Ira Pearl, Cox Enterprises
Today's guest is Ira Pearl, Vice President of Environmental Sustainability at Cox Enterprises. Ira is also the leader of Cox Conserves.
In his role, Ira leads Cox's efforts to tackle sustainability challenges while driving its goals to achieve zero waste to landfill by 2024 and become water and carbon neutral by 2034. Cox Enterprises is interesting because they are a privately held global conglomerate headquartered in Atlanta, Georgia, with approximately 55,000 employees and $21 billion in total revenue. Its major operating subsidiaries are Cox Communications and Cox Automotive. Not only is the scale of Cox Enterprises pretty shocking, but the proactive role they've taken in trying to do the right thing with climate change and the clean energy transition is also noteworthy.
Jason and Ira unpack a lot in this episode, including Ira's career and what led him to Cox in the first place. They talk about Cox's approach to sustainability, some of the progress the company has made in reaching net zero goals, as well as some of the barriers that they've come across along the way. They also cover where Cox is going in the future and have a great discussion about some of the things Ira thinks will help everybody move faster and what gets him most excited about the future and the clean energy transition overall. Enjoy the show! !
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Episode recorded on November 3, 2022.
In this episode, we cover:
[3:20] An overview of Cox Enterprises, including Cox Communication, Cox Automotive, and their cleantech division
[5:37] Ira's personal climate journey
[10:39] How Cox approaches organizational change at the functional level
[15:01] The reason behind Cox’s pursuit of climate-related and philanthropic projects
[18:09] How public companies can focus on the longtime horizons of the collective good
[21:15] Ira’s views on solutions that need improvements
[25:40] An overview of Cox Enterprises' clean tech division
[27:45] How Ira's sustainability department collaborates with their cleantech group
[29:00] The importance of data tracking in reducing emissions and how Cox evolved from energy conservation to energy production
[34:14] Balancing the tension between barriers to accelerated adoption and issues associated with changing too quickly
[37:36] Ira's thoughts on the Inflation Reduction Act
[41:39] Some of Cox's partnerships and community work in disadvantaged areas
[45:09] How the company inspires employee action for climate-related activities
[49:36] Ira's thoughts on offsets
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Jason Jacobs (00:02):
Hello everyone, this is Jason Jacobs.
Cody Simms (00:04):
And I'm Cody Simms.
Jason Jacobs (00:06):
And welcome to My Climate Journey. This show is a growing body of knowledge focused on climate change and potential solutions.
Cody Simms (00:16):
In this podcast, we traverse disciplines, industries, and opinions to better understand and make sense of the formidable problem of climate change and all the ways people like you and I can help.
Jason Jacobs (00:27):
We appreciate you tuning in, sharing this episode, and if you feel like it, leaving us a review to help more people find out about us so they can figure out where they fit in addressing the problem of climate change.
(00:41):
Today's guest is Ira Pearl, the vice president of environmental sustainability at Cox Enterprises. Ira is also the leader of Cox Conserves. In this role, he leads Cox's efforts to tackle sustainability challenges while driving its goals to achieve zero waste to landfill by 2024 and become water and carbon neutral by 2034.
(01:03):
Now, Cox Enterprises is interesting because they are a privately held global conglomerate headquartered in Atlanta, Georgia, here in the US with approximately 55,000 employees and 21 billion in total revenue. Its major operating subsidiaries are Cox Communications and Cox Automotive.
(01:22):
Now, I was shocked as we went into this episode with one, just the scale of Cox Enterprises, but two, what a proactive role they've taken in trying to do the right thing with climate change and the clean energy transition.
(01:36):
Now, there was a lot to unpack here, and in this episode we talk about Ira's career and what led him to Cox in the first place. We talk about Cox's approach to sustainability, how it came about, when it came about, why it came about. We talk about where they are to date, some of the progress they've made, some of the barriers that they've come across along the way.
(01:56):
We talk about where they're going in the future and we have a great discussion about some of the things that are holding them and their peer group back, what Ira thinks will help everybody move faster and what gets them most excited about the future and the clean energy transition overall. Great discussion and I hope you enjoy it.
(02:17):
Ira, welcome to the show.
Ira Pearl (02:19):
Hey, thanks for having me.
Jason Jacobs (02:21):
Thanks for coming. It's interesting, I think you guys were initially put on my radar, I think through your PR firm and we don't typically respond to those to be honest because it's not really a promotional kind of show. But then I started reading up on Cox Enterprises and I mean, gosh, you guys have a fascinating story and I have so many questions and so much I want to learn, and it seems like it's a template that I hope more companies follow. So to spend an hour with you and learn more about it is a huge honor. So thank you so much for making the time.
Ira Pearl (02:53):
Well, I appreciate it very much. And one of our things at Cox is we want to leave the world a better place and the things we do around sustainability aren't really intellectual property as far as we're concerned. We love to share that with other companies, learn from other companies, help other companies on their journey so that the shadow we cast is bigger than just our own company in terms of making the world better.
Jason Jacobs (03:13):
Sounds great. Well, to kick things off, maybe just talk a bit about Cox Enterprise and what you do and where you sit within the organization.
Ira Pearl (03:20):
Sure. So Cox Enterprise is the parent company of the holding company of two larger divisions, one is called Cox Communication. We're the third largest broadband cable internet provider in the US and have a bunch of other communication type subsidiaries, as well as Cox Automotive. You might know some of our brands like Kelley Blue Book, Dealer.com, Autotrader and Manheim Auto Auctions.
(03:42):
In addition, at the Cox Enterprises level, we have a clean tech division that split out from the sustainability group about four years ago, and they've made over a billion dollars investments in clean tech, ag tech, food scarcity type of investments in companies. So we do a lot in several spaces, but our investments generally are all keyed towards improving the lives of other people with communications.
(04:05):
Our automotive division has recently moved very heavily into electric vehicles. What are you going to do with all those end of life EV batteries when your car turns 10 years old and the dealer tells you the battery's no good? So we assess, refurbish and recycle those batteries, as well as the technicians in our fleets that manage EV fleets. So all kinds of good stuff going on.
(04:24):
My role specifically is I'm the vice president of environmental sustainability. I have a team of about 35 people that work with me. We do all of the energy procurement for the company and driving us more towards renewables. We have subsidiary departments that do energy conservation, water conservation, waste diversion and recycling.
