Brands are adopting a circular economy to promote sustainability and economic benefits, thus meeting consumer demand. Here, we pick out the top 10 of 2023
More brands have been embracing the concept of a circular economy over the past few years as a way of promoting sustainable development and reducing the impact of human activity on the environment.
A circular economy is an economic model that emphasises the efficient use and reuse of resources, products and materials in order to minimise waste and pollution. By prioritising circular economies, brands are able to capitalise on economic benefits, while also meeting the ever-rising demand for sustainable strategists from consumers.
That’s why, we’ve rounded up our top 10 brands embracing the circular economy in 2023.
Patagonia has been at the forefront of the circular economy movement since first making a sustainability commitment in 1986. The apparel brand aims to reduce its environmental impact through a number of different initiatives, including The Worn Wear programme, which encourages customers to repair, reuse, and recycle their garments. The programme offers a repair service that addresses any damages to the clothing, as well as a trade-in option where customers are provided with store credits for used Patagonia clothing. Through this initiative, Patagonia has successfully prolonged the lifespan of its products while also minimising waste.
The brand also introduced a line of clothing that incorporates recycled materials and uses organic cotton and other sustainable fibres. By adopting sustainable materials, Patagonia is making strides to reduce the environmental impact of its products and promote a circular economy.
Swedish home-retail conglomerate IKEA has made strides towards a circular economy and sustainability initiatives with three main commitments: The take-back programme, circular services and investing in sustainable materials.
Firstly, the Take-Back programme allows IKEA customers to return their furniture to be either repurposed or recycled, helping to promote a circular economy. The company also allows customers to rent items or buy refurbished furniture to promote the reuse of products and encourage customers to practise sustainable shopping habits. Finally, many products are made from FSC-certified wood and recycled plastic to reduce the company’s impact.
Unilever, a multinational consumer goods corporation, has prioritised sustainability and circular economy goals by undertaking various measures to advance its objectives. For example, all products use sustainable ingredients, such as ethically-sourced palm oil, to mitigate their environmental impact. The company has also pledged to reduce packaging waste by 2025 by 2025, while also establishing a recycling programme to increase education and enhance recycling rates.
Accenture is a company that utilises advanced technologies and partners with leading organisations like Mastercard, Amazon Web Services, Everledger, and Mercy Corps to advance its circular supply chain capability. The aim of this capability is to enhance financial inclusion, promote sustainable practices, and empower consumers. With this approach, Accenture ensures that its clients achieve their corporate sustainability goals through better resource planning and utilisation.
Fashion giant H&M has made a significant commitment to its ESG initiatives, such as reducing waste and promoting sustainable practices. One of these initiatives is its garment collection programme, which enables customers to return used clothing for recycling or repurposing. Additionally, H&M is dedicated to utilising sustainable materials like organic cotton and recycled polyester in its products, which has reduced the environmental impact of its products while promoting the circular economy.
Adidas is a prime example of how a big business can change and take responsibility for its role in the plastic problem and pledge to use its influence to make a positive impact. The sportswear giant launched the ‘Three Loop Strategy’ consisting of three interrelated initiatives. The first loop involves recycling plastic waste, the second involves designing shoes that can be remade and the third loop focuses on regeneration, where Adidas aims to use biodegradable materials that will disintegrate naturally into their surroundings.
Flooring company Interface has taken a strong stance towards sustainability and promoting a circular economy by initiating various measures to achieve its goal. One of their significant approaches is adopting a closed-loop manufacturing process, using recycled materials to make their carpet tiles. When tiles have reached the end of their life, they are collected and recycled into new products, reducing waste and fostering a circular economy.
HP has been incorporating circular practices into its operations for nearly two decades by collecting used ink cartridges. In recent years, the company has further intensified its recycling efforts, by launching the world’s first monitor and an entire PC made from ocean-bound plastics. The company’s overall goal is to become net-zero by 2040, with 100% renewable energy.
TrusTrace is on a mission to introduce transparency to both producers and consumers in the fashion industry, which accounts for 10% of humanity’s carbon emissions. With its cutting-edge digital platform, the company aims to raise awareness about individual responsibilities and promote best practices, having already attracted over 10,000 users. The company’s exceptional dedication to sustainability and circular economy has earned it the prestigious Solar Impulse label.
Mud Jean uses recycled denim to make new pairs of jeans, which customers can lease for just under €10 per month. This initiative allows customers to avoid buying jeans they will rarely wear, thus contributing to a closed-material loop. To participate in the Mud Jeans leasing programme, customers can send in an old pair of jeans and receive their first month of leasing for free. From there, customers can choose to continue their subscription and receive a new pair of Muds each month or end their subscription after the initial month.
By: Inogen Alliance View the original article here
Modern industry has long perpetuated a linear economy. This model relies on the continued extraction of new materials and ultimately leads to an accumulation of waste. A circular economy, on the other hand, strives to function in ways that reduce waste and pollution, keeping products and materials in circulation for longer.
Read on to learn more about the practices and principles of a circular economy, and its economic, environmental, and social benefits.
The 4 Rs That Underpin a Circular Economy
Before we examine the core principles of a circular economy, let’s first revisit the basics. It’s fair to say that most people are familiar with the concept of “reduce, reuse, recycle.” What is less commonly discussed – yet extremely important to developing a true circular economy – is the fourth R: recover.
Here is what each of these practices means when applied to business:
Reduce: Minimizing waste before it’s even created by engaging in design and production processes that prioritize lifespan and sustainability.
Reuse: Finding new ways to use products or materials, extending the functional lifespan of the item and enabling it to circulate within the economy for as long as possible.
Recycle: Breaking down products into their raw materials and manufacturing new items from them. While this is by far the most publicized, recycling is often seen as a last resort in the hierarchy of circular practices.
Recover: Reclaiming materials or energy from products that can no longer be reused or recycled. This can mean everything from composting organic materials to capturing energy from waste.
The 3 Core Principles of a Circular Economy
The following three principles are central to establishing a circular economy within your business.
Eliminating waste
This principle involves rethinking how resources are used at every stage of a product’s lifecycle, from design to disposal.
For businesses, this could mean:
Using recycled material in manufacturing rather than raw materials.
Designing products with modularity, allowing for easy repair or upgrade.
Choosing manufacturing processes that minimize offcuts and scrap.
Keeping materials in use
To break the cycle of the use-and-dispose economy, keeping materials in use as long as possible is crucial.
Here are examples of how you can apply this principle:
Developing take-back schemes or leasing models where products are returned to you after use, ensuring they are either reused, refurbished, or responsibly recycled.
Facilitating a secondary market for your products or materials, extending their lifecycle beyond initial use.
Regenerating natural systems
Engaging in the circular economy isn’t simply about reducing negative impacts on the environment – it focuses on using regenerative practices to restore natural systems and enhance biodiversity.
In practice, this may look like:
Investing in technologies or processes that restore soil health, clean water, and air quality through your business operations.
Partnering with organizations working towards reforestation or ocean clean-ups to offset the ecological footprint of your operations.
Circular Economy Benefits and Advantages
Embracing a circular economy presents many benefits that span environmental, economic, and social spheres.
Environmental benefits
Through engaging in the practices of reduce, reuse, recycle, and recover, your company can have a net-positive impact on the environment. In addition to reducing greenhouse gas emissions, businesses can also contribute to better soil and water conditions by reducing waste across all product lifecycle touchpoints, such as material extraction, manufacturing and packaging.
In terms of regenerative efforts, businesses that proactively design campuses with restoration in mind can have a hand in expanding natural habitats, contributing to cleaner water sheds, and promoting soil health.
Economic benefits
Reducing material costs through reuse, recycling, and recovery can lead to significant financial savings. Additionally, circular economy models like product-as-a-service offer new revenue streams and financial incentives that challenge traditional business models.
Following the principles of a circular economy can also appeal to investors, who are continuing to prioritize sustainability. A recent report by Morgan Stanley found that “A majority of investors … believe that companies should address environmental and social issues.” These investors reported being motivated by the financial performance of sustainable investments and new climate science findings.
