A new analysis from the $80 trillion-backed investor network FAIRR warns that most of the world’s largest protein producers are dangerously unprepared for the escalating threat of water scarcity, placing global food security and investor returns at risk.

The research briefing, “Water Insecurity in the Agri-Food Value Chain,” reveals that nearly two-thirds of the companies assessed in FAIRR’s Coller Protein Producer Index are failing to manage water-related risks effectively. The Index evaluates 60 of the world’s biggest publicly listed meat, dairy and aquaculture companies against sustainability themes linked to the UN Sustainable Development Goals.

The analysis also offers steps that business leaders can take to preserve water supplies — from mapping their full water footprint to setting basin-specific targets and standardizing how progress is measured. These actions, FAIRR says, are critical to safeguarding long-term water supplies as demand and stresses surge in the coming years.

“We are moving towards a future of water insecurity, particularly with the increase in intensity of droughts in different parts of the world,” Simi Thambi, climate and nature economist at FAIRR and co-author of the report, told Trellis in an interview. “It’s becoming a threat to business models, and yet it’s not explored that much.”

Source: FAIRR

Trace your water footprint beyond the factory gate

For many companies, the biggest water risks lie not in direct operations but in feed and supply chains. Yet FAIRR found that 84 percent of livestock firms fail to disclose where their feed crops come from — even when sourced from drought-prone regions such as northern China, India and the U.S. Midwest.

Only one, Texas-based egg and dairy producer Vital Farms, disclosed all feed sources from water-stressed areas. 

Others are likely under-reporting their exposure. Thailand’s Charoen Pokphand Foods, for instance, estimates its corn supply chain uses nearly 29,000 cubic meters of water per $1 million in sales — roughly 10 times higher than peers that count only direct operations. That difference highlights how much risk can remain hidden upstream.

“Supply chain disclosures of water usage and risk are very important because that’s where a lot of these water-intensive activities are concentrated,” Thambi said. “It’s not sufficient to disclose only direct operations because it doesn’t capture the full picture.”

Set basin-specific targets 

Only 10 companies in FAIRR’s 2024 Protein Producer Index have set targets to cut water withdrawals, and most focus narrowly on efficiency rather than absolute reductions.

By contrast, New Zealand dairy company Fonterra has committed to reducing withdrawals by 30 percent by 2030 at high-stress sites, while Charoen Pokphand has already achieved a 30-percent per-unit reduction domestically and is now expanding targets to overseas operations and suppliers.

The report also recommends tying these absolute reduction targets to executive pay. Such a move could be profitable for investors: BlackRock research cited in the report found that high-efficiency water users achieved better returns than peers.

Standardize metrics

Even when companies disclose water data, comparability remains poor. FAIRR urges firms to report water intensity per unit sales and link it to the source (groundwater, surface or rainfall) and stress level of each basin.

This would allow investors to benchmark risk and direct capital towards companies reducing withdrawals where it matters most. 

The takeaway

Global freshwater demand is projected to outstrip supply by 40 percent within five years. For the trillion-dollar livestock sector, the choice is clear: build water-resilient business models now, or face stranded assets and shrinking supply chains later.

“Just as big tech — and especially artificial intelligence — faces scrutiny over water use, a handful of highly dependent agri-food companies hold outsized influence in building water resilience,” FAIRR research manager and report co-author Henry Throp said in a statement. “It is critical that we understand the financial implications of water insecurity — and the value that can be generated in building resilience.”

The post Big meat producers must mitigate water risks. Here’s how   appeared first on Trellis.

Microsoft co-founder Bill Gates has devoted more than $2 billion to funding zero-emissions technologies since 2015, when he founded venture firm Breakthrough Energy. A decade later, he’s adjusting his climate investment thesis to prioritize human welfare and urging investors and corporations to do the same.

Too much climate finance is dedicated to innovation that promises near-term emissions reductions at the expense of initiatives aimed at improving human health and livelihoods as global temperatures rise, Gates argues in a lengthy “Gates Notes” essay published Oct. 28.

As an example, he cites the decision of one low-income country in 2021 to ban synthetic fertilizers as a way to promote organic farming before cost-effective alternatives were available. Gates doesn’t name the country, Sri Lanka, but the nation was forced to reverse the policy just eight months later to stabilize its economy.  

