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John: Welcome to another edition of The Impact Podcast. I’m John Shegerian, and I’m so honored to have with us today, Lisa Shibata. She’s the director of Sustainability of Chipotle Mexican Grill. Welcome, Lisa to the Impact Podcast.

Lisa Shibata: Thank you. So glad to be here today.

John: We’re so happy to have you and for you to be talking about all the great important things you’re doing at Chipotle and sustainability, but before we get into those issues and those topics, I’d love you to share with our listeners and our viewers a little bit about your journey, where you grew up, how you even got interested in sustainability, and what brought you over to Chipotle.

Lisa: Sure. Thank you. So I will take you way, way, way back, way, and I think I started having an interest in environmental issues back in the third grade. This was a time when I just remember this pivotal moments where there was a lot of discussion about the ozone layer and that there’s a hole in the ozone layer. What are we going to do about it? The world is on fire, and all I could think about was what could I do in my own little world and what can I do when I grow up to help really solve this problem. As an adult now, I know all that media was because of the Montreal protocol that was being discussed at the time about ozone-depleting substances, and really the nations coming together and agreeing on passing this piece of legislation, and that was really where I started my journey. Then I went to school and actually have a degree in environmental studies. Again, at a time when sustainability was not quite a word yet, and there wasn’t a lot of corporate sustainability at all.

I remember talking to my parents and they said, well, what are you going to do? What is environmental studies, and is there even a job? And I said, I really don’t know, but I think there’s something that I can do, and I went on from graduating and working in air quality and taking that and learning from the compliance world of how do we protect our environment. How do we sustain good air quality and working with businesses and really providing a consulting service at that time? And from there this is when corporate sustainability then became more active and Fortune 500 companies started creating environmental targets and goals. And that’s when I transitioned from the compliance world to a volunteer world, and I really wanted to work for a company to do more. So what else can a business do beyond meeting your compliance obligations? How can we operate and do what’s good for the environment above and beyond, and really think about the environment and our business priorities? And so that led me to my role. Before Chipotle, I was at a multimedia company, also working in corporate sustainability, and now, transitioned over to Chipotle and had the opportunity to really engage with our teams here over the last year.

John: So, wait a second. Let’s go through this a little bit though. So, Mom and Dad, were they environmentalists? Were they concerned about the world and the environment back then, or were they more business-related folks? What, what field were they from? Where was their headset?

Lisa: Not at all. So, I think a lot of folks had that early exposure from their parents. I am actually a child of immigrants, and so, my parents were working two jobs, both of them, I wouldn’t see them till like 9 p.m. — latchkey kid really just doing things on my own. I think that’s part of it, of not being able to have that access to nature and exposed to these issues that really made me even more interested. The only type of really outdoor experiences I had was Girl Scouts. I was a Girl Scout for two years, and because of my Girl Scout leader, we went camping and I really enjoyed it. But that was, that was it. As immigrant children, we save a lot of energy. You’re always told to turn off the lights when you leave a room, don’t waste any water, and so all of that conserving side of things was built into me. But the nature side was really just that exposure to camping a few times. But again, I really think it was back to the fear of the world has a hole in the ozone layer, and what are we going to do about it, and we need to do something about it.

John: You’re very humble. When you talked about you went to go work for a multimedia company, it’s my understanding that multimedia company’s called the Walt Disney Company.

Lisa: Yes. That’s correct.

John: Okay. So it’s very interesting to hear how humble you are calling a multimedia company. It’s actually a Walt Disney company. So you were at Walt Disney. From when to when were you at Disney on your way to Chipotle?

Lisa: Sure. So I joined Disney in 2008 right after they announced their first set of environmental targets around sustainability. So they had announced their goal around climate change, reducing emissions by 50% by 2012, and also a goal around waste. I went in and really helped put that program together on measuring our greenhouse gas emissions, setting the boundaries, working with operational teams across all segments. So, I sat in a corporate function, which meant we were really working with our consumer products teams, theme parks, and resorts to the production side, and really getting engagement across the entire enterprise. It was fun.