Social benefits
Circular economy initiatives often involve collaboration between businesses, local governments, and communities. These joint efforts help each party better understand the needs and challenges of the other, and can lead to stronger community relationships.
The principles of circular economy do not allow for planned obsolescence, meaning products are built to be more durable and long-lasting, offering consumers a break from having to replace important items every few years.
Implementing Circular Economy Principles
While organizational needs can vary greatly from industry to industry, there are some key steps that must be taken in order to effectively implement circular economy principles.
1. Conduct a thorough assessment
Begin by evaluating your current operations, supply chain, and products or services to identify areas where circular economy principles can be applied. This assessment will help you understand the potential impact and feasibility of implementing circular practices within your business.
2. Set clear goals and targets
Establish specific, measurable, and achievable goals for your circular economy initiatives. Whether it’s reducing waste, increasing resource efficiency, or designing products for reuse and recycling, having clear targets will enable you to track progress and adjust goals as needed as well as promote your progress to customers.
3. Collaborate with stakeholders
Engage with suppliers, customers, industry partners, and other stakeholders to gain a broader perspective of your organization’s impact. Building partnerships can help overcome challenges, access resources, and drive innovation in implementing circular economy practices.
Embrace the Circular Economy: Begin a New Cycle
The benefits of a circular economy are clear – and the need is urgent. As the human and financial toll of climate change continues to grow around the world, governments, businesses, and social institutions are collaborating to reduce impact and improve well-being. The circular economy model is a significant step toward these goals.
Google’s model showing ‘before and after’ components of its packages including paper-stay tape, silicon adhesive, and a tray made from pulp rather than polystyrene plastic. Source: Heather Clancy/GreenBiz
Google will eliminate plastic from its consumer electronics packaging six months ahead of its self-imposed 2025 deadline. Google made its “plastic-free” pledge in October 2020.
The search giant will publish a 70-page guide in June so that other companies can see how it was done, said David Bourne, lead sustainability strategist for Google, during a session last week at Circularity 24, a GreenBiz event.
The company’s Pixel 8 smartphone, launched in October, was the first product under the new approach.
“You might think it’s sort of strange to enable other companies, potentially to enable other competitors,” Bourne said. “But our point of view on sustainability is that it really should be a collaborative endeavor. Innovation should be shared in sustainability, because if we sincerely want to create a sustainable future, then just a handful of companies being more sustainable isn’t going to achieve that.”
Google is encouraging those who use the guide to offer feedback.
Making sure design changes don’t frustrate consumers
The idea for the guide originated with the Google team working on the heaviest of its consumer products, TVs. They can weigh up to 40 pounds, said Katy Bolan, Google’s lead for environmental sustainability.
Google doesn’t make televisions, so it worked with manufacturing partners to deliver the goal, she said.
A major issue was ensuring that design changes weren’t frustrating for consumers, that they met Google’s aesthetic requirements and that they could be disposed of within existing recycling systems, said Miguel Arevalo, packaging innovation lead at Google. “It’s a bad experience if you have to think about it,” he said.
Google’s key design considerations
The new packaging is predominantly paper- and fiber-based, so it can be recycled easily. It required Google engineers, designers and suppliers to rethink lamination and coatings, box assembly, enclosures and labels, among other factors.
The company’s biggest challenges were:
Assessing how the elimination of plastic shrinkwrap would affect the durability and reliability of packages.
Determining whether size or shapes needed adjustments to accommodate “drop dynamics,” or what happens when an item is dropped.
Selecting new coatings and inks that met Google’s branding requirements: At least 50 solutions were reviewed. Suppliers that weren’t transparent about their impacts were eliminated quickly.
New ways to seal and waterproof the box, and to make sure it stays closed.
The reliability of closure labels and how easy they are to remove.
Weighing the future implications of substitutions, particularly for chemicals that could inadvertently result in higher greenhouse gas emissions.
One way to justify the extra cost
New paper-based packaging is likely to be more expensive than plastic, since they aren’t produced at the same scale. “When you first achieve something, it will be the most expensive version,” said Bourne.
That increase can be easier to support when considered as part of the total cost or if the expense is likely to decrease over time, the Google executives said. “We also see this as an investment,” Bourne said. “We are looking at sustainability as an augmentation of the consumer experience.”
Plastic is a very useful material for getting our products to consumers safely and efficiently. It’s often the lowest carbon footprint option compared to other materials. However, plastic is ending up in our environment. This has to stop.
Global research has shown that without action, twice as much virgin plastic will be created and three times more plastic could flow into our oceans by 2040. The plastic we produce is our responsibility. It’s clear we must reduce the amount of virgin plastic we use and completely rethink our approach to packaging. We must also keep plastic in use for as long as possible in a circular loop system. That means we need much better systems to collect, process and repeatedly reuse it.
We’re working hard to make progress in our business, but we can’t turn the tide on plastic pollution alone. To achieve a circular economy for plastics, we need strong commitments to be supported by systems-level change. Policy and regulation can play a critical role in tackling plastic waste, improving waste management infrastructure, and creating the right enabling environment for a circular economy. That’s why we’re calling for a global UN treaty with legally binding targets.
We also support policies like Extended Producer Responsibility (EPR), where companies pay for the collection of packaging – a key ask of the Business Coalition for a Global Plastics Treaty. We believe that well-designed EPR schemes are a game-changer in tackling plastic pollution. They ensure money is invested back into waste management and packaging innovation, and hold businesses to account for the packaging choices they make. In 2021, we signed a public statement with the Ellen MacArthur Foundation calling for the implementation of well-designed EPR policies, recognising that, without EPR, packaging collection and recycling is unlikely to be meaningfully scaled. Read more about how we’re using our voice to fix the broken plastic system through our advocacy and partnerships.
Our mantra and framework: Less plastic. Better plastic. No plastic.
We’re making progress towards our ambitious plastics goals, guided by the following framework:
Less plastic: cutting down how much plastic we use in the first place through lighter designs, reuse and refill formats, and concentrated products which use less packaging.
Better plastic: making sure the plastic we use is designed to be recycled and that our products use recycled plastic.
No plastic: using refill stations and formats to cut out new plastic completely and switching to alternative packaging materials such as paper, glass or aluminium.
Our actions on all three are key to delivering our virgin plastic reduction goal. Due to our step up on recycled plastic, we’ve reduced our virgin plastic footprint since 2019 by 18%.
Our plastic packaging footprint
We use a variety of different plastic packaging types for our products.
Our total plastic packaging footprint – including virgin and recycled plastic – is made up of 68% rigid packaging materials, with bottles, such as those used for fabric cleaning liquid, shampoo and body wash, being the biggest contributor. Flexible packaging makes up 31% of our footprint, with sealed flexible packs and pouches, such as laundry detergent bags, contributing the most. The remaining 1% is made up of tubes, for example, those used for toothpaste
Less plastic
Sometimes a complete rethink of how we design and package products is the best way to reduce plastic. Reducing the amount of material in a product by just a few grams can make a huge difference across an entire product range. Over the last decade we’ve already cut the weight of our packaging by a fifth through better and lighter designs.
We’re encouraging consumers to think of bottles of our cleaning and laundry products as a ‘bottle for life’ – just like a ‘bag for life’ they might use for shopping. For instance, our OMO laundry customers can use their 3-litre bottles for life.
Ultra concentrated products help us give consumers the same products but with much less plastic and smaller packaging. Comfort’s ultra concentrated laundry formulas offer a smaller dosage than any other product on the market. Our Love Beauty and Planet concentred shampoos and conditioners provide the same number of uses with half the plastic.
Our Beauty & Personal Care brands are challenging our throwaway culture too. Dove has started a beauty ‘refillution’ with its first-ever durable, stainless steel refillable deodorant case which is designed to be used for life.