(04:43):
We have three significant goals, one of which is to be carbon neutral by 2034, to be water neutral by 2034, and then to be zero waste to landfill, which is a term of art, it means 90% of your waste is diverted from landfills by 2024, which is really coming quickly. This year we're on track to hit 85% plus diversion. So we're real proud of that.
(05:06):
And ultimately we seek to be a leader in sustainability because we think it's the right thing to do. We are privately held, as you've observed. We don't have any shareholders clamoring for this. The family that owns Cox, the fourth generation is our CEO, outdoorsman, conservationists, love outside land and have made observations that led them to believe that we need to be very involved in sustainability and in helping solve the problem of climate change.
Jason Jacobs (05:33):
And what about you, Ira, how did you come to do this work? What's your journey?
Ira Pearl (05:37):
Very long and tortured journey, but it started over 25 years ago. My first real job was helping power plants clean up their emissions. And back in those days there was nobody talking about climate change or sustainability in any real way. But I was working on acid rain and solving those problems and helping the power plants and got more involved in environmental and air quality issues. And this was on the heels of the 1990 Clean Air Act.
(06:02):
And gradually that evolved to a corporate role for me at a large airline where I ran the environmental affairs group, and that was when sustainability first cropped up. And in fact, I was involved 20 plus years ago in the first climate neutral travel product at this airline where customers can opt in to neutralize the climate impact of their travel.
(06:20):
And I gradually migrated into operational roles. I've owned P and Ls, I've had operational groups, but it always seems to evolve back into energy, environmental. And energy and the environment are so interconnected and what we have to do to evolve our energy grid and our energy production to renewables.
(06:39):
My personal belief is the earth is a sphere that's got a finite volume of raw materials in it. We only have so much fossil fuels. We only have so much metals and other things, and we only have so many places to put our waste. So we need to be conservationists first and foremost, and we need to start migrating away from those fossil fuels. This is 20 years ago my thought, we're not going to have these forever. We have to start looking at renewables, we have to start driving them.
(07:04):
And then as more and more climate related information became available and everybody's seen those Greenland ice core charts from 600,000 years ago and the spike in carbon dioxide that the industrial revolution has caused and is causing, it became a little bit more of a cause to not just solve the problem because of resource scarcity, but to solve the problem to keep us from polluting the environment in which we live.
Jason Jacobs (07:27):
And putting aside Cox for a minute, I mean, the way I think about it, and caveat, caveat, four years ago, I came in from a cold start and just trying to learn and still just trying to learn, but that essentially there's a lot of thriving and human improvement that's come over the last several hundred years, but our planet, we've essentially ravaged the planet and we're out of balance.
(07:53):
And our whole infrastructure is built presuming that there was a foundation of a stable climate and increasingly the climate is destabilizing. And so we both need to take steps to restabilize it and we need to take steps to better prepare for living and functioning with a destabilized climate.
(08:13):
Now I'm going to stop there. Before I go on with my question, is there anything you disagree with there or does that align with how you think about it as well?
Ira Pearl (08:20):
No, I think that's pretty spot on. The challenge is this is, everything happens gradually and then suddenly. And then it seems like the pace has picked up recently, but this is a long ballgame. We're not going to solve it overnight, but only by putting one foot in front of the other and making improvements every day.
(08:37):
The earth, if you believe the numbers that I've seen published, 51 gigatons of carbon dioxide, 34 of those gigatons is due to fossil fuels. And the United States is about 5.7 of those 34 gigatons. And Cox is about, last year we reduced from about 700,000 tons in 2017 to about 356,000 tons of carbon. So we've pulled it down over 40% in about four or five years, which is really good, but not good enough.
(09:06):
So the short answer is yes, there is a lot of change that you see going on with weather, with fires, with drought, and we have to be practical environmentalists is the way I look at it. It's not just about embracing the fact that we need change, it's about operationalizing change. It's about developing strategies and tactics, funding them, gaining support for them and implementing them because anybody can wish the problem away, but it takes a very different skill set and a different level of determination to start whittling away at the problem.
Jason Jacobs (09:42):
So now translating that to, and again, not necessarily Cox specific, but companies in general, there's all these buzzword, there's ESG, there's sustainability, there's decarbonization, there's resiliency planning. And plus all these different functions like material composition is different than supply chain, and supply chain is different than offsets, and offsets are different than efficiency and building efficiency is different than circularity and reuse.
(10:09):
And so when it comes to functionally how an organization thinks about change, do you find that all these different titles are kind of siloed and unbundled? And is that how it should be as we look to drive efficient change? Or should these functions somehow be consolidated? Where do you even start when it's not a function problem, it's not a vertical problem, it's an everything problem, which also means it's a nothing problem from an accountability standpoint? So what do you do with that?
Ira Pearl (10:39):
Well, it's not nothing problem, and the old joke about eating an elephant one bite at a time. So Cox started 20 plus years ago with energy conservation and there's a dual purpose for that. If you use less energy, you need to produce less energy. And the energy you produce results in fossil fuel emissions including carbon dioxide. So you're also saving money while you do that.
(11:00):
And everybody here talks about the triple bottom line, the win of the societal win, the economic win, and the environmental win. And that's what we strive to do. And in the past 15 years, Cox Conserves, which is the internal brand for my group, has invested over $150 million on projects with a double digit rate of return. So we've proven that you can have an economic win, which is how we get funded and have a beneficial win for society and the environment.
(11:26):
Now, when you talk about the different groups, the best electron that you can save is the one you don't use and that reduces carbon. So energy conservation is how most companies started off with this, can I use less energy? Can I save the carbon? And once you get to the point where you've reduced as much as you can, now how do I replace that with low carbon emissions?
(11:47):
So one of the things we try to do is wherever our facilities have a big enough footprint, we put on renewables, whether it's solar or other types of renewables. We also have some landfill gas assets out there where we take the methane from waste that it produces from anaerobic decomposition, we capture that and make renewable energy out of that. So not only are you making renewable, carbon-free energy, but you're pulling methane out of the sky, which is 30 times worse for the climate than carbon dioxide.
(12:15):
And then if you think about that, the waste piece is really important too. Not only do we have finite resources, but if we throw those resources into the landfill that produces carbon dioxide and methane. That is the principal byproduct of waste decomposing in landfills.
