How Holistic Thinking Can Help Drive Sustainability in Food Retail
November 17, 2021 |
An interview with Effecterra cofounder Tristam Coffin
When it comes to sustainability in the built environment, Ratio Institute Advisory Board member Tristam Coffin has just about seen it all. As director of Sustainability and Facilities for Whole Foods Market’s Northern California Region, Coffin drew on more than a decade with the company to build out some of the most climate-friendly grocery stores in the country. More recently, Coffin served as the U.S. president for Livingstone Consulting before going on to cofound Effecterra, a solutions group focused on accelerating decarbonization in commercial buildings.
In the interview below, we spoke with Coffin about Effecterra’s vision; the major climate challenge posed by refrigerants; and how policymakers, business leaders, and nonprofits can advance sustainability in the food retail industry, without leaving smaller companies behind. After fifteen years of working on related issues, Coffin emphasized the need for holistic thinking. “The analogy I would make is that businesses are ecosystems,” he said. “The trick is thinking about the web of interactions as opposed to thinking about solutions in isolation.”
This interview has been edited for clarity and concision.
Tristam, great to be talking with you. Could you start us off by telling me a bit about your new company, Effecterra?
Our mission is to enable and accelerate decarbonization at pace and scale. A large part of that is focused on integrating different sustainability strategies, bringing a holistic process to the built environment. Many people think it’s just about energy efficiency, but there are now any number of things that you can focus on to decarbonize buildings. You have to integrate those things to be effective.
Effecterra provides end-to-end sustainability and engineering services from technology development and commercialization to carbon program strategy to the implementation and optimization of solutions. Right now, we’re more squarely focused on carbon management and technology commercialization but excited to be moving toward the implementation and optimization space. We’re only six months old, and we have a team of seven full-time now, plus ten subcontractors working with us on project-based work.
Is all of your work focused on helping food retailers operate more sustainably?
No, but food retail is one of our niche areas. Many of our customers are looking for expertise in the HVAC/R area, and refrigerants tend to be one of our areas of expertise.
Could you say more about what you mean when you refer to a “holistic approach”?
Looking at a standard building, you might have a facilities manager mainly focused on keeping energy costs down. That’s important, but depending on who that person is, they will come at it from their area of greatest comfort. Meanwhile, if you begin to break down the silos and focus on the integration of supply-and-demand solutions that reduce direct and indirect emissions, you can marry different strategies into a more effective approach.
A lot of the challenge today is that while some people are thinking big, the solutions they’re implementing are inaccessible to the masses. We need to figure out how to get action not just to companies who are well-resourced but to all companies.
You mentioned refrigeration, which is not only a huge climate issue but also an under-recognized one. How would you explain the topic to my aunt who has never heard of it?
Great question. My ninety-five-year-old grandfather recently asked me, “What do you actually do?” I don’t know that I’ve got the elevator pitch down to the point that I could explain it to your aunt or my grandfather, but I’ll try.
What folks don’t realize is that there’s this little-noticed direct emissions issue found in HVAC systems, in transformer systems, and most importantly in refrigeration systems. When we talk about carbon, the [refrigerant gases used in these systems] are between 1,900 and 9,000 times more potent than CO2.
So, for my grandfather, refrigerants are gases that are generally about 3,000 times worse for the climate than CO2 is. That means we need to manage refrigerant leaks and start switching to natural refrigerants. But I’d also say that we need to think about changing the paradigm entirely. We can’t get to zero emissions with the old mindset of refrigerant management. We even need to look beyond natural refrigerants. CO2 is a natural refrigerant that we could use, and it has a Global Warming Potential of one. That’s closer to zero than 3,000, but one isn’t zero.
|Refrigerant||Global Warming Potential (AR4 GWP) Over 100 Years||Ozone-Depleting Substance (ODS) Over 100 Years|
|Natural Refrigerants (Hydrocarbons, and CO2)|
|R-744 (carbon dioxide (CO2))||1||0|
Table above is from our piece on A Practical Guide to Refrigerant Regulations for Food Retailers.
How much of the gas in the refrigeration systems at my neighborhood grocery store might end up leaking into the atmosphere?
The way we talk about it today in terms of sustainability reporting is that refrigerants should be considered committed emissions. The reality is that they will all generally end up in the atmosphere. The greatest potential for losing refrigerant gas is typically during the operational lifetime of a system. On the last day of operation, [a system] can blow the charge. You can’t prevent catastrophic issues, and that’s why you need to look for alternatives. This means going beyond leak detection; it means preventing leaks in the first place.
What are the barriers that a supermarket would face if seeking to decarbonize its operations?
Supermarkets are operating on a razor-thin margin, so if you compare them to organizations with two hundred sustainability employees, you can see the challenge. The first challenge is that you need the people to focus on challenges at hand. The second challenge is that there are competing priorities.
That’s why it’s amazing that Ratio Institute exists, because it offers third-party resources to the underserved. Most folks in the supermarket space are trying to reach compliance with policy rather than going beyond compliance. If you think beyond compliance, I would argue that it will keep you in compliance and save you a lot of money.
