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Trek’s Burke talks about Earth Day and e-bikes. Why companies must confront climate change

Trek’s Burke talks about Earth Day and e-bikes. Why companies must confront climate change

Trek's Burke on Earth Day talks e-bikes, why companies must face climate change

John Burke, Trek Bicycle’s president and CEO, believes that any business can play an active role in slowing global warming. Even if it means incurring upfront costs, there will be a benefit later on.

He is in a business that views bicycles as not just a way of connecting with an Earth that is worthy of saving, but as a legitimate rival to autos for many purposes, especially as electric bike sales take off.

Burke believes that the true bottom line is unlivable Earth, non-humanity, and no business.

“If you play the long game, if we don’t address the climate issue, we don’t exist. I think, from a business standpoint, people have too short a view,” said Burke, who has worked for Trek, a $1 billion-plus global privately-owned bike manufacturer with Wisconsin roots, since 1984. He’s been its president since 1997.

“Business people ought to be able to look at numbers and they ought to be able to look at charts and they ought to be able to come to the conclusion that if we don’t address this, we’re screwed,” he told MarketWatch in an interview in the lead-up to Earth Day, held each year on April 22.

Read: What is Earth Day? Why is Earth Day important for your health and money?

John Burke has been working at Trek since 1980. Cycling is climate action — as well as an answer to road congestion and public health, he says.


Trek

This interview is followed by just a few more weeks. It’s an important turning point in many companies’ lives as the Securities and Exchange Commission draws closer to setting rules requiring listed companies to let investors know all the risks and opportunities around climate change, in much the way that earnings are disclosed. It will have an effect On every retirement account or 401(k)..

Some companies balk at the expense of additional reporting. It will be a challenge for many to address. Scope 3 emissions, the pollution throughout a supply chain, often out of a particular company’s direct control.

The SEC is responding to a larger global call for action. However, it has raised concerns from business groups as well as some Republican lawmakers, who are concerned about U.S. energy independence and costs. The Latest report from the U.N.’s Intergovernmental Panel on Climate Change says that by 2030, greenhouse gas emissions – must be reduced by at least 43% to prevent 1.5 degrees Celsius of warming at the end of the century. Fossil fuels
NG00,
-7.07%

Humans have burned it The largest contributorsTo that warming.

Trek’s Burke talked with MarketWatch about embracing the hurdles of disclosure and reporting. Trek does not have shareholders to answer, but it does have customers to answer.

‘ Even products that benefit people and the planet leave behind a [carbon] footprint.’

In 2020, Trek brought in an outside consultant for the company’s first emissions audit to better understand its impact on the rising global temperatures and build a plan to become a more conscious and sustainable global citizen. This Report shows the findings, actions to date and a vision for more to come.

“It makes sense that a bicycle company would care about the environment. Trek makes a product that provides a solution to many of the world’s most complex problems such as climate change — cycling IS climate action — as well as an answer to road congestion and public health,” Burke and other executives said in calling for the audit.

“But for too long, cycling has been given an environmental pass based on this assumption. Even products that benefit the planet and people are not good for the environment. [carbon] footprint. And it’s a footprint Trek isn’t afraid to address and share publicly,” they said.

MarketWatch asked Burke to provide additional insight into the Trek approach. Some answers were edited for clarity and length.

MarketWatch: Is it possible to get ahead of climate-change reporting or keep up with the pace?

Burke: To answer that question, I must first tell you how I came to this thought as an individual. I was at a speaker night about three years ago, and there’s this guy, Robert Swan who was talking — he’s the first person in history to walk to both the North and South Poles — and the conversation quickly became a climate conversation. At the end, he said something that was etched in my mind: “The greatest threat to our planet is the belief that someone else will save it.” And I thought that was so true. I thought about me. I’ve been waiting for somebody else to save it and Trek’s been waiting for someone else to save it. It seems like our government is waiting to save it. At that point, I realized we must do our part.

Then, I was on a bicycle ride with [documentary filmmaker] Rory KennedyThree months later, she produced the documentary. She produced a documentary “Above and Beyond…” and it started out as a tribute to her uncle, the president [John F. Kennedy]NASA’s push to reach the moon was led by him. And then it quickly flips… and you find out that the organization that knows the most about the condition of Earth is NASA. They show a graph on parts per million of carbon in the atmosphere… and it’s just going along, going along, going along and then through the 1900s, it just goes straight up.