(12:29):
So it's not only a good idea from preserving our raw materials and that circularity story that you want to have, how do I take the waste and turn something good out of it, but it's also a matter of solving the climate problem.
(12:43):
And then the climate problem is integrated into water issues. If you look in the Southwest where there's just unbelievable drought, the Colorado River, Lake Mead, Lake Powell drying up never before seen levels, that's really a big issue for those communities. It stifles growth, it hurts agriculture.
(13:00):
So you can address all of these things. My group is organized where we have several teams under carbon that do energy conservation, that do onsite renewables and we procure external renewables where we can't build enough of our own. So we'll go out and invest in solar outside of our four walls and bring that power in. And as of 2025, we've got enough stuff in the pipeline, we'll be 56% renewable at Cox. We're really proud of that.
(13:25):
We also have a waste and recycling team who looks to go upstream to our vendors to create less packaging that creates that waste, that gets thrown away, that goes to the landfill, that contributes to climate change. And also can we reuse packaging? We get a lot of coax cable and fiber optics that comes on spools and can we reuse those multiple times and then make sure those things themselves are recyclable?
(13:47):
And in terms of the water scarcity, while we don't have a really big consumption of water at Cox, our customers have told us clean, safe drinking water and plentiful water is a big problem for them, and we know that climate change exacerbates drought. So we have started investing in our communities that have water scarcity issues or water quality issues. And we are in turn allowing water to be replenished to many of these important water bodies and reducing the amount of water that's pulled out of the ecosystem that we need.
(14:18):
So you're right, there's a lot of pieces to manage and I'm more of the orchestra conductor and I've got leaders who play the different instruments across those different verticals.
Jason Jacobs (14:28):
I want to go back to something you said before, how the family and fourth generation and they came to realize that this was an issue that required their attention. Why do you think they believed that it required their attention? Was it selfish to the bottom line or was it about collective good? I'm just trying to glean because I want every company to feel that way. But I'm just trying to get at, was it a philanthropic pursuit or was it their own selfish mercenary interest that public companies should then follow suit with the same playbook?
Ira Pearl (15:01):
Your priorities change at a company depending on the winds of whatever affects you, but your values don't. And the company was founded by Governor James Cox 125 years ago who really believed ... And the family has always been an outdoors family, conservation-minded family. And it's just part of the DNA. They walk the talk. Our CEO talks to me pretty often about ideas he has, things he's worried about, things he wants to solve for. And if you look at even the family foundation and where they invest those philanthropic dollars, it is very much a conservation, nature-based thing.
(15:39):
The nice thing about being a private company is you can play long ball. You're not worried about the next quarterly earnings cycle or what your EPS is going to be or what your shareholders think about you, you can invest long term and do things that you think are for the good.
(15:53):
So as an example, about a year and a half, two years ago, we got very heavily into controlled environment agriculture, also known as greenhouses. So if you think about where the lettuce you eat is made, it's all in the Southwestern United States, probably Yuma, Arizona. And the average lettuce head or romaine head or whatever it is, travels about 2,100 miles.
(16:13):
So you're producing this in an area that's got major water scarcity issues and it spends a week to 10 days on a truck or a train. So if you live east of the Mississippi, by the time you get it from the grocery store and put it in your fridge, it's turning brown two days later.
(16:28):
What we've done is allowed that production to move into the market area. So now you're transporting the food to within a 200 mile radius. It's fresher longer, and you're also growing it hydroponically where you use about 80% less water in an area that does not have water scarcity issues.
(16:45):
So that's about getting an economic win, getting a consumer win and getting an environmental win. So not just the philanthropic pursuits about restoring the environment and keeping nature where it is and making it better, but the business investments are all about generating community good.
(17:01):
I'm talking to our CEO, he said, "I used to go hunting every year up in Canada and I remember it was just always frozen tundra and snow pack. And over the years I've noticed the snow pack is receding and the species of animals we see aren't there anymore." So because they spend a lot of time outdoors, hiking and hunting and fishing and traveling, they've observed the changes to the environment and that is a motivating factor to fixing the problem. It's not materialistic.
Jason Jacobs (17:28):
I mean, it's really inspiring to hear this, but I was also worried that you were going to say that because what you're basically saying is that because you're private, you have luxury to play the long ball that public companies can't necessarily do due to market forces.
(17:44):
And so now put yourself in the shoes of listeners who might work at Alphabet or Amazon or Ford Motor, whoever, who are super concerned just like the family is concerned. How do we get those public companies to move? Or is the answer is just that we need to figure out how to get more companies to be private and family owned with values that factor in the planet and the longtime horizons of the collective good?
Ira Pearl (18:09):
No, I don't think that's necessary at all. And in fact, I think what's happening is the shareholders and other stakeholders are beginning to focus on that which gives the companies the flexibility to focus. And you don't have to move giant chunks of your P and L to do this.
(18:23):
If you think about Cox, we're a 20 plus billion dollar a year company and this coming year I'll invest about year about $20 million, so a very small fraction of that, one 1000th of that on cleaning up our footprint. And most of that in general and all of that in aggregate will have a double digit return on investment.
(18:45):
So it may not be highly competitive. Let's say a company says, well, we have a 20% IRR hurdle for our invested capital. It's not going to kill a company to say, well, I'll take a 15 or 12% return on a very small fraction of that money.
(19:00):
And companies not only are getting that message, but even the Microsofts and the Amazons and of the world, they are making significant investments in doing that, and they're actually putting it into their P and L. There's several companies that actually have a cost of carbon into their subsidiary divisions where it becomes part of their goals and moving that.
(19:19):
And probably about two and a half, three years ago, there was a big movement that's affected almost every publicly traded company, not just in the United States, but really globally to start focusing on climate and more broadly sustainability and even more broadly ESG, and we've seen this huge groundswell.
(19:38):
So now it's really table stakes. You don't have to be private. Every company's been motivated. There are a dozen different reporting standards, financial disclosures becoming big in the European Union and the SEC is now reviewing public comments from a climate disclosure rule that they've proposed. So all these things are affecting us.
(19:58):
And not only that, but as we look at our suppliers, which are our Scope 3 emissions and say, "Hey, what are you doing? What's your footprint? How are you making things better?" It's not just Cox asking those questions, just about every one of their large customers are asking them, what's your footprint and what are you doing to get better? And that is an associative transitive property, if you will, that every company is cascading around.
