Archive for November, 2010
Delivering more value, less mass
Howard Brown
Is it possible to find the elusive environmental metric – an indicator that aligns environmental and business management performance? I’ve seen many companies try and fall short with systems that are either too complex or so simplified they become useless. Metrics are important because they not only measure success, they also drive behavior. They create incentives – some you intend, and some you don’t. In short, you get what you measure.
A good illustration of this adage is the case of a manufacturer who sought my advice while launching a new initiative to measure environmental performance. The client had begun tracking tons of scrap metal recycled, out of concern for the large amount of scrap being produced at their plants. When the plant managers learned they would be rewarded by recycling more scrap, scrap recycling quickly increased, and company managers thought they had a success on their hands. As the tons of scrap recycled continued to grow, however, it eventually became clear that plant managers were paying too much attention to recycling scrap, and too little attention to minimizing scrap production in the first place.
I approached the problem from another angle, reflected in this simple principle: “If you don’t use it, you can’t spill it.” My advice to management was to look at the total resource inputs (in tons) required by their manufacturing and delivery processes in relation to their output, or the product delivered to their customers.
If my client could reduce the mass of resources at the front end without compromising the value they delivered, they would not only reduce scrap use and improve overall environmental performance (due to fewer spills and emissions),but also reduce their purchasing, production and warehousing costs; the fuels used in manufacturing, transport and throughout the entire supply chain; the potential for fines related to environmental impacts and their carbon footprint, while enhancing brand value.
Any company grappling with measuring sustainability performance needs to measure inputs and outputs and then manage the relationship between these critical factors. You can measure input in terms of total tons of fuels and materials required to source, produce and ship a product. You need to think of output as value delivered – not units produced or revenue generated, but value delivered to customers.
The process of reducing the total mass required by your organization and your products while actually increasing the value of what you deliver is the key to creating business value in the 21st century. Improving the relationship between resources used and value delivered is a simple way to align environmental performance and business performance. In an increasingly crowded, unpredictable and polluted world with a diminishing resource base, this is the future of business and the future of environmental management.
What do you think? How can you improve a product or process to deliver the most benefits to people with fewest tons of resources?
Howard Brown is founder of dMASS and chairman of o.s.Earth. For more than 20 years as CEO of Resource Planning & Management Systems (RPM), Inc., in New Haven, Conn., he worked with companies such as Duracell, Avery Dennison Corp., Exxon Mobil Corp., General Electric Co., Deere & Co., Whirlpool Corp., Warner- Lambert Co. and Pfizer Inc. to establish or enhance their environmental practices and performance.
Throwing away the dumpster: How Burt’s Bees achieved zero waste to landfill
Steve Walker
In 2007, Burt’s Bees set out to achieve zero waste status by 2020. Three years in, the company has achieved zero waste to landfill and reduced its waste stream from 344 tons in 2006 to 66 tons in the twelve months ending last June. Steve Walker, Manager of Environmental Sustainability, is responsible for helping the Durham, N.C.-based company reduce its waste across its headquarters, manufacturing and distribution operations. We spoke to him last week about how he got started and the systems he’s using to make this goal a reality.
Q: How does Burt’s define zero waste?
SW: To make our products, there will have to be a certain amount of water and energy use, but we want to be as efficient as we can to ensure that any energy we put in is going directly to adding value to the customer. So when we say zero waste, it’s 100 percent efficient in the processes. Our true aim, however, is not only to get to zero, but to have a net-positive impact on the environment and on society.
Q: When you started at Burt’s, the company had already outlined its zero waste goals. How did you get started?
SW: We began by setting a baseline. We went back and got our water history use, energy use and landfill data, and then starting measuring our by-products. At Burt’s, we define ‘by-products’ as literally everything that leaves one of our buildings other than a person or a finished good. This broad definition runs the gamut from scrap metal to hazardous waste to used batteries to typical recyclables like plastic, cardboard, and paper.
To measure our by-products, we bought industrial floor scales and began weighing everything. The data goes into Excel spreadsheet, which I use to monitor how we are doing by by-product type as a whole, and how are we doing in using our internal by-product hierarchy.
