Archive for July, 2011
Identifying Opportunities for Energy Efficiency
John Hoekstra
Energy efficiency programs and renewable energy projects are growing priorities for many companies. This week, we spoke with John Hoekstra, Director of Sustainability with Summit Energy Services to learn more about how companies are addressing these challenges.
GT: How important is energy efficiency to the sustainability programs of companies today?
JH: Energy efficiency is a key component of any sustainability program. Investors, clients and supply chain stakeholders are interested in not only the sustainability footprint of an organization, but how to reduce it. Energy is often the largest contributor to an emissions profile. The alignment of project cost and emissions impact is what many companies are seeking today.
GT: What are some best practices that organizations can use to find energy efficiency opportunities at their sites?
JH: A sustainability site assessment is an efficient method of identifying no- and low-cost reduction opportunities for energy, water and waste. The assessment will produce a roadmap of low investment activities that can save resource usage and money.
GT: In this economy, how are companies paying for sustainability projects?
JH: In addition to local and federal incentives, collaborative solutions also can assist with moving a project from paper to action. This can be in the form of the contract structure (performance-based) and leveraging market resources (incentives, demand response programs, etc).
GT: We hear a lot about state and federal budget issues. Are there still incentives available?
JH: In general, yes, although funding has certainly been affected by recent budget constraints faced by these entities. Many incentives at the federal level are slated to come to a close at the end of this year, but can always be extended by Congress. In particular, many should watch the Federal Investment Tax Credit (FITC) grant for renewables. This is a program in which the government provides a cash grant for up to 30 percent of a project’s cost. If this incentive is not extended, it will be difficult to make renewable projects work in the United States.
GT: Do you see companies adding water and waste into their efficiency/reduction plans?
JH: Yes. Investors, clients and supply chain stakeholders have identified water as a scarce resource that needs to be tackled. Organizations are now being asked to report their water footprint and reduction strategies externally through vehicles such as the Carbon Disclosure Project survey. Waste efficiency is driven by many supply chain sectors: consumer goods, automotive and related packaging providers. Our experience shows that, similar to energy, waste management can be a substantial cost that needs to be actively managed.
John Hoekstra will share more tips for optimizing energy efficiency programs though incentives during NAEM’s “Capitalizing on Energy Savings Incentive Programs” webinar on Aug. 9.
Staying Connected
Megan Lu
Every Friday, I, along with every PG&E employee, receive an e-mail from the CEO. It provides a link to the CEO’s blog in which he shares the issues that are on his mind – issues and challenges facing the company, how we’re going to rise to meet them. He also recognizes employees and teams for their successes.
The title of the e-mails (and the blog) is always the same: “Staying Connected”. When I first joined PG&E I thought that was a clever play on words; after all, we are a utility. It’s our business to help people “stay connected”. Recently, during a particularly busy day at the office, it occurred to me that “staying connected” isn’t something that’s only applicable to the CEO.
During the course of a typical business day, I have interactions with many people.
- Working with my direct reports. We update each other on current hot topics, what progress has been made on projects, what steps were to come next, with whom we had to partner, how we are going to communicate and where we are going as team.
- Meeting my internal business clients. I meet with the leadership teams of my internal client business groups regularly. We talk about their issues, how Environmental Operations can help them face those challenges. I also provide updates on new requirements their team may have to comply with in the near future, and work with them to achieve compliance.
- Working with a cross-departmental team. We were pulled together to address a concern by one of our external customers. Before our initial meeting, there’s a flurry of e-mails to prepare. What message would we send? How do we send it? How do we address their concerns? What do we need to do before we meet?
- Maintaining external/agency relationships. There are meetings coming up with some regulatory agencies to review the work done to date on plans to be submitted for their approval. We confer internally to go over questions, options and expected questions. Then, we make sure we provide open, transparent and clear communications with the agency to demonstrate our commitment to compliance and doing the right thing.
- A former colleague contacts me via LinkedIn. We exchange e-mails and catch up on what’s happened since we worked together. It’s always great to keep in touch; plus those former colleagues are always valuable resources when I’m trying to solve a particularly difficult issue.
