ESG Matters episode 13: transcript

Transcript

Anna-Marie Slot: Hello, and thank you for joining me for the latest episode in our 30 for Net Zero 30 series. I'm Anna-Marie Slot, Global ESG and Sustainability Partner at Ashurst. And today we are joined by Chris Castro, Director of Sustainability and Resilience for the City of Orlando, and in addition, one of the co-founders of Climate First Bank. Thank you so much for joining us today, Chris. Perhaps you could start off by telling us a little bit about all of your various different projects and how you came to start your journey in sustainability?

Chris Castro: Thanks, Anna-Marie, it's great to be here with you this morning and appreciate the opportunity to share the story. So, starting back, I'm a second generation Cuban-American, born and raised in Miami, Florida. And growing up, I was fortunate to have a family that really immersed me in nature and got me outdoors. In fact, my stepdad is a business owner of a palm tree nursery. So, I grew up on a palm tree farm, growing trees, and long story short, I ended up getting a full ride to the University of Central Florida, and I was undeclared at the time, but I knew that something dealing with the environment was pulling towards my heartstrings. And I ended up focusing my studies on environmental science and policy, and a minor in clean energy and sustainability, really trying to focus on, how do we make this transition away from fossil fuels and towards a clean energy future?

And so, I've really become a very passionate eco entrepreneur. I've had a stint in community organizing, and today I'm a sustainability professional. The last seven years, I've served here in the City of Orlando as the Senior Advisor to our Mayor, Buddy Dyer, and the Director of Sustainability and Resilience, really developing a comprehensive set of different policies and programs and partnerships, that are really making a big dent in the issue and advancing us in a cleaner and a healthier, and a more sustainable direction.

And outside of the city, you alluded to it, I'm very active as well and serve on about a dozen nonprofit and academic boards. And most recently, earlier this year, I'm quite honored to be a founding director of Climate First Bank, as you mentioned. It's Florida's first B Corp certified community bank, and really with a mission to change finance so that we can finance change, and ultimately use our capital as a force for good. So, the bank is fully FDIC insured. It's a digital and in-person depository institution. And the overall goal is to advance lending that really works to draw down carbon and decarbonize our future.

Anna-Marie Slot: It sounds like a busy lifestyle there, focused on key areas that we've talked a lot with the various people about. So, looking forward to hearing more about what you're doing. What do you think might've been the biggest shift you've seen over the last two years or 18 months? I mean, you've clearly been looking at this all the way since your college days, but have you seen movement in that, in your work world?

Chris Castro: I think so. I think there's certainly a new awakening and certainly a heightened awareness across the general public, of this concept of sustainability and even talking about the climate crisis. Since the pandemic, I do think that the focus on health has really helped to elevate and underscore the important work of sustainability. And really the intersections of the health of our environment and how that impacts the health of our communities, and how that ultimately impacts the health of our economy. Right? It really comes back to that triple bottom line of sustainability, people, planet, and our prosperity. And so, that's one big shift that I've seen, is the focus on health.

Secondly, I've seen a real focus on equity. I personally believe that we can't have a sustainable future without addressing these inequities and really centering those that have been disadvantaged, too often are black, are Hispanic, are Indigenous, and other communities of color. And so, I'm excited that there seems to be this convergence of the traditional environmental group and the traditional social justice groups, that are coming together and realizing that we can't have, again, a sustainable future without addressing equity and justice as well.

And lastly, I think climate. Climate, I remember just getting into this in 2006 and I was at the time a student activist trying to get my university, UCF, the University of Central Florida, to commit to carbon neutrality. And we ended up succeeding in doing that, but I remember how difficult it was to even bring the topic up and for people to understand it. And today, it's evident and it's in front of our eyes, right? We can't get away from it. The wildfires we're seeing out west, the unprecedented hurricanes, the flooding events from those hurricanes that are now trickling up further and further north. I mean, it's something that we can't even deny anymore, in my opinion. And so now it's a matter of, how do we address this in the most immediate and meaningful way?