“Farmers’ yields plummeted, there was much less food available and prices skyrocketed,” Gates wrote. “The country was hit by a crisis because the government valued reducing emissions above other important things.”

Dear COP30 attendees

Gates’ essay, titled “Three tough truths about climate,” is addressed to policymakers, businesses and other climate leaders planning to attend the COP30 gathering in mid-November. Those truths:

• “Climate change is a serious problem, but it will not be the end of civilization” — And civilization will need even more investment in low-carbon building materials, clean electricity generation, wildfire management systems and other infrastructure designed to withstand extreme weather. 
• “Temperature is not the best way to measure our progress on climate” — A better metric is quality of life, as expressed by the United Nations Human Development Index.
• “Health and prosperity are the best defense against climate change” — There’s a direct correlation between economic growth and a reduction in projected deaths related to rising temperatures. “When you look at the problem this way, it becomes easier to find the best buys in climate adaptation,” Gates said. At the top of the list: improvements for agriculture, such as climate-resilient crops and animals.

No time to waste

The timing is urgent, Gates said, as governments pull back aid for developing nations. His viewpoint is influenced by Breakthrough Energy’s work along with the Gates Foundation’s 25 years of philanthropy in many countries where climate change is taking its toll on human health and livelihoods in the form of extreme weather.  

“This is a chance to refocus on the metric that should count even more than emissions and temperature change: improving lives,” Gates said in the essay. “Our chief goal should be to prevent suffering, particularly for those in the toughest conditions who live in the world’s poorest countries.”

Breakthrough Energy, which has invested in more than 150 companies over the past decade, focuses on innovations that erase the “green premium,” or the cost delta between low-carbon technologies and traditional approaches, in five areas: electricity, manufacturing, agriculture, transportation and buildings.

The twist is that impacts on the human condition will carry even more weight for Breakthrough. 

For example, Gates wrote that while heating and cooling buildings accounts for a relatively small portion of emissions today, that percentage will skyrocket as the world urbanizes and demand for air-conditioning increases. The world needs more investments in electric heat pumps — five times more efficient than boilers and furnaces — along with new approaches for windows and building insulation, he said.

Hints about Breakthrough Energy’s shift in thesis emerged in March, with reports that the firm had slashed dozens of positions related to policy and partnership engagements.

Like many high-profile business leaders, Gates has refrained from public criticism of the Trump administration’s systemic dismantling of federal support for clean energy and other climate technologies. This is one of his first public reflections since many incentives from former President Joe Biden’s Inflation Reduction Act were killed. 

While investments in early-stage climate tech cooled 19 percent in the first half of 2025, compared with 2024, Breakthrough Energy remains committed to de-risking new technologies. On Oct. 21, for example, it disclosed a $50 million grant for low-carbon iron startup Electra.

“I wish there were enough money to fund every good climate change idea,” Gates said in his essay. “Unfortunately, there isn’t, and we have to make tradeoffs so we can deliver the most benefit with limited resources. In these circumstances, our choices should be guided by data-based analysis that identifies ways to deliver the highest return for human welfare.”

The post Bill Gates: What companies get wrong about climate investments   appeared first on Trellis.

Google’s thirst for more data center energy capacity around the clock led it to sign a first-of-a-kind contract that will fund a carbon capture and storage system at a new natural gas plant in Illinois.

Under the agreement, disclosed Oct. 23, Google will buy most of the electricity from the Broadwing Energy Center in Decatur, a combined heat and power facility with 400 megawatts of generation capacity being built near an ethanol plant run by Archer Daniels Midland. The electricity will be added to the regional grid that serves Google’s data centers in Illinois and Arkansas. The steam produced at the site — more than 1.5 million pounds per hour — will be used by ADM’s industrial processes. 

Approximately 90 percent of the emissions generated by the new natural gas plant will be captured and stored in an existing sequestration site one mile underground, which ADM has used since 2011 to house more than 4 million tons of carbon dioxide. The facility can store 2 million metric tons of CO2 annually.

“Our goal is to help bring promising new [carbon capture and storage] solutions to the market while learning and innovating quickly — the same approach we’ve taken with other advanced energy technologies,” said Michael Terrell, head of advanced energy at Google, in a blog disclosing the project.

