Resources

• Joel Makower’s column on landfills in India: The temperature is rising on heat as an ESG issue

• Financial Disclosure and Transparency Resources
  • Securities and Exchange Commission Proposed Climate Disclosure Rule press release, and analysis from Deloitte, PwC, McKinsey, and the Harvard Law School
  • Task Force on Climate-related Financial Disclosures (TCFD)
  • CDP (formerly Climate Disclosure Project)
• Corporate Climate Coalitions
  • AAA Framework for Climate Policy Leadership
  • Transform to Net Zero
  • Business Alliance to Scale Climate Solutions
• Climate Advocacy Resources
  • InfluenceMap
  • ClimateVoice (emphasis on employees)
  • Climate Corps (EDF graduate fellowship)
  • Defend Our Future (EDF climate youth initiative)
  • Climate Reality Project

Guests

Climate Rising Host: Professor Mike Toffel, Faculty Chair, Business & Environment Initiative

Guest: Victoria Mills, Managing Director, Environmental Defense Fund+Business

Transcript

Editor’s Note: The following was prepared by a machine algorithm, and may not perfectly reflect the audio file of the interview.

Mike Toffel:
Victoria, thank you so much for joining us here on Climate Rising.

Victoria Mills:
You're welcome, Mike. I'm delighted to be here.

Mike Toffel:
I wonder if we can start by just asking you to describe your role at Environmental Defense Fund or EDF, and how you got there?

Victoria Mills:
Sure. I'm a Managing Director on the EDF+Business Team at Environmental Defense Fund. I've been working for EDF since 1997, so coming up on my 25th anniversary here. I've done a bunch of things on the EDF+Business Team since I joined EDF. But what I do now is focus on the intersection of business and public policy, and working with companies to advance the policies they need to achieve their environmental goals, and that we need to meet our national and global emission targets.

Mike Toffel:
Great. Can you help us set the stage of what does Environmental Defense do?

Victoria Mills:
EDF has been around since 1967. And we started as a scrappy group of scientists and a lawyer on Long Island, concerned about the impacts of chemicals, and especially pesticides on the local osprey population. And that led to the first nationwide ban on DDT. And through that work and that historic project, Environmental Defense Fund was born. And our first motto was, Sue the bastards, because we had a focus on using litigation as a tool to improve environmental outcomes. And the power of that tool was proven through that first DDT ban.

As our work expanded and we began focusing on a broader range of environmental issues, our approach also became more diverse. And the motto evolved to, Finding the ways that work. We've long had an emphasis at EDF on market-based solutions to environmental problems. Now, that doesn't mean that public policy is absent from the situation. On the contrary, we need enabling public policies that make the market work to deliver better environmental outcomes and better outcomes for people. But one of the aspects that was an early emphasis of EDF was working with corporations.

Mike Toffel:
Now, if I recall, some of the earlier work from Environmental Defense with corporations included things like working with McDonald's on their packaging or working with some companies on their paper supply chain. That was in the '90s, perhaps.

Victoria Mills:
That's right. And that was sort of the creation of what became the EDF+Business program. And that was that iconic EDF McDonald's partnership in 1990. And legend has it that Fred Krupp, our president, walked into a McDonald's with his young children, and they had a meal. And after the meal, there was this pile of packaging on the table. And one of his kids said, "Dad, don't you work for an environmental organization? Can you do something about that?" And so, he did something about that. And he wrote a letter to the president of McDonald's at the time, and said, "We have expertise in solid waste, and environmental issues, and chemicals, and paper. And you have a solid waste problem. Maybe we can work together to solve that problem." And they did.

And I think the most iconic element of that was eliminating the polystyrene clamshell sandwich container that you still see in some parts of the world, but no longer in the US for a long time. There was also a wholesale switch to recycled content packaging, unbleached packaging. It transformed supply chains. It influenced McDonald's competitors. There was a lot of follow-on behavior. And it had great outcomes for the environment in terms of waste reduction, reduction at the source, reduction of inputs and emissions from paper and packaging manufacturing, and it saved the company money. And so, we thought, why not take that model of partnering with business to achieve environmental results and scale it. And that became what is now EDF+Business.

