Fortune 500 Sustainability Analysis

Stories - Fortune 500 Corporate Sustainability Analysis

Key Terms: Ecology; Energy; Forest Products; GHG & Waste Goals; Infrastructure; Packaging; Product Design; Reverse Logistics; Social, Staff, Culture; Standards; Systems; Toxics; Transportation; Waste System; Water

Introduction

This document is a first-attempt to review a broad range of Fortune 500 sustainability approaches, through a technical and engineering lens. It is a summary of sustainability tactics utilized by 11 companies chosen to be a cross-industry sample. The companies reviewed are: 3M, Amazon, Comcast – NBC Universal, Home Depot, Intel, Jacobs, McDonalds, Netflix, Paypal, Starbucks, and UnitedHealth Group. Further research would expand the survey to more companies. For any questions please contact the author at matteshed@gmail.com.

Ecology

Intel utilizes the term “handprint” a number of times in their report, the only company to do so, which they define as ways to help others “reduce their footprints, including Internet of Things solutions that enable intelligence in machines, buildings, supply chains, and factories, and make electrical grids smarter, safer, and more efficient.” This is reflected in their product, supporting large data centers, servers, and massively distributed computers. By improving the energy handling of their products, they can have a massive impact on energy utilized by computers, accounting for 1.8% of electricity use in the United States (Siddik et al., 2021). This product ecology perspective recognizes the role that Intel products have for its users, going beyond “Scope 3” terminology, enabling customers to achieve their own goals. Doing well by doing good, one might say.

Environmentally speaking, McDonalds, Starbucks, and the Home Depot all have initiatives focused on environmental stewardship. McDonalds is funding regenerative agriculture projects, in partnership with Target, Cargill, and the Nature Conservancy (the primary funder of the TechStars Sustainability Startup Accelerator in Denver, with multiple “regentech” startups participating, such as Nori, the carbon removal marketplace). Starbucks offers training programs for their farmers, emphasizing “precision agronomy practices – such as analyzing soil and leaves – to help reduce our carbon footprint.”

Energy

Energy is a factor of every company’s approach, either simply as a factor for purchasing offsets or renewable energy credits, as an aspect of infrastructure development, or as a driver of innovation. 3M, Amazon, Home Depot, McDonalds, Starbucks, and Jacobs are all playing a role in building solar farms, wind turbines, battery storage, small nuclear reactors (Jacobs), and Virtual Power Purchase Agreements in countries around the world. Home Depot uses hydrogen powered forklifts in some of its locations, and publicizes the use of battery storage in at least 50 of its stores. Starbucks has funded nearly $100 million in community solar projects in New York, and McDonalds is experimenting with various methods to achieve zero-emissions electricity at its stores, including solar panel-covered parking lots, energy-generating photovoltaic windows, and even a bicycle that illuminates their logo. Renewable energy credits and offsets are used to “zero-out” emissions on the balance sheet by purchasing credits from verified registries.

Forest Products

With many products and their attendant packaging in inventory, 3M and Home Depot speak more than the others about the importance of sustainable forestry and paper products. 3M is prioritizing paper and pulp products as an area needing formal expectations because of deforestation risks and human rights violations. Home Depot is working to evolve and in some cases eliminate the use of pallets; experimenting with pallets made from post- consumer paper, and in some cases, forgoing pallets in shipment to enable the stacking of goods to the top of the trailer. According to Home Depot, it takes “a whole tree” to make eight wooden pallets. Amazon participates in initiatives such as the “Sustainable Packaging Coalition,” “The Recycling Partnership,” and has an internal “Packaging Lab.”

Greenhouse Gas and Waste Goals

All companies publish greenhouse gas and pollution reduction goals. Home Depot is working with one of its local plant suppliers to replace plastic tags with paper adhesive labels, eliminating the use of 7,900 lbs of plastic, a relatively small amount for a Fortune 500 company. Starbucks has a goal to eliminate one billion plastic straws per year, by replacing them with paper straws or with redesigned lids that do not need a straw. Starbucks Korea has set a goal of eliminating single-use cups by 2025, and Starbucks set a global goal in January 2020 to be a “resource-positive” company over the coming decades. Intel is nearing its goal to be zero-waste, with 5% of their total waste sent to landfill. Intel defines zero-waste as 1% of all waste sent to landfill.

