Name: Impact Initiative 2024: The Price Tag Of Sustainability
Uploaded: 2024-10-08
Duration: 19 min 11 s
Description: Jason Buechel, Chief Executive Officer, Whole Foods Market Calvin Butler, Chief Executive Officer, Exelon Moderator: Indrani Sen, Senior Features Editor, Fortune; Co-chair, Fortune Impact Initiative

Jason Buechel, Chief Executive Officer, Whole Foods Market Calvin Butler, Chief Executive Officer, Exelon Moderator: Indrani Sen, Senior Features Editor, Fortune; Co-chair, Fortune Impact Initiative  

Impact Initiative 2024: The Price Tag Of Sustainability

Photography by Rebecca Greenfield/Fortune

Conferences

We're going to start out with some questions that I have for Jason and Calvin. But we also would love to hear some questions from the audience. So I hope you can all start thinking of questions for our esteemed guests. Um We'll be sending uh mics around a little bit later on. Uh I'd love to start Jason. Um You've talked about democratizing healthy grocery shopping in this era of high inflation about price reductions that whole foods has carried out kind of across the board. Calvin. I know that affordability is also very important to you. Given that 22% of exelon's customers are economically disadvantaged. How do you balance your sustainability goals with addressing the needs of financially stretched customers or put another way? How do you resist the temptation to compromise on your sustainability goals in order to offer your customers lower prices? Maybe we could start with you, Jason. Yeah. Yeah. Happy to and, and thanks for having me here today uh for us, you know, balancing and finding those win, win win solutions has been a really important part of whole foods market since we opened our very first store 44 years. Ago and practicing things like climate friendly agriculture have been an integral part of our company's offering, whether it was organic back when we first started to supporting things like regenerative today as well. And for us, it's finding the balance of how do we make sure that we can support value and quality for our customers. So I've been really proud of the work that we've been doing in reducing over 25% of prices across items within our stores, doubling the number of promotions from 2020 3 to 2024. And for us doing all of that without sacrificing quality. So ultimately, holding to our high quality standards and our goal is to find those win, win wins where we can balance impacts to the environment, do great things for customers, suppliers and the environment alike. Thank you, Calvin. Do you want to dive in on that one? Sure. First off, let me begin by saying good afternoon and thank you for having me. Thank you so much for being here. And I love the way you frame the question because it's not a either or it's definitely an and you started off with a statistic that was 22% of my customer base is from under resource communities. So as a utility, if I'm going to serve my customer base and recognizing the 22% and then I also have some of the highest income zip codes in the country as well. And my number one job as the CEO of a utility company is to serve all of my customers. So for me, it's definitely an and, and I have to do this in an equitable manner. And what I mean by that is that as we begin this energy transformation and I'm investing capital, I can't leave any neighborhood behind. We have the privilege of serving the nation's capital and I'll use them as an example for those of you who go to DC. The second ward is one of the most affluent wards in the nation's capital. The eighth ward is one of the most under-resourced. Their needs are very different, but I have to serve both of them and that's why afford affordability must be at the top of that list of everything I do. But this is what I also know. And we talked a little bit about this, all the things that I get to do and all the things that I'm being asked to do, if I don't keep the lights on and the gas flowing, it doesn't matter. So that reliability and resiliency also must be at the list. So when you talk about priorities, it's a one in one a and depending on who I talk to, it's what their priority is and how I need to show up. Right. Right. We talked about storytelling quite a lot. Um Calvin, some of Exelon's initiatives like rec conductor or investing in battery technology are kind of backend changes. Um, they're certainly hugely important but they're not necessarily that visible or easy to explain to customers. Um, and I'd say the same Jason, um, of initiatives at Whole Foods, like your approach to food waste. Um How do you think about telling customers those stories? And I guess as a part of that, like how much appetite and curiosity do your customers have for, for hearing these stories? Depends on the customer. Some of you want to hear about it each and every day and you want to start with, hey, what are you doing to help me get a battery charger at my home to charge my car? Some of you are saying, what can I do to get my solar panels put on my house quick enough. But once again, different customers have different priorities and I love the way you framed is that so much of what we do? You don't even know, but it's setting it up for the future of that grid, the resiliency of that grid. You think about what's happening right now and I heard one of the panels a couple of panels ago, talk about Hurricane Helene and now Milton coming through, that's when you talk about the grid and it's at the forefront, you're feeling it right now in real time. And you're saying, why wasn't that utility ready for this? Because that's the question that everyone's gonna ask when they get to the third or fourth day without power. And by the way, you're all very impatient right about now and you, you know that hurricanes coming and after about 48 hours, you lose all patience, but that's ok. We know that. So having said that, what are our investments that we're making today to make that grid more resilient? And I look at resiliency as the ability to get back online sooner rather than later. And that's what we're trying to do. And I think for us, you know, we're fortunate, we have probably some of the most passionate consumers as it relates to sustainability, uh you know, sustainable seafood sourcing animal welfare standards. And so in many cases, we've got a set of customers who are coming to us because we do the homework for them in this space. There's a lot of customers who are, you know, coming because we have great deals because we have high