The supermarket industry needs to stop looking at everything from a first-cost perspective. We will go for the lowest first-cost option, and then immediately, you’re going to be dealing with operating expenses or risks of long-term policy compliance. It’s not easy to change. But if you can think about total cost of ownership and think about new financing mechanisms and think beyond one quarter to the long term, that’s what is going to allow these organizations to succeed.
I would also make the argument that people need to start thinking about it from the macro level: without a healthy, functioning society, there is no business.
Let’s make decisions that aren’t so shortsighted or short-term. Supermarkets depend on selling food. Without healthy ecosystems, you can’t grow healthy food.
Ratio Institute is starting to introduce these things to the supermarket industry. Effecterra is very aligned with that, but we’re also working beyond the supermarket industry, in part because we need to start bridging gaps between industries. There are a lot of best practices that can be applied from supermarkets to other places and things that can be exchanged back.
If you were going to give me a tour of systems in big buildings that impact the climate, what else would you point out, besides refrigerants?
Traditionally speaking, in a supermarket, refrigeration and HVAC systems are the big ones, followed by lighting and process loads (i.e., kitchen equipment). And typically, people are looking at them independently. It’s better to think about them holistically because they impact each other. Simplest example: when you go from incandescent to fluorescent lights to LEDs, LEDs put off substantially less heat. How are you addressing that from an HVAC perspective? Are you changing HVAC set points to be better from a holistic standpoint?
The analogy I would make is that buildings are ecosystems. As you think about changing one thing, you probably need to think about the domino effect on other things. You can get to a very optimized building with off-the-shelf technology, but the trick is thinking about the web of interactions as opposed to thinking about solutions in isolation. You also need to think about the layers of where the impacts are in terms of carbon. Think about it as, How do you decarbonize completely rather than simply use energy more efficiently?
Where does policy come in? What will businesses not be able to solve without a push or help from the government?
I think of a slide we have in a deck we’re using with a lot of people. It’s about the ostrich and the eagle. The ostrich, you know, has its head buried in the sand. The eagle has a 10,000-foot view. Well, probably not that high, but you get the idea.
It doesn’t matter where people are on their sustainability journey. You have to start somewhere. And it’s understandable that folks in the grocery retail space aren’t all eagles. They have thin margins. A majority of their focus is not on these kinds of things and never has been, because they don’t have the resources.
So, I think that the policy piece plays an important role but can also be dangerous for food retail, because the government can incentivize through the carrot and the stick. Compliance is the bare minimum, but the floor needs to be lifted. We can’t maintain the status quo from a policy perspective. The dangerous part, however, is that you can leave folks behind. It can be hard, especially for smaller outfits, to adapt to policy. And I think this is where Ratio Institute can play an important role. It offers educational support on the nonprofit side of things. And then, Effecterra can help execute on the solutions side of things.
I think that California has done a very good job of making the process as inclusive as possible. But if you look at something like the new California Air Resources Board (CARB) rules that will go into effect on January 1, 2022, a lot of food retailers don’t know the extent to which this will impact them or what impact it will have. I’m not talking about the national retailers but about the smaller folks, with one to twenty stores.
The beautiful thing is that the policy could result in a better outcome for everyone. The trouble is that it’s going to take a minute to get there and that there’s a huge finance challenge to implementing it across the industry. And so far, some of the government incentives to help companies have only scratched the surface of what’s needed.
My understanding is that for new buildings and major retrofits, CARB will be mandating a switch to alternative refrigerants. Will those mostly be “natural” refrigerants?
No, not necessarily. There are other refrigerants coming to market that would be below the 150 Global Warming Potential limit that CARB has set. But the question there is, Why? Why would you use anything other than natural in a new store or application?
Some of these new synthetic refrigerants that are coming to market, called HFOs, are better for climate change. But there are already studies coming out of the EU suggesting that when they interact with the other elements in the atmosphere, the compounds could cause other issues—for example, water-quality impacts.
Obviously, the chemical industry is at the table and has a role to play, but given the history of refrigerants, I believe that we need to think critically about the next generation of synthetics.
It’s hard to sell a natural refrigerant like CO2. You can’t patent it, right?
You can patent synthetic refrigerants. Granted, the new synthetics might be better for climate change, but that doesn’t mean these new chemical compounds won’t have other detrimental impacts.
We’re on a bit of a tangent here, but the reality for the petrochemical industry is also that refrigerant regulation could help them. If they are being squeezed by regulation forcing them to phase out one product, they are going to look to others to generate sales. I believe that in some respect, they’re saying to go ahead and regulate us on refrigerants, and then they’ll try to sell the next thing. And in the meantime, they’ll make more money because there is going to be a supply-and-demand pinch as HFCs [existing refrigerants] are phased out.
I don’t think that this is a conspiracy theory. It’s pretty simple supply and demand. It just is what it is and might help explain why we are not talking about only natural refrigerants. My hope is that we proceed with caution given that we went from ozone-depleting substances to high Global Warming Potentials to whatever’s next.
