As GreenBiz co-founder and Executive Editor Joel Makower wrote earlier this week, many companies are moving to disclose “climate risk,” although far fewer are moving to actually minimize it. And as those tasked with preparing those reports can attest, the process of gathering the data for them is frustrating and complex, especially as the level of detail desired and required by investors becomes deeper.

That pain point was the inspiration for a new climate data project launched this week that will be spearheaded by the Linux Foundation, the nonprofit host organization for thousands of the most influential open source software and data initiatives in the world such as GitHub. The foundation is central to the evolution of the Linux software that runs in the back offices of most major financial services firms. 

There are four powerful founding members for the new group, the LF Climate Finance Foundation (LFCF): Insurance and asset management company Allianz, cloud software giants Amazon and Microsoft, and data intelligence powerhouse S&P Global. The foundation’s “planning team” includes World Wide Fund for Nature (WWF), Ceres and the Sustainability Account Standards Board (SASB).

The group’s intention is to collaborate on an open source project called the OS-Climate platform, which will include economic and physical risk scenarios that investors, regulators, companies, financial analysts and others can use for their analysis. 

The idea is to create a “public service utility” where certain types of climate data can be accessed easily, then combined with other, more proprietary information that someone might be using for risk analysis, according to Truman Semans, CEO of OS-Climate, who was instrumental in getting the effort off the ground. “There are a whole lot of initiatives out there that address pieces of the puzzle, but no unified platform to allow those to interoperate,” he told me. 

There are a whole lot of initiatives out there that address pieces of the puzzle, but no unified platform to allow those to interoperate.

Why does this matter? It helps to understand the history of open source software, which was once a thing that many powerful software companies, notably Microsoft, abhorred because they were worried about the financial hit on their intellectual property. Flash forward to today and the open source software movement, “staffed” by literally millions of software developers, is credited with accelerating the creation of common system-level elements so that companies can focus their own resources on solving problems directly related to their business.

In short, this budding effort could make the right data available more quickly, so that businesses — particularly financial institutions — can make better informed decisions.

Or, as Microsoft’s chief intellectual property counsel, Jennifer Yokoyama, observed in the announcement press release: “Addressing climate issues in a meaningful way requires people and organizations to have access to data to better understand the impact of their actions. Opening up and sharing our contribution of significant and relevant sustainability data through the LF Climate Finance Foundation will help advance the financial modeling and understanding of climate change impact — an important step in affecting political change. We’re excited to collaborate with the other founding members and hope additional organizations will join.”

An investor might use the platform, for example, to run projections focus on portfolios or specific investment opportunities. Governments might consult the resource while evaluating resilient infrastructure projects and policies.

The main buckets of historical and forward-looking information that the LFCF group hopes to make available include research and development spending, policy response scenarios, or historical data about fires, floods and droughts. One example of a tool that data hounds will find there is a Finance Tool related to the Science-Based Targets Initiative. There also will be industry-specific data, likely starting with the energy, transport and industrial sectors, Semans said. Early beta versions of various pieces of the platform will be available this fall, with certain elements of the data commons available first, followed by modeling and analytics resources.

Just because the data is “open” doesn’t mean it’s entirely free. Companies need to be a member of the foundation to participate in the governance process (although there will be seats on the board for non-fee paying members from academia, NGOs and intergovernmental organizations). Talk to your CIO about the power of open source, and consider this your call to action.

Replacing the single-use shopping bag may be one of the most complex sustainability challenges of our time.

At GreenBiz’s Circularity 20 virtual conference last week, sustainability leaders from Target, Walmart and CVS came together to discuss how they are planning to do just that, and why working together despite being competitors is critical to achieving success.

Their initiative, which launched last month, is called “Beyond the Bag” — a $15 million, three-year commitment to developing, testing and implementing an innovative replacement for single-use retail bags. The project, led in collaboration with managing firm Closed Loop Partners and a few other nonprofit and private members, aims to redesign the way customers get goods from store to home.