(20:22):
So I think we really are at an inflection point and have been for the last year and a half where it is a very rare publicly traded company indeed, that is not engaging and taking action to neutralize their impact on the climate.
Jason Jacobs (20:38):
So there's a bunch of different areas where if you take a point in time snapshot, essentially critics will just take that point in time snapshot and they'll say, look, that EV you're driving, it's actually powered by coal. Or look, those offsets that you purchased, they're actually crap. Or look, ESG doesn't mean anything because big oil's in there or things like that.
(21:00):
And so how do you think about parsing through the difference between stuff that at a point in time snapshot might be ideal that we need to fix versus stuff that at a point in time snapshot isn't ideal and we need to scrap?
Ira Pearl (21:15):
Well, I remember back 15, 20 years ago, we used to be very worried in the corporate world about disclosing our footprint because we were worried people would start throwing rocks at us. To talk about something you do good invites others to say yeah, but what else are you doing bad? And I think most companies have been disabused of the notion now that it's okay to talk about it, and we are not perfect and it's an evolution and it's going to take time.
(21:39):
So if you think about, yes, if you drive an EV, depending on where you live and what the energy source is that you're charging that battery with, you may be 20% fossil, 40% fossil, even 80% fossil, but over time we're watching that evolve.
(21:55):
And we're also ... It's one of those things like, I don't know if you have an EV, it's a challenge, if you're taking a long trip to daisy-chain the infrastructure you need to charge that. So if everybody went EV tomorrow, it would be a real problem. Even on your street, the transformer that powers your house and your neighbor's houses, all of a sudden you need 3X at each house to put your Level 2 charger on. The electric company couldn't keep up with that.
(22:18):
So think about this as an evolution. And there are folks out there and if they wanted to sharp shoot, they're always going to be able to find, hey, this isn't perfect. But if you want to do that, then you're going to discourage companies and people from making incremental change, which is really how we're going to win this game because you're saying, well, I did something good and then they point out the three things I couldn't fix right away. And we're aware of that.
(22:40):
With our 2034 goal, we are acquiring companies every year. So we snapped the line and said, "This was our company in 2020 and we're going to get to zero carbon by 2034. And as we acquire companies, we're going to measure their footprint and then we're going to create a strategy for each company to put them on their own glide slope to get there."
(22:59):
So I don't think anybody's going to throw a rocket at Cox and say hey, that company you bought in 2033 that you closed in December, you didn't get them to zero carbon by 2034. That's just absurd. You should be glad that Cox is acquiring these kinds of companies and bringing them into our philosophy that we're going to move them down that road much, much faster than if they stayed on their own by themselves.
(23:21):
So yeah, you can worry about that a little bit, but I don't worry about that at all. We talk about the good that we do and the incremental progress that we make. And I think it's really shortsighted of critics to point those kinds of things out because everybody knows them and there are things we're working on, but we're not going to get there overnight.
Jason Jacobs (23:38):
We're going to take a short break so our partner Yin can talk about the MCJ membership option.
Yin Lu (23:44):
Hey folks, Yin here, a partner at MCJ Collective. I want to take a quick minute to tell you about our MCJ membership community, which was born out of a collective thirst for peer-to-peer learning and doing that goes beyond just listening to the podcast.
(23:56):
We started in 2019 and have since then grown to 2,000 members globally. Each week we're inspired by people who join with different backgrounds and perspectives. And while those perspectives are different, what we all share in common is a deep curiosity to learn and bias to action around ways to accelerate solutions to climate change.
(24:14):
Some awesome initiatives have come out of the community, a number of founding teams have met, nonprofits have been established, a bunch of hiring has been done, many early stage investments have been made, as well as ongoing events and programming like monthly Women in Climate meetups, idea jam sessions for early stage founders, climate book club, art workshops, and more.
(24:33):
So whether you've been in climate for a while or just embarking on your journey, having a community to support you is important. If you want to learn more, head over to mcjcollective.com and click on the members tab at the top. Thanks and enjoy the rest of the show.
Jason Jacobs (24:47):
Back to the show.
(24:49):
So this next question is more of a Cox specific question. So you have this communications arm, you have this automotive arm, it's like, I know the obvious next place I should go, is we should stand up a clean tech arm, which it seems like you did. And so I guess this question is kind of twofold.
(25:05):
One, you're seeing more companies have heads of sustainability, which is great. You don't see that many companies that have clean tech divisions. And so that's one question is the origin of that and does that mean that every company should have a clean tech division or was it just natural and obvious for Cox? And if so, why?
(25:25):
And then the other question related to that is just how does that clean tech division, and I think it's Steven, your colleague that runs that, how does that interact and interface with your team and how do you collaborate versus divide conquer?
Ira Pearl (25:40):
So good question. So Steve Bradley, who used to be part of the Cox Sustainability team in 2019, they officially broke off and created the clean tech investment vertical, and not every company will probably do that.
(25:53):
You see a lot about companies diversifying and then going out and selling their non-core assets and shrinking and growing. Cox is more of a conglomerate, kind of like a Berkshire Hathaway or something like that, where we have different divisions with very, very different investments as opposed to some companies that only make one type of product. Ford is not going to start manufacturing TV sets, or rubber boots for people to wear when it rains outside. That's just not who they are and what they do.
(26:19):
But growing out of our desire, not only to make the world better and improve our sustainability footprint at Cox, it was a realization that we could make a bigger difference in the world by making investments in these companies, by investing and growing these companies and basically having a force multiplier effect. Not every company is going to be lined up to do that.
(26:41):
Again, one of the luxuries of a private company and particularly a conglomerate, is you can make those different investments. Bill Gates started Microsoft, but he's got Breakthrough Energy Ventures as a separate group that he runs now at a separate vehicle that he makes those kinds of investments.
(26:55):
So where we kind of overlap is we're both working on the sustainability issue, but the clean tech team under Steve Bradley invests in companies. They're buying parts of companies or even all of companies that we're going to continue to invest in and grow that solve certain types of problems.
(27:11):
There was one we call Nexus Circular that takes hard to recycle plastic and then reconverts that into feed stock to make more plastic. So you're not using fossil fuels, petroleum or natural gas to make plastic. You're using less of that and recycling what you have. Whereas my group, we invest in a product.