On the side of greenhouse gas and other environmental pollutants, Netflix shared a metric of note: one hour of streaming releases in the range of 100g CO2e, which they equivocate to driving an internal combustion vehicle 1⁄4 mile. Netflix reported a 2020 carbon footprint of 1.1 million metric tons, less than a normal year because of the reduced production schedule due to the pandemic. As a semiconductor manufacturer, Intel’s waste stream is diverse, including PM2.5, VOCs, hazardous air pollutants (HAPs), nitrogen oxides, and carbon monoxide. For pollution prevention, Intel uses “abatement equipment such as thermal oxidizers, wet electrostatic precipitators (WESPs), wet scrubbers, and ultra-low NOx burners.” In addition, Intel’s waste stream includes “lithography- related solvents, metal plating waste, specialty base cleaners, spent sulfuric acid, ammonium sulfate, and calcium fluoride.”

Infrastructure

Amazon, Home Depot, Intel, and Netflix have notable reports on infrastructural developments to support sustainability goals. Amazon is making capital expenditures on energy-efficient buildings, utilizing green roofs, LED lighting with sensing to detect when buildings are occupied, and advanced building management systems, including motor variable frequency drives, high-efficiency HVAC, and remote energy and power monitoring. Amazon claims green roofs “reduce building heating and cooling loads, clean and reduce storm water runoff by at least 70%, moderate the urban heat island effect, and improve local air quality.” In addition to battery storage systems used in Home Depot stores, the company also utilizes variable frequency drives (VFDs) to ensure equipment only uses electricity needed for immediate demand, with upgraded HVAC equipment in 576 stores. Netflix claims its efforts to reduce traffic on transmission networks by installing content delivery caches close to customers as sustainability improvements. Intel uses “22 different technology applications, such as solar hot and cooling water systems, solar electric photovoltaic-covered parking lots, and mini bio-energy, geothermal energy, and micro wind turbine array systems.”

Packaging

As consumer goods companies, 3M, Home Depot, Amazon, and McDonalds all make efforts to replace plastics with biodegradable substitutes in their packaging. UnitedHealth Group notes an effort to replace foam and polystyrene packaging with cotton, which they describe as “100% renewable” and “biodegradable, compostable, reusable, and recyclable.” It is worth noting that these terms deserve defining in order to integrate them into supply systems. At a 3M “Center of Excellence” in Oakdale, Minnesota, the team replaced the packaging used for a medical warming device from two-part foam molding to corrugated cardboard. Home Depot is swapping plastics in private-label packaging for “biodegradable options like molded pulp and paper” and has an effort to find substitutes for expanded polystyrene foam (EPS), claiming that EPS “contains beads of chemicals and oil that are often difficult to recycle and can take more than 500 years to biodegrade.” Home Depot claims to have “eliminated enough PVC film to cover 99 football fields.” McDonalds is replacing plastic drink lids with fiber in some markets, and Amazon speaks of “carbon neutral packaging,” though without any detail.

Product Design

3M, Amazon, Home Depot, Intel, and McDonalds are integrating sustainability into their product lines. 3M produces coatings and tapes for wind turbines, as well as roofing granules they claim can improve air quality, and soap that produces more lather than previous versions. Amazon uses its technology service business to support their Sustainability Data Initiative, “a global and authoritative source for open-sourced weather, climate, and sustainability data.” Home Depot cites metrics resulting from their energy- and water-efficient products, such as conserving 52 billion gallons of water in 2019 through WaterSense-labeled products. Intel celebrates their Internet of Things lighting platform, which can be used to optimize lighting in large buildings, as well as taking on the “global challenge to partner with the technology industry and other stakeholders to achieve ‘carbon-neutral computing’,” with “Modern Standby” cited as an energy-saving measure. Intel is also working on “engineering advances cooling solutions that optimize the reuse of compute exhaust heat,” and works with data center operators to enhance energy efficiency and renewable energy.

McDonalds is making an effort to replace plastic cutlery with wood, plastic straws with paper, plastic lids with fiber ones that eliminate the need for a straw, and is piloting a cup-share program in Germany. Starbucks is also working on a cup-share program in partnership with NYC-based Closed Loop Partners, with a Circular Cup offering in the UK, a “reusable cup made in the UK from approximately six single-use paper cups,” and cup- share pilots in Japan and Seattle. Starbucks claims oatmilk and Impossible / Beyond Meat breakfast sandwiches as sustainability measures.