Better plastic
Whenever we use plastic, we make sure we’re choosing better options – that means recycled and recyclable plastics. Currently, 53% of our packaging is recyclable, reusable or compostable[c]. This is our actual recyclability rate, which is significantly less than the 72% of our packaging portfolio that is technically recyclable with existing technology. This gap is an industry-wide challenge and is primarily driven by a lack of collection and recycling infrastructure. We’re working with local governments and partners to close this gap, while we continue to deploy new materials and technologies.
We’re keeping plastics in the system, and out of the environment, by buying recycled plastic – sometimes called post-consumer recycled plastic (PCR). We’re ramping up how much recycled plastic we use. We’ve increased our use of recycled plastic to 22% of our total plastic footprint. This puts us on track to meet our commitment of at least 25% recycled plastic by 2025.
For instance, in 2021 Hellmann’s launched 100% recycled packaging in two-thirds of its markets, Knorr launched 100% recycled plastic bouillon tubs and lids in Europe, and Swedish Glace’s plant-based ice cream comes in recycled plastic tubs. Our Dove beauty brand uses 100% recycled plastic bottles in Europe and North America (where technically feasible) and 98% of its new refillable deodorant packaging in the US is made from recycled plastic. Our Love Beauty and Planet hair and skin care brand, is also working to incorporate recycled plastic in bottle caps and pumps.
There are plenty of technical challenges that we’re tackling in our better plastic journey. We’re developing new solutions, including chemical recycling for plastics which are hardest to recycle such as multi-layered and flexible packaging. We’re also aware that not all packaging that’s technically recyclable will actually be recycled. It’s technically possible to recycle around 72% of our product portfolio. However, what is actually recycled is lower because of the lack of infrastructure in communities.
Recycled plastic packaging also has to meet the same technical and safety standards as virgin plastic – standards which are higher for food packaging. Our Magnum ice cream brand worked with a supplier to overcome this challenge and launch recycled plastic ice cream tubs (see case study below).
In our Home Care division, our dilutable laundry detergents in Brazil, Argentina and Uruguay are made with recycled plastic and cost less than undiluted detergents.
Collecting and processing plastic
We can’t reach our ‘better plastic’ goals unless there’s enough high-quality recycled plastic available. There’s no shortage of plastic in the system – but there are some big challenges. Turning plastic waste and pollution into usable material relies on local collection and sorting facilities. There also needs to be technical innovation and new solutions to make collecting and reprocessing materials commercially viable.
Our business in India was one of the first to help collect and process more plastic than it sold, and we have roadmaps for achieving this in other markets including Brazil, India, Indonesia, Philippines, South Africa, Thailand, UK and US.
However, we have more work to do to scale up our collection efforts. This includes direct investments, such as in the US where we’ve made a $15 million investment in the Closed Loop Partners’ Leadership Fund to help improve recycling. Partnerships in waste collection and processing, building capacity by buying recycled plastics, and supporting extended producer-responsibility schemes will also be critical to drive progress.
We’re developing technology-led solutions too. For instance in Indonesia, we’re supporting urban communities to develop systems to collect and sell waste. A digital platform called ‘Google My Business’ enables consumers to find their nearest waste banks via Google Maps. In China we’re using artificial intelligence to increase recycling rates (see case study below). And together with partners in the UK and US, we’re working to tackle the challenge of black plastic, which typically can’t be detected by waste sorting and recycling machines (see case study below).
We also need to consider the impact of the plastic system on people’s livelihoods, as plastic is frequently collected by waste collectors in the informal economy, often working under dirty and dangerous conditions and without earning adequate wages or receiving social benefits. These individuals and their communities are an integral part of the plastics solution, because without them we will not be able to scale up our collection efforts to meet our goals for a waste-free world.
This issue is a priority for Unilever, and we’ve been busy developing a global framework on how we approach and include human rights in our plastic value chain, especially for informal waste collectors who are involved in collection and processing in a number of developing markets. We’ve also been working with our peers and expert NGOs to build a common approach across industry – most notably through the Fair Circularity Initiative, which we co-founded and launched in November 2022 alongside Coca-Cola, Nestlé, PepsiCo and the NGO Tearfund. Together, we have agreed to advance and adopt the initiative’s 10 Fair Circularity Principles and are now working towards implementing them.
In India, for example, we’re working with the United Nations Development Programme (UNDP) to create a circular economy for plastic and support the social inclusion of thousands of workers within the informal waste sector – also known as waste pickers and Safai Saathis (which translates to ‘invisible environmentalists’) – in recognition of the critical role they play.
Finding new solutions for flexible packaging
Plastic sachets allow low-income consumers to buy small amounts of products – often ones that provide hygiene or nutrition benefits like shampoo, food and toothpaste – that they would otherwise not be able to afford. However, flexible packaging, such as sachets and pouches, is particularly difficult to improve. In the long-term, we want to transition from using multi-layered sachets to mono-material sachets that are technically recyclable, and improve their collection and recyclability, particularly in our markets across Asia, where we sell more products in sachets. We’re learning there are no easy solutions. It’s a technical challenge, made more difficult by different local regulations on collection, sorting and recycling.
We’re developing new business models to reuse packaging and increase collection. For example, in the Philippines we have a sachet recovery programme to incentivise collection of post-consumer sachet waste in and around Manila. We’re also exploring how we can make sachets from single materials instead of multiple layers, making them easier to recycle. In Vietnam, we launched a trial for recyclable mono-material sachets of CLEAR shampoo. The recycled material is reused for items like refuse bags and containers, but with scale there’s potential to return it to our supply chain as recycled plastic. In Indonesia we’re testing solutions to eliminate the need for plastic by offering refill stations.
In Europe we’re members of CEFLEX, a consortium aiming to make flexible packaging in Europe circular by 2025. We contributed to an industry roadmap and guidelines exploring solutions.
We are committed to finding a solution for flexible packaging and we’re partnering with others to make progress.For instance in the UK we’ve partnered with other brands to launch the Flexible Plastic Fund to improve flexible plastic recycling rates. We’re working with Mars, Mondelēz, Nestlé, PepsiCo and UK retailers to incentivise the recycling of flexible packaging.
No plastic
No plastic means rethinking how we design products, developing whole new business models, and new shopping experiences for our consumers. It also means switching out plastic for alternative options such as metals, paper and glass.
The reuse-refill revolution
We want to help bring about a reuse-refill revolution. That’s why we’re working hard to find new ways for people to shop and use our products – for example, by buying one container and refilling it over and over again. Refills can be bought online or in a shop, or through in-store dispensing machines. A service could pick up empty containers, replenish them and deliver them back. Alternatively, people could return packaging at a store or drop-off point, as part of a deposit-return scheme (DRS).
We’ve been trialling a variety of reuse-refill models across our broad portfolio since 2018. We’ve conducted around 50 pilots across the world – testing and scaling different approaches, with the goal of making refilling our products as convenient, affordable and desirable as possible for consumers. Read more about the lessons that we’ve learnt along the way.
As we move beyond our initial ‘test and learn’ approach, we are working with partners, sharing our learnings and focusing our efforts to support an industry-wide shift towards reusable and refillable packaging at scale, in addition to scaling our own successful models. Collaboration is essential if we are going to get reuse-refill models working economically at scale.
Plastic-free packaging and products
We’re finding ways to remove plastic entirely from some of our products and packaging.
Our brands are using a range of alternative materials. Plastic-free packaging innovations include bamboo toothbrushes from Signal, fully recyclable paper food sachets for Colman’s, recyclable glass soup bottles from Knorr and paper ice cream tubs from Carte D’Or, Ben & Jerry’s and Wall’s. Persil laundry capsules now come in plastic-free boxes that can be fully recycled as paper in France. Dove’s single-bar soaps now come plastic-free and Seventh Generation also has a zero-plastic range on eCommerce channels in the US, using packaging made from steel.
We’re taking plastic out of our products too. Simple’s biodegradable facial cleansing wipes are made from sustainably sourced wood pulp and plant fibre.
EV charging company Voltpost‘s “first-of-a-kind” lamppost EV charger is now commercially available in major US metro areas.