(27:29):
So for example, I'm making this up, let's say the clean tech team decided to build a solar development company. I build solar projects and we work with solar developers to help us build our projects, but I don't buy the company, I implement their technology in my facilities.
Jason Jacobs (27:45):
So are you a customer of his? Do you give him a wishlist and say, here are the things I'm trying to solve, go find companies that do this?
Ira Pearl (27:50):
A little bit, but not really. I don't say Steve, go buy a company that does this, but a couple years ago I said, "Hey, if we really want to make meaningful inroads into solar, wouldn't it be cool if we actually owned a solar developer?" And we had a couple of small conversations around that.
(28:05):
For example, we use ESG software to calculate our carbon footprint and other things. So hey, is that an area we should invest in because Cox and other companies like us are having a need for that kind of data analysis, reporting software, especially now with these regulations.
(28:21):
So they might look at that, but right now we're not necessarily buying anything from our clean tech group, but we do participate in discussions and evaluations and looking at technology because we bring very comparable expertise to the table. They're like more of an internal venture capital, small PE firm, whereas again, we're investing in projects, not companies on my side of the house.
Jason Jacobs (28:43):
And so now I want to talk about that 40% in the last four and a half years. So what did that journey look like as a company? And so it's kind of twofold. One is where did you start? And then another is with the benefit of hindsight, where would you start or what advice would you have for others that are sitting in your shoes but earlier on in the journey?
Ira Pearl (29:00):
So long before I joined Cox back in about 2000, it started off with one person who was just basically doing lighting replacement projects, incandescent to fluorescent, and then later fluorescent to LED. And it was really good economics and it really reduced the carbon footprint and the energy consumption.
(29:17):
And that's generally where most companies start, with the low hanging fruit. You want to put some wins on the board that feel good, that build momentum, that are very cash flow positive. And I joined Cox just three years ago, but I've had a long career in environmental and sustainability.
(29:31):
And the one thing that I think early on in the journey, the focus was more on let's do good things, let's not worry about who gets the credit, let's not worry about the points on the scoreboard, let's just move the ball down the field. And the thing I would probably have done different early on was maybe putting a lot more metrics around that and really more assiduously calculating our benefit.
(29:53):
If you go back to our carbon footprint, which was first calculated in 2007, it looks like it grew between 2007 and 2017. And it wasn't because we got worse because we were doing projects every year, it was because we were finally measuring everything. And when you have over a thousand facilities and over 60,000 electric meters in your company and all these other utility meters, collecting the data to understand your footprint is ridiculously difficult and challenging.
(30:19):
And you're dealing with hundreds and thousands of utilities and some of these are municipal utilities who you call them up and say, "I want a year's worth of bills." They say, "Yeah, I'm kind of busy. I'll give you last month. So I'll fax you a copy." So the data story is really important so you can track your journey and then use that data to provide insight into where you can attack the problem.
(30:41):
So we evolved from energy conservation to energy production. We have two freestanding utility scale solar facilities that we built. We've got a landfill gas to electricity plant that provides 15% of the energy that we use in our Virginia operations, which we're really proud of and knocks 60,000 tons of carbon out of the environment every year.
(31:01):
And we are more and more procuring energy through third parties, and a lot of times it depends on the regulatory environment that you live in whether you can build your own or you have to buy through the regulated utility. Or if it's deregulated, you could buy through a merchant production.
(31:16):
We were fortunate enough to get involved in some virtual power purchase agreements a few years ago that are very much in the money for us. They produce about a quarter of our energy that we need. So that's all renewable and that's part of that 56% renewable story that we'll get to by 2025. So all of those factors, conservation, standalone projects, renewable energy projects at our facilities and then procured renewable energy and we're picking up speed and momentum.
(31:45):
Now what people don't think about a lot is I might get asked, why don't you just solarize everything? Why don't you go a hundred percent renewable today? And their answer is, we would love to, but there's not enough material in the supply chain. There are not enough mines to produce the lithium you need for the batteries for when the sun's not shining, there's not enough silicon, and we have very little of that capacity in the US. There's not enough solar manufacturing capacity.
(32:12):
And at the same time over the last two years, you've seen every company and their uncle enter into this marketplace and say, I want to go decarbonize, I want to be more renewable. So now there's a lot of stiff competition in a finite resource of production, manufacturing, installation against a growing demand that has made it more and more challenging to get projects done.
(32:35):
And even the projects that we've done that are standalone solar projects, which we're really proud of, nowadays, if you want to build a solar project, you got to go out and find a piece of land that's hopefully near some utility infrastructure and then you go to the utility or the system operator and say, "Hey, I need an interconnect with you." And they say, "Okay. Well, write a check and we'll do a study."
(32:56):
Some of these interconnect queues are now three years deep because of all the developers that are flooding it. So if I want to do a project, I have to get in a three year waiting list for the utility to tell me whether or not my project can be supported where I would like to build it, and if it can be supported, how many dollars I need to contribute to upgrade their infrastructure to be able to accept that additional power onto the grid.
(33:19):
So it's not just wanting to do it, it's not just having the resources, it's not just having the corporate support, the entire supply chain from the electric grid to the manufacturers to the mining operations just can't keep up fast enough for how much people would like to do.
Jason Jacobs (33:35):
That was super helpful. One thing that immediately comes to mind is when you talk about these barriers to accelerated adoption, what the critics love to say is, well yeah, there's barriers, but that is just an excuse to take our foot off the gas. And that's a bad analogy, but our foot off the whatever, the accelerator-
Ira Pearl (33:56):
Our foot of the E pedal.
Jason Jacobs (33:58):
Yeah. Because if we move too fast and all the things that you just said. At the same time, if we take the leap off the ledge before the parachute's built, then we're going to hit the ground and it's going to cause those issues that you were describing. So how do we balance that tension?
Ira Pearl (34:14):
Well, I think it's about improvising and adapting and overcoming these barriers. And we're not just tucking tail and saying well, we can't execute our plan because there's not enough resources available. We say what's another way to go about it?
(34:26):
So for example, instead of us getting into a queue and I send out 20 land agents to find land that we can build on and then I talk to 20 different utilities about, hey, can I get an interconnect with you, we're looking at developers that have already bought the land, are already in the interconnect queue, already have an interconnect study done and saying hey, let us buy your project from you and we'll develop it and grow it, things like that.