Reverse Logistics

I have chosen to categorize all product and waste returns as reverse-logistics, as the effort to return a good from the customer to the seller. 3M celebrates their medical device repair center in Oakdale, Minnesota for its capacity for repair. Amazon has developed capacity in plastic film recycling, with goals of recycling 7,000 tons per year, with 1,500 tons per year being recycled in Europe. Home Depot also runs a plastics recycling program, focusing on plant pot recycling of plastics No.2 HDPE, No.5 PP, and No.6 PS, and claim 15 million pounds of plastics recycled by their vendor East Jordan Plastics, a manufacturer of plastic plant pots. Home Depot is also a big collector of light bulbs and batteries, with over 3⁄4 million pounds of CFL bulbs and 1⁄4 million lead-acid battery cores recycled per year. Home Depot also “recycled or reused for energy 33% of the hazardous waste generated from our operations and customer returns.” Intel has a well-publicized zero-waste strategy, with 82% of their manufacturing waste “fuel blended, recycled, recovered, or reused” in 2020. Paypal has a zero-landfill strategy for e-waste, with over 450 metric tons of e-waste retired in 2019 and 2020, half refurbished and reused, and half disposed of according to R2 and other e-waste disposal standards.

Social, Staff, Culture

Amazon, 3M, Intel, and Jacobs shine when it comes to staff, culture, and innovation. A team of Amazon employees used their DeepLens machine learning technology to identify waste items being discarded with built- in audio giving directions for how to discard the items. 3M encourages its staff to conduct energy walk-throughs, submit conservation ideas, and makes executives available to integrate their ideas into the company’s operations. Intel is lead within the semiconductor manufacturing industry, with a “collective approach to reducing emissions for the semiconductor manufacturing industry and increase [sic.] the use of technology to reduce climate impact in global manufacturing.” Jacobs has the most integrated sustainability training offering of the companies surveyed, which as a global engineering consulting company, they want staff who are well-versed in the various topics of sustainability. Starbucks offers a “Greener Apron” sustainability training program, and Netflix hired its first Sustainability Officer, who holds a PhD in Environmental Science Policy and Management from Stanford University, and sits in the office of the Chief Financial Officer.

Standards

All companies surveyed used a suite of standards in their sustainability endeavors. Many use the ISO 14001 Environmental Management System, “an internationally recognized approach for managing the immediate and long-term environmental impacts of an organization’s products, services, and processes.” Life cycle analysis is common, described by Amazon as an effort that “takes inflows from nature—raw materials, water, energy—and converts them into the process outputs and environmental impacts—releases to air, land, and water—for all processes that represent over 5% of total impact, energy use, or product mass.” Food companies used standards such as Rainforest Alliance for coffee procurement and the Roundtable on Sustainable Palm Oil to ensure “deforestation-free” supply chains. Companies dealing in electronics use standards such as Electronic Product Environment Assessment Tool (EPEAT), “designed to help purchasers in the public and private sectors evaluate, compare, and select electronic products based on environmental leadership and corporate social responsibility attributes.” Responsible mineral sourcing was mentioned by all companies working in electronics, such as “Beyond 3TG” (tin, tantalum, tungsten, gold, cobalt), and the OECD Due Diligence framework for minerals sourcing. 3M has developed its own Sustainability Value Commitment (SVC) system, where all products must be assessed in how the “product incorporates environmental or social factors to contribute to our aspirations laid out in our Strategic Sustainability Framework. Examples of considerations include reusability; recyclability; waste reduction; energy and water savings; and responsible sourcing or use of renewable materials appropriate to the specific product throughout its life cycle.” Intel, with one of the highest load of toxics in its manufacturing operations and as a manufacturer of what will one day become e-waste, is “co-leading an Open Compute Project ... defining standards and practices on concepts of repairability, modularity, circular economy, biodegradability, and ultimately a minimum level of incremental residual e-waste (inspirationally, less than 10% of the original bill of materials).”

Intel publishes a chemical footprint methodology as:

Mfg Chemical Footprint = Mass of Chemical Used * Weighting Factors

Weighting Factors = Reputation Impact * Expectation of Regulation * Human Health Factors * Environmental Impact * Climate Impact

Systems

From Home Depot’s Project Sync “omnichannel initiative that identifies better ways to move our products,” to Intel’s new chemical management software systems, Starbucks’ Rwandan farmer agronomy tips hotline and cup- borrowing programs, Amazon’s shipping box optimization algorithms, machine learning models to identify highest leakage risk, conveyor optimzation models, and building control analytics for heating and cooling systems, and beyond, Fortune 500 sustainability is clearly a systems initiative. 3M, as a manufacturer of chemical and high-risk products, utilizes pollution prevention technologies such as “thermal oxidization, solvent recovery, carbon adsorption, biofiltration, electrostatic precipitators, baghouses, scrubbers, and cyclones,” with independent third-party verification of “volatile organic compound emissions, water, waste, environmental compliance metrics, energy consumption, and greenhouse gas emissions.” 3M also has a Supplier Sustainability Solutions Library, to enable product developers to work in line with their Sustainability Value Commitment system. With its new sustainability department, Netflix has implemented a process to collect business activity data for its greenhouse gas management system. In the agricultural realm, McDonalds has established global research projects to “validate pioneering sustainability practices for beef farming.” Jacobs highlights that “solving the world’s most complex water challenges demands different thinking.”