John: Well, wait I want to give her credits credit where credits to you are a sustainability OG. We talked a little bit off air and you’ve been doing this now stuff, like you said, originally formally educated on the compliance side. Then you go to Disney, now you’re literally kicking off their program. They were an early mover in terms of real sustainability programs, and right now, they’re known to have one of the greatest sustainability programs in corporate America, really. So you really set the table for what has become a real great paradigm for many other companies to model themselves after in terms of sustainability, what you built over there.

Lisa: It was an incredible journey, and just having, being able to take what we have learned in a very early stage of sustainability on the compliance side, and really trying to amp it up on a voluntary side. There’s a lot of parallels between the compliance world, but then not with greenhouse gas emissions at the time. Right. There wasn’t any legislation IPCC hadn’t agreed upon that climate change is real and that we should have that we should limit global warming. So, it was really trying to build this new journey of, of how do you think about climate issues? How do you think about building these programs and these strategies from what has been done on the compliance side?

John: And then when were you recruited over to Chipotle? When were you recruited?

Lisa: So I just started at Chipotle. We’re in 2023, so just last year.

John: Wow. Okay.

Lisa: Yeah, it’s been a very exciting one year, and we’ve done a lot.

John: So, tell me about the difference. So, when you walked into Walt Disney, it was a blank page, which the blank page is fun and fascinating and exciting because it’s new. You can do almost what you… It’s, you own it. Now, when you came into Chipotle, was it a blank page? Was there already something up and running? What were you tasked with when you were recruited and came over there a year ago?

Lisa: Sure. Chipotle has always had sustainability as part of our ethos, and so, there has already been established programs on animal welfare and really our sourcing program, thinking about how we are purchasing our food, who we’re working with, are they aligned in their priorities like we are. So that piece was already in place, and there was already thinking about sustainable packaging, we use compostable bowls, we have 100% recyclable bags, and so, that piece was all there, but I was tasked with really working on our climate and decarbonization strategy.

John: Understood.

Lisa: We announced our goals for reducing greenhouse gas emissions 50% by 2030, just the previous year. So, now we are really digging deep and working with our teams, working with our suppliers to really reach those goals of the 50% reduction.

John: So, from third grade and the ozone layer, you’re now taking one of the most iconic brands in America, and you’re working on decarbonizing that brand and getting them all aligned with regards to what they’re doing with their regards to greenhouse gases. It’s so fascinating, the journey, really when you think about what you’re how far you’ve come and what you’re doing, and the important work you’re doing. How do you go about doing that though? First of all, one of the beauty… One of the great things is everybody seems to be really aligned for the first time in long time, maybe forever, with regards to sustainability and the race to decarbonize the world. No longer is it that, us and them, conversation of this climate change is real, it’s not real. Those days are behind us. So, how do you choose? 50% is a daunting goal, but is that on scope one, two, and three? Then, what’s the algorithm and the targets that you use because there’s different methodologies for understanding goal setting. Where do you look for the best methodology and the best benchmarks to put your company against?

Lisa: Great question. Our goals, that 50% just come out of thin air, and so we set our goals aligned with science, and the I P C C has found that to be able to keep our global warming below a 1.5-degree centigrade world that we need to be on a trajectory of at least a 4% annual reduction in greenhouse gas emissions year on year. To do this, 2030 is really one of the big milestones of staying on track to a net zero road by 2050. So, this is where we had established our greenhouse gas emission reduction target of that 50% to be aligned with what the science tells us needs to be completed, but also being able to demonstrate to our employees, to our suppliers that we’re serious about decarbonization, and really setting up, I would say, a very and intense strategy of how are we going to achieve that target? So, we’re really looking at different tools there to decrease our emissions on our operations and within our supply chain.