(34:48):
We're working on different types of technology that decarbonize our energy production. We're getting ready to do a pilot project, I don't want to get into too much details, out in California where there's energy resilience problems. You have this thing called public safety power shutoff. So when it's hot and windy and dry, the utilities will shut down parts of the grid to prevent further fires from happening.
(35:10):
We don't want to turn on our diesel emergency generators and run those for two days because that's very polluting. So how do we get to a lower carbon solution, whether it's fuel cells, more solar battery backup, microgrids to manage all that?
(35:22):
So one of the things I'm proud of is when we did our strategic plan a little over two years ago, we restructured the organization around it and we created a role with a program manager whose job is to be on top of innovation and technology.
(35:38):
He's out talking to the DOE, he's talking to universities, he's talking to companies, he's seeing what's coming over the horizon and what's commercially viable. And then we fund pilot projects to get out there and try these technologies out, to test them out, to make sure they work and then we'll roll them out further. So it's all about incremental progress where you can.
(35:56):
I think ultimately the US government and FERC needs to probably intervene a little bit on this whole issue of, it takes too long to get an interconnect study done. We need more resources available to review this and prepare. That's really the bottleneck.
(36:11):
And then as we onshore manufacturing in the US and we start making more solar panels here, then we're not as beholden to countries that may be hostile to us because believe it or not, foreign policy has a huge impact.
(36:25):
Earlier this year, a small solar manufacturer in California filed a charge with the Department of Commerce that said the Chinese, who are currently banned in the Xinjiang region of China because of Uyghur slave labor from exporting their panels to the US were illegally dumping those panels and funneling them through Southeast Asia, other countries.
(36:46):
And if that was found to be true, there could be very punitive tariffs. And literally in the US for four months, the market just seized up. No one could buy solar panels because no distributor wanted to sell them and risk a 250% tariff if the Department of Commerce's review came out adversely.
(37:06):
So whether or not you want to say it's an excuse to take your foot off the gas, we're not taking our foot off the pedal, we're just finding another pedal to step on while we're waiting to see what happens and freeing up those resources, so we can start over again.
Jason Jacobs (37:19):
I was about to ask you a question about the Inflation Reduction Act, and I was going to start by asking, is it Ira or is it IRA, and then I realized that I'm talking to Ira. So what do you call that bill? I've heard some debate on Twitter about what it's called. That wasn't the question, but that's just a question before the question.
Ira Pearl (37:36):
Let's just say this, there are many components of that bill. Originally there was the Build Back Better plan, which was huge and had some of these elements in it. And it's almost like they took away all the stuff that didn't matter to us and left in the stuff that did matter.
(37:52):
So I think it's a very good thing to have the investment tax credits available and to expand that, but realize one thing. So there was a declining investment tax credit curve that we were living on. It went from 30% to 26% to 23%, I don't know, 10% to zero, and that made the hurdle very difficult.
(38:12):
And also while everybody in the country thinks about inflation and we're seeing 8 or 9% consumer price inflation, if you're in the building trades, which is effectively what we do when we retrofit buildings or build solar, it was really about 30, 35% over the last 18 months to two years. So giving us a 30% tax credit, just neutralized most but not all of the inflationary impact we were seeing on solar panels.
(38:36):
For many years. For 15 years, solar got less and less and less expensive. And we hit the nadir, I would say in late 2019, early 2020. But then it was all the value rung out of that supply chain, it started getting even more expensive, but with the inflation and the supply chain collapse, that rocketed back northward in a rate that was way above the CPI.
(38:58):
So the IRA was a good thing to have happen because it helped neutralize that inflation, but if you compare it to 2019, there's really not much of a boost from 2019. But we're so glad to have it because I shudder to think what it would be like had we not had it because it really does hurt the returns on those projects and we still have a company to run and we still try to make sure that we get a reasonable return on investment.
(39:22):
Another reason we just love doing solar projects and other renewable projects is I'd rather own than rent. And if I build an infrastructure asset, then I own that and I have a fixed cost over a long period of time, and I'm not going to be subject to the volatility that we're currently seeing in the energy market.
(39:38):
And most of the marginal electrons produced when you flip on that light switch at your house and turn on one more thing, they're putting more natural gas into a boiler somewhere. That's how it's being made. So when people talk about electrifying everything, we're not quite ready for that yet because that's actually driving up carbon emissions.
(39:57):
And if you say, well, let's take away natural gas in the home, well, natural gas gets to your home about 95% efficient, where it's only about 35% efficient, if you convert that in a power plant, chemical energy goes to thermal, goes to mechanical, goes to electrical. And eventually we'll get there, we'll be all electric and all renewable, but probably not in my working lifetime. So we have to be very pragmatic about that.
(40:20):
And you used the example of jumping out of a plane and your parachute's not ready yet. I like to think of it as a ship across the ocean, we're going from fossil land to renewable land. And Cortez when he got to the new world, burned his boats so there's no turning back. We got to be careful not to light the boat on fire while we're still in the middle of the ocean.
(40:37):
We still have a ways to go. It doesn't mean we've quit on it, it doesn't mean we're giving up. I'm very hopeful and I'm planful that we're going to get there, but it's just not going to be today.
Jason Jacobs (40:48):
And when you look at the goals, of course there are multiple goals and you talk about some of them where it's not just about carbon as an example, but it's about community and pollution and environmental justice and jobs and things like that.
(41:01):
So if you look at the IRA, one of the things that I think was a point of contention with some of the environmental justice groups is, on the one hand, you're right about permitting, interconnections, transmission, that's like, we need to go faster, we need to clear up the queue, and the communities having a voice is a bottleneck. So oh, let's remove their voice and speed up the process. That's a big point of contention with the environmental justice groups.
(41:23):
How do you balance the different needs where if you focus on any one there could be unintended consequences that affect negatively other things that you care about? But at the same time, if you don't focus on one, you're not going to make any progress on one because it's hard enough to make progress on one.
Ira Pearl (41:39):
Well, you can do both. You won't necessarily nail it every time. I'll give you an example. Some of the things that we need to do to get to our goals involve working in the community because for example, there's just some things I got to throw in the landfill. It's illegal to dispose of any other way. So I need some external tons that I divert from a landfill to recycling.
