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Why Water Stewardship in the Food Sector Is Failing — and How to Change It

Claudia Baldwin

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In many ways, 2021 was the year that investors and companies stepped up to address climate change, with historic commitments making the front page of newspapers on a regular basis. Unfortunately, the same cannot be said for water. Missing from these stories were concrete action plans to address water pollution and scarcity. And just like with the climate crisis, we are running out of time to address this issue — a new report released this year by the IPCC suggests that the frequency and intensity of droughts exacerbated by climate change are poised to ratchet up over the next decades.

This summer gave a preview of the toll more frequent droughts will take, with farmers in the American West fallowing fields, ploughing under fruit and nut trees and selling off cattle because of high feed prices and lack of water. In fact, no sector has a bigger role in deciding how we will manage through the existing water crisis than the food and agriculture sector. This $6 trillion industry uses a whopping 70 percent of freshwater resources worldwide. And yet, new research from Ceres suggests that the food industry is not meeting this challenge — and is fundamentally unprepared for a water stressed-world.

What are the missing pieces?

Our most recent edition of Ceres’ Feeding Ourselves Thirsty benchmark analyzed and ranked 38 of the largest food and beverage companies across the globe on their water use and management practices. The results were not impressive. The food sector overall racked up an average score of just 45 points out of a total of 100, with the meat sector lagging significantly with a total of just 18 points.

Graph of the top and bottom performers on water in the food sector. Image courtesy of Ceres.

Granted, some companies have notched progress since our last benchmark report in 2019. One bellwether of a significant commitment to water is the role it plays in high-level decision making. Some 71 percent take water risks into consideration in planning major business activities and investments, up from 58 percent in 2019. And 53 percent of companies link executive compensation to water and sustainability performance goals, up from 33 percent in 2019.

However, the food industry is overlooking the area where it needs the most help: the fragile supply chain. The food industry is dependent on the ranchers and farmers who make up the supply chain, many of whom are in highly water-stressed areas and produce water-intensive products. But only 18 companies even assessed the vulnerabilities of their agricultural supply chains to water scarcity. Even fewer are focusing their support where it is most needed — only 12 companies are providing support to farmers growing essential ingredients in high-stressed water basins, and only nine implemented water reduction targets for their supply chain’s key growing regions.

What are the stakes?

Failure to manage water where it matters most shows that there are still critical parts missing from stewardship practices of food companies. If this oversight is not corrected, more than our dinner plates will be affected. The financial fallout will affect all of us — with the higher cost of producing food under these conditions being passed on to consumers, forcing farmers and ranchers to make difficult decisions, and exposing investors to material risk.

Due to a drop in the water supply, a beer plant’s water permit was denied. Now the plant is being dismantled.

Price volatility of ingredients, reduced access to inputs, loss of markets, legal actions for negative environmental impacts, and stranded assets are all real risks that investors take on when investing in the food sector.

For example — when beer maker Constellation Brands Inc. began construction on a $1.5 billion plant in Mexicali in 2016, it was expected to consume 20 million cubic meters of water annually from the Colorado River Basin. But due to a drop in the water supply, the plant’s water permit was denied. Now the plant is being dismantled — costing the company an asset impairment of $680 million. Preparing for this type of fluctuation must become a routine consideration for investors, as the water crisis grows in intensity over the coming years.

What can be done about this?

Investors have considerable power to help turn things around. An $11.4 million global investor engagement launched in 2019 by Ceres and global investor network FAIRR urged the largest fast-food brands to reduce their supply chain greenhouse gas emissions and manage water use more sustainably. As a result, five out of the six companies publicly agreed to set emissions reduction targets, which should also lead to positive water outcomes through land use changes, and half have assessed the water risks in their supply chains.

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By leveraging the Feeding Ourselves Thirsty analysis and joining investor initiatives such as Ceres’ Valuing Water Finance Initiative, investors can spur corporations to act on water-related risks and raise awareness about these risks in the capital markets.