Mike Toffel:
Interesting. And what is EDF+Business today? Again, we're going to get into the policy aspects that you work on, but what's the rest of the portfolio?

Victoria Mills:
Sure. We work on a variety of issues affecting companies and their supply chains. So we have a big focus on energy, on agricultural and forest impacts of supply chains. So food, and food production. There's also big emphasis on chemicals, and chemical safety, and consumer products. And also working with companies to meet their net zero goals, which involves kind of looking holistically at the company's operations and supply chain, and my work with companies on public policy. And I could share some examples.

In the early days since McDonald's, we worked with other companies on making improvements to their paper and packaging, like UPS and FedEx. We worked then with FedEx to develop the first commercially available hybrid truck. We partnered with Walmart to reduce their supply chain emissions, which led to Project Gigaton, which now involves thousands of suppliers. We started EDF Climate Corps, which places graduate students in organizations to work on projects that cut costs and emissions. A great thing for HBS and other MBA students to look into. And those are some of the main things that we work on.

Mike Toffel:
Now, let's dig into the policy advocacy work. So this is the corporate advocacy on climate policy. So this is not so much on what they're doing in their operations, but rather what they're doing on their policy advocacy side. Talk a little bit about what that landscape looks like. Who tends to be the folks in companies who are working on that? And what's the mechanisms they're using? I think we know that there's trade associations in this space. There's lobbyist of all sorts. How does Environmental Defense fit into that landscape?

Victoria Mills:
Let me start with, what's the need? And what's the problem that we're trying to solve? So we work with many, many companies to make many, many environmental improvements. But we knew all along that even if you add up all those improvements and you get all the follow-on behavior in the world, it's still not going to be enough to bend the emissions curve downward at a speed and on a scale needed to meet our climate goals and avoid the worst impacts of climate change. So if you look at the history of how do companies lobby on climate policy, there are some sectors that have been active since they got started. Oil and gas, the automotive industry, electric utilities. Those are companies that EDF organizationally has always engaged with. And sometimes to advance common interest in legislation or regulation, but sometimes on opposing sides, because we are trying to raise the bar environmentally. And sometimes companies in those industries resist. I think we've come a long way.

And those sectors are, I think, increasingly recognizing their need to contribute to getting the world to net zero. And the battles aren't eliminated, but there are, I think, fewer of them. At the same time, there's a whole vast swathe of American businesses that have a powerful political voice and that create climate impacts that have not been active. And this is where EDF+Business realized maybe around 2015, 2016 we really needed to expand our focus. Because at the same time, you have many companies setting net zero and other climate goals, and coming up with transition plans. And we started looking at those and realizing, You can't just count your tons that you're reducing and think, oh, that's going to help fix the world. It might, if we had a thousand years to solve the problem and everyone did exactly what you did, but it's not fast enough. And the fact is that companies need public policy to meet their enterprise-level goals.

Mike Toffel:
Can you say a little more about that? So I understand a bunch of companies sorting their own problems in terms of reducing their own in-house emissions. That's never going to be enough. We need policy to ensure that we're doing that at scale. But say a little more about why companies would need policy engagement to make even their own targets.

Victoria Mills:
Say you have a goal to convert to a hundred percent renewable energy. How are you going to do that without a modernized electric grid? That takes public investment. How are you going to do that without incentives and enabling policies for the uptake of significant amounts of clean and renewable energy? We have a lot of subsidization right now of fossil fuels, and not the kind of system level incentives for renewable and clean energy that we need. So you can't get there from here without that policy intervention. A second example I could think about is, lots of companies have a fleet conversion goal or even a Scope 3 emission reduction goals that depends on their reducing emissions from transportation.

Well, how are you going to achieve that goal without the conversion, without electrification of goods movement? And specifically, trucks that move the vast majority of goods in this country. And so, for example, in the climate and clean energy provisions that are before Congress right now, there are investments in charging infrastructure that are necessary to enable that transition. There are incentives for the purchase of EVs. So that's what I mean when I say, companies need to advocate for policies, not just to achieve some far off climate goal that other people will benefit from, but to meet their own commitments.

Mike Toffel:
I see. So let's talk about some typical engagements that you're working on. Do you go out and pursue companies who you think should be engaging in policy? Or do they come to you? Or is it some of each?