Q: What is a by-product hierarchy?
SW: We’ve established a hierarchy for how we deal with our by-product, ranging from landfilling it (the least preferred method) to reducing it altogether. (The sorting guide has not yet been updated; landfill has now become waste-to-energy.)
Q: What were the next steps?
SW: Starting at the bottom of the hierarchy, we worked hard to reduce our waste to landfill. Back in April 2008, we held a Dumpster Day. We took two weeks’ worth of trash from our manufacturing and administrative sites, dumped it into the parking lot, and sorted it into three piles: what should have been recycled (material that we already recycled); what could be recycled if we found an outlet for it; and everything else, or the stuff that we needed to eliminate.
We immediately saw an additional 50 percent reduction in waste to landfill as a result of this employee engagement exercise. That drove a cost savings for us, as we reduced our service frequency from weekly, to every other week, to only once per month. That ended for our manufacturing site in October 2009, when our service provider took the trash compactor away for good.
Now there’s no going back. It’s not like we just put caution tape over the trash compactor and said, “Don’t use it.” There’s no place to throw this stuff out. We have to figure out where we’re going to send it other than landfill.
Q: The next step in your by-product hierarchy is waste-to-energy conversion. How do you designate which materials belong in that category?
SW: These are the materials that are left over after we’ve reused, composted or recycled everything that we can. The stream includes break room materials like Styrofoam carry-out trays, potato chip bags, and plastics that aren’t numbered. We also have some raw packaging, such as 50-pound bags comprised of plastic and paper. We’re continuing to address those through reduction and substitution efforts.
Q: How does waste-to-energy work?
SW: Our waste-to-energy story is a little different than most. Many companies that are zero waste to landfill send their materials to a facility that burns them to generate electricity or steam. The problem is, up to 20 percent of what goes in comes out the back end as ash or non-combustibles, which typically still wind up in a landfill.
To avoid this scenario, we work with a waste-to-fuel firm, who takes our materials, shreds them up and blends them with materials from other companies. The resulting fuel has a heat value equivalent to that of coal, which cement manufacturers can use in their process. The real key for me is that the ash from our materials is incorporated into the cement itself — a truly zero landfill process.
Q: How does recycling fit into your by-product management process?
SW: An overall challenge with recycling is having enough volume to find a suitable outlet. Because we’re a relatively small company, the trick for us is finding others with similar materials so we can put them together and reach the volume necessary to enable the financial side of the equation.
For the past three years we have worked with a professional total by-product management (TBM) firm that does just that. By connecting us with other TBM customers, they’re able to deliver the entire volume to their network of recyclers across the country. This allows Burt’s Bees to play much larger in the market and affords us additional professional resources to support our TBM efforts without increasing our internal headcount.
Q: So is Burt’s Bees out of the landfill and incineration categories on the by-product hierarchy altogether?
SW: Yes with respect to landfill. We do continue to generate some waste from our R&D and quality labs that must be incinerated per the U.S. Environmental Protection Agency’s rules. The ink and solvents used to put the date codes on many of our products are also regulated. We’ve minimized the hazardous waste stream to a few hundred pounds per year and continue to explore substitution of other laboratory reagents along with alternate date coding options.
You can hear Steve talk more about Burt’s Bees’ zero waste journey in the upcoming webinar, “Zero Waste and Beyond,” on Dec. 2, 2010. To register, visit www.naem.org.
Times change. Good leadership doesn’t.
Alex Pollock
Ever wished that change would take a holiday? You’re not alone. I once heard someone say, “If you’re not confused, you’re not engaged,” words of solace to those struggling to navigate the maelstrom of change that is life these days.
(As a member of the LP era, I must confess that I’ve found myself looking for the Dramamine on many an occasion…)
Despite the ways in which our world has transformed over the past few decades, there are some things that neither time, nor technology, nor culture has altered. Leadership, it turns out, is one of them.
In their latest book, “The Truth About Leadership,” researchers James Kouzes and Barry Posner propose that the context of leadership has changed dramatically since they began their research in the early 1980’s but the content of leadership has not changed much at all.