Anna-Marie Slot: No, exactly. As other people have said, it's been brought to your front door, I think, in a lot of different ways. And we've heard that from a number of different guests that I've spoken with, around how COVID actually has created a more focused lens on how people are looking at things. I think, particularly in your role as part of the City of Orlando, I think you've got a particularly interesting insight into the underlying infrastructure and grid that we need to be looking at to transform. What are you seeing? I know you were recently up on the Hill, speaking with the politicians in the US about what to do, but could you share with us what you think are specific actions that need to happen in the next two to three years, to really be a game changer around what's happening with the net zero promises that people are making?

Chris Castro: Yeah, most definitely. And back in 2017 and '18, the City of Orlando participated in something called the American Cities Climate Challenge. And this was a competition among the 100 largest cities in America to develop strategies that would drastically reduce emissions by the greatest amount, over a five-year period. It was really a short term window to say, what are those big, high impact actions that we could be doing? Orlando pulled together a very robust plan of about 15 different policy and program strategies, and we ended up being selected as one of the 25 winners of this climate challenge.

And I think it's really critical that data guides the actions and the priorities of any given community. And so since 2007, when Mayor Dyer launched our Green Works Orlando initiative, we've been accounting, we've been doing a greenhouse gas emissions inventory, right? A carbon accounting, to really understand what are the sectors of the economy that are contributing the most to this problem, and how do we start to address those? Well, it's been fascinating to see the trends. And first and foremost, when I first saw this, I was shocked that building energy use in the residential and the commercial buildings, made up over 72% of Orlando's annual emissions profile.

And we know that buildings on average are wasting between 20 and 30% of their energy. And it was evident that accelerating energy efficiency is the critical first step, not just for our city, but I think we're seeing that across the country and around the world, energy efficiency happens to be one of the most cost-effective and impactful strategies. And so, we've been doing a lot around enabling clean energy financing tools, like PACE, the Property Assessed Clean Energy, or SELF, the Solar and Energy Loan Fund. Just as two examples of how we can provide capital to offset that upfront cost, to make these improvements. In addition, we have a policy that requires that buildings actually monitor and track their energy and water use, their carbon footprints, and report that information every year to the city, so that we make that publicly transparent. It's a benchmarking and energy audit law that was passed in 2016.

So, buildings are such a key piece of this, the infrastructure that we live and work in every single day happens to be a silent emitter, right? They don't have smoke stacks on top of buildings, but believe it or not, they're the biggest contributor in our city, to this problem. Secondly, most of those emissions associated with buildings are dealing with the electricity and the emissions associated with that electricity, right? We're still using predominantly fossil fuels to power our city and most of this country. And so, hardening our grid, modernizing that to make it more resilient and focusing it on decarbonizing the electric supply is the second key focus area for us in Orlando, and I think around the country.

We've been doing a lot to invest in rooftop solar on municipal properties. We have now over 150 megawatts of community solar that we're tapping into here, for our municipal operations and citywide businesses and residents. We're beginning to see solar carports go up over flat parking lots and parking garages. And Orlando is interestingly enough, pioneering floating solar, we're part of the leading edge of solar applications, where we're starting to install solar on water bodies. In fact, we have one here at the Orlando International Airport as a showcase to the world, of the future of photovoltaics.

So, decarbonizing the electric supply is certainly a key priority for us, and we're doing a lot in that space. And it happens to be also a priority for our Biden Administration here at the Federal Government, where they're looking to push 100% clean electricity standard by 2035, and hopefully get that through Congress. Thirdly, is following buildings, about 27% of our emissions are associated with on-road transportation. This is the use of gasoline and diesel and CNG that are powering our methods of mobility. And so, reducing our vehicle miles traveled in our city is actually the first step to addressing that issue. And we've been doing a lot to enable micro mobility, things like electric scooters and electric bikes, and car share and ride share opportunities. We're beginning to roll out autonomous electric shuttles in some of our neighborhoods, like the Lake Nona community in South Orlando, that now has 15 different shuttles moving people around, to and from their homes in the town center.