Victoria Mills:
It's a little bit of both. And I think it's been more us being forward-leaning. I think we have been, through all of this work, building on the relationships that we've already established with companies through our programmatic collaborations. And we start by working with the corporate sustainability or CSR departments in a company. Then, we sort of expand the dialogue to, well, what are the policies that you're working on to enable you to achieve those goals? Then, we have a meeting. Let me bring in my colleagues from Government Affairs. And then, we start comparing notes on that.

Mike Toffel:
How well aligned do you find the sustainability folks and the Government Affairs folks? Because I know there's lots of examples where companies that seem to be investing in a green brand and greener than average products will, at the same time, be lobbying against more progressive climate policies, or fuel efficiency standards, and things like that. Which makes me wonder, are these working for the same company? Or because they have different reporting minds, they have different objectives. What do you see as the alignment or misalignment of those organizations?

Victoria Mills:
There can be a really big misalignment there. You've really hit on one of the barriers that we're running up against very often. Now, some companies, and increasingly I think, the forward-leaning ones and the smart ones have very little daylight between their government relations and their corporate sustainability departments. And they crosswalk their goals on an ongoing basis. And sometimes they even report up to the same people. But more often than not, they are separate. And sometimes, they don't even talk to each other. And if you think about the history here. Government relations has been around forever. And their job is basically risk-minimization. What are the policies that are in play that are going to help or hurt my company? Pounce, advocate, lobby work with the trade association. And corporate sustainability came along much later, and is all about sort of optimizing the brand, and wanting to be a leader. And sometimes, you have to go up to the CEO and back down again to the other side to get the two to talk to each other.

Mike Toffel:
I wonder if you can give us some examples of some of the current or recent policy engagement work you've been doing?

Victoria Mills:
Sure. We have been very focused since the Biden Administration came in of getting some real investment and incentives to transform the sectors that are the biggest emitting sectors, which are transportation and electricity. So in the bill formerly known as Build Back Better, there's $550 billion in climate and clean energy provisions, which include tax credits for clean energy use, grid modernization incentives, for purchasing electric vehicles, investments in charging infrastructure, investments in resilience. These all build on an initial down payment that was made in the bipartisan infrastructure bill also known as the Infrastructure Investment and Jobs Act, which included, I think, a $65 billion investment in modernizing the electric grid. That's really important. But that is a down payment, and what we really need are the $550 billion investment. So I'll share a few examples.

Some of what we do involves just calling up companies one-on-one, and saying, "Who do you know? Who can you call? Do you support this? Can you let them know?" And that's sort of the private, what we call, shoe-leather or Zoom-leather lobbying that we do. There have also been companies that we've worked with on various sign -on letters and messages to Congress. For example, last October, Carrier Corporation spearheaded a letter to congressional leadership saying we support the climate provisions in the Build Back Better Act. And they got 17 companies, big major employers, including a range of tech companies, major emitters, manufacturers, et cetera on that letter. And that was, I think, a really important message that came at an important time. There are a whole bunch of companies now that we are working with in partnership with Ceres, another terrific advocacy organization based in Boston, to recruit companies on a business letter that was published on April 26th.

Another really important example, Mike, was, there is a case before the Supreme Court right now called West Virginia versus EPA. And that involves, what is EPAs authority to regulate emissions from power plants? And there's a lot at stake in that case, for our ability as a country to meet our climate goals and to be credible in asking other nations to lead. And so, EDF is a party to that case. But we worked hard to make sure that businesses were aware of the case, and that they knew that they had an opportunity to weigh in.

And 15 companies did, including Apple, Amazon, Google, Johnson Controls, Siemens, and others. And basically saying, we need the strong EPA. We need a predictable regulatory environment to enable investment and growth. We can't have our regulations going back and forth with every administration. And climate change is a material risk to our business. So I think that's a really important statement in informing the court. Because otherwise, all they would hear from are Environmental Defense Fund, and other public health advocates, and utilities, notably the power sector is on our side, in this case, on one side. And coal companies on the other. And where is American business, the vast majority that will be impacted by the ruling? So those are the kinds of things that we make happen.