“This project in Illinois would be one of the first gas power plants of this size to use carbon capture in the country, demonstrating clearly that we have the technology to prevent CO2 emissions and that unabated gas should no longer be a choice,” said John Thompson, technology and markets director at energy NGO Clean Air Task Force, in a statement.

Multi-pronged approach

Google’s clean electricity strategy, published in September 2023, outlines a plan to use a wide range of renewable generation sources including geothermal, hydro, nuclear, solar and wind to reduce related emissions. The tech company uses power purchase agreements and special tariff agreements to offset the cost of using newer technologies.

The plan also names natural gas equipped with carbon capture and storage equipment as an important source of low-carbon power.

Google negotiated a special offtake agreement to fund the new Illinois plant; construction is slated to begin in 2026, with commercial operations slated for 2030. The project is the part of a long-term relationship between Google and developer Low Carbon Infrastructure, which is backed by investor Squared Capital. 

“This partnership underscores how private investment, technology innovation and corporate energy demand can come together to deliver scalable climate solutions,” said Gautam Bhandari, Squared’s chief investment officer and managing partner.

U.S. demand for natural gas has spiked to its highest level in two decades, largely driven by big data center expansion projects, including artificial intelligence facilities planned by Amazon, Google, Meta and Microsoft. As large corporations invest more deeply in AI and other digital infrastructure, that ripple effect is pressuring corporate climate goals.

Carbon capture and storage is a viable solution for reducing emissions from plants that are at least 100 megawatts in capacity, according to an analysis by advisory firm Carbon Direct.

The Google deal offers an important proof point for the viability of these projects, which will be increasingly important over the next 18 months, said A.J. Simon, director of industrial decarbonization at Carbon Direct. 

The project uses “low-risk” gas turbines from a respected equipment vendor, Mitsubishi, and a proven carbon capture and storage process from ADM, which helps with the economics. Google will use a new type of environmental attribute certificate to track and report on the emissions associated with the project. The certificates, designed by consulting firm Northbridge Energy, can be used in much the same way that corporations currently use renewable electricity certificates as part of greenhouse gas accounting inventories. 

 “Every single one of the pieces in this project reinforces that other,” Simon said.

The post Google is funding a new natural gas plant outfitted with carbon capture and storage appeared first on Trellis.

For many companies, the journey to net zero starts by aligning with two of the most influential organizations in sustainability. To measure and report emissions, businesses often turn to guidelines from the Greenhouse Gas (GHG) Protocol. When they’re ready to set goals, it’s the Science Based Targets initiative (SBTi) they seek help from.

These dominant standards for corporate climate strategy are now being challenged. Just this year, at least six new approaches to reporting and target-setting have been launched or piloted. This rush of alternative methods raises important questions about whether it will help or hinder progress to global net zero. It also reflects frustration with the slow pace of reform at the incumbent standard-setters.

“The original reporting frameworks were created mostly by NGOs as they were making the case for what to account for, in the spirit of what gets measured gets managed,” noted one consultant with experience in non-profits and government, who asked not to be named because they work with standard setters. 

Now we’ve moved from “what” to “how,” the consultant added. “Many of the new types of behavior — purchasing, investment decisions — necessary for economy-wide decarbonization do not show up cleanly in current reporting frameworks. There is a need for new ways to measure things.”

Alternative approaches

Here are some of the more notable new approaches, listed by launch date:

• A code of practice from the Voluntary Carbon Markets Integrity Initiative that allows companies to use carbon credits to address Scope 3 emissions.
• The Exponential Roadmap Initiative’s Climate Solutions Framework, which measures the climate benefit of low-carbon products relative to market averages.
• Spheres of Influence, which gives credit to work on product development, climate finance and policy engagement. The approach is a joint project between the consultancy Futerra and Oxford Net Zero.
• Reporting and target-setting rules from the Task Force for Corporate Action Transparency that extend the scope of the GHG Protocol.
• New accounting methodologies for product-level emissions from Carbon Measures, a group with backers from heavy industry and finance.

That’s just the ones born this year — there are others that predate 2025 but are still in early development. The AIM Platform, for instance, launched in 2023 and is now in pilot tests with Patagonia, Schneider Electric and others. The platform helps companies target and take credit for investments in supply-chain decarbonization.

