The Lead-Up to Paris. Five hundred investors and 4,431 companies representing $25 trillion, or one third of global assets under management and $38 trillion in annual revenues, or half of global GDP, urged their governments to strike a climate deal in Paris. The U.S., the EU, and China, collectively representing 54% of global greenhouse gas emissions, came into the negotiations in Paris with public national reduction commitments.
Paris in December 2015, 195 countries reached consensus on a climate deal – the
Paris Agreement – during the 21st yearly session of the Conference of the
Parties (COP21) to the 1992 United Nations Framework Convention on Climate
Change. Negotiations began with strong support from industry,
and the world’s largest economies and ended with a global agreement to reduce
greenhouse gas emissions (GHG). This will be achieved through nationally
determined reduction plans, as well as a pledge to hold “the increase in the
global average temperature to well below 2 °C above preindustrial levels” with “efforts
to limit the temperature increase to 1.5 °C.” The U.S. has committed to reduce GHG
emissions 26-28% by 2025 from 2005 levels. The Paris Agreement will enter into
force in 2020, and requires national governments to meet every five years to
review reduction plans in light of new climate science.
Businesses representing 50% of global GDP have welcomed the Paris Agreement as a substantive signal to the private sector that national policies to foster low carbon technologies and business models need to grow. The text of the agreement includes elements designed to encourage the private sector – including the retail industry – to lead the transition to a low carbon future. However, some climate scientists criticize the agreement for failing to put a price on carbon, while others express doubt over whether some countries will ratify the agreement when it opens for signatures in 2016.
While new legislation directly targeted at retail is not anticipated, analysts expect a growing number of incentives for investment in low carbon alternatives and emission reductions – from energy efficiency and green power, to preventing deforestation and food waste. Retailers that are proactive on energy reduction and renewable energy generation will benefit from those incentives through reduced costs and maintenance. Topics relevant to retailers:
Energy – Retail is among the leading industries transitioning to lower carbon technologies. The U.S. EPA Green Power Partnership recognizes the top 30 retailers for their shift to green power – 23 of the top 30 retailers source wind, solar or both, and 11 have installed onsite generation. The Solar Means Business report ranks organizations in terms of total on-site installed solar capacity; 10 of the top 25 are retailers.
Green building – Target's goal is for 75% of its U.S. buildings to reach EPA Energy Star status by the end of 2015, with 58% Energy Star buildings in 2014.
Food waste – Delhaize, Publix, Safeway, Walmart, Wegmans, and Weis are among the retail participants in the Food Waste Reduction Alliance, working to reduce the 40 million tons of food waste sent to landfill in the U.S. each year.
Refrigerants – Delhaize Group's goal is to reduce refrigerant emissions per m2 of sales area 20% by 2020 from 2008 levels. Sobeys Inc., together with members of the Consumer Goods Forum, is committed to begin phasing HFCs out of new refrigeration installations in 2015 and to improving refrigeration efficiency.
Transparency – The retail sector, along with many of its product suppliers, continues to gain greater visibility into the GHG emissions, deforestation, and other impacts behind products on the shelves. Unilever & WRI's Global Forest Watch provides maps of certified palm oil concessions.
Green / energy efficient products – Sears, The Home Depot, and Best Buy won awards for increasing their selection of EPA Energy Star certified products and marketing the benefits of those products.
Deforestation – Costco expanded its commitment to zero net deforestation in the palm oil supply for its store brand products, targeting 100% certified sources by 2021. In the U.S., Walmart has transitioned 25% of its private brands to certified sustainable palm.
The examples above illustrate how retail companies are taking leadership roles. Retailers, individually and in collaboration, have initiatives underway to measure and address GHG emissions from energy consumption, wasted food, deforestation, and refrigerant leaks. These efforts are significant. Retail buildings consume approximately $20 billion in energy in the U.S. alone. Approximately one third of the food produced globally is wasted. As food production accounts for an estimated 15% of global emissions (higher when transportation, processing, and packaging is included), cutting food waste can make a meaningful reduction. Deforestation represents 20% of annual global emissions and clearing forests to grow key commodities, such as palm oil used in prepared foods and personal care products, generates a significant portion of those emissions. Leaking refrigerants containing CFCs or HCFs can account for 25% of the total GHG emissions from retail store networks.
As the focus on GHG emissions reduction increases in the U.S., the retail industry is well positioned to help lead the transition to a low carbon future and stands to gain from ongoing efforts to reduce emissions.
Retailers should begin now to answer critical questions about their GHG emissions:
Some relevant resources, case studies, and collaborative opportunities are listed below. Additionally, it is recommended that retailers review the RILA Retail Energy Management Maturity Model and RILA Retail Sustainability Management Maturity Model to identify practices to improve GHG emissions management in stores and supply chains.
Retailer deployment examples
Collaborative opportunities & other resources
White Paper: Energy Saving Opportunities and Tactics for Retail
2015 Retail Energy Management Report
Greenhouse Gas Protocol
Yale University School of Forestry & Environmental Studies, Assessing the Wider World of Non-State and Sub-National Climate Action
The Consumer Goods Forum Climate Change Booklet
Unilever, Marks & Spencer join COP21 bid to end deforestation
Open Letter from CEOs to World Leaders Urging Climate Action at 2015 World Economic Forum with List of Key Business Initiatives on Climate Change
RILA's Retail Energy Management Program
The White House American Business Act on Climate Pledge
Food Waste Reduction Alliance
We Mean Business Coalition
EPA SmartWayEPA Energy Star for Buildings
DOE Better Building Alliance
Carbon Disclosure Project (CDP)
Visit www.rila.org/sustainability for more tools and resources.