quality food. And so being able to tell the story of the why, why we're doing the work that we are, I think becomes really, really important. And I think whether it's whole foods and other brands, our responsibility is to help tell that story and bring the transparency to customers. So they understand the impact that they have based upon their decisions and whether it relates to, you know how we're reducing food waste to reducing our carbon emissions to ultimately helping support sustainable waterways and oceans, that impact is really important to understand as we make those buying decisions. And so I think it's our job to help tell the story, work with brands and producers and farmers and understanding why we're doing the work that we are. Right? I guess, I think sometimes customers can become a little cynical about this. We, we talk about these things so much. You hear terms like greenwashing thrown around. How do you, how do you kind of factor that in to these conversations? How do you, how do you make it, you know, make people feel this is important without necessarily kind of making them feel that they're lectured to or uh are kind of being uh being told off in some way. Well, I think that's a really important uh balance that we have to strike. And, you know, one of the things that we put into place is we require, you know, third party certification. So take, for example, Regen, if we're the only national retailer right now that we have to ensure that all of our products that have regenerative on our labels are third party certified. And so we've got a series of certifiers that we work with in this space. And so what we believe we need to do is make sure that there's integrity that stands behind it. Um And so customers don't have that distrust. And as I was saying earlier, we want to do the homework for our customers, so they don't have to is the ultimate goal. And so our goal is to help build that trust. And I think one of the other ways we can do is start to talk about the impacts of us not supporting this. You know, one of the things that is the true reality here is, you know, our food systems are under jeopardy right now. Uh If we don't do something different in the next to 100 years, the products that we know and love today, we're not going to be able to grow all of them. And at the same time, we're losing the nutrient density in these products. So every single year, we're losing that nutrient density from our soil. And so we have to bring different practices in place. And so I think a big part of it is at the same time not being alarmist, but also also like pointing out if we don't do something different, this is a situation we're going to be in. And I would just say for Exelon, our goal is to lead with transparency. Every year we issue our sustainability report, we just did it and you can go online and pull it up. And in that sustainability report, you will see that we've reduced our business driven emissions significantly since 2015. And we focus on that. We were also one of the last companies we were slow out the gate in announcing our path to clean our uh emissions driven goals. And we did that for a very uh very real reason, is that anything that we said we wanted it to be measurable and attainable. So when I tell you that we're going to be net zero business driven emissions by 2050 the first reaction I got when I came out the gate was that's kind of late. But I said I got a line of sight to 80% of that. By 2035 the last 20% is going to be technology dependent. So I didn't want to state a goal that I didn't have a clear line of how I would achieve it. And then I also challenge people that once we say we're at someplace, ask us and we can show you the data to back it up and that's what's important for us as a utility company because we're never going to tell you something that we cannot do or have a line of sight to achieving. So a boa our chief sustainability Officer is here and we take very, we're very diligent about what we put out in the public space because we never want that credibility to be eroded. So it's very important for us. Absolutely. I'm gonna now say if there's anyone who has any questions, I, I see a question over here. Um I'd ask that we have some mic handlers who are gonna come over. I just ask that you stand and, and please state your name and the, and the company that you're representing here. Sheikh uh fascinating panel. Uh We are an era where the businesses and the government should work together for the value creation. Now, in the context of uh the, the electric industry, Exelon or in the food industry and in the, the things that are going on under the Department of Justice, the Trust Arena. Um What are the one or two strategies that uh you are looking into to make sure we work with the government to drive value because we alone cannot do it together. Because at the end of the day, the customers, communities, education institutions, every stakeholder matters. If you don't mind, I'll, I'll start, you go ahead. Let me just capture to your point. Public private partnerships are critical to any level of success we're going to achieve. And I give this administration a lot of credit for the passing of the Infrastructure Investment Jobs Act and the Inflation Reduction Act because that is those were critical elements to spearheading everything that we did and how we partnered with our communities directly. I don't benefit from that. But what it has done is accelerated, the adoption of electric buses, it's accelerated buildings going all electric, it's accelerated um decarbonization in urban areas and rural areas that would not have happened because of the expense of getting it done. And what I've shared with Secretary Granholm and others is that not only are those billions being put to work, we're partnering and putting our own capital on top of that. And it's a true example of one plus one equaling three. And that's the benefit of that partnership. And we talk regularly with not only Secretary Granholm at doe, but Secretary Romano at Department of Commerce. I noticed you had Ali Z up here earlier. Those are conversations on a weekly basis that we're doing and we're having because this administration is all into it. Um Now I wish it was happening quicker and the challenge for it happening quicker is that there's not always an alignment between federal legislation and what's happening at the state level in terms of the regulatory policies. So the utilities may be looking to run and put that money to work, but