The Ceres’ Valuing Water Finance Task Force was convened to help address these concerns. An advisory council of major investment funds, financial institutions, and banks, the Valuing Water Finance Task Force helps make the case for corporations to mitigate water-related financial risks and encourage corporate leaders to implement sustainable water practices. In its next phase of work to be launched next year they will release a framework of specific steps based on scientific and academic research for corporations to take and galvanize investor engagement with companies around water risks,.

The key to change lies with this large tent of investors and the companies they own. Let’s hope they take up the mantle — before it is too late.

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Original Post: greenbiz.com

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Is Climate Tech the Hottest Corner of the VC Business in the 2020s?

Claudia Baldwin

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This is an excerpt from “Climatenomics: Washington, Wall Street, and the Economic Battle to Save Our Planet” (Rowman & Littlefield, 2022). Reprinted by permission of the publisher.

While government policies and leadership from Washington can help accelerate change, there’s another place that can accelerate change much faster: Silicon Valley.

In 2003, as a national technology reporter for a chain of newspapers, I visited the Mountain View, California campus of Google to meet with cofounder Sergey Brin. At the time, Google was still a private company, though there was widespread speculation that it would launch an initial public offering soon. The moment I pulled into the company parking lot, I got a taste that Google wasn’t a typical company. Covering many of the parking spaces were canopies made from solar panels, something that’s commonplace today but back then was pretty unusual. Even more unusual were the thick power cords hanging down from the panels over nearly every parking space, something that didn’t make sense until Brin and team later explained it to me. At the time, electric vehicles were even more uncommon than solar parking lot canopies (the first Tesla wouldn’t hit the streets for another five years). But Google knew EVs were coming someday soon, and it wanted to be ready. Google also wanted employees and other visitors to think about the possibilities that could come with solar-powered parking lots and cars that you could plug in to refuel.

Two of the forward-thinking people responsible for Google’s early solar deployment were Chris Sacca, who as the company’s corporate counsel and later head of special initiatives was involved in Google’s energy purchase agreements, and Andrew Beebe, who was chief commercial officer at solar company Suntech, which helped Google go solar.

“There really wasn’t any corporate interest until those guys stepped up and said, ‘Please build solar arrays all over our campus,'” Beebe recalled during a GreenBiz VERGE [climate] tech conference in October 2021. “But (Google executives) also said, ‘Set it up so we can have Walmart and Cisco and Microsoft and all of our competitors come over and see what we have done.’ They obviously had a hugely catalytic role in making all this happen.”

Both Beebe and Sacca would go on to become successful venture capitalists, Beebe with Obvious Ventures, the firm that helped launch companies such as Medium, Beyond Meat and electric bus maker Proterra, and Sacca with his firm called Lowercase Capital, which funded companies such as Twitter, Uber and Instagram. For about three years, Sacca also was a “guest shark” on the ABC television show “Shark Tank,” where budding entrepreneurs bid for the favor — and the funding — of millionaire investors. But it didn’t take long before Sacca was feeling unfulfilled by funding kitchen gadget start-ups on “Shark Tank” or electronic-gaming companies back in Silicon Valley. He, like Beebe, turned his attention almost fully toward clean-energy and climate-related investments.

Sacca and Beebe represent one of the hottest corners of the venture capital business in the 2020s: climate tech. Some of the companies that investors like them are backing today will likely become the Googles of tomorrow. Only instead of changing the way we search for stuff on the Internet, climate tech companies will change the way we source and store our energy, grow our food, and move from point A to point B, whether on land, water, or air. In doing so, they’ll not only transform our economy, but help save the planet.

In 2021, investments in climate tech companies hit more $31 billion, according to deal tracking firm PitchBook. That was 30 percent more than in 2020 and more than 2.5 times what it was in 2019. Those big numbers will likely only get bigger as federal, state and international clean climate and clean-energy policies are implemented. Quite simply, government policies and funding help reassure venture capitalists and other private investors to put more of their money at risk.

In 2021, investments in climate tech companies hit more $31 billion, according to deal tracking firm PitchBook.