Mike Toffel:
Great. So the example you just gave is bringing businesses that are not directly engaged in the lawsuit. For example, they're not the coal producers or not the electricity utilities, but they are companies who have a vision and a desire for a long-term stable climate. And that's so far, as far as I can tell, a perspective that hasn't been very well represented in Washington. And so, you, and Ceres BICEP, the program that you mentioned, bringing those voices to the table. Is that a fair way to characterize what you're up to?

Victoria Mills:
I would say so. And I think the reason it's important is, you got to think about who's at the table when policy decisions are made. There's sometimes the excuse we hear, "Oh, that's not in my lane. I'm a telecom company. I don't weigh in on climate stuff." Well, guess what? You cause emissions, and these regulations impact you, and this legislation would impact you. And you have an opportunity to lead and to use your political power to advance climate policy and to advocate for your climate goals, just as you would advocate for your tax, or your trade, or your intellectual property, or anything else. Climate needs to be a top advocacy priority for businesses across the economy. Or we'll all be sunk, literally.

Mike Toffel:
Well, and the reason they're not, I would speculate, is because in some ways these are longer term concerns. And they may impose short-term costs, even though perhaps the long run, we're all better off. They have to fight against this instinct of, well, I can either lobby for cheaper taxes in the short-term or a more resilient infrastructure, which requires, you're noting, hundreds of billions of dollars of investment, which we're all going to have to pay through taxes over the next 10, 20, 30 years.

Victoria Mills:
Right. And this is what makes me crazy as an advocate is that what you read in the news can be very one sided. It's like, oh, the cost to comply with the SEC Climate Disclosure Rule would be X. Or the cost to address climate change is some number. Well, what about the cost not to?

Mike Toffel:
Right.

Victoria Mills:
Extreme weather events cost the United States almost $750 billion over the last five years alone. So who's going to get stuck with that bill? It's you and me. It's the taxpayers. It's going to balloon our budget deficit. It's not healthy for the economy. It prevents growth. And it hurts the businesses directly. And they're not immune from natural disasters and damage to their facilities from the direct physical risks of climate change. I've never encountered a business that's not concerned about climate risk.

Mike Toffel:
Yeah. We really do need ways to change the dialogue. It seems to me that the do-nothing approach is still often viewed as the cheaper perspective or the free perspective even.

Victoria Mills:
I don't think that's a tenable position anymore. All of the NGOs that have embraced what we call our AAA framework for climate leadership at Ceres, and WWF, and World Resources Institute, and C2ES, and BSR. Every major nature conservancy, major NGO that works with business has said climate leadership requires policy leadership. And the first day is advocate for climate policy that gets us to net zero by 2050 and halfway there by 2030. The second is, align your trade associations behind the same advocacy goal.

We have that problem you mentioned earlier, Mike, where a company can even be doing its own advocacy, but then the US Chamber comes in and says, "This is terrible." And they have a lot more money and a lot more influence than that one company by itself. And then, the third element is, allocate your spending, whether it's on contributions to candidates or elected officials, advertising spending, lobbying spending. And so, you can't be talking out of one side of your mouth on how much of a climate leader you are, and look at these great goals, and then be giving money to organizations that are working to obstruct progress on policy.

Mike Toffel:
Are there robust scorecards yet that are grading the extent to which companies are adhering to this AAA framework? Because there's surely lots of scorecards on traditional ESG metrics, whether it's Sustainalytics or other types of data providers, MSCI. I know that that tends to be sort of carbon footprint oriented.

Victoria Mills:
I would say we have some progress to make to increase transparency and accountability for corporate lobbying, in the same way that companies are transparent about their emissions disclosures and their disclosure of TCFD I would like to see as part of every corporate sustainability report : These are the policies we need to meet our sustainability goals. Here's what we did on them last year. And here's what we're going to do to get them passed next year.

That should just be routine. Now, there are groups that look closely at this issue of corporate lobbying. One is InfluenceMap. They have some excellent reports where they do deep dives on asset managers, on oil and gas, on trade associations. They have terrific resources. The Center for Political Accountability is another one that looks closely at campaign contributions and other forms of lobbying.

Mike Toffel:
Let's bring us back toward your role in corporate advocacy, working directly with companies. can you describe some lessons learned, perhaps a misstep or two that you now know you won't take again? What are some of the successes and failures that make you better at doing this than you were six or seven years ago?