Toxics

Product manufacturing companies that use toxic chemicals are increasingly seeing these as liabilities and are phasing them out of their products. From antibiotics in poultry and livestock, to VOCs, to PFOA/PFOS, the list of compounds being phased out is immense. For reference sake, I have provided a nearly-exhaustive list of chemicals no longer used or being phased out by Home Depot. Home Depot alone is eliminating neonicotinoids (which can harm pollinators), methyl chlorine, carpet and flooring chemicals such as triclosan, organotins, ortho- phthalates, vinyl chloride, nonylphenol, ethoxylates (NPEs), coal fly ash, formaldehyde (limited to 0.0073ppm or less), perfluoroalkyl and polyfluoroalkyl (PFAs), paint chemicals such as triclosan, isocyanates, formaldehyde, lead/heavy metals, alkylphenol ethoxylates and nonylphenol ethoxylates (APEOs and NPEs), ethylene glycol, fiberglass insulation chemicals such as brominated flame retardants, halogenated flame retardants, antimony trioxide, formaldehyde, and added heavy metals. Amazon is also eliminating lead and halogenated flame retardants from their products. As a major manufacturer of PFAS/PFOA, 3M has now phased these chemicals referred to as “forever chemicals” by critics of their presence in the environment, out of their products, as they have been found in a significant number of waterways and aquifers in the United States. Intel pays particular attention to the handling of sulfuric acid waste.

Transportation

As transporters of large volumes of products, Amazon and Home Depot are investing in transportation optimization technologies and systems. Amazon utilizes automatic tire inflation systems in their trucks, and Home Depot is using electric 18-wheelers with a 250-mile range on the West Coast of the USA. Home Depot is working to stack products to the top of the trailer, are using technology to optimize shipments, and use “an artificial intelligence tool to set the engine utilization grind for optimal truck performance based on load weight.” Amazon is deploying small electric delivery vehicles such as electric bikes and rickshaws around the world. The field of transportation optimization is immense and deserves more attention.

Waste System

At a 3M site in Mexico, waste material is sent to an external co-processing facility, where the material is combusted and its ashes are used in cement. The site also has a polypropylene pelletizer that recycles nearly all of the polypropylene waste generated by that site’s processes. These examples of “industrial symbiosis” or “waste as food” are common among industrial sites.

Water

Intel’s facilities are sometimes located in water-stressed regions, and since semiconductor manufacturing requires high volumes of water, the company must invest in water conservation projects. In 2020, Intel claims to have “conserved 7.1 billion gallons of water internally and invested in water restoration projects that restored more than 1.3 billion gallons.” They also implement “ultra-pure water efficiency projects by optimizing or eliminating bypass flows,” and treat water using systems such as cooling towers and scrubbers. Amazon also uses onsite modular water treatment systems, for use in toilet flushing and gardening, as well as recharge wells, which send water back into aquifers. Starbucks also has initiatives to conserve water, in the processing of coffee as well as sourcing, utilizing the World Wildlife Foundation’s Water Risk tool to map highest risk basins. As large economic players in the world, these companies operationalize water management, an approach described well by Jacobs: “Water quality can often be compromised by poor management of infrastructure, pollution incidents and increased consumption patterns.”

SOURCES CONSULTED

Company Name, Report Title (Year), Page Count

3M, Sustainability Report (2021), 333

Amazon, Sustainability: Thinking Big (2019), 171

Comcast – NBC Universal, Carbon Footprint Data Report (2021), Values Report (2020), 32

Home Depot, Responsibility Report (2020), 267

Intel, Corporate Responsibility Report (2020 – 2021), 266

McDonalds, SASB Index (2019), Purpose and Impact Summary Report (2019 – 2020), 102

Netflix, ESG SASB Report (2020), 103

Paypal, Global Impact Report (2020), 170

Starbucks, Global Environment & Social Impact Report (2020), 134

UnitedHealth Group, Sustainability Report (2019), 63

Jacobs, PlanBeyond 2.0 (2021), Sustainability Strategy (2018 – 2020), 216

And:

Siddik, M. A. B., Shehabi, A., & Marston, L. (2021). The environmental footprint of data centers in the United States. Environmental Research Letters, 16(6), 064017. https://doi.org/10.1088/1748-9326/abfba1

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