People don’t think of Perdue Farms, the country’s fourth-largest poultry producer, as a fertilizer company, but chicken droppings are perhaps the most valuable of manures for enhancing soil. High in nitrogen and phosphorus, they are prized by farmers, whose soil is often short of those nutrients.
The qualities that have turned “litter,” the polite name for the mix of guano, wood chips and other matter that’s periodically swept out of chicken houses, into a big business also make it a potent pollutant, contributing to algal bloom and other pollution in streams, rivers, ponds and lakes.
So Perdue has started turning litter, sludge and waste from its hatcheries and production lines into a rich compost that’s sold by lawn and garden companies.
“The reduction in our carbon footprint as a result has been substantial,” said Steve Levitsky, vice president of sustainability at Perdue. “Production of compost has reduced our carbon footprint by about 7,000 tons a year.”
Perdue is just one of hundreds of large corporations taking steps to mitigate their impact on the environment. Propelled by regulation, investors and consumers, businesses are overhauling their operations in ways that reduce their contribution to climate change.
“Addressing climate change can help you find savings, stimulates innovation and puts you in the vanguard, which is good for business no matter what business you’re in,” said Paula DiPerna, global adviser to CDP, an international nonprofit group (formerly known as the Carbon Disclosure Project) that works with institutional investors to push companies and governments to disclose and manage their environmental impact.
CDP asks companies to file an “environmental disclosure,” and last year about 6,300 companies complied, up from roughly 80 when the organization was started in 2003, giving the organization perhaps the largest collection of data on how business is working to reduce its impact on climate change. “When we started, 20 enlightened, mostly European investor signatories signed onto our disclosure request,” Ms. DiPerna said. “Today, we have more than 700 signatories.”
But a few years later, Ms. DiPerna said, the New York State Common Retirement Fund and Green Century Capital Management, which together had a $20 million investment in Bunge, pushed the company to make its deforestation even more stringent by promising to eliminate deforestation from its business altogether, not just deforestation declared illegal under a country’s regulations.
Pressure from investors is likely to increase, given that more investors are building environmental and other do-good screens into their models. “Ten and 20 years ago, idealists focused on what stocks not to own,” said John Goldstein, a managing director in Goldman Sachs’ asset management division. “We’ve come a long way since then.”
Mr. Goldstein was a founder of Imprint Capital, an asset management firm devoted to what is known as “impact investing,” or investing in companies that promise to deliver social and environmental results in addition to financial returns. Imprint was bought by Goldman Sachs in 2015, when it had about $550 million under management.
A year later, it was managing $6 billion, and today more than $15 billion is devoted to investing in such double- and triple-bottom line companies. “Sovereign wealth funds, insurance companies, pension funds, large family offices — the volume of demand is pretty remarkable, even for Goldman,” he said.
Goldman Sachs has built assessment of corporate efforts to improve social and environmental impact into its own investment decisions, using it to, say, determine how long to hold a particular bond or whether a real estate investment makes sense.
“It’s not that the steps companies are taking to improve sustainability are magic,” Mr. Goldstein said. “You don’t sprinkle pixie dust and suddenly see a company outperform. But it does help you better manage risk and reward over time.”
As much as investment is driving efforts among companies to reduce their carbon footprints, so are customers and consumers. Airbus, for instance, continuously works to improve the fuel efficiency, and thus the carbon footprint. A team of 220 people, the company said, is devoted to removing as much “drag” as possible to make its aircraft more efficient and thus reduce fuel costs, the biggest demand from its airline customers.
Airbus has enlisted nature for ideas, creating innovations from its study of birds and fish. The funny-looking bend at the end of many airplane wing tips? “Albatross and other sorts of birds have high aspect ratios (a measure of aerodynamic efficiency) with wing shapes that curve up at the tips,” said Simon Galpin, head of aerodynamics at Airbus.
That modification reduces fuel use by about 3.5 percent, Mr. Galpin said. The study of birds is also responsible for an improvement in the wing flap on the Airbus A350 that changes the wing shape, enhancing aerodynamics and redistributing the weight of the plane, making it more environmentally friendly.
The company is also studying how water flows over the skin of fish to reduce the drag created during acceleration. “If you look at dolphins or sharks, their skin is not perfectly smooth, there’s a little roughness to it,” said Norman Wood, aerodynamics expert at Airbus. “That controls water flow just above the skin’s surface, reducing drag.”
In the case of an airplane, such a modification would reduce carbon emissions. But applying the principle commercially has its issues. “A brand-new aircraft is beautiful, shiny and sleek,” Mr. Wood said. “Riblets would have a tendency to collect dirt and make the aircraft look tarnished quite quickly, which would perhaps mean more cleaning and more cost.” Nonetheless, another airline is trying riblets out to help Airbus collect real-time data on how the innovation functions.
Perdue confronted similar challenges when it began considering ways to reduce the impact of chicken manure. When it started tackling the issue in the early 2000s, it put litter through a heat process to make pellets, using some of the same equipment for making feed.
That process, which involved natural gas to heat the litter and electricity to run the mill, cost the company more than it could charge for the pellets. “I spent innumerable hours up there to make it efficient enough to get the cost down,” said Wayne Hudson, vice president at Perdue’s agribusiness arm.
The company hit upon composting a couple of years ago at the same site where it had been making pellets. Composting had the additional benefit of giving the company a use for its sludge, which it typically pumped into the ground.
The company also has begun capturing methane generated in anaerobic lagoons where solids from its processing plants end up. Perdue burns the methane to make electricity for its plants.
By 2020, the company aims to reduce its carbon footprint by 30 percent and its water use by 25 percent, and divert 90 percent of its waste from landfills. Jim Perdue, its chairman, hopes those efforts will reduce costs and even generate new profit streams, though he’s not counting on the latter — the fertilizer-cum-composting operation has cost $80 million over 18 years.
Rather, the company, which is privately held and faces no pressure from public shareholders, has taken steps to reduce its environmental impact to get ahead of possible regulation or simply because they made sense for its business. “It’s not really about making a profit,” Mr. Perdue said. “Sure, we’d like that, but it’s really about positioning our company for the future.”