And lastly, but certainly not least, the partnership with our transit authority, LYNX, in terms of bus electrification, have been working together for the last four or five years on moving our downtown bus rapid transit to an electrified system, a zero emission. And I'd say the last thing really quickly is, our priority is around electrifying everything. Moving forward, we need to make sure that our vehicles, our buildings, really everything is moving towards being electrified. And here in Florida, where we have a huge cooling load and not so much of a heating load, we're already using mostly electricity for our buildings. And so, we've been thinking about, well, how do we get ready for, as an example, electric vehicles? We've been deploying hundreds of electric vehicle charging stations. We just turned on 100 new stations on public property, at city parks and parking garages and rec centers.

We're also building these Downtown fast charging hubs for DC fast chargers, so that people that are commuting to and from, can get charged up really quickly. And we just two weeks ago, passed an EV readiness code, which requires moving forward in January 1st of 2022, all new construction to come equipped with a minimum level of EV readiness, including some installed chargers and other future-proofing the electrical infrastructure to make it easier later down the line. So, those are the four key areas of opportunity and I think that there's a lot of alignment with other cities around the country in terms of how their emissions data is looking and where we need to start targeting our investments and our dollars to accelerate towards a zero carbon future.

Anna-Marie Slot: Now, all excellent initiatives. I think really interesting obviously, is your first point around energy efficiency and that's a real win for businesses, right? I mean, it is them overpaying, essentially. So, I think a lot of people who struggle with where to start or what to focus on, that's a fantastic first step for companies to think, "Okay, what is my energy efficiency and how can I improve that?" And that's certainly one, right?

Chris Castro: No doubt.

Anna-Marie Slot: That plays well internally as well.

Chris Castro: Well, just really quickly on that point, mayor loves to talk about our programs for energy efficiency, because you're absolutely right, this is the business case for sustainability. We, in 2016, ended up moving forward, very ambitiously with a $17.5 million green bond. This was the first green bond that the city took out. And the whole objective was to go back into our outdated and energy hogged buildings and to retrofit them. And at the end of the day, we're paying for it one way or another, either we're paying the utility or we're paying and investing in our buildings that will help minimize the cost of operations and therefore taxpayer expenses to run the city.

And so, we took that 17.5 million and since then have retrofitted 55 of the most energy intensive buildings and now are seeing incredible results. We're seeing over $2.2 million per year in avoided cost savings, which we're using by the way, to pay the debt service on that green bond, plus an additional about 250,000 per year that has created a revolving energy fund. So, now we're taking those savings and we're reinvesting those savings into other buildings so that we can save more, and reinvesting those savings, so on and so forth.

And across the seven million square feet that we have conditioned, we have seen a reduction of 23.4% since that launch in 2016. So in five years, almost a quarter of the power that we were using across our entire municipal portfolio has been reduced and is now much more efficient, which is allowing us to take those excess dollars and put it back to work into the community. So, you're absolutely right, energy efficiency is the best first step. It makes business sense, it has a great return on investment, and it happens to be one of the best ways to reduce carbon pollution from the smokestacks.

Anna-Marie Slot: No, it's like a triple win. It's like your three Ps that you started with. And I think other things that you've mentioned are also really interesting, because we get the question a lot about, what role do the different players in an economic system play in driving the achievement of net zero ambitions? And I think having transparency laws, like you have noted from 2016, that kind of transparency really drives market behavior and the decarbonization agenda. But also, having building codes that say, "Look, this is what the grid is going to have to look like going forward. So, you need to build that in now, so that we can shift to an all electric grid, that is a decarbonized grid." Those are great movements. I'm almost afraid to ask, given that all of the different things that you're at work on, but I do always ask, what is your own commitment to net zero, on a personal level? Do you have one or do you just go to work every day?

Chris Castro: Oh, I definitely have one. This is not what I do, it's who I am. I'm relatively new into my career, over the last 10 years though, I have been really focused on early steps to decarbonize my life. And I started out growing my own food, I actually launched a non-profit called Fleet Farming that converts homeowner lawns, front lawns and back lawns, into in-ground farms. And so, I started to really get engaged in trying to minimize food miles that I was contributing to, and to really localize the food and also improve my health from the nutritious food that I was eating. And that led me to other things, right? Re-earthing and composting is a natural process of that food system. And so, in addition to recycling, which I had been doing, I started composting in my house and I have been over the last decade.