Extending the current system

One theme that unites several of the new approaches is the freedom to use market-based mechanisms to meet climate goals. 

That includes carbon credits, which current SBTi rules say can only be used to nullify residual emissions at the end of a company’s net-zero journey. Guidelines from the Task Force for Corporate Action Transparency, for instance, detail how to report emissions reductions from credits alongside other mitigation efforts. 

Credits generated from value-chain investments are another focus. Patagonia, for example, hopes to use the AIM Platform’s methodology to claim credits, sometimes known as “insets,” that it will generate by funding the replacement of fossil-fueled boilers used by fabric suppliers.

Other frameworks, particularly Spheres of Influence, seek to acknowledge the impact of climate action that isn’t directly tied to a company’s emissions, such as lobbying for climate legislation. 

The approach resonates with Environmental Defense Fund Vice President for Net Zero Ambition and Action Elizabeth Sturken, who advocates for identifying the overlap between a company’s major emission sources and its opportunities to act. 

“Let’s lean in there and go big,” she said. “And that might not even be in their operations or supply chain. It might be in public policy, right?” 

Bringing in others

Another common focus is groups of companies that aren’t yet participating at scale in emissions reporting and target-setting.

The launch members of Carbon Measures, for instance, include several companies from hard-to-abate sectors: three from oil and gas (ExxonMobil, Adnoc and EQT), as well as a steel manufacturer (Nucor) and a metals and mining business (Vale). None of those five have set targets with SBTi. In fact, SBTi is not currently accepting submissions from oil and gas companies, after work with the industry on an emissions-reduction framework for the sector stalled.

Startups are also often excluded, but for very different reasons. SBTi rules prioritize absolute emissions reductions, but startups by definition need to grow market share, which almost always involves increasing emissions. The Climate Solutions Framework allows fledgling companies with low-carbon products to set targets by measuring their emissions against industry averages. This recognizes companies that lower emissions for a product category, even if the businesses’ own emissions increase.

What’s driving the action

The GHG Protocol’s first corporate guidelines were published in 2001. The SBTi is celebrating its 10th birthday this year. Experts who spoke with Trellis noted the positive impacts both have had. They also said the organizations’ standards are in need of reform. And while both the SBTi and the GHG Protocol are revising their standards, the pace of change has been too slow for some. 

“I fully support VCMI’s new code and I think SBTi could be in trouble if it doesn’t broaden its approach,” said a sustainability leader at a global strategy consulting firm, who also asked to remain anonymous to protect relationships with standard-setters. “Residual emissions are going to exist, and we desperately need to scale high-quality removal solutions.”

Supply-chain decarbonization is another area in need of updates. It’s “very scary” for large publicly traded companies to commit to time-consuming and costly projects without knowing how to claim the benefits, said Kim Drenner, head of environmental impact at Patagonia, one of the companies piloting the AIM Platform. 

“I understand why people are trying to bring these solutions forward,” she added. “The Greenhouse Gas Protocol needs to move a bit faster.”

The likely outcomes

Backers of most of the new approaches favor an evolution of existing standards. The AIM Platform and the Task Force for Corporate Action Transparency, for instance, are collaborating with the GHG Protocol and the SBTi and hope future versions of those organization’s standards incorporate their innovations. 

That may be less true for Carbon Measures. Amy Brachio, the initiative’s CEO, emphasized the need to include multiple stakeholders in the organization’s work to create a new accounting standard for emissions. But Carbon Measure’s approach draws inspiration from E-liabilities, an emissions accounting approach that rejects the concept of Scope 3. 

The focus instead is on individual companies measuring their direct emissions and allocating a portion to customers — an approach so fundamentally different to existing methods that were it to gain traction it might create a schism in emissions reporting and target-setting. The risk then is that stakeholders — investors, policymakers, consumers and other groups — would be left with a patchwork of standards that complicates policy and undermines attempts to hold companies accountable.

“This will get messier before it gets cleaned up,” said the consultant with non-profit experience.

The post Why 2025 has seen a flood of new ways to count carbon appeared first on Trellis.