John: If you’ve just joined us, we’ve got Lisa Shibata with us today. She’s the director of sustainability at Chipotle Mexican Grill. To find Lisa and her colleagues and all the important and impactful work they’re doing, please go to www.chipotle.com. Talk[?], Lisa, we’re living in a really fun and fascinating age of the electrification of our both communication and also of course our highways with Tesla, Rivian, and all these fascinating new automobiles that are coming out, but I’ve never heard of these phenomena of Chipotle’s all-electric restaurant before it. Can you explain to our listeners and viewers what you mean by the all-electric restaurant?

Lisa: Sure. So it’s no secret that restaurants operate using natural gas equipment to a lot of you’re cooking needs. So, at Chipotle, it’s rice cookers, it’s our cook line, the stove, and as part of our strategies to be able to reduce our emissions, we are transitioning away from natural gas and using all electric equipment. So, the all-electric restaurants and the equipment there will allow us to be able to leverage renewable energy and really try to be able to eliminate the greenhouse gas emissions associated with fossil fuels. So, as we continue to build new restaurants, we have goals of building 100 new restaurants that will be all-electric next year.

John: Wow.

Lisa: Adding on top of that, being able to purchase, generate renewable energy to be able to electrify our equipment and again, help us get to that 50% reduction.

John: Got it. So there’s ways to retrofit or to fill the gaps on the historic restaurants, the legacy restaurants, while you build 100 new electric ones a year?

Lisa: That’s correct, and also, with the legacy restaurants, we are doing a lot in energy efficiency and also trying to lower our demand. So, for instance, we have looked at different ways to design our restaurants and just even the cook line area of making some adjustments that require us to have a lesser demand on our hood fans. So, being able to capture that air more efficiently, making that smaller cook line, and therefore, also reducing our overall electricity consumption at those restaurants.

John: Is it interesting and fascinating for you to have shifted from Disney to Chipotle? At Disney, they have beautiful huge parks as we know in Orlando and in Anaheim and other parts of the world, where Chipotle now, you’re working in so many zip codes across the United States in almost every state, I take it. So, is it a new Rubik’s cube for you figuring out the laws and the opportunities to avail yourself of different decarbonization tools in the different states that exist since you’re not just working in two major states anymore? Is that a new math for you, and is that fun and interesting?

Lisa: It is, but there’s a lot of similarities because with the Disney footprint, it was also global, and though there was the two major theme parks in the United States, and then the theme parks internationally, there’s also a lot of different offices and consumer products and stores spread out throughout the United States. So really, again, working with a lot of different jurisdictions, all the rules and regulations on the compliance side, but then also really thinking about how would you approach decarbonization differently for different types of building structures. So, you’re still looking at HVAC units, you’re looking at tools like waterless, yeah, the heat pumps and things like that. So, that doesn’t change with what type of building you’re looking at. One of the things that Chipotle has done and has been a leader in this space as well for the restaurants is something that we think about, and oh, everyone uses LED lighting. Chipotle is one of the first restaurants to really use LED lighting and develop that in the restaurant space. So, there are still some of those similarities that come from that theme parks, hotels, stores into the restaurant world, but really having to develop and innovate so that it fits in the restaurant world.

John: Interesting. Chipotle’s broader mission is to cultivate a better world. Let’s switch topics now from decarbonization, which is more specific to the broader topic of ESG, which you and I know can be defined almost in so many ways. Some chief sustainability officers or directors of sustainability define it narrowly, others more broadly. Talk a little bit about cultivating a better world at Chipotle and your definition and your company’s definition of ESG and what that matters, and how you implement that at Chipotle.

Lisa: Sure, and so we really think about our ESG as environments and food and animals and people and the governance structures along that support [inaudible] those three pillars. It’s been really important to tie our executive leadership to our goals on sustainability and the commitments that we have made. So, we’re one of the first companies in the restaurant space to actually put executive compensation along with our commitments in ESG for each one of these pillar areas, and so we have established goals. This started in 2021, and we had established goals on greenhouse gas emission reductions on how we purchase local organic and transitional produce. Then also how do we continue to support and develop our employees? So, this is one of the tools that we’ve been able to use to really, again, show our commitment to sustainability and ESG in general, and really have our executive leadership be very involved and committed to seeing us show progress towards all of these goals that we have set.