The New York and San Francisco-based company is developing and deploying EV charging projects in US cities like New York, Chicago, Detroit, and others this spring.
Voltpost retrofits lampposts into a modular and upgradable Level 2 EV charging platform powered by a mobile app. The company says its platform provides EV drivers convenient and affordable charging while reducing installation costs, time, maintenance, and chargers’ footprint.
Voltpost can install a lamppost charger inexpensively in one to two hours without construction, trenching, or extensive permitting processes. The ease of installation helps bring more EV charging to underserved communities and high-density areas.
Last year, Voltpost participated in the New York City Department of Transportation (DOT) Studio program, a collaboration between the NYC DOT and Newlab. In its pilot, Voltpost installed chargers on lampposts at Newlab in Brooklyn and in a DOT parking lot. The chargers were installed in an hour, operated with a high uptime, and got positive feedback from EV drivers.
The lamppost EV chargers feature 20 feet of retractable cable and a charge plug with a pulsing light that routes the cable at a 90-degree angle to the car socket so the cable doesn’t become a hazard to pedestrians and traffic.
The system can accommodate either two or four charging ports. There’s a Voltpost mobile app so drivers can manage charging, and it also features a map of available and in-use Voltpost chargers. Users can make reservations, track charging, pay based on electricity consumed, and see stats on financial and environmental savings.
The lamppost EV chargers also have a Charge Station Management System that provides charging analytics for public and private stakeholders. Site hosts can set charger features, including pricing, and remotely monitor chargers.
Even zealots of the electric vehicle will tell you that public charging can be a fraught affair. If all goes well, and it often doesn’t, your charging session will likely entail sitting in a dark corner of a parking lot for upwards of an hour. You might have to stand in the rain or snow to operate the charger because most stations lack awnings. You might have to go hungry because many lack access to food. And, perhaps worst of all, your session may be made extra uncomfortable by a typical lack of restrooms.
But hopefully that’s changing. This year, Electrify America opened an indoor flagship location in San Francisco. Situated at 928 Harrison Street, this bank of 20 high-speed chargers is unique not only for its location—occupying some very expensive real estate—but also for its amenities. While charging, you can grab a drink from a vending machine, host a meeting from one of the lounges, and, yes, even use the bathroom.
Electrify America’s new flagship location in San Francisco. ELECTRIFY AMERICA
It’s a massive upgrade from what many EV early adopters have become accustomed to, but it’s just the beginning. With familiar roadside refuges such as Love’s Travel Stops and Buc-ee’s getting in on the game, the future is finally looking a bit brighter when it comes to electrification’s infrastructure.
Just as with buying a new house, the three most important factors in EV charging are location, location, and location. After all, the fastest, most reliable charger in the world is worthless if it isn’t where you need it. The good news? If you have off-street parking, you can likely put a charger in the best possible spot: your home. More than 90 percent of EV owners charge where they live. While slower than the high-speed units at public stations, at-home chargers more than make up for it in convenience.
The latter can typically bring an empty car to full in under ten hours, which is plenty of time for most folks to replenish their EV’s battery pack between returning from work and heading out again the next day. That potentially means a full charge every morning, so public installations take a back seat for many who use an EV as their daily commuter. That’s why we need far fewer of them than we do gas stations. However, whether road-tripping or just going for an extended Sunday cruise, most EV owners will still need to replenish their batteries in the wild at some point. And while location is still crucial, other factors are gaining significance.
The fastest, most reliable charger in the world is worthless if it isn’t where you need it. KENA BETANCUR/VIEW PRESS/GETTY IMAGES
Amaiya Khardenavis, an analyst of EV Charging Infrastructure at the energy-research firm Wood Mackenzie, says that there was a lot of “land grabbing” by the larger networks in the early days of EVs. That is, just throwing down chargers as close to major highways as possible with little regard for amenities. According to Khardenavis, today’s locations are more “customer-centric” than before. “The landscape in 2020 was dominated by only a few players in the market,” he says, “and these were all pure providers, like of course Tesla, but EVgo, Electrify America, ChargePoint, and that’s about it.”
Tesla gained an early advantage with its Supercharger network in 2012. Now, with more than 2,000 domestic locations, it’s the largest operator of fast chargers in the United States. But it wasn’t the first. ChargePoint is the nation’s largest network in general, launching back in 2007 and offering over 30,000 locations. Others weren’t far behind, including EVgo, which has about 3,000 chargers spread across 35 states.
“We’re addressing a lot of our legacy equipment . . . some of our chargers are getting close to a decade old,” says Katie Wallace, EVgo’s director of communications. Yet some newer players are helping to raise the bar. One of those is EV manufacturer Rivian, which launched its Adventure Network just 18 months ago and has since deployed 433 fast chargers across 71 locations. “We’re opening sites each week,” says Sara Eslinger, director of the program for Rivian.
The EVgo network comprises about 3,000 chargers across 35 states. JUSTIN SULLIVAN/GETTY IMAGES
While the name “Adventure Network” infers that these chargers are at off-road trailheads, and indeed Rivian offers some of those, Eslinger says the company is still focused on serving major transportation corridors, while ensuring availability of amenities like 24-hour food services and restrooms, even going so far as to bring in their own lighting if necessary. As increased EV adoption pulls new investment from some familiar names, features like these are becoming the next battleground.
According to Khardenavis, “More retail stores, retail chains, and travel centers [are] entering the space—Walmart, Pilot, and Flying J, as well as Love’s, everyone is trying to be involved in this space to some extent.” Though many of these partnerships are still developing (Mercedes-Benz just announced a deal with Buc-ee’s in November, for example), the net result should be a significantly improved charging experience.
The CEO of Rivian, Robert Scaringe, talks about the automaker’s Adventure Network plan at a presentation last month. PATRICK T. FALLON/AFP VIA GETTY IMAGES
Why are all these players getting into the market now? The money is starting to flow. In the beginning, running an EV-charging business was brutally complicated and expensive, and served only a small segment of early adopters. Today, utilization rates for public chargers are surging, and so is revenue.
“In our last earnings call, we reported that EVgo’s network throughout was growing five times faster than EVs in operation,” Wallace says. She adds that people are getting more comfortable driving their EVs, relying on chargers further afield.
Anthony Lambkin, vice president of operations at Electrify America, sees the same trend: “Some of our sites, especially in parts of California, are routinely over 50 percent utilization.” Lambkin refers to this as “massive growth,” and that it has driven the company to redesign some of its chargers, which were not up to surviving that intensity of use. Higher utilization means more money, and more money means more profits. But, as volume increases, so does the opportunity for other revenue streams.
Unlike these chargers in Oyster Bay, N.Y., an increasing number of future stations may have a retail-store component. ALEJANDRA VILLA LOARCA/NEWSDAY RM VIA GETTY IMAGES
“In today’s gas-station business model, over 60 percent of the revenue really comes from store purchases, not from fuel retail,” Khardenavis says. “The future of the EV-charging model will be some sort of co-located retail-store presence.” More chargers at nicer locations, though, means nothing if they’re constantly broken. “The bigger question is going to be how reliable are these chargers?” Khardenavis says. A 2022 study out of the University of California, Berkeley, found that roughly one out of four chargers evaluated in the Greater Bay Area was non-functional (Tesla stations were not included). More troublingly, when the researchers visited those sites a week later, nearly all of them were still not fixed.
Khardenavis says that such historically poor reliability is directly related to profitability: “I think with that kind of cash flow coming in . . . there is now an impetus to develop this model, which is more customer-centric than just earlier focusing on expanding to locations.”
More chargers at nicer locations means nothing if they’re constantly broken. JOHN TLUMACKI/THE BOSTON GLOBE VIA GETTY IMAGES
In the world of public charging, there’s Tesla’s Supercharger network, and then there’s everybody else. Tesla’s network not only earned a reputation for being the most readily available and reliable, but using a single plug across every new Tesla model meant owners only had to show up, plug in, and wait while the electrons flowed.
