Greening of California Wine Napa Technical Group January 22, 2008

Regulatory Pressures SWP (Knowledge Network) Evolving Market Driving Forces of Change

What is sustainable winegrowing? Sustainable winegrowing is the growing and winemaking practices that are sensitive to the Environment, responsive to the needs and interests of society-at- large (social Equity), an are Economically feasible to implement and maintain. Sustainable winegrowing is the growing and winemaking practices that are sensitive to the Environment, responsive to the needs and interests of society-at- large (social Equity), an are Economically feasible to implement and maintain. 3Es

SWP Highlights Leveraged existing efforts (regional and statewide) Formed 50 member Joint Committee of WI & CAWG (2001) Published SWP Workbook (2002; online and 2 nd edition 2006) Worked with key partners: regional associations, government agencies, universities & NGOs

SWP Highlights Formed California Sustainable Winegrowing Alliance (2002) Held more than 200 self-assessment and targeted education events Published Sustainability Reports (2004, 2006) Leveraged more than $2.6 Million in Grants

Self Assess Interpret Performance Develop Action Plan to Improve Implement Change SWP Cycle of Continuous Improvement targeted education custom report action plan energy efficiency

ViticultureViticulture Soil ManagementSoil Management Vineyard Water ManagementVineyard Water Management Pest ManagementPest Management Wine QualityWine Quality Ecosystem ManagementEcosystem Management Energy EfficiencyEnergy Efficiency Winery Water Conservation & QualityWinery Water Conservation & Quality Material HandlingMaterial Handling Solid Waste Reduction & ManagementSolid Waste Reduction & Management Environmentally Preferred PurchasingEnvironmentally Preferred Purchasing Human ResourcesHuman Resources Neighbors & CommunitiesNeighbors & Communities Air QualityAir Quality SWP Workbook

Workbook Framework 227 criteria with four categories of practices

110 workshops110 workshops (Nov present) (Nov present) 1,400+ Growers and/or Winemakers1,400+ Growers and/or Winemakers

Current Data - Vineyards Number of Distinct Vineyard Enterprises 990 enterprises Total Acres Farmed by the 990 Enterprises 288,072 acres55.2% of 522,000 statewide acres Number Of Acres Assessed by the 990 Enterprises 171,764 acres32.9% of 522,000 statewide acres Number Of Enterprises that Submitted Results 807 enterprises 81.5% of 990 enterprises Total Acres Assessed in Database 152,799 acres 29.3% of 522,000 statewide acres

Current Data - Wineries Number of Distinct Winery Facilities 175 facilities Total Cases Produced by the 175 Facilities million cases 62.5% of 273 million total statewide cases Number Of Cases Assessed by the 175 Facilities million cases 52.7% of 273 million total statewide cases Number Of Winery Facilities that Submitted Results 107 facilities 61.1% of 175 total facilities Total Cases Assessed in Database million cases 42.1% of 273 million total statewide cases

Benchmarking Performance

Self-Assessment Chapter Report

Self-Assessment Criteria Report

California Sustainable Winegrowing Program Progress Report

2004 Sustainability Report

Targeted Education and Action Planning

Review report & highlight strengths and areas for improvement (low hanging fruit) Review report & highlight strengths and areas for improvement (low hanging fruit) Determine what can be changed and when Determine what can be changed and when Integrate targeted education & other technical understandings & guidance Integrate targeted education & other technical understandings & guidance Complete action plan Complete action plan

Action Plan

Targeted Education Integrated Pest Management Integrated Pest Management  Funded by American Farmland Trust Ecosystem Management Ecosystem Management  Funded by National Fish and Wildlife Foundation Energy Efficiency Energy Efficiency  Funded by Pacific Gas & Electric Air and Water Quality Air and Water Quality  Funded by USDA’s Natural Resources Conservation Service Upcoming: Risk Management Risk Management GHG and Other Accounting Tools GHG and Other Accounting Tools Process Water Process Water Green Building Green Building participants in targeted ed events

Energy Efficiency Example BIGGEST ENERGY DEMAND IN THE FOOD PROCESSING SECTOR? WINERIES NUMBER OF BONDED WINERIES IN CALIFORNIA? 2275

Integrated Energy Management Practices environmentally preferred purchasing material handling water quality economics solid waste wine quality human resources energy efficiency water use neighbors/community air quality

