E&E Daily, December 10, 2013
A glance at Environmental Defense Fund President Fred Krupp’s environmental allies presents a strange picture: They include Wal-Mart CEO Mike Duke; former President George H.W. Bush counsel C. Boyden Gray; and executives from Anadarko Petroleum, Noble Energy and Encana.
But the ethos of EDF under Krupp’s 29-year reign has been atypical: The group will work with anybody and everybody to find a workable solution to combat climate change and pollution. Under the right circumstances, even a coal company can be a worthy ally.
“If you’re going to move America, you have to move American business,” Krupp said in an interview. “Businesses are central to the economy, so where we can find folks that want to get things done, it’s in our interest to work with them in a nonpartisan way.”
It’s netted results and has given industry interests an open ear in a movement not known for working with big business. But it’s also placed EDF firmly on the right of the environmental spectrum and opened the group’s leaders to criticism by hard-core greens.
In a 2008 essay, Krupp wrote that most of the staff at the time didn’t back his view that “setting tough performance standards while harnessing markets [was] a far more powerful way to inspire human ingenuity on behalf of the environment.”
EDF in 1975 had already hired Zach Willey, the first Ph.D. economist to work at an environmental organization full time (he’s still there). Krupp early on hired Dan Dudek, an agricultural economist who believed in a bottom-up approach to fighting pollution that would become cap and trade. Dudek recalled being “thrown from the chalkboard to the international politics boardroom” when he was placed on the U.S. delegation to negotiate the Montreal Protocol, where he established a rough trading mechanism for ozone-depleting substances.
It was a 1986 Wall Street Journal opinion piece that cemented Krupp’s philosophy. He wrote that environmentalism was entering its “third wave,” after the first phase focused on conserving land and wildlife and the second wave of stopping pollution. The third wave would involve cooperation between “our economic well-being and preserving our health and natural resources,” built on bringing industry and environmentalism together.
That editorial captured the attention of Gray, Bush’s personal attorney, which gave EDF an opening to engage with the White House when Bush was elected. In 1990, that gave EDF perhaps its biggest win of the Krupp era when it helped draft a cap-and-trade program for sulfur emissions from power plants to target acid rain.
In signing the 1990 Clean Air Act amendments that included the acid rain program, Bush praised Krupp for “bringing creativity to the table to end what could have been a hopeless stalemate.”
Collaboration or confrontation?
Twenty-seven years into Krupp’s third wave, it’s safe to say it hasn’t been the movement-shaking idea he likely envisioned. While EDF has found success engaging with businesses and recruiting market support, that has not been the agreed-on strategy across the board.
“At its root, they’re about working with the parties that actually need to change,” said Andy Hoffman, professor of sustainable enterprise at the University of Michigan. “This is a more pragmatic approach, but there are these more radical groups. … For every EDF that wants to collaborate, you want another group that’s more confrontational.”
Hoffman added, “But there’s a danger about losing your brand. At what point does EDF stop being seen as a serious environmental group?”
Those same critiques have dogged EDF’s assistance to major corporations for sustainability efforts. It’s a model that started with a 1990 deal with McDonald’s to reduce packaging waste. It has gotten FedEx to adopt hybrid trucks and seven major companies to set greenhouse gas reduction goals.
A high-profile project with Wal-Mart on a grand-scale sustainability plan has contributed to the world’s largest retailer cutting greenhouse gases by 20 percent across its operations and keeping emissions low even while expanding. The retailer has installed solar power, adopted cleaner fertilizer and worked to purchase more sustainable products as part of that partnership and work with other NGOs.
“As we show what can be done with Wal-Mart, it can spread change throughout the industry and its supply chain,” said Elizabeth Sturcken, EDF’s managing director of corporate partnerships. “When Wal-Mart asks something of its suppliers, they respond. They have a lot of power.”
But while EDF is working closely with Wal-Mart, even setting up an office near the company’s headquarters in Bentonville, Ark., in 2006, other groups are casting stones. Last month, liberal groups on Twitter circulated a graphic with a quote attributed to the Sierra Club: “Walmart is failing on climate exactly like it is failing on workers’ rights.”
“Allowing Wal-Mart to define what sustainability means is a mistake because they’ll do it in a way that works for them,” said Stacy Mitchell of the Institute for Local Self-Reliance, who has written about Wal-Mart’s climate impact. “The question is whether EDF’s involvement is doing more to facilitate Wal-Mart’s public relations push, or is it actually offering a hard-nosed outside critique of what the company is doing? From my vantage point, it’s the former.”
EDF leaders say they don’t take money from the companies they work with and shy away from corporate donations, a bid to avoid the perception of a consulting relationship.
But several critics have pointed out that EDF does take money from the Walton Family Foundation, the charity arm of the family of Wal-Mart founder Sam Walton. EDF collected $13.2 million from the foundation in 2012, dwarfing the take of other groups (although Conservation International took in more than $22 million that year). Walton’s grandson, also named Sam, sits on EDF’s board, another tie that has some critics crying foul.
Also raising questions is the massive funding offered by board member Julian Robertson, founder of the hedge fund Tiger Management and a major financial backer to Mitt Romney’s super PAC.
“We draw the line between corporate and private philanthropy,” explained Pooley, who said EDF has a more restrictive policy than other NGOs. “There are people who don’t see the distinction between Walton and Wal-Mart, but there is no connection to the executives who run Wal-Mart.”
The Walton money was geared to fishing work ($7.8 million for catch shares) and freshwater conservation ($4.9 million), not any corporate work, and Pooley said the group is careful to keep its pools of money separate.
“It’s important to point out those distinctions, but the work speaks for itself,” he added.
To be sure, the corporate strategy has its benefits, especially in framing EDF as a more centrist collaborator that can engage in the corporate structure as it currently exists. The approach has also been welcomed by other groups: Even Wal-Mart has partnered with the Natural Resources Defense Council, Nature Conservancy and World Resources Institute, among others.
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