Victoria Mills:
Well, I think one is realizing just looking at organizations holistically. So I think we talked about how different groups within a company may have different points of view. So the need to speak to government relations, and corporate sustainability, and get them talking to each other, and sometimes to escalate. I think the importance of really pressing companies to influence their trade associations. Because again, they're just any individual company that tends to be outgunned in advertising, spending, and political influence than a trade association. And then I think, it's a fine balance to strike, Mike, between meeting companies where they are and raising the bar, raising their level of ambition. So you can't come in and say, "We want you to put a billboard on I-95 saying I heart Build Back Better." That's kind of scary to some companies.

But what can they do? Will they call their lawmakers privately, individually, and say, "This is why these investments are important for a business. I want you to know that." Businesses are constituents, just like individuals are. And lawmakers have a responsibility to listen to them. And thinking about, if you start there, how can you grow the relationship? And I think, the other thing that I've learned is, it's important to play the short game and the long game at the same time. We don't have time to lose on climate. For example, there are things moving this year that we need to get done. I've mentioned the Clean Energy Tax Credit several times, because I think they'll be transformational.

There are new medium and heavy duty truck standards that are going to be extremely important, not just to reducing greenhouse gas emissions, but also health harming pollutants, [NOx 00:30:07], and particulates, and VOCs that cause asthma, and ground level ozone, and exacerbate all kinds of health problems. There are rules coming down the pike on methane that are going to be extremely important. And what's gotten a lot of attention lately is the SEC's Climate Risk Disclosure Rule. And that is not climate policy. It is financial regulation. And yet, it's an important piece of the puzzle. Without it, investors won't have the information they need to make good decisions about, is this company managing its climate risk? Is it moving to the clean energy economy? Ultimately, capital needs to flow to support the clean energy transition. And disclosure is a necessary first step for that.

Mike Toffel :

Are you working with companies to develop a plan on how to lobby in favor of tougher disclosure requirements, especially as they relate to climate?

Victoria Mills:
So on that one, we have been working with both companies and investors. Two really important audiences, to make sure they're informed of what the proposed rule says and they know how to comment. For the SEC rule, the most important audience is investors, because that's who it's for. That is the customer. And that's who's been asking the SEC to bring climate risk disclosure level with other forms of risk disclosure that the SEC already requires. So we know and expect that investors will be broadly supportive of the proposed rule.

Companies are sort of next in line in importance, because they're the regulated entity. They're the ones who have to respond. And so, we've been doing a lot of outreach along with Ceres and other NGOs to make sure that companies understand what's in this proposed rule and how it builds on existing reporting frameworks, whether it's CDP or Task Force on Climate-Related Financial Disclosures. And all it's doing is it's making that mandatory and leveling the playing field across the economy.

Mike Toffel:
So it sounds like you have sort of two strategies going on at the same time with regard to who you work with and why. On the one hand, there are those that come to you from your colleagues in other areas of EDF+Biz who've been supporting perhaps their operational or supply chain area. And you're complementing that work by saying, "Hey, let's make sure we think through the policy aspects as well."

But then, there's another part where it sounds like you have your thumb on the pulse of all the different policies that are being discussed in Washington, whether it's transportation, or electricity, or methane, or SEC. And with that policy in mind, you're like, "Who should I go talk to? Who should I bring into this conversation and get their voices, either on talking about legislation or talking about lawsuits?" Is that right?

Victoria Mills:
That's exactly right, Mike. And I'd say as environmental advocates, we start with the tons. Where do you get the maximum amount of reduction of greenhouse gas emissions? And then, it's working back. Okay, then we need policies to dial down emissions and dial up the transition in the marketplace. In the case of transportation and power, the clean energy investments in Congress are sort of dialing up the incentives to accelerate the transformation. Whereas, the regulations on emissions from vehicles that happens through EPA and Department of Transportation, that's dialing down the emissions. So yes, we start the tons. Then, what are the policies that will deliver the tons? Then, who do we need on board to get those policies done? And at the same time, what can we do with the relationships that we already have?

Mike Toffel:
Great. So there's been lots of discussion about how the war in Ukraine with Russia has put new pressures on natural gas and new pressures on oil. Is that an area that you're focusing on in terms of policy advocacy?

