‘Challenge Your Organization to Adopt Carbon Neutrality’ says Allbirds’ VP of Sustainability and Innovation
Currently, Allbirds is finding sustainable projects to invest in that are truly additive (meaning new), permanent, and without unintended consequences (i.e. creating more carbon elsewhere, like a game of Whack-a-Mole). While the pollution from product production is undeniable, companies like Allbirds and RTS are considering the impact of their operations, and they challenge YOU (founders, operators, inventors, marketers) to mitigate your business’ environmental impact.
I attended the Shopify Plus Commerce+ conference in NYC at the Times Center. To my right and left I found myself surrounded by talented marketers from Rosecliff’s most successful portfolio companies. We had the pleasure to hear Jad Finck the Vice President of Innovation and Sustainability at Allbirds speak. He described his goal — to produce thoughtful products in a world that needs less stuff.
In his Commerce+ keynote speech, Finck focused on Allbird’s environmentally conscious SweetFoam shoe sole. Traditionally, shoe manufacturers use EVA, a petroleum based plastic, as shoe soles. Allbirds uses the exact same process companies follow to produce EVA, but sugarcane is the main ingredient. Not only is SweetFoam less reliant on petroleum-based fuel, but Allbirds is allowing any shoe company to access the recipe completely for free, Finck revealed.
Sugarcane pulls carbon out of the environment,” said Finck. “It breathes it in, converts it into chemical energy in the form of sugar, and then we convert it into this foam. So while other soles are adding to the carbon footprint, this one is actually carbon negative.” Of course, you don’t have to develop a groundbreaking material to mitigate your organization’s carbon footprint.
Finck challenged the Commerce+ audience, “how can you encourage your company to become carbon neutral?”
Renewable Energy Credits (RECs) & Carbon Offsets
Carbon Offsets take many forms, such as reforesting projects or methane sequestration, and are distinct from RECs, which are specific to renewable energy. For every megawatt of petroleum-generated power that a corporation uses, they can purchase RECs or Carbon Offsets.
Allbirds committed to offsetting the entire company’s footprint from 2019 going forward by purchasing Carbon Offsets. This self-imposed carbon tax costs the company a mere 10 cents per pair of shoes — which is very cost-effective, Finck argues. This 10 cent tax neutralizes the carbon footprint of the entire organization, from factory floor machines to office electricity — otherwise known as Scope 1, 2, and 3 emissions.
“Scope 1 emissions are direct emissions from owned or controlled sources. Scope 2 emissions are indirect emissions from the generation of purchased energy. Scope 3 emissions are all indirect emissions (not included in scope 2) that occur in the value chain of the reporting company, including both upstream and downstream emission.”
Additionality
Additionality is really a way for firms to definitively assert that they alone are responsible for new renewable energy injections into the grid (as opposed to buying RECs from a generator that is already built). For example, a corporation could build it’s own wind energy farm, as opposed to buying wind power from a plant that already exists. Well-known tech giants, like Apple, Google, and Microsoft, use Additionality as well as Carbon Offsets and RECs to combat their emissions.
As I listened to Jad Finck’s keynote speech, it struck me that he was not the only executive in Rosecliff’s portfolio who was speaking out about carbon neutrality. Gary Levitan, now the VP of Sustainability at Recycle Track Systems (RTS), has crafted sustainability action plans for corporate clients for his entire career.
Both Finck and Levitan agree that achieving carbon neutrality through the purchase of Carbon Offsets or RECs is a great place for any business to start. Levitan helped develop the carbon neutrality plan at JP Morgan Chase, which pledged to use 100% renewable energy and become RE100. Since joining RTS, Levitan has developed a more holistic view on carbon neutrality. In September 2019, Levitan asserted that:
“Americans don’t have patience, entrepreneurs don’t have patience, stockholders don’t have patience. We want the sexy terms, and we want to be the leaders, and for everything to be positioned properly. But, the holistic way of looking at it, we really have to pay more attention to the supply chain and how things are made, how the grid is energized. That has to be done slowly.”
Levitan’s insistence on a holistic sustainability plan involves purchasing RECs and/or Carbon Offsets while also making realistic goals to dramatically reduce the Scope 1, 2, and 3 emissions released by your business by changing current manufacturing practices, like Allbirds did with their SweetFoam material innovation. Finck encourages companies to calculate and offset all three scopes of emissions in order to reach 100% carbon net neutrality.
Rosecliff is proud to be an investor in companies like Allbirds and RTS, who are thoughtfully considering ways to minimize and mitigate their carbon emissions.