Climate-tech and clean-tech investing is no longer just about solar or wind or even batteries anymore. Those businesses now attract plenty of mainstream investors. They’re almost like investing in restaurants or real estate — they’re too passe for venture capitalists who are more interested in finding more disruptive technologies that can scale quickly and create big returns.

“What we look at every day are energy innovations that are just insane, some of which are doing things that Einstein declared literally would not be possible,” Sacca said at the VERGE conference. “We see stuff happening in synthetic biology, for instance, that’s just nuts.”

Amid the hellish fires in the West, back-to-back hurricanes in the East and scientists everywhere warning that things were only going to get worse, Sacca in August 2021 stepped away from Lowercase Capital, quit “Shark Tank,” and with wife Crystal turned his attention specifically toward figuring out how to fund and support companies trying to do more to address climate change. The couple launched a new investment fund called Lowercarbon Capital. In a matter of days, they raised more than $800 million that Lowercarbon Capital could deploy to try to “un— the planet,” in Sacca’s terms. The fund was so popular, Sacca wrote on Lowercarbon Capital’s blog, that it had to turn investors away. “It turns out that raising for a climate fund in the context of an unprecedented heatwave and from behind the thick clouds of fire smoke probably didn’t hurt,” he wrote.

Since then, Lowercarbon has invested in companies that capture carbon dioxide and turn it into consumer products, reduce carbon emissions from livestock and fertilizers on the farm, and mine materials that are key to batteries and storage in ways that don’t destroy the environment. One such company is Twelve, a Bay Area start-up that “upcycles” carbon dioxide captured from industrial emissions and turns it into everything from jet fuel to sunglasses lenses, replacing fossil fuels and plastic. Another company Sacca was particularly excited about in 2021 was Lilac Solutions, which has raised $150 million to commercialize its lithium-mining technology. Lilac claims it can produce the essential element for batteries 10,000 times faster than conventional methods, using 90 percent less land and water. Lowercarbon Capital has also made numerous major investments in companies at the intersection of agriculture and climate, including start-up Formo, which is following the Beyond Meat and Impossible Burger model to make fine European cheeses that don’t require dairy or cows; Entocycle, which has figured out how to speed up the gestation period for black soldier fly larvae which happen to be some of the world’s fastest converters of food waste to protein; and Nitricity, which uses solar-powered modules placed around farms to literally make fertilizer out of thin air by converting and processing nitrates found in the atmosphere.

If garbage-eating fly larvae and fine cheeses bioengineered in a sterile laboratory don’t sound like appealing business models, think again. According to research group Climate Tech VC, food-and-water-related climate tech was the biggest sector for climate venture funding in 2021, followed by mobility, consumer goods, and clean energy. Tech investors’ take on food and agriculture is yielding new high-tech twists in one of the world’s oldest and most established economic sectors. Seattle-based clean-agriculture start-up Nori, for instance, got its start in 2017 when its cofounders entered a hackathon contest for coders to figure out new ways to use blockchain technology for social good. Far from the nearest farm, what they came up with was a way to use blockchain technology to monitor and track low-carbon agriculture practices and then monetize that by selling farm-based carbon-removal offsets.

In doing so, Nori is incentivizing farmers to use more climate-friendly agriculture practices that don’t just reduce carbon emissions but actually increase the ability of soil and crops to store carbon, while also creating a new marketplace for carbon removal and trading. In 2020, Nori raised more than $5 million in seed funding to launch its platform. “We call it climate-smart agriculture — thinking of carbon removal like a crop,” Christophe Jospe, a Nori cofounder, told E2.

This excerpt has been updated since publication.

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Original Article: greenbiz.com

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Walmart Begins Search for Sustainable Packaging

Claudia Baldwin

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“We don’t have time to waste.” With this imperative tagline, American retail giant Walmart launched its Circular Connector this spring.

The goal: to accelerate innovation in the field of sustainable and circular packaging, creating a bridge between companies looking for packaging that has less impact on the environment and those with new solutions to offer.