John: And executive compensation at Chipotle is tied to ESG success and goals?

Lisa: Yes, and so we established that in 2021.

John: Wow. That’s a real commitment because that means from the top down, it’s not just listening to our words, it’s follow our feet. We’re going to actually do the work, and we’re really committed to that. Talk a little bit, Lisa, about diversion rates. How does Chipotle look at increasing your diversion rates in a world that’s moving from a linear to circular economy? How creative has that process gotten, and how are you attacking it at Chipotle?

Lisa: So, I wouldn’t say that anything is completely outside of the box. The tools are there for us to increase diversion away from landfill, and at Chipotle, we’ve been using some basics of food donations, right? So, every one of our new restaurant operations are enrolled in our harvest program where we’re donating any excess foods rather than sending it to the landfill. So, that’s just one of those, I would say, quick and dirty and easy things that I think every restaurant company should be doing if they’re not doing. Then we really think about not just the diversion within our restaurants, but what’s available to our consumers and our customers and our guests that are coming in. So, we are offering, I mentioned this before, all of our paper bags are 100% recyclable, and we use paper bags so that you can recycle at home and you can recycle at our restaurants as well. So, we think about the way that we are sourcing our packaging and being cognizant of trying to move away from version materials, more recyclable materials, more post-consumer waste within the products and packaging that we’re using. So again, being able to support that circular economy and being able to provide materials that can be diverted rather than sent to landfill.

John: I know you’re big on goals, what’s the goal in terms of increasing and improving diversion rates at Chipotle?

Lisa: We did set a goal for reducing our waste to landfill by 5% by 2025. Now, 5% doesn’t sound like a huge number like 50% for our greenhouse gas side, but we are on a trajectory of growing our footprint. We want to open 7000 restaurants by 2030, and so a 5% reduction is pretty significant for the amount of growth that we are planning for to be able to divert from all of the additional packaging that we will be bringing into our ecosystem as we open more restaurants.

John: Home posting has become something that people are excited about, but it’s not socialized yet on a mass basis across the United States. Talk a little bit about how Chipotle is leveraging the opportunity to compost more, and what would that mean to your overall broader goals as you evolve composting at Chipotle in the months and years ahead.

Lisa: So, this really ties into that waste school I just mentioned and the diversion. It’s obvious because we want to donate our food waste and we also want to compost what we are not able to donate, right? Then also being able to provide the compostable materials, but one of the things that we are doing is also a lot of this internal education within our teams and our crew members because you could only do so much and have the programs in place, but the training of our crew members to be able to really separate the food waste correctly and really work the back of house is really important. It’s something that we do as a part of our new restaurant openings, and also with a lot of resources that we make available to our general managers and to our new employees that’s online in our intranet. We do some videos on what composting is, how to do it correctly. I’m sure you do it the same thing. When I go to a new restaurant, new place, and you stand there and you’re trying to figure it out, it’s like, what do I do with my food? So, really trying to address that as well. We are working with trying to think about ways that we can leverage social media and really be able to get more engagement amongst our consumers on composting in general, and what does it mean to do it correctly? I think half of it is a lot of people just aren’t very familiar with what can be composted, what cannot be composted, and we are trying to work through that with our communications within our employees and with our customers.

John: Yeah, on a macro basis, how hard is it to compost on a level, from a scale of 1 to 10, and what are the real true one or two, three benefits of doing composting for anyone, whether you’re a homeowner, restaurant owner, you’re running a huge chain like you are involved with? In terms of leadership, talk a little bit about so our listeners and viewers understand how impactful composting could be if done right.