The opinions expressed here by Trellis expert contributors are their own, not those of Trellis.​

If it ever went away, the need for the sustainability field to make and deliver a business case has returned with a vengeance. The political backlash combined with skepticism over the performance of ESG funds and an unstable economy means sustainability teams are increasingly pushed to show how environmental and social initiatives support financial performance.      

A new report from Rochlin’s company, IMPACT ROI, puts the debate to rest over whether sustainability drives financial performance or functions purely as a negative cost center. Drawing predominantly from academic research conducted over the last 10 years, the report concludes that when done well, sustainability absolutely drives superior financial and competitive performance. (Rochlin will discuss the findings at Trellis Impact this week.)

Specifically, the report finds that when done well, sustainability can boost: 

• Firm value by 36 percent
• Profitability by 21 percent
• Shareholder returns by 6 percent
• B2C and B2B sales by 20 percent
• Reduce employee turnover by 57 percent and
• Reduce a range of financial and market risks by 30 percent

The research includes a wide range of quantitative benefits sustainability can generate related to financial key performance indicators, growth, risk reduction, cost reduction and responsible sourcing. Companies that engage in sustainability aren’t promised these results. Rather, those that follow a set of good practices increase their ability to deliver these kinds of benefits to the bottom line.

The report updates the 2015 framework that defines what “doing sustainability well” looks like. Summarized as Fit, Commit, Manage and Connect, the framework overlaps with the research on sustainability strategy and tension management we published last year.

One key area is for companies to commit to one or more value propositions for sustainability. Companies typically define value propositions for customers, but sustainability professionals should also define value propositions for internal customers such as the board, C-suite and business line leaders as well. Sustainability can support three high-level value propositions: 

Offer sustainability/corporate responsibility as a feature

Offering sustainability/corporate responsibility as a feature means expressing to key business stakeholders that the company has intentionally designed and built sustainability into its business model. In this way it becomes part of the brand promise communicated to consumers or business customers.

For example, Hewlett Packard Enterprise (HPE) has used sustainability as a tool to support business-to-business sales. The company incorporates sustainability into key marketing messages and sets up customer meetings to discuss HPE’s sustainability commitments, the customer’s sustainability needs and the intersection with HPE’s technology. “Our sustainability program has a demonstrably positive effect on our bottom line: we win business and attract investment by demonstrating the benefits of sustainability and of HPE’s leadership to our customers and investors,” the company states. The sustainability and sales teams collaborate to identify sustainability’s contribution to lead generation and in closing sales. The company estimates that in 2019, sustainability helped drive nearly $585 million in net revenue.

Use sustainability to drive down costs

Sustainability practices often align with efforts to use resources more efficiently, reduce waste and optimize operating expenditure and capital expenditure. For example, Apollo Global Management found its flagship portfolio companies that adopted a goal to lower carbon intensity by 15 percent have identified over $44 million in savings and $52 million in risk reduction costs. 

Grow through sustainability offerings

In addition to offering sustainability as a feature, companies can grow by offering products and services that help solve environmental and social challenges. Research finds that in the U.S. alone, the transition to a sustainable economy represents a $130 trillion opportunity between now and 2050.  

For example, BASF generated sales of $28.02 billion from what it calls “accelerator products” (products that make a substantial sustainability contribution in the value chain). The company is now focusing on setting new, more ambitious sustainability targets to continue its commitment to sustainable development.

Skeptics have long argued that sustainability sits outside of conventional business practice and represents taxation and regulation in disguise. This remains a powerful counterpoint that feels intuitive to executives and investors. 

The new report shows it’s time to tell a more intuitive story. Who would you rather do business with: a company you trust or one you don’t? A company that’s accountable and engaged in improving the environment, communities and people or one that isn’t? The new Project ROI report finds that sustainability helps improve the trust and favorability of a wide range of stakeholders including consumers/customers, investors and employees. The idea that trusted businesses perform better in the marketplace is far from rocket science.

Investing in trustworthy, responsible and accountable behaviors isn’t bad for business. To the contrary they’re a business imperative. It’s time to put aside the debate of whether sustainability supports business value creation and focus on how to use sustainability to support business in a way that will enable it to meet expectations and accountabilities to profit, people and planet at scale. 

The post The sustainability business case debate is over. Here’s why appeared first on Trellis.