Searching for sustainable packaging

That the world’s largest retail multinational is launching an online platform to encourage the circular economy of packaging — even while accounting for some form of greenwashing — is undoubtedly great news.

After all, it’s a fact that consumers are becoming increasingly sensitive to the problem of plastic pollution and in general to any aspect related to the sustainability of products. And Walmart, the retail chain of over 10,000 stores around the world, is held accountable by consumers on a daily basis.

Hence the ambitious commitment that the multinational has set for itself by 2025: to achieve that 100 percent of packaging on its shelves would be either recyclable, reusable or industrially compostable. And hence the rush to find solutions to reach the goals.

It’s a fact that consumers are becoming increasingly sensitive to the problem of plastic pollution… And Walmart is held accountable by consumers on a daily basis.

The Circular Connector was therefore created as an online tool to connect packaging designers and manufacturers with companies in various sectors, from food to cosmetics, from fashion to toys. “Basically,” explains a statement on Walmart’s website, “it’s a platform to accelerate packaging innovation and implementation. We want to make it easier for suppliers and brands to find sustainable packaging solutions, thus enabling all of us to move faster toward waste reduction.”

How does the Circular Connector work?

The Circular Connector is accessed from the multinational company’s sustainability policy site, the Walmart Sustainability Hub. To participate, sustainable packaging manufacturers or designers must fill out a special questionnaire with a series of questions about the functions, materials and recyclability of the candidate packaging. Each proposal will then be reviewed according to Walmart’s packaging sustainability goals and, if compatible, will be posted on the site and made available to brands for possible supply contracts.

Reiterating, pragmatically, that they “don’t have time to waste,” the project leaders also made available the company’s Recycling Playbook, based on the two principles of recyclability established by the Ellen MacArthur Foundation. Namely: 1. Is there, in practice, a system for large-scale recycling of this category of packaging that guarantees at least a 30 percent recycling rate for over 400 million people? 2. Do the packaging components fit into that system?

Walmart’s handbook also contains valuable guidance on materials, such as those that are difficult to recycle and therefore tend to be excluded from sorting: metallic films, multi-layer materials, PVC or PVDC, PETG in rigid plastic packaging, oxo-degradable plastics and colored PET.

“We need to work together to promote innovative solutions on a large scale,” states Walmart. “Companies with reusable, refillable, recyclable and other sustainable packaging solutions should therefore come forward. There are hundreds of brands striving to achieve their own packaging sustainability goals, just like Walmart, and the Circular Connector is one tool available to them in this journey.”

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Original Post: greenbiz.com

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Episode 317: Conversations About Circularity

Claudia Baldwin

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This week’s run time is 1:03:05.

CONSIDERING CIRCULARITY (8:50)

Featuring a recap of interviews and stories from Circularity 22, held this week in Atlanta.

INTERVIEW: Jon Smieja, vice president of circularity and senior analyst for GreenBiz, reflects on hot topics and themes
STORY/AUDIO HIGHLIGHT: Planet vs. plastic: Three steps to solving the global plastics crisis (Featuring Keiran Smith, co-founder and CEO of Mr. Green Africa, on how to encourage decisions made at the local level.)
STORY/AUDIO HIGHLIGHT: John Warner: How to do the materials economy right (Featuring John Warner, senior vice president and research fellow of Zymergen, on how green chemistry could enable the leap to a regenerative, circular economy … if we educated chemists.)
CHITCHAT: Textile recycling tech startup triumphs in Circularity 22’s Accelerate competition
AUDIO HIGHLIGHT: Suzanne Shelton, founder and CEO, Shelton Group (On the importance of shifting context; and what that disturbing baby wrapped in cellophane image teaches us about marketing circularity.)

FEATURE
More sustainable consumer goods (47:30)

Interview with new CEO Christy Slay of The Sustainability Consortium, about priorities, circularity and engaging nimble innovators.

*Music in this episode: Lee Rosevere: “Not My Problem” and “Let That Sink In”; ItsWatR: “Awakening Instrumental”

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Original Post: greenbiz.com

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