That’s fascinating. Would you say that refrigerant policy is the main area where smaller businesses could struggle to keep up as stronger climate mandates come into force?
Also energy. Take California as an example again. California’s goal is carbon neutrality by 2045. Today, the target isn’t zero. But they’re ratcheting down to zero.
Meanwhile, businesspeople are saying, Oh, I’ll do what I need to do to meet the next target, instead of looking at the long-term goal. The problem is that if you’re talking about grocery infrastructure or any industry infrastructure, such as HVAC systems, then there’s a twenty-year lifetime on this equipment! You don’t want to adopt an interim solution and then have to swap it out ten years later. Your depreciation alone on these units is normally, at minimum, eight to ten years.
At Whole Foods, we experienced a version of this issue. We switched out of R-22 refrigerants because they were being phased out. Now, it’s clear that if we had sat on R-22, those systems could have kept going, and then we could have switched to the long-term solution versus doing a bunch of retrofits. We went to 407A, and that still has a high Global Warming Potential. Now, 407A is going to have to get changed as well. You’re doing work twice.
Do you think that public companies can take this long-term view? Don’t they have to justify everything on a quarterly basis?
I think that the reckoning has yet to hit. I read an article recently that said if you don’t have a climate plan, you don’t have a business plan. And it’s kind of true. If you aren’t addressing carbon and your carbon impacts throughout your portfolio and in your supply chain, you’re doing yourself a disservice and also damaging your climate resiliency.
The largest retailers, like Walmart, for instance, are going to put themselves in a position to address this. However, not everyone is Walmart.
That’s a good segue to another question I wanted to ask. What obligation do you think bigger companies have on an issue like refrigerants? Should the Walmarts of the world be helping to create a whole new industry here?
I think that you see it in the North American Sustainable Refrigeration Council (NASRC), which Aaron Daly and I helped cofound, and with Ratio Institute now. I think that it’s very important. The grocery industry has been hesitant to share. We’ve viewed some of this information as trade secrets. But when it comes to sustainability, we’re all in the same boat.
So, for the big companies, I think that they are leading and should continue to lead the charge. It’s not necessarily the companies that should be sharing the information, but by working with other organizations like NASRC and Ratio Institute, they can help to get important information collected and shared.
One additional thing here is that big companies especially just want certainty. They don’t want fifty different state laws that they have to manage or four years of laws that get changed with the next administration. The only businesses that want that are ones that thrive off chaos. Most would prefer clear, consistent federal policy.
One thing I’ve noticed is just how many different kinds of reporting corporate sustainability teams have to do. They are reporting for all of these different standards and metrics, many of which seem to be overlapping.
Right. The Environmental, Social, and Governance (ESG) reporting thing is critically important, but currently, over the course of a year, half of open sustainability jobs are about reporting. If you already have limited resources, when are you going to be able to do the work of actually implementing change?
That’s one thing we’re very clear on with Effecterra. There are a lot of consultancies that will charge you an arm and a leg to collate metrics and report on them, but we want to actually be helping to implement solutions. Transparency is the name of the game, and ESG reporting is important. But we have to also be moving things forward.
What do you expect Effecterra will be working on most?
I hope it’s all of the above, and I’m not saying that only because I personally want to work across a lot of areas. It’s because if you’re approaching sustainability issues in silos, you’re approaching them in the wrong way.
That being said, I think we’re squarely focused on Scope 1 and 2 emissions and have a niche in refrigerants. But refrigerants also tie into HVAC systems, and then what are the two biggest energy loads in many buildings? Refrigerators and HVAC systems. So, it’s all connected.
Well, I think that you’ll have plenty of work. I mean, it’s amazing to think about just how many people will need to go in and improve building HVAC systems in order to address climate change.
HVAC is a huge nexus right now, on the refrigerants front, on the energy front. It’s interesting. One of my cofounders, he’s been in three start-ups, one of which was in energy and one of which was in HVAC dehumidification. They all failed, and what he said was that it wasn’t a lack of technology or funding. It was that the companies were being pushed instead of pulled. And now, we’re grateful that that’s different for Effecterra. We’re six months in and don’t even have a website yet, but we’re growing fast.
I also think that we’re in it for the right reasons. We’re not trying to retire as billionaires. We’re trying to move the needle. I can wake up every morning and be excited about working on that for twelve hours. That mentality also makes us more open to being collaborative, and that’s what we need. We are literally working on borrowed time.
Similarly, we don’t want to be consultants. We want to be a solutions group. We aim to provide not just advice but also action.
Is there anything I should have asked about but didn’t?
I’ll just say that I’m excited about our work, because the playing field is changing. There’s a real demand for the kind of work that Ratio Institute and Effecterra are doing, and that wasn’t true even a few years ago.
The flipside is that there is so much work to do, and we need everyone on board. We need the storytellers, the technical people, the programmers, the finance people—everyone.
I think about Patagonia, which is a company that I look at as a leader. A few years back, they disbanded their corporate sustainability team because of the idea that sustainability should be embedded into everything they do. I don’t think that every company is at that point, but we do need sustainability to be built into the ethos of everything we do.