state policies are slowing it down and we're working to get that done. And I love this question. I would love to just throw in. Also. How are you thinking about November? I'll jump in on the food side. I'm gonna jump in on the food side. So for us to be able to protect the future of our food system, we have to change our farming practices and it's going to require the public and private sectors to work together, you know, today that we have so many different incentives and subsidies that are actually incenting the wrong behaviors of where we need to go. And so it has to be a collective set of work. And I think what's more important than November is we need bipartisan collaboration to support this. You know, I oftentimes share, you know, we have red and blue states that are some of the largest producers of produce and goods that we have in this country from our farms and we have to work together to find solutions so we can help bring these changes and put them into place. Um Just picking up on that. One of the things that you've said, Jason is uh that there's a danger of a kind of whack a mole approach across industries where efforts to solve one problem in one industry can end up causing problems in the other. In another industry. A classic example is uh corn ethanol, the biofuel uh leading to uh they were impacting food production, um government uh you know, working with the government as a part of that. Do you see any kind of path of working across industries as the Kia Car Johnson talked about a little bit earlier also? Yeah, I think we have to, you know, and some of the examples that you just mentioned, you know, we're in a situation right now where across this country, only 1% of our family farmlands are certified organic and the pressure in many cases of farmers to, you know, move to producing corn for the purposes of energy is increasing and the demand is going to get higher. If you look as an example, the airline industry has got a number of solutions where corn is going to be a major dependency in helping support some of their sustainability goals. And it's great on things that they're able to do. But we have to say, what is that going to be doing in our food systems? And so we need support both across industry, but we also need help from some of our government partners here to make sure that we've got the right incentives in place so we can protect our food systems and continue to support other industries in meeting their goals as well. Do you want to weigh in on that one? Kelvin? I'm teasing. So I think it applies to, is there a part of that from the energy perspective, you'd like me to dig in on? Well, I mean, I think that the the collaboration across industries in particular, do you see, I mean, is that real or is that kind of pie in the sky? No, it's definitely realistic. I mean, you look at we're at the forefront for at least the last 40 to 50 years where we're seeing load growth in the electric sector and you talk about uh data centers, the load growth, depending on who you talk to and doing that in a sustainable way in a clean way is critical because depending on once again who you talk to could be 3 to 5 X over the next decade. And data centers for our National Security for information flow based here in the US is going to be critical and how we do that and still manage to provide adequate clean energy to those uh data centers is important. So that's where the collaboration and partnership really shows and the security of the system. And fortunately, most of you don't have to think about protecting the grid, but the grid is critical infrastructure. When you look at any major disturbance across the world, the first thing they go after is the grid. And so that's also something that we put at the forefront. So not only with the data center developers, but also with the national gov federal government in terms of making sure those assets are protected, that collaboration and partnership is critical. Absolutely. So with our, our last couple of minutes, um I'd love to just end on a note of, you know, what are your biggest concerns about the future? But also what makes you feel optimistic? Yeah, I'm happy to, to jump in. I kind of mentioned, you know, a little bit earlier, we have to protect the future of our food systems for future generations. And that's going to require us to implement more climate friendly agricultural practices overall. And I'm hopeful that we're actually going to be able to achieve that because as I look at some of our future generations and specifically Gen Z, this is something they really care about. 70% of Gen Zers support climate friendly agriculture practices. 55% of them even will pay more for those products. And they really want to make sure that there's authenticity behind it. And so I'm very hopeful that we'll be able to help address this in the future. I love that. So I will tell you my, my biggest concerns and it wouldn't surprise you is the reliability and resiliency of this system, affordability and resource adequacy, meaning that having enough power to supply all the things that you as our customers want. And depending on the audience, it could be 11 A and one B because at different points, different customers. But those are the three issues that I think about on a regular basis. Why am I optimistic? Because here in the United States, we operate one of the most reliable and resilient grids across the world. Sometimes it may, may feel that way, but we have to get better because you as customers, your expectations are very different for us today than they were a year ago. And we're being asked to do different things with the grid today and tomorrow than we ever had to do so, we have to get better. So I'm optimistic because I think we, I know we'll be able to step up. And the last thing I would say I'm optimistic is the workforce of the future picking up what Jason just said, I started my opening a stem center in an elementary school in Prince George's County and to see those young elementary kids just really go to those stem packages with the teachers, not read the instructions and go right in where the rest of us my age were looking like, OK, what do we do here? They're excited about science, technology, engineering and math. All we need to do is empower them and give them the resources and they will be our future scientists and mathematicians in the future. So that gets me excited. Love that. Well, thank you so much for the panelists and thank you so much to our audience for your.