(42:00):
So we work with The Recycling Partnership and we go into socioeconomically disadvantaged communities and we make contributions that bring recycling to those communities. So we're helping socioeconomically disadvantaged communities by less waste going to the landfill, more recycling. And we're also educating and developing habits for young people that they'll carry with them the rest of their lives.
(42:20):
Instead of retrofitting restrooms in our facility in Rhode Island where nobody cares about how much water we're using and we don't use a lot anyway, I'd rather turn that 50 or a $100,000 and use that to eradicate arundo donax, which is an invasive species in Los Angeles that sucks up so much water every year.
(42:37):
It's like we have kudzu in the south here in Georgia, and I can do more in a community that needs it, and usually a socioeconomically disadvantaged community like the Colorado River Indian tribes that we've made multiple forays into with the Bonneville Environmental Foundation to replenish the water systems in those areas where we can have much more impact, not just environmentally, but socially and societally in economically distressed and socioeconomically disadvantaged areas.
(43:07):
So it's not an either or, it's an all of the above type of thing. And we generally say where we're going to do something that, I'll call it quasi philanthropic, we're going to seek to do that in an underserved community. We're not going to go to Beverly Hills and put in a water hub, but we may go to East LA and try to do something like that.
Jason Jacobs (43:26):
How active is Cox as an organization on the policy side, if at all?
Ira Pearl (43:33):
Oh, I don't want to speak for our government affairs and our public policy group, but generally speaking, you will not find us fiercely advocating for radical positions in the world. We see our role as one of informing policy makers and politicians of the facts as they affect us, communicating what we're trying to accomplish in the community.
(43:52):
There's a big program that was launched a year and a half ago, rural broadband. There are many people that don't have broadband internet. And it became very obvious during COVID where there are usually socioeconomically disadvantaged areas. So we work with the federal government to help deploy those funds where it may not be economically viable for us normally to run five miles of fiber down a road for three houses, but to allow us to serve those communities.
(44:18):
And we also do things like Connect2Compete where we donate internet services and things to underserved communities. So when you think about all of that in aggregate, it's all about doing good where you can, when you can.
Jason Jacobs (44:29):
And I guess this is more of a personal question than a Cox question, but one of the things that I wrestle with is on the one hand, we live how we live and we want these changes to happen under the hood invisibly so that we can live how we live in a more sustainable way by swapping out the infrastructure under our feet.
(44:48):
On the other hand, there's talk of our over consumption and the compressed life cycles and new releases for electronics and everything disposable and waste and pollution and our car culture and things like that. Where does the demand side fit into the equation and how do you feel about terms like sacrifice or lifestyle change?
Ira Pearl (45:09):
Well, there's a couple things I'd probably comment on there. Number one, we recognize that you can model habits at work for employees that they can bring home. And at Cox we have every year something called the chairman's challenge. So 2021, it was all about carbon, 2022 was about waste, and 2023, it's going to be about water.
(45:30):
So when we came back from COVID, we started implementing flex work. So it reduces commuting emissions and improves the employee quality of life and it actually reduces the amount of water we use in our facilities by like 40%. But we recognize that that water is just not being used, this is being used somewhere else.
(45:46):
So next year's chairman's challenge is about helping employees drive water efficiency improvements in their home, teaching them about zeroscaping, giving them low flow fixtures and the like. So part of that discussion is how do you use your corporate presence to imbue your employees with the right sense of responsibility and give them the tools and incentives to do well.
(46:09):
And I think the other half of that conversation is what I would call behavioral economics. If I interview people on the street and say, "Would you pay five bucks more every week for your groceries to be carbon free?" And they say, "Sure," and then you put them in front of a shelf and it's that carbon free carrots and non-carbon free carrots and one of them is 25 cents more, probably 9 of those 10 people that said sure are probably going to reach for the non-carbon free carrots because hey, I got a budget, I got to live with them.
(46:34):
So it's all about striking a balance and giving people tools they can use that bring them the same kind of benefits, both economic benefits. If I can help you reduce the energy consumption in your house, you're reducing your carbon footprint, but you're also reducing your electric bill. So how do we find those win-wins on a personal level for people.
Jason Jacobs (46:55):
In terms of the path forwards and reaching those aggressive goals that you laid out earlier, where are some of the gaps or things that are outside of your control that if changed, would be most effective in helping you accelerate your progress?
Ira Pearl (47:10):
So that's a great question. So a lot of people, let's talk about EVs. We started early on talking about EVs. Everybody said, why don't you just switch your fleet over to EVs? Well, the reality is EVs don't exist in the types of vehicles that we always need. So if you think about a lineman at an electric company or a telephone company or a cable company has to have a bucket truck. There are no electric vehicle bucket trucks out there. And it would take a battery probably the size of a portalit that would take a lot to charge.
(47:38):
We're doing a pilot program with our technicians this year with the Ford E-Transit minivans. They're only available with 110 mile battery. So we're going to roll those out, but that means 80% of our employees are home start. So that means we have to have employees who have the home where we can put the infrastructure in and then we have to worry, is the battery big enough. And if they get the battery much bigger, then the van weighs more, now I need a different kind of driver's license for my technicians.
(48:03):
So there's all kinds of issues that we have where, for example, diesel powered vehicles, you say well just switch them to renewable diesel. Well, I don't know if you know this, but there's not a lot of stations in the country that offer renewable diesel, maybe out West in California. So it's not ubiquitous yet.
(48:20):
So getting the vehicle types that we need, the infrastructure that we need, the ability to quickly charge the vehicles either at home or at work or on the road. And if you think about it, if I had to pull my technician over for two hours to plug in and get a charge, that's two out of eight hours of their day, 25% of their day. I'm not working orders. So that means I need 25% more technicians, and that means I got to raise everybody's rates on cable to cover that cost. So it's not economically sustainable.
(48:47):
So we love working with the OEMs, talking about our needs. We recently formed a working group for the Cable Television Association on sustainability. We can collaborate and figure out how we can solve these problems together.
(49:01):
We collaborated last year on how do you recycle coaxial cable because that cable's got five or six or seven layers depending on the cable, and it's really hard to separate and it's a kind of an intractable problem.
(49:11):
So we believe there's power in numbers. And we know that you talk about what problems we want solve, don't have the EV infrastructure, don't have the EVs I need, other things around just renewable electricity. We talked about all the impediments to rolling that out as fast as we would like to roll it out. It's still coming and it's growing every year, we just need to build that manufacturing base to get the infrastructure we need.