Energy Efficiency Education Partnered with Pacific Gas & Electric Company Fifteen Energy Efficiency 101 workshops around the state – more to come in 2008! Energy Efficiency resources – binder and online Increased use by wineries of free energy audits, PG&E rebates for solar and other energy efficiency measures In-depth workshops on green building, climate change and process water in 2008 and 2009

Green Building Practices

Regulatory Pressures Knowledge Network Evolving Market Driving Forces of Change

Demand for Environmental Information CONTENT + PRODUCT = MARKET ACCESS

Regulatory Pressures SWP (Knowledge Network) Evolving Market Driving Forces of Change

Regulations CO2 Water Use PM10 VOCs GLOBAL WARMING SOLUTIONS ACT AB32 LIMITS ON C02 EMISSIONS, METHANE AND OTHER GASES REPORTING BY 2009 Planning Departments Public Policy Zoning Ordinances Educate Elected Officials Food Economics Ground Water Recharge Compost Fuel Carbon Sequestration

Addressing Market & Regulatory Drivers CERTIFICATION Growth of 3rd party certification programs (regional, national, international) Lodi Rules, CCVT, Napa Green, Fish Friendly Farming WA (Food Alliance), OR (LIVE) National Sustainable Ag Standard ISO NZ, S. Africa (developed); Australia (considering) Development of certification program related to SWP GREENHOUSE GASSES/CLIMATE CHANGE Development of GHG Accounting Tool CDFA grant to examine vineyard GHG footprint Climate change workshops Identifying / filling research gaps

Cycle of Continuous Improvement Gaps: Self-assessed, no 3rd party verification (regulatory/retail problem)Self-assessed, no 3rd party verification (regulatory/retail problem) Can only report on Self- Assessment and participation, no way to verify continuous improvementCan only report on Self- Assessment and participation, no way to verify continuous improvement

Cycle of Continuous Improvement Closing the Gaps: Develop a 3 rd party certification program – That is cost effective and credibleDevelop a 3 rd party certification program – That is cost effective and credible Demonstrating continuous improvement - Verify that areas of weak sustainable performance are being identified (through S-A) and improved upon (verified through certification)Demonstrating continuous improvement - Verify that areas of weak sustainable performance are being identified (through S-A) and improved upon (verified through certification)

Desired Outcomes of Certification Voluntary certification option for winery and vineyard SWP participants Voluntary certification option for winery and vineyard SWP participants State, national and international validation of the SWP State, national and international validation of the SWP Maintain our global leadership position Maintain our global leadership position Credibility with regulators and policymakers Credibility with regulators and policymakers Credibility with retailers and consumers Credibility with retailers and consumers Support of the core principles, objectives and strategic goals of the sustainability program Support of the core principles, objectives and strategic goals of the sustainability program

What is Your Consumption? kWh per ton/acre kWh per ton/acre kWh per gallon/case of wine kWh per gallon/case of wine Gallons of water per ton/acre Gallons of water per ton/acre Gallons of water per gallon/case of wine Gallons of water per gallon/case of wine ENERGY INTENSITY WATER INTENSITY What is Your GHG Intensity?

Common Definition CARBON NEUTRAL CARBON ZERO CAP & TRADE CARBON OFFSETS CARBON FOOTPRINT FOOD MILES

Shared Understanding MINIMIZE MISCOMMUNICATION REDUCE MISINFORMATION ELIMINATE MISUNDERSTANDING ALIGNMENT FOR CHANGE

Charting a New Direction

A Little Humor

Wine Industry GHG Calculator

Created by International Partners New Zealand Winegrowers Winemakers' Federation of Australia South African Wine and Spirit Board Wine Institute of California Goal: to provide a free, easy to use, wine industry specific calculator that will satisfy GHG accounting needs: Operational tracking Carbon labeling Market Access Marketing Carbon Credit Accounting Future regulatory requirements under a low carbon cap and trade market

3 Scopes – WRI Methodology

GHG Calculator Output

Why should I participate? Be proactive to increasing environmental pressures Be proactive to increasing environmental pressures Respond effectively to social concerns Respond effectively to social concerns Reduce unnecessary inputs and outputs Reduce unnecessary inputs and outputs Minimize risk and liability exposure Minimize risk and liability exposure Enhance economic viability Enhance economic viability Join network of proactive wine community members Join network of proactive wine community members NOW ONLINE!

Outside the Box Thinking