As environmental professionals, it’s imperative for us to keep the communication flow going in order for us to be successful at what we do. At the end of the day, it’s clear that “staying connected” is a significant portion of my job. I “stay connected” over the phone, face to face, by e-mail and by social media.
How do you stay connected?
Megan Lum is Manager of Environmental Operations, Shared Facilities for Pacific Gas & Electric Co.
Would you fire your boss?
Alex Pollock
I recently read that 24 percent of employees in the United States would fire their bosses. Does this surprise you?
Well, workplace engagement research supports that if workers feel their supervisor cares about them as a person they aren’t as likely to want to fire them. Is this problem limited to the U.S. workplace? I don’t think so.
Gallup studies of 4.5 million employees in 112 countries indicate that fewer than one in every two employees feels strongly that they have a supervisor who cares about them as a person. With data now showing a link between workplace stress and medical issues such as coronary heart disease, “organizations need to take the workplace environment and the quality of employee/manager relationships seriously, because the health of employees may have an enormous effect on the bottom line in lost productivity, absenteeism and insurance costs’” according to Dr Jim Harter, Chief Scientist in Gallup’s workplace management practice. (From the book “Decade of Change”)
What’s your reaction to this research? Are we just bad at picking good supervisors and managers or is the issue more complex? With all the efforts to appear “green” and globally sensitive to the outside world, do companies now need to dedicate effort at regaining the hearts of their employees? With all the talk recently about reinventing and reinvigorating the American economy it seems to me that upping employee engagement would be a great place to start. What do you think?
To whom do we report our CSR and sustainability progress?
Stephen Evanoff
The last NAEM Board of Regents meeting featured a thought-provoking and entertaining session on communicating corporate environmental performance that reinforced the importance of understanding one’s audience and stating information in a way that connects with them.
I think there was a tacit understanding among the participants that the primary audience for sustainability and corporate social responsibility (CSR) reports is the general public and others outside the organization, such as customers and investors. I’ve certainly been operating with the presumption that they are designed primarily for people outside the organization. But a business leader surprised me recently with his response to a proposal to report certain aspects of his company’s EHS performance.
He felt that these reports are for people on the inside, not the outside. He explained that today’s graduates want to work for organizations that are environmentally and socially responsible; this makes these reports valuable in recruiting, retaining and motivating young talent. The more I think about it, the more I believe he is on to something. Here are a few thoughts in support of this premise:
- Environment, health and safety (EHS)/CSR reports may seem commonplace to outsiders: The proliferation of EHS and CSR reports available today may not distinguish a company among external audiences. But, to people on the inside, the company EHS report stands out and can make a positive impact on employee perception.
- The public is increasingly wary of greenwashing: Those on the outside are more likely to discount information in an EHS or CSR report from an organization with which they aren’t familiar. Among insiders, however, a well-crafted report will contain information they can recognize and can validate, making it more effective.
- Modern enterprises are complex. Business management systems, products and services are increasingly complex. A well-designed EHS or CSR report can help employees better understand the company’s goals, principles, achievements, and the value it delivers to society.
- Businesses are increasingly global: EHS programs can build a sense of common purpose and commitment within an organization that transcends language and cultural differences.
- Idealism is back: The Millennial generation tends to be more idealistic. As employees they likely will become a receptive internal audience.
- Capable, well-educated graduates are in short supply: A company that can demonstrate a commitment to high EHS standards and a high level of EHS performance has a subtle, but significant advantage in attracting and keeping top graduates. We all want to be on a winning team. EHS performance is one way of defining success and instilling pride among the most malleable insiders.
What do you think? Among which audiences do you think CSR and sustainability reporting has the greatest impact?
What Makes Ergonomics “Green”?
Walt Rostykus
As a break from my planned series on the key strategic elements of successful ergonomics management systems, I want to share some insight from James Good, President of Humantech Inc., regarding ergonomics and LEED. Jim writes:
The ergonomic conditions of a building are neither as obvious nor as intuitive as safety and security.
The National Institute for Occupational Safety and Health (NIOSH) defines ergonomics as the science of fitting workplace conditions and job demands to the capabilities of the working population. Effective and successful “fits” increase productivity, reduce illness and injury risks, and increase worker satisfaction.
