From Promise to Action on Net Zero is a series of research publications, interviews, and events exploring how companies are translating net zero emissions goals into practice. This interview presents one of our discussions with senior executives responsible for delivering their companies’ climate ambitions.
Mark Lee, Director of the SustainAbility Institute by ERM, spoke with Jim Gowen, SVP Global Supply Chain and Chief Sustainability Officer for Verizon, about Verizon’s commitment to reaching net zero.
Mark Lee: How long have you been in this role, and why do you do this work? Or, more simply, what should we know about you?
Jim Gowen: I’ve been with Verizon for over 25 years, and I have been on a journey through sustainability and operations – operations for my whole career, and in this current role as CSO and SVP Global Supply Chain for the past decade.
Why am I doing this work? I’m an operations person through and through. The CSO part came in the form of an unbelievable opportunity given to me by Verizon’s former CEO Ivan Seidenberg, who put sustainability in operations, essentially taking sustainability from a corporate function and putting it into the heart of the company.
From nothing, we went to 3,000 people having performance agreements with the word “sustainability” in them, and that was a quick jumpstart to our journey. At the same time, I have the ability to set objectives around transportation, logistics, cardboard recycling, and so on directly.
That marriage of the operational and sustainability functions and the ability to embed that into people’s targets is so important and often means everything.
Given the 10 years since you became CSO, and seeing Verizon’s net zero goal-setting in 2019, one thing is constant: you got in early. Why was Verizon ready to set such goals in 2019, and what was the motivation?
At Verizon we go by the mantra, “We create the networks that move the world forward.” We’re a growth-oriented tech company, and we’re always expanding and making both our wireless and fiber access networks more robust. Because we wanted to continually grow the company, our original climate goals were around carbon intensity. In 2018 though, we decided to revisit our commitment and instead focus on net zero.
This was fully supported by our CEO, Hans Vestberg, who challenged me to set a goal in line with our ambitions as a company. So, we first set a goal to reach 50% renewable energy by 2025, both on- and off-site, then revisited our commitment again, deciding to go for carbon neutral, and come up with a plan to get there.
Being in operations, we wanted to focus first on what we could control, and we knew that keeping our networks up all the time and looking at different sources of energy to enable that was a big challenge out of the gate.
Something I find so interesting is that even after you did the math to know what was feasible climate performance-wise, you hint that it was as much as anything a cultural thing to accept a goal you didn’t know how to deliver in 2035.
Exactly. We could buy our way to carbon neutral right now with carbon offsets, but that was never part of our plan. We wanted to buy renewable energy, reduce fuels, and help green the grid, so we had to build that from the bottom up.
I love that values-based push. You say offsets are not part of your approach. What are the fundamental building blocks of the plan?
Electricity is the biggest one because it enables us to keep our networks up all the time. We’ve committed to purchase over 1.7 gigawatts of renewable energy for the grids that power our operations and doubled down on renewable energy at our locations with more than 28 megawatts, both of which are key. On-site actions build the culture of who we are as a company by making things like electric vehicle (EV) charging visible on a daily basis, but we also need to get to scale, which is why we started doing Power Purchase Agreements (PPAs) designed to bring more renewable energy onto the grid.
We’ve always acted incrementally. We have been building steadily with our own solar and wind partners, so what we’re doing is additive.
On the fuel side, it’s about consistently updating our infrastructure, like diesel back-up generators, HVACs, and our vehicle fleet to make those more efficient and look at the fuels we use. Our fleet is still a work in progress; we drive very few sedans, and the trucks we use are not readily available as EVs yet.
I am so glad to hear about the incremental / additive approach to renewables. There’s an interesting message there. As everyone might expect, these plans are 100% dynamic; you don’t only have permission to change the plan you cast recently just a couple years down the road, you’ll probably need to do that. After launching your ambitions in 2019, in 2021 you updated them. Why an update two years later?
It was the next step. We believe we’re leaders and collaborators in this industry and want to continue to build on our commitments. We just set Science-based Targets (SBTs) to reduce operational emissions by 53% and reduce value chain emissions by 40%, but those are just our next steps. We’re going to continue to move things forward, particularly on Scope 3. That’s where we’re going - not as an end state, but the next iteration.
In February 2019, we also launched the U.S. telecom industry’s first green bond to fund our environmental initiatives. The first green bonds we issued oversold eight times in four hours and proved to be one of the best bonds we’ve ever launched. We were then able to spend the $1 billion raised over the next 18 months and then launch another round to continue to fund our commitments.
It is amazing to see how that demand is growing and the ways you are getting to benefit from premiums on green bonds, or “greeniums.”
So true, and the other aspect is that such bonds come with a requirement to be transparent. For our green bonds, we detail our spending in our ESG and green bond reports every year. Transparency is crucial.
You’re right, transparency plays such a unique role in the sustainability space, partly because we’re often on a new frontier where the rules haven’t yet been set. Disclosure is how people can keep tabs.
Related to transparency, a lot of people are concerned that net zero goals are a cover for inactivity, even a way for corporates to punt action on climate down the road. Besides transparency, how do you give people confidence that the promises made by Verizon today will be met?
Sharing progress on our goals, as we do in our annual ESG report, and by obtaining external assurance of our emissions results and other key environmental metrics, are some of the ways we do it. Giving people confidence is also about the little things forming a constant drumbeat, like the sign in all of our stores that says that we’re an Energy Star partner.
We’ve talked a lot about Verizon’s solo journey, but I’m curious about collaboration. Verizon and ERM are both signatories of the Climate Pledge, one of the high-profile initiatives where we see business moving to accelerate on the Paris Agreement goals to achieve net zero by 2040 instead of 2050.
Verizon’s targets have you well ahead of that, so what do you get out of participation in those types of groups? How do they help all of us move forward at the increasing pace we need to?
Climate Pledge is just another great example of industry working together to face the challenge.
Coming to a close, you and Verizon are a ways down the road, but a lot of companies are just getting started or haven’t yet taken a first step. What advice do you have for companies starting on this journey about how to set a net zero goal, or at least an ambitious reduction target?
It’s got to start at the top of the house but also resonate throughout the company. Unlocking your employees’ passion will absolutely lead to rewards. Sustainability is a team sport, and small and big actions alike are equally important.
I’d like to end with the message that the ICT industry gets it and Verizon gets it. We are all moving forward. And as a company, we want to step up to the challenge.