course we want to
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DENNIS SCHROEDER
Solar, or photovoltaic, cells convert sunlight into electrical energy.
FIRST MAJESTIC SILVER CORP. Flecks of gold are visible in this core sample from First Majestic Silver Corp.’s Springpole Gold Project located in Ontario, Canada.
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SHANE MCLENDON/UNSPLASH Mining is necessary to extract the amount of metals needed to produce enough renewable energy sources to offset fossil fuels. recycle to recover valuable materials and prevent hazardous materials from getting into the environment.”
But Neumeyer points out that most silver isn’t currently being recycled because it is too expensive to extract, for example, from a computer circuit board. He says that in order for solar and other companies to have an economic incentive, the price of the product will have to increase to make it worth the cost of recycling. As the demand grows for renewable energy, Neumeyer believes the price of silver will go up, which will in turn increase recycling and help make green energy products more sustainable.
And as the demand for silver rises, mining companies are doing their share to make their processes more sustainable. For instance, according to its 2019 sustainability report , First Majestic recycled 80 percent of the water used in mining operations and is involved in massive reforestation projects of native plant species in the regions where the company is currently operating.
As the world population grows to a projected 10 billion people in 2050 , there will be more demand for resources and less to go around. “Fossil fuel resources won’t be available for too long except coal. We will have no choice but to switch to renewable energy sources. At the same time, people are also finding out the negative consequences of fossil fuels on the environment and their health — and it’s the health part that is moving people more toward renewable resources,” Goswami says.
According to Goswami, the biggest misconception about renewable energy is that “there is not enough of it to fulfill our global energy needs.” To provide for all the electrical power needed in the U.S. for one year, he says, “We only need (a) 100 miles-by-100 miles area (for solar production). The major issue is that solar energy is available only during daytime when it’s not cloudy. In order for solar energy to fulfill its promise you need energy storage, and a lot of research and development work is going on to meet that challenge.”
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By Karen Asp Climate change is not only real, it’s coming to a brewery near you. Let this sink in: The effects of long-term changes to the Earth’s weather patterns may affect natural resources to the point that, in 50 years, a six-pack of beer could cost $100 as a result of disruptions
to global agriculture, according to calculations New Belgium Brewing gleaned from a 2018 report in the online journal Nature Plants. To boost awareness of the climate change impact, the Fort Collins, Colo.-based brewery hypothetically hiked the six-pack price of its signature beer, Fat Tire Amber Ale, to $100 on International Beer Day last August.
And breweries aren’t just being affected by climate change, they’re also contributing to it. That’s prompted many to lean on their eco-conscious backbones to come up with creative ways to lessen their impact on the environment. From creating more eco-friendly brews to repurposing food in their beers, breweries are becoming climate leaders to protect their product and the planet.
Brewing climate-fr iendly beer
At face value, beer is a relatively simple product. It has four primary ingredients — hops, barley, yeast and water. But all of these products come from the land, and with natural disasters like droughts and wildfires becoming more prevalent, beer-specific crops can be decimated or severely limited. “Climate change is disrupting agriculture, which affects breweries,” says Katie Wallace, New Belgium’s director of social and environmental impact . In fact, New Belgium has come close to not being able to brew certain beers because it couldn’t source specific ingredients — oranges in one case.
On the flip side, brewing has a significant impact on the Earth, starting with its water use. A 2012 paper in the Journal of Cleaner Production identified breweries as one of the largest industrial users of water . Water makes up 90 percent to 95 percent of beer , plus it is involved from the growing of the ingredients to the brewing process.
That process, however, represents only a small percentage of beermaking’s environmental impact, something New Belgium has been hyperfocused on studying. In the mid-2000s, the brewery conducted its first carbon footprint study for beer to understand its sources of greenhouse gas (GHG) emissions, and the results were surprising. “Over 85 percent of our emissions are outside of our direct control,” Wallace says.
While cans and bottles were identified as the largest source of GHG, other factors included growing and harvesting ingredients, electricity, manufacturing, packaging materials and distribution and retail activity, which includes keeping beer cold through refrigeration.
Although New Belgium is a larger craft brewery, it doesn’t have worldwide pull to demand change across its supply chain. So it started evaluating what it could do within its walls to reduce its carbon footprint, and since then, the brewery has become a leader in sustainable brewing. For example, it helped co-found the Glass Recycling Coalition , now made up of numerous industry partners. It’s also transitioned to renewable energy and is funding research into climate-resilient crops. However, with climate change accelerating more rapidly than expected, New Belgium knew it had to act more quickly. In 2020, the company achieved a first in the American brewing industry when SCS Global Services certified its Fat Tire beer as carbon neutral . “Carbon neutral certification means that we have reduced GHG emissions going into the atmosphere where possible and then purchased carbon offsets to remove GHGs from the atmosphere, thereby neutralizing the climate impact of Fat Tire beers ,” Wallace says, adding, though, that offsets aren’t a viable long-term solution on their own. “We must also cut back our GHG emissions across the globe to avoid climate catastrophe, so we strategically select offsets that are transformative in nature.” For example, New Belgium is buying offsets from Indigo Ag, a Boston-based agricultural technology company that helps drive revenue to farmers who adopt regenerative farming practices. Additionally, as a part of the certification, New Belgium must prove an ongoing reduction in its own emissions over the years, which it plans to do by investing in clean energy and other carbon-cutting technologies. It also hopes to certify all of its beers as carbon neutral by 2030.