Various plug standards have come and gone for other manufacturers, but that too is changing. Virtually every major manufacturer has agreed to use what’s being called the North American Charging Standard. It’s essentially the same plug that Tesla uses.
Soon EVs from Ford, Rivian, and plenty of others will not only use the same plug, but will be able to easily charge at Tesla’s Supercharger stations across the nation. That’s the good news. The bad news is that all the non-Teslas on the road today use a combination of different plugs, most featuring the Combined Charging System, or CCS. While Tesla is updating some of its Supercharger installations to support CCS, it’s going to be a slow transition. “We’re going to be in a land of adapters for a while, because the soonest that any non-Tesla OEM is going to come out with the NACS port is probably the fall of 2025,” says Wallace.
Soon other EVs will not only have the same plug as Tesla models, but will be able to use Tesla’s Supercharger stations across the nation. CELAL GUNES/ANADOLU AGENCY VIA GETTY IMAGES
Rivian has updated its vehicles to show the location of all Superchargers on its integrated navigation, routing drivers appropriately depending on whether they have an adapter. Yet Khardenavis is concerned that this transition could slow down EV adoption further, with some buyers deciding to wait for the port transition to be completed before investing in a new EV. He fears that EVs with the “now-obsolete” CCS port could sit on dealership lots for longer.
Increased utilization raises the potential for long lines at chargers, but the process of building new stations entails dodging numerous roadblocks. One of those is working with local municipalities, which often aren’t used to moving at the pace of a startup. Electrify America’s Lambkin says that processes are improving, but it’s still a challenge. “Permitting is going much better for us now than it was five years ago because there are far more cities and towns and municipalities that are used to seeing this type of equipment,” Lambkin says. “Back in the day, it was like alien technology.”
The federal government is helping as well. The 2021 National Electric Vehicle Infrastructure (NEVI) program provides funding to help cover planning, construction, and even maintenance of chargers. “Folks are going to see a lot more stations coming online in the next year and a half,” says Wallace, who attributes this to the various Department of Transportation outposts at the state level becoming “more comfortable and more familiar with how to implement the NEVI program.”
U.S. President Joe Biden gets a demonstration of an EV charging setup at the White House. JIM WATSON/AFP VIA GETTY IMAGES
Another issue is grid capacity. Khardenavis notes that, for a larger installation, it can take upwards of a year just for the necessary upgrades to power the site. “Project delays are a very common theme in the fast-charging space especially,” he says. But the charging companies are finding ways around this, too. According to Lambkin, Electrify America routinely uses on-site batteries to offset energy usage during peak times and has a so-called “mega pack” in Baker, Calif. “That’s actually to allow us to build that site well in advance of when the utility, SCE in this case, had the capacity to be able to serve the number of dispensers and the amount of power that we needed.”
And finally, there’s construction. It takes time to design a given charger layout, run the conduit, lay out the chargers themselves, and wait for all that concrete to cure. Even that process is changing. “We just deployed our very first station using prefabrication in Texas,” says EVgo’s Wallace. “It’s just a more efficient way to deploy because everything is assembled off-site, in an assembly facility, and then dropped into a skid-frame. So this construction timeline is much shorter.”
Tesla owners line up for an available charger in Utah. GEORGE FREY/GETTY IMAGES
According to the National Renewable Energy Laboratory (NREL), current growth and demand for EVs will require 1.2 million U.S. public chargers by 2030. As to the current reality, Khardenavis notes that there are about 165,000 available today, and he’s skeptical about that 2030 target. “It’s almost ten-X growth, which is extremely challenging in today’s environment,” he says, adding that predicting the need for six years in the future is itself difficult given the unpredictability of consumer behavior. “I don’t see us reaching that number anytime in the next four- to five-year timeframe. But I think it’s a target that we need to have in mind before we deploy and make plans around making EV charging more ubiquitous.”
A couple wait on their EV to charge in Texas. SHELBY TAUBER FOR THE WASHINGTON POST VIA GETTY IMAGES
But merely adding more chargers isn’t enough. It’ll take a better all-around charging experience to meet the needs of a new generation of luxury EV owners, such as drivers of the Mercedes-Benz EQS and the Rolls-Royce Spectre, for example. Meeting those standards will take more installations like Electrify America’s indoor flagship. “We’re really competing with the traditional fueling industry, and that’s been around for 100 years,” says Lambkin. “If you think about where we are today and where we’ve come in just five years, think about the levels of improvement that we can expect to see over the next five years.”
While that dingy charger in the back of the shopping-mall parking lot is still the norm for now, there’s work underway to make it the outlier. The real issue remains whether public adoption of EVs and the requisite infrastructure expansion will both maintain enough juice.
Data centers, factories, heat pumps and EVs are putting increasing stress on a grid that isn’t growing fast enough, new data shows.
Written by: Jeff St. John View the original article here
A recently constructed Meta data center in Eagle Mountain, Utah (George Frey/Getty Images)
For the past two decades, demand for electricity across the United States has hardly increased. But those dynamics appear to have dramatically reversed — and U.S. electric utilities, regulators and power grid planners aren’t prepared to deal with this new paradigm of surging electricity demand.
That’s the key takeaway from a new report by consultancy Grid Strategies called The Era of Flat Power Demand Is Over. Already, massive amounts of clean energy projects are stuck waiting for grid expansions to happen so they can connect. Soon enough, data centers, factories, electric-vehicle charging depots and other major electricity users could start facing the same barriers, the report warns.
In the past year, estimates from U.S. utilities and grid operators of how much electricity demand will grow over the next five years have nearly doubled, jumping from 2.6 percent to 4.7 percent, according to Grid Strategies’ analysis. That’s far higher than the more incremental 0.5 percent annual demand growth estimates of the past decade.
(Grid Strategies)
Over the past 20 years, efficiency improvements — primarily replacing incandescent lightbulbs with fluorescents and then LEDs — have counterbalanced rising power demand from population and economic growth, giving utilities and regulators little reason to expand their power grids or generation capacity.
“I think people got used to…flat power demand,” said Rob Gramlich, Grid Strategies president.
But the combination of near-term growth in electricity use by data centers and industry and longer-term growth from electric vehicles and building heating has upended that status quo, he said. “Those who are actively involved in electrifying parts of the economy understand that that means more electricity demand. But it’s only been dribbling out anecdotally here and there.”
That anecdotal data has piled up. In Virginia’s Loudoun County, dubbed “Data Center Alley” for its remarkably high concentration of data centers, power shortfalls have prompted utility Dominion Energy to push grid planners to approve a multibillion-dollar grid expansion; some data center operators and regulators have even proposed running backup diesel generators to cover power gaps. In California, lags in grid expansions are causing monthslong wait times for getting connected to utility service, not just for major new loads like electric truck-charging depots but even for everyday commercial and multifamily buildings.
All told, grid planners across the U.S. forecast an increase of 38 gigawatts of peak demand by 2028, according to data reported to federal regulators — a pace of growth that will be hard to keep up with. Data centers and factories can be built in a few years, but it takes four years or more to build new power plants, and up to a decade or longer to build new transmission lines.
While this is a problem that goes beyond the clean energy sector, it also presents a particular hurdle for the energy transition. Not only does the U.S. need to rapidly replace existing coal- and gas-fired power plants with renewables — it also needs to grow fast enough to accommodate the surge of new electricity demand. For this new demand to be met in a way that doesn’t derail the transition away from fossil fuels, the U.S. will need to clear the way for a much speedier buildout of wind, solar, batteries and power lines.
“The main reason [tracking increases in electricity demand] is important is for infrastructure planning,” Gramlich said. “Transmission infrastructure in particular takes a long time. As soon as we know this load situation to be the case, we’d better act quickly.”
A sector-by-sector breakdown of where new electricity demand is coming from
Grid Strategies highlighted key demand-growth drivers across several major grid regions, including PJM, which operates the grid in all or part of 13 states from Illinois to Virginia, as well as the grid operators for California, New York and Texas, and four large utilities: Arizona Public Service, Duke Energy, Georgia Power and Portland General Electric in Oregon.