“It’s great to think of a slightly better bag, but the real excitement is when you are open to a transformative idea and a way that hasn’t been thought of,” said Amanda Nusz, vice president of corporate social responsibility at Target, during the Circularity 20 session.

The consortium’s goal is to develop a range of solutions to fit consumer needs, including innovations in materials, delivery options and recovery after use.

Having different perspectives, different people with different backgrounds … that’s where you get true innovation.

But driving such immense, industry-wide change is no easy task. No company is equipped to do it alone. The panelists stressed that the transformation will require a new approach founded in precompetitive collaboration, one that brings diverse voices to the project, signals new needs to suppliers and spreads the core message to consumers.

For that reason, the project plans to involve a broad range of consumers, innovators and stakeholders in the development process. “Having different perspectives, different people with different backgrounds … that’s where you get true innovation,” said Jane Ewing, senior vice president of sustainability at Walmart.

The panelists noted that any alternatives the consortium creates will need to match the functionality and convenience of current options on the market as well as minimize any unintended consequences along the way.

By collectively standing against single-use bags, each company hopes to establish a new normal in retail.

“Our collective approach sends an important, unified message of commitment,” said Eileen Howard Boone, senior vice president of corporate social responsibility and philanthropy at CVS. “[It] sends a signal to suppliers and innovators of how closely together we are standing to make sure that we see some change.”

Any solution will require work in areas of consumer awareness and education, the panelists said.

“There is a lot of education that has to happen,” Boone said. “Part of the benefit of this collaborative is that there will be more voices pushing out the same conversation.”

Moderating the session, Kate Daly, managing director of Closed Loop Partners, highlighted the unique position of the retail giants to create “ripple effects” for smaller businesses in the retail industry. Addressing the speakers, she noted: “You’re opening up the market for these innovations, you are doing the heavy lift of testing them and de-risking them, and that makes that available to the ecosystem.”

For retailers that want to join this initiative or take on a similar one themselves, the panelists offered several key pieces of advice. Primarily, they stressed that companies must clearly identify what problem they are trying to solve, seek allies that have a shared vision and engage a broad set of stakeholders to drive innovation.

Daly also encouraged anyone with ideas or innovations for Beyond the Bag to reach out to her directly.

Amidst their hopeful tone, the panelists underscored that the road to plastic-free shopping will be long and complex. “These issues aren’t one-time, short-term solutions,” Boone put simply. “They are going to take a lot of time to course correct.”

How much time? We will have to wait and see. Based on the conversation, the more that customers and companies collaborate to drive innovation and push for change, the better the chance for collective success. “Now, coming together with others and bringing more people to the table,” Boone said, “the art of possible has grown very, very large.”

The U.S. recycling market has been in free fall since 2018, when China, Malaysia, Thailand and other Southeast Asian countries announced that they would no longer import many types of recyclable material scraps. Of course, the U.S. recycling system had been a mess for far longer — seeing as the country never fully developed the infrastructure to recycle anywhere near the amount of plastic waste it produces. Indeed, only 8.4 percent of all the plastic produced in 2017 eventually got recycled, according to the U.S. Environmental Protection Agency. 

But a new agreement announced last week at Circularity 20, GreenBiz Group’s virtual conference on the circular economy, has the potential to change that: The U.S. Plastics Pact.

This new initiative is a collaborative project launched by the Recycling Partnership and the World Wildlife Fund (WWF) that aims to redesign the way the United States uses plastics so that they don’t become waste in the first place. The effort is part of the Ellen MacArthur Foundation’s global Plastics Pact network: The think tank has helped organize key public and private stakeholders to push towards a circular economy for plastic in countries around the world, from the United Kingdom to Chile to South Africa.