In Portland, Ore., Hopworks Urban Brewery has been creating sustainable beer in partnership with Patagonia Provisions . Patagonia wanted to bring an innovative, regenerative grain called Kernza to market through beer, and knowing Hopworks’ track record in sustainable practices, it reached out to the brewery. The first beer, the Long Root Pale Ale , debuted in 2018, and the Long Root Wit has since followed.
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Kernza not only has a flavor akin to the spiciness of rye that pairs well with hops, it also offers a “wealth of sustainable attributes that make it a wonderful substitute for brewers’ favorite cereal grain, barley,” says Christian Ettinger, Hopworks founder and brewmaster. “Kernza’s long root allows it to sequester carbon deep in the soil, and its regenerative nature eliminates the need for annual tillage, which is responsible for releasing carbon.” Drawing water deep in the soil also cuts the watering requirements for the plant.
While Kernza is neither easier nor harder to brew with, it does require that Hopworks adapt its process to its unique shape and flavors. Patagonia and sustainable agriculture nonprofit The Land Institute are working to make more Kernza available, and Ettinger’s goal is to widen its distribution and usage within the industry.
Finding new ways to use waste
Americans are wasting food at alarming rates, and breweries produce a large amount of waste. “Food production is the biggest impact humans have on the planet, but we waste one-third of the food produced,” says Shannon Flannigan, USA chief toaster for Toast Ale USA, which brews craft beer using unsold bread and donates its profits to charities fighting food waste.
When Toast’s founders learned that, because of bakeries’ production overages and short shelf life, bread is one of the most wasted foods in the Western world, they saw an opportunity. Why not brew with bread that would otherwise go wasted?
That mission has given the Earth a powerful lifeline. By Earth Day 2021, the brewery will have utilized approximately 2 million slices of bread that would have otherwise been thrown away, saving more than 42 tons of GHG . “In the brewing process, the second-biggest opportunity to reduce greenhouse gases is the grain bill; first is packaging,” Flannigan says. “By using surplus bread, we reduce the demand for land, water and energy that would have been necessary to produce virgin barley.”
Although every can of Toast Ale contains about a slice of bread, the brewery uses only a small portion of the total bread waste. “Even if you serve Toast at every bar and restaurant in America, there would still be surplus bread,” Flannigan says. Yet Toast is determined to do its part
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New Belgium Brewing’s Fat Tire Amber Ale is the first carbon neutral beer in the U.S.
Toast Ale brews craft beer using bread that would otherwise be thrown away.
Hopworks Urban Brewery produces its Long Root Pale Ale and Wit beers using a sustainable wheat-grass called Kernza that requires less water to grow.
ReGrained’s savory snacks are made with upcycled spent grain.
NEW BELGIUM BREWING; TOAST ALE USA; HOPWORKS URBAN BREWERY; REGRAINED; GETTY IMAGES
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A typical beer is 90 to 95 percent water, making breweries one of the largest industrial users of that natural resource.
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to slow the damage to the planet.
But what about the waste produced from the beer itself, namely the brewer’s spent grain? Its environmental impact is jaw-dropping. “It takes 330 gallons of water to produce one pound of malt, which equals one six-pack,” says Dan Kurzrock , CEO and co-founder of ReGrained , a sustainable food company dedicated to upcycling food waste.
In other words, producing one six-pack is the equivalent of taking a two-hour shower. Worse? All of this water is being used for a product that’s used solely for its sugar. “If you can put that to second use, you’re not using virgin resources,” says Kurzrock.
While some breweries donate spent grain to farmers, compost it or turn it into dog treats, there’s now another option, thanks to ReGrained, which uses spent grain to create what it calls SuperGrain+. Ironically, Kurzrock and his partner were planning to open a brewery that doubled as a bakery. But they realized they could have a bigger impact by working with upcycled ingredients, in this case, spent grain. “With a mom who’s a dietitian, I know the benefits of the fiber in spent grain,” Kurzrock says.
Located in the San Francisco Bay area, with hundreds of breweries within a 10-mile radius, ReGrained partners with local establishments to pick up their spent grain. That grain is taken to ReGrained’s factory in Berkeley, where its patented technology dries and mills it into a powder that can be used for food products such as pancakes, ice cream and breads. SuperGrain+ consumer products can be found in stores around the country — in 2020, the company launched a line of savory snacks — and Kurzrock hopes they raise awareness of the importance of upcycled products.
SUPPORT SUSTAINABILITY
So what can beer lovers do to help reduce the beverage’s carbon footprint? Follow the advice of Katie Wallace of New Belgium Brewing and drink sustainably. Besides buying climatefriendly brews, Wallace also encourages beer drinkers to recycle all cans and bottles. To be even more eco-friendly, use a refillable bottle (like a growler) or buy a keg. And petition elected officials to support action on climate change and carbon sequestration.
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