(Grid Strategies)
Data centers and industrial facilities were among the biggest drivers of new load. New investments in U.S. data centers are projected to exceed $150 billion through 2028, driven by rising demand for cloud computing, telecommunications, digitization and artificial intelligence. Data centers already make up roughly 2.5 percent of total U.S. electricity demand, according to analysis from Boston Consulting Group — but exploding demand for AI could drive that to 7.5 percent by 2030.
(Grid Strategies)
New industrial facilities are also adding demands on the grid. The country has seen about $481 billion in commitments to build and expand industrial and manufacturing facilities since 2021, the report states. Much of that growth stems from the clean energy manufacturing boom and is concentrated in the Midwest and Southeast, which are receiving the lion’s share of battery and EV manufacturing investments spurred by the tens of billions of dollars of federal incentives from the Inflation Reduction Act.
(U.S. Department of Energy)
Not all of the emerging demands for grid electricity are fully accounted for in current load-growth forecasts, Gramlich noted. One striking example is hydrogen produced from zero-carbon electricity, supported by lucrative tax credits offered by the Inflation Reduction Act, which could add gigawatts’ worth of new power demand across the country. But with the exception of New York, grid planners’ “load forecasts don’t appear to be explicitly considering the implications of hydrogen fuel plants,” according to the repo
(U.S. Department of Energy)
Increased electricity demand stemming from the electrification of transportation and buildings — a key facet of the Biden administration’s climate plans — is not as granularly tracked in states outside those with aggressive policies on those fronts, such as those adopted by California and New York. In California, where policymakers have set their sights on replacing fossil-fueled vehicles and building heating systems with EVs and heat pumps, respectively, statewide electricity demand is expected to grow by about 60 percent through 2045, according to an analysis from utility Southern California Edison — a remarkable turnaround from a state that’s led the country on energy efficiency. New York expects similar increases in electricity demand over the coming decades.
How uncertainty and cost concerns have limited grid infrastructure buildout
Though it’s clear what direction power demand is moving in, “we don’t know enough yet to say what load growth is going to be,” Gramlich cautioned. Load forecasting is an inherently uncertain field. Some proposed data centers and factories may never be built. The uptake rates of EVs or electric-powered heat pumps for homes and buildings can’t be predicted with perfect accuracy.
These uncertainties can lead utility regulators to look askance at utility grid-expansion proposals that may exceed future needs, since their costs are passed on to utility customers via increases on their bills. Over the past half-decade or so, a number of large-scale utility grid-expansion plans have been denied by state regulators due to concerns over excessive costs.
Similar dynamics have slowed efforts within the independent system operators and regional transmission organizations that manage the grids that provide electricity to roughly two-thirds of the country’s population. Since a series of large-scale buildouts in the early 2010s, the scale of U.S. grid projects has declined significantly, with the average miles of newly built high-voltage transmission lines falling by more than half from the first half to the second half of that decade.
Several of these grid operators have approved multibillion-dollar grid buildout plans in the past two years. But those plans still tend to project lower levels of load growth than the data in Grid Strategies’ study indicates is on its way, Gramlich said. “It may be that everybody’s base case needs to be ratcheted up.”
The Federal Energy Regulatory Commission, which regulates interstate transmission policy, is in the midst of crafting proposed transmission rules that are expected to require grid operators and utilities to examine a broader set of future grid needs, including increasing demand from electrification of transport and buildings, when making their long-term grid plans.
“There should be a lot of work coming up for every region following the FERC rule,” which is expected some time in the first half of 2024, Gramlich said. “That rule will require a lot of planning — and the devil’s in the details in every region.
New industrial facilities are also adding demands on the grid. The country has seen about $481 billion in commitments to build and expand industrial and manufacturing facilities since 2021, the report states. Much of that growth stems from the clean energy manufacturing boom and is concentrated in the Midwest and Southeast, which are receiving the lion’s share of battery and EV manufacturing investments spurred by the tens of billions of dollars of federal incentives from the Inflation Reduction Act.
(U.S. Department of Energy)
Not all of the emerging demands for grid electricity are fully accounted for in current load-growth forecasts, Gramlich noted. One striking example is hydrogen produced from zero-carbon electricity, supported by lucrative tax credits offered by the Inflation Reduction Act, which could add gigawatts’ worth of new power demand across the country. But with the exception of New York, grid planners’ “load forecasts don’t appear to be explicitly considering the implications of hydrogen fuel plants,” according to the report.
(U.S. Department of Energy)
Increased electricity demand stemming from the electrification of transportation and buildings — a key facet of the Biden administration’s climate plans — is not as granularly tracked in states outside those with aggressive policies on those fronts, such as those adopted by California and New York. In California, where policymakers have set their sights on replacing fossil-fueled vehicles and building heating systems with EVs and heat pumps, respectively, statewide electricity demand is expected to grow by about 60 percent through 2045, according to an analysis from utility Southern California Edison — a remarkable turnaround from a state that’s led the country on energy efficiency. New York expects similar increases in electricity demand over the coming decades.
How uncertainty and cost concerns have limited grid infrastructure buildout
Though it’s clear what direction power demand is moving in, “we don’t know enough yet to say what load growth is going to be,” Gramlich cautioned. Load forecasting is an inherently uncertain field. Some proposed data centers and factories may never be built. The uptake rates of EVs or electric-powered heat pumps for homes and buildings can’t be predicted with perfect accuracy.
These uncertainties can lead utility regulators to look askance at utility grid-expansion proposals that may exceed future needs, since their costs are passed on to utility customers via increases on their bills. Over the past half-decade or so, a number of large-scale utility grid-expansion plans have been denied by state regulators due to concerns over excessive costs.
Similar dynamics have slowed efforts within the independent system operators and regional transmission organizations that manage the grids that provide electricity to roughly two-thirds of the country’s population. Since a series of large-scale buildouts in the early 2010s, the scale of U.S. grid projects has declined significantly, with the average miles of newly built high-voltage transmission lines falling by more than half from the first half to the second half of that decade.
Several of these grid operators have approved multibillion-dollar grid buildout plans in the past two years. But those plans still tend to project lower levels of load growth than the data in Grid Strategies’ study indicates is on its way, Gramlich said. “It may be that everybody’s base case needs to be ratcheted up.”
The Federal Energy Regulatory Commission, which regulates interstate transmission policy, is in the midst of crafting proposed transmission rules that are expected to require grid operators and utilities to examine a broader set of future grid needs, including increasing demand from electrification of transport and buildings, when making their long-term grid plans.
“There should be a lot of work coming up for every region following the FERC rule,” which is expected some time in the first half of 2024, Gramlich said. “That rule will require a lot of planning — and the devil’s in the details in every region.”
Building new power plants instead of transmission lines could help serve these growing loads. But it’s far more efficient to expand the grid to carry power from where it’s most cheaply generated to where it’s most acutely needed.
A host of new transmission grid projects have been approved over the past few years. But they’re still not enough to connect the massive amounts of new renewable power needed to reach the Biden administration’s goals of a zero-carbon grid by 2035. Studies from the U.S. Department of Energy, the Massachusetts Institute of Technology and Princeton University have found the country must double or triple current transmission capacity to reach that goal.
Nor are the new power lines being planned sufficient to eliminate rising grid-congestion costs that are adding billions of dollars to U.S. consumers’ electricity costs, or to enable different regions of the country to share power in order to mitigate the risk of blackouts during extreme winter storms or summer heat waves. This new report also adds the risk of stalling economic growth to this list of threats.
Transmission projects can take more than a decade to move from planning to construction, and they can be blocked by permitting and legal challenges at multiple points. Regional grid-expansion proposals can be scuttled due to conflicts between the utilities and states they connect over how to fairly allocate and distribute the costs of building them.
Federal action on this front has been limited as well. To date, Congress has failed to act on proposed legislation to offer tax incentives to transmission projects, to require minimum amounts of transmission between regions or to give FERC more authority to override state-by-state objections to new projects. But members of both parties in Congress “should care enough about infrastructure to support economic growth in this country,” Gramlich said.