They reveal 10 leadership truths, fundamental to effective leadership:
-You make a difference
-Personal credibility is foundational
-Values drive commitment
-Focus on exciting future possibilities
-You can’t do it alone
-Trust rules
-Challenge is the crucible of greatness
-Lead by example
-Best leaders are best learners
-Leadership is an affair of the heart
At times we just need to stop inventing new stuff and dedicate ourselves to perfecting the basics. What do you think these fundamentals should include? What are some of the timeless qualities of a good leader?
Voices of NAEM: Mike McGuire shares his advice for the next generation of EHS leaders
Mike McGuire, Manager of Global Environmental Strategy for Deere & Co. shares his perspective on the evolution of the EHS profession.
Toward sustainability: Interface Inc.’s ‘Mission Zero’ journey
In 1994, Ray Anderson, founder of Interface, Inc., outlined an ambitious new vision for his company: to achieve sustainability by 2020. Lindsay Stoda, a Senior Business Analyst with the company, spoke at the recent EHS Management Forum about the metrics Interface uses to measure its sustainability progress. This week, we caught up with Lindsay to learn more about the company’s Mission Zero goals.
Lindsay Stoda
Q: Where did the Mission Zero goal come from?
LS: Sparked by questions from customers and the ideas he encountered in Paul Hawken’s book, “The Ecology of Commerce,” our founder Ray Anderson realized that business and industry were part of the larger system that was damaging the environment and that it was not going to be a sustainable future if business continued in that direction. And realizing that it was someone’s job to lead industry down that path, he decided to ask his company and his employees to be that leader.
Q: How do you measure success against your Mission Zero Goals?
LS: We’ve always followed the “What gets measured gets managed” philosophy, so our way of being able to track and ensure that we’re making progress is through four different measurement platforms:
- Eco Metrics: Measure environmental impact
- Socio Metrics: Measure social impacts
- Quest program: Measures waste elimination
- Ecosense: Measures the activities on a plant-level that contribute to our sustainability goals
Q: How did Mission Zero change the work of Interface’s EHS department?
LS: Prior to Ray’s epiphany, we had a more traditional manufacturing environment, health and safety (EHS) department focusing on safety and compliance. Today, it’s typically the same folks because the tracking of that kind of information all kind of overlaps with the sustainability roles, except that people’s EHS roles developed a sustainability-minded focus.
Q: Can you tell me about some of your efforts toward creating closed loop products?
LS: We have a strong push to create closed loop products using recycled and bio-based raw materials. This process basically involves returning the materials in used finished product back to raw materials.
For carpet tile, there are two main components: There’s the face fiber and the fluff — the surface that you walk on — and then there’s the backing, which is different from residential carpet in that it’s a vinyl backing and it’s heavier, to hold the tiles to the floor and give them dimensional stability.
We had previously been able to cut the fibers off the front, take the backing, crumble it up, melt it down and return it to backing. But now we’re able to take the nylon fibers from the face of the products, shave them off and return them to our fiber suppliers to create new face fiber with post consumer recycled content.
We bring back both our carpet as well as competitors’ products through ‘ReEntry’—our recycling program. We collect used product back from the marketplace, run it through our process, and return backing to backing and fiber to fiber. Since the program began, we have diverted more than 100,000 tons of material from landfills.
Q: One of the goals you’ve identified is providing Environmental Product Declarations (EPDs) for all of your InterfaceFLOR products by 2012. What does that entail?
LS: We have used life cycle assessment (LCA) for several years now as we’ve tried to evaluate different materials and processes for manufacturing our products. The Environmental Product Declaration is a 10-15 page summary of the life cycle assessment results, everything from global warming potential to toxicity to resource use throughout the entire life cycle of the product. There is a lot of different environmental information out there and we thought the most useful thing for our customers would just be to give them the facts they need to make the decisions about what type of products they’d like to purchase. So it’s really the good and the bad. It’s just the facts. We collect the data and have it third-party verified to ensure it is complete and accurate.
You can hear Lindsay talk more about using metrics during “Defining the Metrics that Matter,” part of NAEM’s Best of the 2010 Forum webinar series, on Tuesday, Nov. 16. To register, visit www.naem.org.