Jason Jacobs (49:34):
How do you think about offsets?
Ira Pearl (49:36):
So we took a hard look at that and there's probably a couple of reasons why we are not in a position where we want to be a buyer of offsets. And one of them is that number one, there's a lot of greenwashing or accusations of greenwashing, so there's reputational risk associated with that. Number two, as more and more companies are expressing these very grand decarbonization goals, some are going to have to buy a lot of offsets to get there and it creates a lot of pressure on the marketplace.
(50:07):
There's a program in New England called RGGI, the Regional Greenhouse Gas Initiative that applies to any large power plants. And there's I think 11 states in it now. And those power plants have to buy allowances and it's diminishing curve of allowances. So some companies thought, well, I'll just buy those RGGI allowances and retire them and that's how I'll decarbonize.
(50:24):
And they're legitimate, they're government, they got to be real, but the reality is the money from those allowances goes to the state and sometimes the state uses it in their general fund. They're not using it to decarbonize things. So you're not getting a dollar for dollar offset.
(50:38):
At best, the data I've looked at, it's about two thirds of the dollars actually go to carbon projects, but I'm not even convinced that dollar for dollar, every ton of allowance you buy funds a ton of carbon reduction on the other side. So that's kind of one issue, the cost, the reputation.
(50:57):
And then the third issue is really, it's like going for a run and paying someone else to take a shower for you. We really feel like we start with our own footprint inside our own fence line and fix it.
(51:06):
Now that being said, we may not be able to get to that finish line without doing something outside of our footprint. So we're evaluating several strategies right now. We're very close to the finish line on those to develop projects that generate our own offsets that we can look at, point to, have the math, the data, reputable verification bodies looking at these things. This is real.
(51:28):
So we're looking at things like forestation, we're looking at things like helping rural communities with landfills capture and destroy the gas where it's not already required to remove that methane from the environment and also reduce the odor issues in socioeconomically disadvantaged neighborhoods.
(51:43):
So we will do projects that generate carbon offsets that we will just retire of our own, but I don't see us participating in that marketplace right now, it's just too fraught with potential for problems.
Jason Jacobs (51:56):
If you were either interviewing for another job or you were, let's say, brought on as an advisor to help diligence other companies on how serious they are about climate action, what criteria would you use to assess? There's a lot of net zero commitments in years flying around out there, but with a trained eye, how does one know who's serious?
Ira Pearl (52:17):
Well, you got to look at their plans. Okay, first of all, are you measuring everything as best you can? Do you really understand what your footprint is? And have you developed a strategy to address the different elements that comprise your footprint? And are you operationalizing that? Are you making the investment? Do you have a team that's dedicated to implementing the projects?
(52:37):
If you have an energy procurement team, how much of their time is focused on procuring renewable energy? If you have infrastructure and facilities teams, how much of their efforts are about reducing the energy consumption at your facilities?
(52:50):
There's a double handful of ways to solve these problems that we have, we call it our playbook, but right now we're taking a look. Our playbook is a couple years old, and our strategy is a couple years old. We're saying, okay, where is it working? Where doesn't it work?
(53:04):
And are you going back and reevaluating your plans and adjusting your plans to acknowledge the reality of the marketplace that you're in, whether it's new ideas or challenges to getting infrastructure deployed? So just is it real and have you made progress? And how are you measuring that progress? And are those metrics credible? Can you defend them?
Jason Jacobs (53:27):
Great. And in terms of listeners, for people that are inspired about the work that you're doing and your vision, who do you want to hear from? How can we be helpful to you?
Ira Pearl (53:37):
Well, you can go on our website and read about what Cox is doing. You can look at the people that we support and the things we're doing. But I would say start inside your own company. If you want to make a difference, figure out what your company is doing about sustainability. Let your voice be heard.
(53:53):
And look at your own lifestyle. One thing you got to keep in mind is profligate polluters as we are in the first and second world, there's still about 2 billion people in this world that live below the poverty line that use very little energy, and they would like a better life.
(54:07):
And as those folks come into that economic growth curve, this problem's going to get worse before it gets better. Sub-Saharan Africa, India, China, those are all big problems. So think about how you can contribute in your lifestyle every day and how you can contribute at your company.
(54:23):
One of the things we do at Cox that I love is every year we have a contest where employees submit their ideas and they compete for funding and the very best ... It's like a little, mini Shark Tank type of thing and we have five or six executives that sit on the panel and we agree to fund these challenges that the employees come up with to solve these problems. And there's so many better ideas than me or my team can just come up with.
(54:47):
So if you're a leader in a company, open your ears, open your heart, listen to the employees who know where the problems are, know where you're wasting energy or wasting resources, and give them the opportunity to be part of the solution.
Jason Jacobs (54:59):
Well, that's a great point to end on, but I'll ask it anyways. Anything I didn't ask that I should have or any parting words?
Ira Pearl (55:04):
Great interview. Appreciate the very insightful questions. Again, our goal is to be a leader, not to be recognized, but to show other people the way. And we want people to understand what we do and that's why I'm on your show, which I really appreciate the time you've given me.
(55:18):
And if there's my peers out there who are heads of sustainability, hit me up on LinkedIn, I'm happy to talk with you, exchange ideas, and share best practices. We're going to get better by helping each other. It's not a competitive issue.
Jason Jacobs (55:31):
Well, thanks, Ira. Thanks a lot for coming on the show and sharing your knowledge, and thanks for all the work that you're doing to move things forward as well.
Ira Pearl (55:38):
Well, thanks for your great podcast. I really appreciate your time today. And thanks to your listeners.
Jason Jacobs (55:43):
Thanks again for joining us on the My Climate Journey Podcast.
Cody Simms (55:46):
At MCJ Collective, we're all about powering collective innovation for climate solutions by breaking down silos and unleashing problem solving capacity. To do this, we focus on three main pillars, content like this podcast and our weekly newsletter, capital to fund companies that are working to address climate change and our member community to bring people together as Yin described earlier.
Jason Jacobs (56:09):
If you'd like to learn more about MCJ Collective, visit us at www.mcjcollective.com. And if you have guest suggestions, feel free to let us know on Twitter, @mcjpod.
Cody Simms (56:23):
Thanks and see you next episode.