One assumes that, by definition, any program or initiative that reduces waste, increases productivity and reduces worker injury or illness—and does more with less—is inherently a conservation activity. But let’s dig a little deeper.
The main objectives of sustainable design are to avoid resource depletion of energy, water and raw materials (conservation); prevent environmental degradation caused by facilities and infrastructure throughout their life cycle; and create built environments that are livable, comfortable, safe and productive.
Protecting the health, safety and security of a building’s occupants has expanded beyond disease prevention and nuisance control. It now includes considerations for mental as well as physical health and productivity through the creation of places that exhilarate and delight as they exhibit the realization of human creative potential.
Healthy, comfortable employees are invariably more satisfied and productive. Unfortunately, this simple, compelling truth is often lost, for it is simpler to focus on the first-cost of a project than it is to determine the value of increased user productivity and health. Facilities should be constructed with a focus on providing high-quality interior environments for all users.
Over ten years ago, the U.S. General Services Association (the nation’s landlord) concluded in The Integrated Workplace: A Comprehensive Approach to Developing Workspace that “since people are the most important resource and greatest expense of any organization, the long-term cost benefits of a properly designed, user-friendly work environment should be factored into any initial cost considerations.”
With the launch of LEED® 2009, the U.S. Green Building Council recognized the value of workplace ergonomics as a proactive process. The Innovation in Design Process category provides for five possible points, of which one point can be obtained for good ergonomic design of existing or planned workspaces.
What constitutes good ergonomic design? “A comprehensive ergonomics strategy that will have a positive impact on human health and comfort when performing daily activity for at least 75 percent of Full Time Equivalent building users.”
While environmental sustainability focuses on the impact of building design on the environment, ergonomics focuses on the impact of the building work environment on the occupant. Good ergonomic design is a critical element of building design; it can significantly hamper or greatly enhance the performance of occupants.
So, what is your choice?
Going Beyond: Shell Oil’s systemic take on sustainability
Nancy Roberts
It is heartening to come across companies and leaders that are actively engaged in applying systems thinking; it is even more heartening to hear both positive results and frank observations. A recent interview with Marvin Odum, the president of Shell Oil Co. (the US subsidiary of Royal Dutch Shell) in MIT’s Sloan Management Review demonstrated an applied systemic view of the company and the industry and the landscape in which it must operate.
Royal Dutch Shell has long been famous for its use of scenario planning, a process that helps the company consider how different variables will affect possible futures, and how it can reduce risk and increase resilience. Here are some of the actions Odum says the company is taking to incorporate sustainability into its decision-making processes:
- Going beyond technical challenges: Focusing on solutions for the technical and operational aspects of a project is no longer enough. Odum describes the effect of the “non-technical” aspects of an energy project – essentially the needs of the affected communities and stakeholders:
“The timelines of these projects now is largely driven by those social performance and sustainable development issues, as opposed to the technical and other commercial issues.”
Stakeholder engagement is essential to a successful new energy project, but it has the consequence of extending the
timelines – inclusion, collaboration and compromise take time and effort.
- Going beyond the company walls: Preparing for the future might mean advocating for sustainability across your entire sector because an event that happens to one company affects the public’s perception of the entire industry.
“As Shell starts to take a very large position in natural gas in North America, the question I ask myself leading this business is not what is Shell going to do in terms of our own performance, but how do we set baseline performance and regulatory standards in this business so it becomes attractive to everybody involved and we secure that critical license to operate?”
- Going beyond the experts in the room: In the past, businesses have quantified their benefit to the community in terms of economic impact, such as job and infrastructure creation. More businesses now realize that the involvement of all stakeholders in a potential project is not just a nice thing to do, it is the best way to generate the most effective options for action. Odum mentions the advantages of working with Alaskan natives, particularly indigenous peoples, who have long-term memory of their environment:
“We’ve studied Arctic ice for years. But what we hadn’t done as much as we do now is work with indigenous people who have lived in that ice for millennia. They have what they would call traditional knowledge about how this ice changes over decades and centuries, and they have deep knowledge about what you have to really be prepared for.”