Reflections on this year’s Forum
Carol Singer Neuvelt
Thank you again to everyone who took the time out of your busy schedules to join us in Indianapolis for the 18th annual EHS Management Forum last month. As we settle back into the work flow, I just wanted to take a moment and reflect on a few of the big ideas I thought emerged from this year’s event.
Transparency is the future and the future is already here: As our opening keynote, Daniel Goleman, pointed out, new media and information exchange channels are changing how we understand the world, the products we consume and the choices we make. Radical transparency tools, such as Good Guide, are giving us greater insight into the complextity of the global supply chain and allowing consumers to better understand a product’s eco-footprint as an important variable in the price=value/benefit equation. Bookending the conference with this same idea, “The Restaurant Guys,” Francis Shott and Mark Pascal, playfully explained how this cultural awareness is already affecting everyday consumer decisions, such as the food we buy and what we are willing to pay for it. Indeed, both keynotes were a glimpse of the impact a well-educated public can have on business in this new age of radical transparency.
It’s all about connections: Just as Nancy Robert’s systemic thinking session reminded us, the future of business is about interdisciplinary cooperation and collaboration. The opportunity to spend a few days apart learning from peers further affirmed that our connections to one another prove invaluable to solving the challenges ahead. We hope NAEM’s new online community will help strengthen your connections and access to other thought leaders and experts in our field. I hope you’ll join us as we continue the conversation online by joining a discussion group, volunteering for a committee or sharing your thoughts here on The Green Tie.
EHS professionals are preparing business for the future: As always, it was thrilling to hear about the work you do and how you transform an idea into a concrete process with a measurable (and improvable!) result. From hearing about your continued efforts to ensure EHS compliance and progress with life cycle assessments, to learning about your efforts to define critical performance metrics and begin measuring Scope 3 GHG emissions, this year’s conference was a veritable showcase of your thought leadership. Without your work, companies would be ill-equipped to meet the increased demands from external stakeholders, articulate the impacts of businesses on the environment and define a strategy for sustainable growth.
If you missed the Forum, but would like to hear the two top attendee-ranked sessions, I encourage you to join us for the “Best of Forum” webinar series, taking place on November 16 and December 2. Visit our events page for details and to register.
If you attended this year’s Forum, I invite you to tell us, what trends or ideas are most memorable for you? What was your favorite Forum session? Why?
Ensuring the credibility of sustainability reporting
Sandy Nessing
As the end of the year approaches, companies are gearing up for their next round of sustainability reporting. What will be different about the next crop of reports in 2011?
I suspect quite a bit.
Under pressure from stakeholders for more transparency of, and accountability for, business strategy, operations and performance, companies are facing a new imperative: How accurate, trustworthy and credible is the information that is being reported? How is it represented in the context of risk management, cost initiatives and decision-making?
This shift is forcing more and more companies to seek some type of assurance of their reporting. At American Electric Power Co., Inc. (AEP), we took that step in 2010 by inviting our internal auditors to audit our Corporate Accountability Report. It was painful for the organization, largely because the voluntary nature of sustainability reporting means there are fewer systems in place for data tracking where compliance is not involved. It remains a challenge, but investors, analysts and other stakeholders now have a greater degree of assurance that what we’re reporting is accurate and relevant.
This type of reporting may be voluntary today, but the tipping point is approaching. The Securities and Exchange Commission (SEC) opened the door earlier this year with its guidance on climate risk disclosure. Transparency is clearly a priority. Those companies with more robust voluntary reporting will be in a better position to meet the challenges under new regulations and mandates.
Many companies already seek third-party assurance of their sustainability reporting. While some advocate for it, I’m not entirely sold on its value, especially since there is no universal set of rules like there is on the financial side. Although I believe it will become necessary as we move toward integrated reporting, we’ve only taken baby steps in that direction and I think it’s too soon to force the same rigor as financial reporting without similar reporting requirements. For now, I think the internal audit review, coupled with our partnership with risk management and external stakeholder reviews of our reports, are more than sufficient.
What do you think about this approach? What are you doing in your company to verify the accuracy of your sustainability reports?