Redesigning the way we use one of the most ubiquitous and convenient materials on the planet won’t be easy. But the initiative is setting distinct targets and deadlines for meeting them. Shooting for 2025, its main goals are:

• Make sure all plastic packaging is 100 percent reusable, recyclable or compostable 
• Take action to ensure that 50 percent of plastic packaging is recycled or composted
• Have the average recycled content or responsibly sourced bio-based content in plastic packaging be 30 percent

The U.S. Plastics Pact has gathered more than 60 prominent partners, which will provide research and funding. They include local governments from Arizona to Texas to California; NGOs such as the Ocean Conservancy and The United States Composting Council; and companies ranging from Eastman to Target. All of these stakeholders have to agree to work in a pre-competitive environment towards the Pact’s targets.

So what will this new collaboration look like? Stephanie Kersten-Johnston, director of innovation at the Recycling Partnership, told GreenBiz that she expects it to be not just a network, but “a network on fire” — with all partners engaged to take the most effective action and make the most impact on the targets.

In some ways it’s a support group for organizations to meet these targets, but we can’t just expect some representatives talking — we need the full value chain in there acting.

“In some ways it’s a support group for organizations to meet these targets, but we can’t just expect some representatives talking — we need the full value chain in there acting,” she added.

Hitting the target: How the U.S. Plastics Pact aims to achieve its ambitious goals

2025 isn’t too far off, so the U.S. Plastics Pact is getting started right away, according to Kersten-Johnston.

In the first six months to one year, developing a roadmap will be the top priority for the project. “So we set these targets, these aspirations — but what are the practical steps we need to get there?” she said.

“In the first year, this will look like network meetings,” she explained. “In practice, groups [of partner organizations] will be convening that will be called ‘workstreams.’ They focus on smaller, specific topics that can’t be solved by a singular organization … where the work is done, where the research is undertaken, and the formulation of the practical steps will take place.”

For example, workstreams include deciding on the data that will be used. “How do we agree to tight definitions that we haven’t agreed on before?” Kersten-Johnston added. “What does that look like in the U.S. in practice? What cadence are we measuring on? What data sources will we be using?”

If certain types of plastic are too hard to recycle or reuse, meaning they don’t have an end-of-life, they can’t have any place in a circular economy for plastics.

Another workstream will decide which plastic materials are too problematic and unnecessary, and need simply to be eliminated from production. If certain types of plastic are too hard to recycle or reuse, meaning they don’t have an end of life, they can’t have any place in a circular economy for plastics. 

After that, the organizations along the plastics value chain — from chemical companies to product designers to plastic recycling facilities and municipalities to materials recovery groups — will rework their operations in line with the targets. 

That’s where the power of having corporate partners from several sectors comes in. Large companies and governments have been saying for years that they want to work to eliminate single-use plastics.

In the past few years, there have been a flurry of plastics-related commitments. McDonald’s, for example, set a commitment in 2018 that its 36,000 restaurants would use only packaging from renewable, recycled or certified sustainable sources by 2025. Coca-Cola also announced it would help collect and recycle “the equivalent” of 100 percent of its packaging and make bottles with an average of 50 percent recycled content by 2030. Nestle, Disney, Starbucks, IKEA and others also have pledged to cut down on single-use plastics over that time.

For all these companies, working together to make a better plastics value chain, from producing more recyclable plastics to creating more chemical recycling facilities, will enable them to meet both their targets and the targets of the entire U.S. Plastics Pact more easily.

“We can start to address the plastic waste issue by taking fast and transformative action at every point in the plastic cycle,” said Viviana Alvarez, head of sustainability, North America, at Unilever, in a statement. “Recycling alone can’t solve the circular economy, but the circular economy can help solve the problem on waste and recycling. Keeping plastic in the economy and out of the environment will require everyone to work together — whether that’s product designers, governments, consumers or the waste management industry.”

A history of the Global Plastics Pact

The Ellen MacArthur Foundation first created its Global Plastic Pact as part of its New Plastics Economy Global Commitment in 2016. The circular economy powerhouse got over 20 percent of all global plastic packaging companies to pledge to address plastic waste and pollution at its source. (In total, more than 450 organizations have joined their global pacts around the world, according to the Ellen MacArthur Foundation.)