Contributed by Grzegorz Marecki, co-founder and CEO of Continuum Industries View the original article here
The expansion of electricity transmission infrastructure is crucial for meeting growing energy demands and accelerating the United States’ clean energy transition. However, spatial planning processes are struggling to keep pace with the speed of change required to tackle climate change. Building clean energy infrastructure today can take more than a decade, largely due to delays in planning and permitting.
The root of this challenge lies in the complexity of infrastructure planning. Developers need to simultaneously meet the requirements of dozens of stakeholders, which demands a balance between technical and regulatory considerations, as well as the perspectives, priorities, and concerns of diverse stakeholders. Utilities, traditionally functioning as asset managers, are now faced with the need to become developers, driving the rapid expansion of America’s grid demands. However, their processes have not evolved at the pace required to meet this urgent need.
Additionally, as the volume of work increases, the industry grapples with insufficient resources to deliver at the speed required. Automation of repetitive tasks can help free up professionals, enabling them to focus on more complex challenges. The industry also faces constraints due to the limited number of specialists available for traditional tasks.
To overcome these challenges, the industry must embrace a technology-powered paradigm shift. A tech-enabled approach to planning processes, supported by professional oversight, has the potential to revolutionize the development of new energy networks.
Frontloading data for more predictable permitting
With the advancement of technology, governments and other key stakeholders now have access to unprecedented amounts of data. If harnessed effectively, this data can help infrastructure developers expedite decision-making processes and streamline the planning and permitting phases.
New tools allow for a comprehensive data dive right at the project’s start, providing a full picture of constraints and opportunities. AI algorithms offer intelligent insights, guiding developers toward optimal decisions. These tools empower users by allowing them to configure assumptions, preferences, and project goals before the algorithm runs, ensuring a clear link between inputs and outputs. For example, easier access to spatial data makes it possible for developers to get a comprehensive view of the permits that would be required. Traditionally, they would have to wait a few months for a manually produced report from a consultant. This also allows the professionals to focus on the areas of highest risk.
Automated routing for unbiased solutions
By automating routine processes, developers can assess more alternatives than was ever possible without automation and remove decision biases. Algorithms can explore and optimize different solutions for infrastructure assets, simultaneously considering factors such as cost, technical feasibility, and environmental and community impact.
While still in its early stages of adoption in the US, automated routing is already demonstrating its potential, and it might pay to look across the pond for an example to follow. The UK is slightly ahead of the US when it comes to grid expansion, and more than just encouraging is now expecting transmission companies to standardize and automate routing. The government has adopted a package of 19 measures to slash the project development timeline from 14 to 7 years, but utilities that have adopted a heavily automated approach say that they’ve been able to kick-start their projects and complete 12 months’ worth of work in as little as 8 weeks.
As the energy sector transforms and projects become increasingly complex, automated tools will empower developers to respond swiftly to changing requirements, market dynamics, and regulatory landscapes.
Transparency and accountability through comprehensive decision-making
In the past, manual record-keeping and documentation processes left room for ambiguity and potential oversights. However, technology can establish a reliable audit trail, ensuring that every decision is logged, timestamped, and linked to the specific dataset or analysis that influenced it. This record enables project teams to revisit and refine decisions, supporting external regulatory approvals and fostering accountability throughout the process.
Breaking silos with cross-department collaboration
Technology can also bridge the divide between internal teams, fostering smooth collaboration and streamlining decision-making processes. Providing a shared platform for data and insights ensures that everyone involved in the project is working from the same information, reducing miscommunication and delays.
Through leveraging technology, traditionally siloed disciplines can replace slow email communication channels with rapid feedback based on standard criteria. For example, when engineers move a tower to avoid difficult ground conditions closer to a water body, they receive automatic feedback on whether the new position meets the requirements for setbacks from the water based on environmental protection policies.
Public engagement and transparent project narratives
Beyond internal teams, technology plays a crucial role in engaging the public and garnering support for critical infrastructure projects. Presenting decisions backed by solid evidence and interactive visualizations makes complex data digestible and addresses concerns head-on. This transparency builds trust and fosters a sense of shared ownership, crucial for navigating the permitting process and ensuring community buy-in.
Stakeholder engagement is also changing thanks to technology. Dynamic maps and immersive 3D visualizations now allow project teams to collaboratively iterate with stakeholders, demonstrating the project’s evolution over time and minimizing impacts. This interactive approach, coupled with routing and siting automation, eliminates the traditional time constraints associated with manual rerouting.
The submission of documents, particularly environmental baseline schedules and reports, has also evolved. Algorithms can now identify potential impacts, presenting them to professionals for screening and defining mitigation strategies. This not only speeds up the process but also frees up professionals for more strategic tasks.
The Linear Infrastructure Planning Panel provides a noteworthy example of the efforts made towards more transparent and dynamic project planning. The Panel’s purpose is to engage key public interest stakeholders, including social and environmental groups, in the development of good practices and ethical approaches in the use of new techniques, such as algorithms and advanced software tools, for infrastructure planning. By actively involving various stakeholders, the Panel contributes to shaping responsible and inclusive technology integration in the planning process, setting a precedent for the industry.
Looking ahead
The American Council on Renewable Energy emphasizes that a $1.5 trillion investment in new transmission infrastructure by 2030 is not just a financial commitment, but an investment in a clean energy future. In this landscape, technology is not a silver bullet, but still a powerful catalyst for change. It facilitates efficiency, transparency, and collaboration, enabling informed decision-making and accelerating the development of a robust and resilient grid.
By embracing a tech-powered approach, the US can overcome the bottlenecks plaguing the current system and realize the full potential of clean energy. This transformation isn’t about replacing human expertise; it’s about empowering and augmenting it, fostering a synergy that paves the way for a more efficient and sustainable future.
With COP28 recent in the rearview mirror, 2024 represents a clear and critical inflection point for confronting the climate crisis. New rules in the European Union and in California, the world’s fifth-largest economy, will change how global businesses report risks, purchase energy and manage supply chains. The effects of the Inflation Reduction Act in the U.S. are still emerging: 175 nations are hashing out the first global treaty to end plastic waste.
Below are some defining moments that will drive change in the business of sustainability in the coming year.
Carbon
Expected U.S. SEC climate-related disclosures in April will require companies to report their GHG emissions.
The U.S. Office of Fossil Energy and Carbon Management, part of the Department of Energy, announces winners in February of its carbon dioxide removal purchase pilot prize and will publish details for corporate sustainability teams’ own carbon removal due-diligence processes.
New guidance from the Science Based Targets initiative on the use of environmental attribute certificates, including carbon credits, in decarbonization goals should come out by summer.
By the end of 2024, companies subject to California’s new Climate Corporate Data Accountability Act (SB253) will need to establish processes for auditing their 2025 emissions ahead of 2026 reporting.
Finance and ESG
A new proposal may emerge in the spring from the U.S. Securities and Exchange Commission (SEC), after it again delayed its climate change disclosure rulemaking.
Changes to the EU’s Sustainable Finance Disclosure Regulation (SFDR) 2.0 are likely following a September 2023 review.
Sometime in 2024, the U.S. Federal Trade Commission’s updated Green Guides are expected to update what “greenwashing” means in business and marketing.
Nature and biodiversity
The EU’s Corporate Sustainability Reporting Directive (CSRD), requiring companies to disclose their risks from environmental and social factors, takes effect Jan. 1.
COP16, the 16th Conference of the Parties to the Convention on Biological Diversity, will take place in Colombia from Oct. 21 to Nov. 1.
Revised or updated National Biodiversity Strategies and Action Plans (NBSAPs), including national targets, are due by COP16.
By Dec. 30, operators and traders must prove deforestation-free sourcing for targeted commodities in the EU market. That’s the EU Deforestation Regulation (EUDR) compliance deadline.
Food and agriculture
The EU CSRD goes into effect as 2024 begins, influencing supply chain impact disclosure and bringing new evidence of deforestation.
