business news in context, analysis with attitude

The Wall Street Journal reports that pork producer Smithfield Foods "plans to cut a quarter of its carbon emissions over eight years, a voluntary move the company hopes will trim costs and burnish its brand." Thew company says that it "will scale back applications of fertilizer used to grow grain for pig feed and install systems to extract natural gas from manure, among other measures. The Environmental Defense Fund, which worked with Smithfield on the plan, said it is the most ambitious commitment yet by a U.S. meatpacker to curtail greenhouse-gas emissions."

Smithfield CEO Ken Sullivan, the story says, sees a business case for making the shift and "expects more energy-efficient operations to save money and boost Smithfield’s standing in restaurants and grocery stores. Two-thirds of U.S. consumers will pay more for a product marketed as sustainable, says research firm Nielsen."

The story also puts the Smithfield move in a political context: "President-elect Donald Trump has pledged to roll back environmental regulations he says put U.S. businesses at a disadvantage. But Mr. Sullivan said Smithfield’s emissions plan is “apolitical” and not a response to any regulatory pressure. Rather, it is based on business and the belief it is the 'right thing,' he said."

And, some historical context: "Smithfield estimates it emits about 17 million metric tons of carbon dioxide annually, nearly as much as five coal-fired power plants. The company was long vilified as a top polluter. In 2001, former CEO and Chairman Joseph W. Luter III derided Smithfield’s critics as whiny. But just a year later, Smithfield hired Dennis Treacy, a former director of Virginia’s Department of Environmental Quality, to help make the company more environmentally friendly."
KC's View:
It will be interesting to see the degree to which companies continue down the sustainability path even as the national political mood shifts away from environmental regulation.

I agree that this is good business. It is good business in terms of reducing cost over the long term, and in terms of creating a positive public image for consumers. The shifting power base in Washington does not mean that the electorate does not care about sustainability or does not believe in the impact of climate change. Not everybody does, of course, but enough people do that companies like Smithfield have to pay attention.