Engaging all internal stakeholders is also key. According to Odum, sustainability was a major driver in Shell’s 2009 reorganization, to get sustainability out into the project teams across the company. Employees are “beginning to understand that this [sustainability] is not an add-on that strips away profitability because it lengthens timeline and adds cost, but that it’s simply not possible to have a successful project if you don’t do this right.”
- Moving sustainability to the core: Shell’s management seems to understand that sustainability is not an afterthought or a public relations campaign. As Odum says, it’s not even enough for sustainability to be a priority; it must become a core value:
“Priorities change with conditions, they change with financial performance and maybe the economy. Core values don’t.”
How does your company’s performance affect your customers, stakeholders and industry peers? What methods are most effective for promoting sustainability internally and externally?
Nancy Roberts is a partner and co-founder of The Idea Hive, a group of GreenMBAs offering research, consulting and facilitation services that combine triple-bottom-line values with cutting edge thinking tools. You can follow her on Twitter at @leapingotter.
NRG Energy’s strategies for enterprise compliance
Tony Shea
At NRG Energy, environmental compliance is a management commitment. Through the pillars of its environmental management program, the Princeton, N.J.-based company delivers on this commitment in the approximately 42 power plants it owns and operates throughout the United States. This week, we caught up with Senior Manager of Environmental Business Tony Shea to discuss the company’s successful compliance strategies.
GT: When it comes to building a successful environmental management program, where do you begin?
TS: It starts with commitment from the very top of the company that environmental compliance is an absolute must. For NRG, that commitment is reflected in our environmental statement and our core values, and we do not make compliance decisions based on economics or other circumstances. It is understood that our plants simply must comply. And that commitment is constantly reaffirmed by our top management down through the plant management.
GT: Once the management commitment is in place, how do you embed compliance into the day-to-day operations?
TS: When we’re talking about power-generating facilities, compliance is a factor in many decisions operators make while on the job. At NRG we try to keep potential environmental impacts at the forefront of everyone’s thinking as we perform our daily decisions and actions.
In 2007, we implemented a system to track environmental compliance performance called the Environmental Key Performance Indicator (EKPI), which tracks incidents such as permit violations, notices of violation, reportable spills and even administrative compliance. The EKPI also accounts for each location’s participation in our econrg initiative, which includes projects focusing on environmental stewardship, greenhouse gas reduction, or water conservation projects in our local communities.
At the beginning of each year, every facility gets a target score. To reach the maximum EKPI score, the facilities need to have a perfect compliance record, and that score is ultimately tied into the bonus of every employee at the plant. Over the past four years I think it has really changed the mindset to reinforce the message that environmental compliance is everyone’s job.
Training is also a critical component of compliance. We’ve improved operator training, enabling them to better understand environmental requirements and potential impacts as they make decisions in their day-to-day operations.
GT: What are the other elements of your program?
TS: In addition to our EKPI, our environmental management information system (EMIS) and our audit program also help us ensure compliance.
We initially implemented our EMIS across all of our generating facilities in early January 2007. That initial roll-out included using it for our EKPI and for tracking environmental events. Shortly thereafter, we began using the EMIS to track any environmental responsibilities that come from permits or environmental regulation. If it’s something that can be scheduled, we’ve scheduled it into that system. The system then sends an email to the employee responsible for making sure it gets done. We’ve seen significant improvement over the years in administrative compliance thanks to our task tracking system.
Every significant facility also gets audited annually by an independent, third-party consulting firm. One unique aspect of our EKPI is that audit findings do not count negatively. We want to find all potential issues and correct them. Audit findings only impact a facility’s EKPI score if the corrective actions are not completed in a timely manner, or if there are repeat findings from year to year. We believe this sends the right message to the employees and encourages a collaborative relationship between the auditors and plants. We want perfect compliance, so it is important to identify potential risks or weaknesses and address them immediately. Our senior management and our plant management are on board with that and welcome the audits.
Tony Shea will share more details about NRG’s compliance program at NAEM’s EHS Compliance Excellence Conference on July 27-28 in Minneapolis.