Lisa: There are so many opportunities with composting, and we keep on talking about diversion, right? Just for our viewers, and I think that’s still a very wonky word, but really just not getting your waste to a landfill. What does that even mean? That means that you’re able to reduce those methane emissions from your waste decomposing at the landfill. So, if you’re doing composting right, that compost or your food waste is being regenerated. It’s being more circular and you’re able to create soil that more nutrients that you can use on agriculture, and really taking that away from generating more greenhouse gases in the form of methane. Now, being able to do it right, again, I think this is a larger issue with composting of having that infrastructure in place. So, we have composting at our restaurants, and some restaurants there aren’t composting, and that’s really due to the availability of composting in the area. We’re seeing more cities, more states really pushing for composting and more of those haulers in place for us to continue to leverage.

John: Right. Lisa, like I said earlier, you’ve been on quite the sustainability journey most of your life, not from a child on up now. Where are we now in this sustainability journey here in North America? How do you see it with regards to… It seems like the big interest in ESG, the undeniable and unstoppable trend from the go-and-throw linear economy to the circular economy and to decarbonizing the planet with the Investment Recovery Act and other great things that are happening here. Is sustainability here to stay, do you believe with regards to corporate America and good government and good politics? And if so, what gets you the most excited right now?

Lisa: Absolutely. I don’t think that. We’re in a time where there has been that recognition now, and as somebody who’s worked in sustainability for so long and have held environmental issues of high importance that the world recognizes, this is something that every company needs to do. You really need to think about long-term operations and your impact on the environment. So, this is an amazing time to be in where companies are motivated because our consumers have more awareness of these issues, and they see it not only as something responsible to do but that everybody wants you to do it as well and is supporting it. So, I think there’s a lot more to be and a lot more action that needs to be taken, though. I mean, for us to be able to reduce our overall impact and really keep climate change at bay.

This really requires not just companies of the Fortune 500 size, but every company along the way, and really thinking about what are those resources as a larger company that we can provide to smallholders and also to smaller suppliers, who are just starting on this journey and helping them overcome the roadblocks that we have seen in the past develop systems and processes. So, I’m really looking forward to being able to really work with a lot of different industries, a lot of different suppliers, and really being able to push this work forward. I don’t think there’s any other time, but now, that we have really come to a consensus as multiple countries, that this is an issue and that we’re putting technology, we’re putting funding towards resolving climate wastewater issues. I just think it’s really an exciting time to be in.

John: If sustainability was a baseball game, what inning are we? Are we at the top, the second, or the bottom of the fifth?

Lisa: Do I know anything about baseball?

John: Well, there’s nine innings. These nine innings. So, it ends at nine and starts at one.

Lisa: Okay. Great.

John: So, you don’t have to know much, but are we closer to the one or are we closer to the nine? Really, that’s what [inaudible].

Lisa: Yeah, I would say that we are probably at the seventh inning, and so we’re close to the end, and I say this because we do need to take a lot of action now. It’s not a waiting game. It’s not a let’s wait until we hit the climate cliff and then try to do something, but everyone’s coming together right now. This is the time we are close to that cliff and more actions to be taken.

John: That’s wonderful. For our listeners and viewers who want to find Lisa and all of her colleagues that are cultivating a better world at Chipotle, go to www.chipotle.com. Lisa Shibata, thank you for making the world a better and greener place. Thank you for helping to decarbonize Chipotle and all the impacts you’ve made on the planet since the third grade. We’re so grateful for your time today on the Impact Podcast, and you’re always welcome back.

Lisa: Thank you so much.

John: This edition of The Impact Podcast is brought to you by Engage. Engage is a digital booking platform revolutionizing the talent booking industry with thousands of athletes, celebrities, entrepreneurs, and business leaders. Engage is the go-to spot for booking talent, for speeches, custom experiences, live streams, and much more. For more information on Engage or to book talent today, visit letsengage.com. This edition of The Impact Podcast is brought to you by ERI. ERI has a mission to protect people, the planet, and your privacy, and is the largest fully integrated IT and electronics asset disposition provider and cybersecurity-focused hardware destruction company in the United States and maybe even the world. For more information on how ERI can help your business properly dispose of outdated electronic hardware devices, please visit eridirect.com.