Victoria Mills:
Absolutely. And we can't ignore that this conversation is happening at a time of twin crises, the war in Ukraine and worsening impacts of climate change. I was just reading Joel Makower's newsletter earlier this week about spontaneous combustion of landfills in India. It's just atrocious to think about, and people living in 120-degree heat. These are just tremendous crises that we're facing with colossal human costs, let alone the economic costs. And both of them are tied to our dependence on fossil fuel. And that's another reason why we need to accelerate the transition to clean energy, so that we become less vulnerable to these price spikes, driven by geopolitical conflict, and regain control of our energy future.

Mike Toffel:
Great. Are there other current projects that you want to share with us?

Victoria Mills:
I would just emphasize the collaboration that exists among NGOs in this space. If your listeners go to aaaclimateleadership.org, they can read all about what the AAA framework is about, what the top climate policy priorities are, and who is involved. And this is basically every leading environmental organization that works with business. And that's been really powerful to have that unified message and coordinated activity. And we're starting to see collaboration among companies as well. Companies involved in the Transform to Net Zero Initiative or the Business Alliance to Scale Climate Solutions, both of which EDF was involved in helping to bring about.

I think the other thing I would want to mention is, you can expect to see more accountability for companies on their climate lobbying, not just from NGOs like EDF or groups like InfluenceMap, but from investors. Investors are taking those net zero commitments very seriously, and asking companies on a much more routine basis. All right, is your lobbying consistent with your climate goals? Is your lobbying Paris-aligned? What are you doing to bring your lobbying in alignment with Paris goals? What trade associations are you a part of? So expect that accountability to intensify.

And I think you're also seeing more pressure from other stakeholders that companies care about, including customers and employees. And so, I would just say to your listeners, as you think about which of the companies you want to go to work for. Whatever you do in your career, you could be in marketing, you could be in logistics, you could be in finance, but if you care about climate, make sure you're working for a company that puts its lobbying muscle behind its mouth on climate.

Mike Toffel:
And how would they know that?

Victoria Mills:
I think they can ask the Government Affairs staff. They can look at the company's lobbying reports. They can look at the company's trade association memberships. They can look at the company's social responsibility and corporate advocacy pages. And I think another great organization is called ClimateVoice led by Bill Weihl, formerly Climate Czar at Facebook and Google. And he is all about engaging employees, because that's something companies care about is their talent.

Mike Toffel:
Right. Well, this has been a really interesting tour of EDF+Biz, in particular on their corporate advocacy on climate policy. I wonder if we can turn toward some of our final questions where we ask you for advice for our listeners. Many of our listeners are considering figuring out how to dedicate their career to business and climate change. And we often ask our guests for advice on the road they should take or resources they should pursue. So what are your thoughts on that?

Victoria Mills:
Two words, Climate Corps. So if you are a student between your first and second year, or second and third year of a dual degree program, or even right after business school, I would really encourage you to apply to Climate Corps. It's a tremendous experience. And the alumni network is now over a thousand committed professionals that are doing something related to climate or energy in their careers.

So that's a great way to learn the issues, apply the issues, and get some of those really concrete bullet points on your resume about what you did to advance a company's climate agenda, save money, save energy, et cetera. I think some other organizations you could consider getting involved in, I mentioned ClimateVoice. EDF also has an advocacy organization for younger people called Defend our Future. So that's a great way to get involved in doing some of your own advocacy. There are ways to get informed, like the Climate Reality Project. There are lots of different organizations that kind of can take you for a few weeks or months at a time.

And you can get to really learn the issues. Because I think, this is such a big challenge and we have so little time to make wholesale transformations to our economy and our industrial system. And we really need all hands on deck. And I think the final thing I'd say is, it doesn't matter where you end up in your organization, if your main talent is finance, or management, or logistics, or HR, you can still bring a climate lens and an equity lens to everything you do, and add value that way. So don't feel like you have to be in some particular department. This is really every skill set. It's a giant orchestra and we need every instrument playing.

Mike Toffel:
Terrific. Well, Victoria, thank you so much for your advice. And thank you so much for sharing the story of EDF+Biz and your journey there. It's really interesting work.

Victoria Mills:
It's been a pleasure, Mike. Thank you so much for having me.