They told me that we have ten years to solve the problem. And so I went back to Trek and I got all of my senior managers in a room… and then we got the whole company together. We established a goal that we would address climate change quickly and be an example for other companies.

‘I’ve been waiting for somebody else to save [Earth] and Trek’s been waiting for someone else to save it. And it seems like our government is waiting for somebody else to save it and at that point, I thought, you know, I think we we need to do our part.’

MarketWatch:What does that look like from a practical perspective? The U.N., the IPCC, was just out with another report… saying pledges are great, actions a little harder. What does it look like on ground?

Burke: The beauty of it flowing through the entire organization is its flow. So it wasn’t one person involved. I think there were over 700 projects that we completed. Take a look at the bike box that was used for shipping. There are 33 pieces. Well today at Trek, there’s now three pieces and within a couple of years there will be zero. The best thing is we’re just getting started. Trek is not a perfect company and we have a long way to go, but we’re moving and we’re moving really quickly and we’re making a difference.

[The 2020 Trek audit report also set goals including: improving supply chain processes to reduce air freight mileage by 75% by 2024; consolidating ground shipments to retailers also by 2024; mainland European retailers currently utilize a batched shipping strategy that cuts mileage required to move product; increase reliance on renewable energy; by 2023, all Trek facilities globally will be powered by renewable energy.] 

MarketWatch: I would imagine you also feel there’s a business imperative. You know your customer. Are there any thoughts about climate change mitigation as an imperative business decision?

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Burke:I was recently a speaker at an event for business people. I was talking with the organizer of this event and he asked me to go over what Trek is doing in sustainability. And this is a guy who runs 35 different businesses and I said what we’re doing. He was impressed by the slide deck. He asks, why aren’t we all doing this? These are large businesses. And they’re not doing anything. It’s not that hard. Watch a documentary. Gather a group of smart people together. We’re at a crisis point here in the game, and very few people are even playing.

MarketWatch:Scope 3 emissions, which are all part of the supply chain, is probably the most difficult. What do you do for your retailers or how do you communicate?

Burke:We have 5,000 retail outlets around the globe. And last night I proof read a 24- page document that’s going to our retailers. For example: here’s the four steps for running an environmentally friendly retail establishment; and here’s 100-point scorecards so that you can measure yourself; and here’s a set of best practices for how you can get there.

MarketWatch: Let’s talk about the product line. You don’t just need to cycle for recreation and exercise, but also as a means of getting around the city. What are your thoughts on electric bikes?

Burke: It’s a big part of our business already. It’s really taken off in the U.S. in the last three years. It’s been big in Europe for the last 15 years. I think we’re in the second inning of the game in the U.S. marketplace. 40% of car trips are under two miles. If you take a look at the health crisis in the United States, it’s a disaster. And there’s nobody doing anything about it. Cycling is one way to get people moving. E-bikes are incredible. Imagine the first time you got an iPhone, when people said, ‘Oh my God, you can take a picture and you can send it to someone.’ The same thing happens with an e-bike.

‘I think we’re in the second inning of the game in the U.S. marketplace’ for e-bikes.

MarketWatch:Depending on how someone uses a particular mode, I would assume that you consider yourself to be a competitor to the car. As many are taking stock, I wonder if this is a time when a bike and e-bike can compete in a way that the automobile has never done before.

Don’t miss: Are you thinking of buying a home? Why you should ask whether it’s wired for electric vehicles even if you don’t own one

Burke: Yes, to your question. You also have the issue of more and more people moving into cities. Not only do you have to deal with the environmental impact of internal combustion engines but also the issue of how cities can accommodate the increasing number of cars in the system. Everyone wants a livable community. One of the best ways to make your community more walkable or bikeable is by making it more walkable. If we just talk about trips, to the store, to school, to a friend’s house. 35% of trips in Copenhagen are taken by bicycle. Take a look at Copenhagen’s people and the American citizens. I don’t know any city that has regretted putting in facilities so that their city is more bikeable and walkable.

Opinion:You are thinking about an electric car? An electric bike may be more practical and save you money.

[Editor’s note: Trek has a range of e-bikes and hybrids for commuting, mountain trails and casual use, ranging in price from roughly $1,500 to $13,000, but prices may vary depending on added features. There’s a guide to take to determine what model might best match a rider’s needs.]

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