And I even have, now my daughter, who's four-years-old, every other day, going out with my compost pale, and we get to tip it together and make soil, which is amazing. And then two years ago, I actually got to invest in rooftop solar for my home. So, I have a 10 kilowatt system, and I'm happy to say that it exports clean power every single day and over the course of the month I'm banking credit, so to speak. And earlier this year, I got into my first all electric, I had a plug-in hybrid before, but I got into my first all electric vehicle, which is now powered by that solar on the home.

And so, I'm starting to make that journey towards a decarbonized future for my own personal life. And I know I still have a lot to go, especially with the Scope 3 supply chains and things that I'm purchasing, but I try my best to support local businesses and move in that direction. So yeah, from the power that I'm getting, to the transportation to and from work every day, to what I'm trying to do with my waste, to where I'm getting my food. Of course, water, I'm being so efficient with that. And other ways that we're trying to interact with the natural world, our landscape, and really pushing native and Florida-friendly landscapes throughout the house. Those are some of my ways and personal commitments.

Anna-Marie Slot: Excellent. Excellent. I think if people could just take one of those, it's a good starting place. And then, this is where you get to tell us your aspiration. If there was one thing that you could have happen or one person that you could have influenced, what would that be and what would the outcome be? Or who would that person be, to really deliver that net zero that we all need? And in fact, that net negative.

Chris Castro: Yeah, no kidding, we got to draw down beyond the net zero, for sure. I'm not sure who the one person would be. I would say it had to get to the top of the chain and maybe get to President Biden ultimately. But the idea here is, I've always found it fascinating that we spend hundreds of billions of dollars, taxpayer dollars, every year, to subsidize extremely profitable corporations, specifically oil and gas. And as if they weren't making enough money already, we're helping to subsidize essentially, corporate welfare. And I have a real issue with that. I believe that we can't really get to the net zero future that we're striving for, in the time that we need to, unless we advance a price on the problem.

If we continue to use our atmosphere as a free sewer, can we expect to get out of this problem and achieve net zero in the time we have? I don't think so. I mean, we don't value the problem. So, without putting a price on the externality, and without integrating that externality into the economic equation of whether we're going to build a new co-gen natural gas plant, or whether we're going to replace that with solar and storage instead, I think it's going to be really difficult.

Now, we are starting to see a great change in the overall economics of renewable energy, not just here in the States, but around the world. And every year it gets better, we know that. And so, there is a crossover point where we're beginning to see that even here in Florida, without state subsidies, that the cheapest form of new power generation is solar, is renewable energy, in the state of Florida. And so, every utility is going gangbusters, putting out huge utility solar farms, whether it's FPL, whether it's Duke Energy, whether it's our own municipal utility, OUC.

And so, that's really exciting because the market is indicating that not only is this good for the planet and for public health, but it's also good for the economy and for jobs. But back to the problem, I don't think that we can truly solve this without putting a price on the problem. There's different ways of going about it, we know that that's always been in debate, but regardless of what we do, we need a national standard on that. And I think that would create tremendous momentum and build upon the momentum that we're seeing in accelerating the zero carbon future.

Anna-Marie Slot: Great, Chris. Well, Florida's always been known for the sunshine and so using it for solar is a great part of getting to net zero, certainly. But thank you so much for joining us today, really interesting takeaways around the benefits of cost savings, really interesting points around how you're reinvigorating the grid, looking to decarbonize the electrical supply, how Florida is hopefully competing in a positive way with other cities about what to do next and how to do it best, but appreciate your time and appreciate you coming on today.

Chris Castro: My pleasure, thank you for the invite. It was a great convo.

Speaker 3: If you enjoy ESG Matters @ Ashurst, why not check out our other two podcast series as well? Ashurst Business Agenda tackles the big strategic issues that business leaders face, and Ashurst Legal Outlook explains the emerging legal trends and requirements of our fast changing world. You can listen and subscribe to Business Agenda and Legal Outlook, wherever you get your podcasts.