These Global Plastics Pact are networks of plastic waste initiatives in different countries, which the Ellen MacArthur Foundation organizes. 

They include the UK Plastics Pact, the Pacte National sur les emballages plastiques in France, Circula El Plástico in Chile, the Plastic Pact NL (Dutch) in the Netherlands, the South African Plastics Pact, and the Pacto Português para os Plásticos (Portuguese) in Portugal. Each country’s goals are slightly different, based on the infrastructure of the location, and the U.S. is the latest initiative.

“There was an unspoken question in the U.S. about how we were going to meet these targets, particularly how we were going to achieve particularly closing the gaps between supply and demand so everyone viewed it as a topic that needed to be tackled but it was never addressed,” Kersten-Johnston described.

So the Recycling Partnership stepped up to meet the massive opportunity in the U.S.: transforming the waste management system of the biggest economy in the world to foster sustainability on a massive scale.

Putting a price on carbon should reduce emissions, because it makes dirty production processes more expensive than clean ones, right?

That’s the economic theory. Stated baldly, it’s obvious; however, there is perhaps a tiny chance that what happens in practice might be something else. In a newly published paper, we set out the results of the largest study of what happens to emissions from fuel combustion when they attract a charge.

We analyzed data for 142 countries over more than two decades, 43 of which had a carbon price of some form by the end of the study period.

The results show that countries with carbon prices on average have annual carbon dioxide emissions growth rates that are about two percentage points lower than countries without a carbon price, after taking many other factors into account.

By way of context, the average annual emissions growth rate for the 142 countries was about 2 percent per year. This size of effect adds up to very large differences over time. It is often enough to make the difference between a country having a rising or a declining emissions trajectory.

Emissions tend to fall in countries with carbon prices

A quick look at the data gives a first clue. The figure below shows countries that had a carbon price in 2007 as a black triangle and countries that did not as a green circle.

On average, carbon dioxide emissions fell by 2 percent per year from 2007 to 2017 in countries with a carbon price in 2007 and increased by 3 percent per year in the others.

The difference between an increase of 3 percent per year and a decrease of 2 percent per year is five percentage points. Our study finds that about two percentage points of that are due to the carbon price, with the remainder due to other factors.

The higher the price, the greater the benefit

The challenge was pinning down the extent to which the change was due to the implementation of a carbon price and the extent to which it was due to a raft of other things happening at the same time, including improving technologies, population and economic growth, economic shocks, measures to support renewables and differences in fuel tax rates.

We controlled for a long list of other factors, including the use of other policy instruments. It would be reasonable to expect a higher carbon price to have bigger effects, and this is indeed what we found. On average, an extra euro per tonne of carbon dioxide price is associated with a lowering in the annual emissions growth rate of about 0.3 percentage points in the sectors it covers.

Avoid the politics if possible

The message to governments is that carbon pricing almost certainly works, and typically, to great effect.

While a well-designed approach to reducing emissions would include other complementary policies, such as regulations in some sectors and support for low-carbon research and development, carbon pricing ideally should be the centerpiece of the effort.

Unfortunately, the politics of carbon pricing have been highly poisoned in Australia, despite its popularity in a number of countries with conservative governments, including Britain and Germany. Even Australia’s Labor opposition seems to have given up.

Nevertheless, it should be remembered that Australia’s two-year experiment with carbon pricing delivered emissions reductions as the economy grew. It was working as designed. Groups such as the Business Council of Australia that welcomed the abolition of the carbon price back in 2014 are calling for an effective climate policy with a price signal at its heart.

Carbon pricing elsewhere

The results of our study are highly relevant to many governments, especially those in industrializing and developing countries, that are weighing their options. The world’s top economics organizations, including the International Monetary Fund, the World Bank and the Organization for Economic Co-operation and Development, continue to call for expanded use of carbon pricing.

If countries are keen on a low-carbon development model, the evidence suggests that putting an appropriate price on carbon is a very effective way of achieving it.