Supply chains risk disruptions if the U.S. Farm Bill continues to stall in Washington in 2024.
Watch for the next steps from the hundreds of nations that signed sustainable food declarations at COP28.
Transport
The U.S. Departments’ of Treasury and Energy rules go into effect, barring vehicles with battery components from a “foreign entity of concern” from consumer tax credits.
The IRS expands its EV tax benefit by letting consumers choose between claiming a credit on their tax returns or using the credit to lower a car’s purchase price.
The ReFuelEU aviation initiative goes into effect Jan. 1 to advance sustainable aviation fuels (SAF) in the European Union. It also requires aircraft operators and EU airports to work towards emission reductions and to ensure a level playing field for airlines and airports.
In January, the EU extends its cap-and-trade Emissions Trading System (EU ETS) to regulate CO2 from large ships of any flag entering its ports.
The U.S. Department of Energy will release an updated Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation (GREET) model by March 1.
Circular economy
A hoped-for Global Plastics Treaty in 2024 moves forward with INC-4 meetings expected in April in Ottawa and INC-5 by November in Korea.
California, Maine, Oregon and Colorado are working on enforcement rules and other fine print for their new extended producer responsibility (EPR) packaging laws.
EU battery regulations are gradually being introduced, encouraging a circular economy for batteries.
Energy
At COP28, the U.S. announced new rules to cut methane emissions in oil and gas production, likely to change the energy cost equation. Watch for progress from 150 countries pledging two years ago to cut methane by 30 percent by 2030.
The Biden administration will be giving out $7 billion for its Regional Clean Hydrogen Hubs (H2Hubs).
2024 will be a watershed year for microgrids moment: Interconnection backlogs are creating a new value-add for microgrids, especially as the macrogrid can’t keep up with electricity demand.
Buildings
Watch the 28 countries agreeing at COP28 for “near-zero” buildings by 2030 through the Buildings Breakthrough.
Applications are due and funding will be announced for the EPA’s $27 billion Greenhouse Gas Reduction Fund, backing climate tech and moving money into communities.
Applications for the EPA’s Environmental Product Declaration (EPD) grants are due Jan. 16 from manufacturers.
Over the last decade, companies and investors have come to pay more attention to environmental concerns, often with a goal of offering “green” products or making “green” investments. But the companion of green is often what’s known as greenwashing. In some countries, regulators are trying to clean up the field, launching investigations and levying fines. They have the backing of some advocates of environmentally minded investing worried that greenwashing’s taint may undermine the field.
1. What is greenwashing?
It’s the use of misleading labels or advertising to create an undeserved image of environmental responsibility. Here are some eamples:
In December, the UK’s antitrust regulator began an investigation of Unilever Plc, the maker of Dove soap and Cif cleaner, for allegedly overstating the environmental qualities of certain products.
Fashion companies Asos and Boohoo and airlines such as Air France-KLM, and Deutsche Lufthansa AG were told by regulators to discontinue misleading ads that made air travel seem more eco-friendly than it is.
In investing, the UK’s Financial Conduct Authority rolled out a framework in November designed to protect retail investors from misleading claims by firms with so-called ESG funds — where investment decisions are shaped by environmental, social or governance factors.
In the US, Deutsche Bank AG’s DWS asset management arm agreed in September to pay a total of $25 million to settle Securities and Exchange Commission probes into alleged greenwashing and anti-money laundering lapses. The penalties included $19 million for “materially misleading statements” about how the bank incorporated ESG factors into research and investment recommendations.
2. What’s the incentive for greenwashing?
The ultimate attraction is the favorable image companies project across to clients, investors, shareholders, lenders and even potential employees. But different players have different reasons for exaggeration. When companies fudge on something they’re selling, it’s because they want environmentally minded consumers to be drawn to their products. When they’re borrowing money, they may be chasing a “greenium” — the money they can save by qualifying for the better terms lenders might extend to green or social projects or to ones with ESG goals. Brazil raised $2 billion in the bond market in November 2023 with proceeds earmarked for green and social work, and the debt was priced lower than initial guidance – meaning the Amazon forest nation is paying lower interest rates, compared with a conventional bond. And investment managers might put a greener label than is warranted on a fund to draw in more assets.
3. How big a problem is it?
In 2022, Bloomberg News analyzed more than 100 bonds worth almost $70 billion tied to issuers’ ESG credentials that were sold by global companies to investors in Europe. The analysis found that the majority were tied to climate targets that were weak, irrelevant or even already achieved. Some companies promised to do no more than maintain their existing ESG ratings. And some of the fastest-growing areas of ESG financing involve so-called sustainability-linked loans(SLL) (and similar bonds) in which the connection between environmental labels and environmental goals can be tenuous.
4. How does sustainability-linked debt work?
Sustainability-linked bonds and sustainability-linked loans are signed with commitments from borrowers to achieve certain environmental or social targets, but those goals may be changed in an increasing number of cases. The more flexible agreements even allow issuers to adjust those targets under certain conditions without incurring a penalty. Issuers argue that they have to look for ways to cope with increasingly volatile markets in which key ESG parameters such as energy prices become harder to predict. Then there’s the “sleeping” sustainability-linked debt where financing has an ESG label but with no immediate sustainability targets. Other approaches push responsibility even further out: Bank of China Ltd.’s so-called re-linked bond sold in 2021 is tied to the performance of a pool of sustainability-linked loans made to its clients — that is, not to anything BOC is or isn’t doing in ESG terms, but to the ESG performance of the clients who have taken out those loans.
5. Who’s checking up?
There are dozens of ESG rating and data providers globally, which can provide some assurance that companies and debt issuers are doing their part in sustainability. But private ratings systems can be unreliable and corporate reporting is spotty and hard to compare. All of this greenwashing detective work would be easier if investors and the public had a standardized approach and a robust set of data to compare. Here’s some of what governments and other organizations are doing:
Hong Kong, Japan, South Korea, India, Singapore, the UK and EU have issued or proposed rules for ESG score providers, though the rules are only mandatory in the EU and India. The UK Financial Conduct Authority, meanwhile, has unveiled its Sustainability Disclosure Requirement ensuring investment products are accurately labeled or presented.
The US SEC is working on getting companies to report on their greenhouse gas emissions and other climate matters.
The EU enforced the Corporate Sustainability Reporting Directive in January 2023 which requires companies to disclose risks and opportunities arising from social and environmental issues. For the debt markets, the European Council adopted a green bond standard in October 2023 that specifies where proceeds will be invested and which activities are aligned with the EU taxonomy.
Financial bodies, including the International Capital Market Association which oversees the international debt capital markets, and global loan associations have drafted guidelines for ESG debt such as sustainability-linked instruments, green and social financing.
6. Is it just environmental misconduct that’s considered greenwashing?
No. Social and governance aspects have grown to be just as crucial as companies’ environmental efforts, especially since the #MeToo and Black Lives Matter movements began making an impact on consumers’ spending. Many corporations are using their annual sustainability reports to showcase how fair they are in equality employment or what they did to improve employee wellbeing. Given that some of these goals are hard to measure in areas where little data is available, there’s a risk in overstating the results. Of the $1.4 trillion of sustainability-linked debt with disclosed ESG goals, only $352 billion was tied to social objectives, according to BloombergNEF data.
7. How can I avoid investing in greenwashing?
Here are some questions to ask yourself:
How ambitious are a company’s goals? Are they integral to its core business, or just superficial commitments? Is the company just promising to do something it would be doing anyway?
How specific is the timeframe? Are the goals set annually, or in a way that allows for easy monitoring?
Are companies looking at the full “scope” of their emissions, including the carbon released when customers use their products?
How much do their plans rely on the kinds of carbon “offsets” that have come under fire for not living up to their promises of environmental benefits?
Is there a way to check on companies’ claims, such as in an evaluation by an impartial ESG data- or ratings-provider?
Is a company making information about their sustainability goals accessible in a transparent and timely way?
