Archive for September, 2011
Corporate Social Responsibility: Is it measurable?
Lisa Barnes
Those of us who have grown up in the environment, health and safety (EHS) arena are very comfortable with quantitative metrics. We are comfortable measuring and reporting in terms such as metric tons, millions of gallons and parts per billion. However, we are increasingly being called upon to report on our company’s social responsibility performance. This is a bit trickier and we need to work with different types of metrics that aren’t as easy to quantify. Metrics for social issues such as ethics, labor relations and community support are not as easily quantified as waste disposal, water use, greenhouse gas emissions and injuries and illnesses.
Measuring corporate performance in the social arena is getting increasing attention in recent years and is a continually evolving area. Most corporations have moved beyond traditional environmental sustainability reporting. There are guidelines available with social responsibility metrics. The Global Reporting Initiative (GRI) Reporting guidelines include 40 Social Performance Indicators, which it groups into four categories:
- Labor Practices and Decent Work
- Human Rights
- Society
- Product Responsibility
There are also industry-specific guidelines such as the International Council of Metals and Mining (ICMM) and American Petroleum Institute (API) guidelines, that include social parameters. For specific aspects within the broad area of social responsibility there are guidelines that companies can formally agree to follow, including the Voluntary Principles on Security and Human Rights.
Sustainability ratings that compare the performance of corporations usually focus on the full spectrum of corporate responsibility issues and social performance is often an important element in how companies are ranked. The SAM Corporate Sustainability Assessment Questionnaire, used during the assessment of companies for the Dow Jones Sustainability Indexes (DJSI), includes a series of questions in the “social dimension.” In 2010, these questions were categorized as:
- Labor Practice Indicators
- Human Capital Development
- Talent Attraction & Retention
- Corporate Citizenship and Philanthropy
- Standards for Suppliers
- Stakeholder Engagement
Corporate Responsibility’s methodology for ranking The 100 Best Corporate Citizens includes seven categories that are each weighted based on their relative values. The “Employee Relations” accounts for 19.5 percent and Human Rights accounts for 16 percent of the score highlighting the importance of these social issues.
The crucial part of social responsibility measurement is focusing on the most appropriate and relevant metrics for your company. Going back to the basics of materiality – deciding what is most important – helps companies decide where to focus their resources for measuring and reporting in the social arena. Once the material issues are identified, you need to find metrics that are measurable in a meaningful way. What are the material social issues for your company and how do you measure your performance in those areas?
During the Social Metrics session at the upcoming EHS Management Forum in Tucson, we will hear how three global companies have incorporated social metrics into their CSR strategy. For those of you who have social metrics of your own, how did you identify which ones to track? Did you use an existing protocol or develop a unique set for your company?
Lisa Barnes is Technical Director of Climate Change Services for Bureau Veritas North America. She is a registered professional engineer, certified industrial hygienist, Lead Verifier for Greenhouse Gas Emissions, Lead Assuror for Sustainability Reporting and Lead Verifier for ISO 14001 Environmental Management Systems. Ms. Barnes’ education includes a bachelor of science in engineering from University of Vermont, master of health sciences from Harvard University and a master of business administration from St. Mary’s College. She has more than 25 years of experience in environmental, health and safety.
Bad Hiring Decisions Haunt Good People
Alex Pollock
Why do bad hiring decisions haunt good people? I’m involved in making an important leadership staffing decision as I write and I’ve researched some of the latest thinking to help minimize the potential for a poor staffing decision and thus prevent the long term damage that it causes.
I’ve been guided in the past by the timeless “3 C’s” of character, competency and chemistry, but I wonder if I can embellish this based on recent research. I found the work of Jeffrey Cohn and Jay Moran in the book, “Why are we Bad at Picking Good Leaders” (2011) most useful. They described what they feel are the essential attributes of effective leadership under the headings of:
- Integrity: the foundational attribute, honest, ethical
- Empathy: feel with people, social savvy, combined with integrity drives trust
- Emotional Intelligence: evident self mastery skills: “know yourself, control yourself, and improve yourself.”
- Vision: forward-thinking with a sense of possibility and wonder, innovative
- Judgment: focus on the important while seeing the “big picture”, take decisive action
- Courage: the ability to “act with grace under pressure”
- Passion: the drive to achieve, learn and master
In hiring decisions I’ve been encouraged to do my homework by the axiom “ You will get what someone has already gotten… no excuse for surprises.” I found the techniques that Cohn and Moran suggest, such as scenario discussions to be most useful for determining whether a candidate does indeed possess the desired attributes or not.
Help me out please. Have you ever made a poor hiring decision? What lessons can you share from the experience? What attributes do you view as important for leaders to possess and what techniques to you use to assess competency during the recruiting process?
Past Presidents’ Series: Who should drive a company’s sustainability journey?
Dick Pastor
One of the great joys of working in the sustainability field is the real freedom for organizations to be creative and innovate while they are on the sustainability journey. The scope of one’s sustainability program is dictated by the culture, mission and vision of that organization. And that is the way it should be.
Individual organizations understand their culture, which helps them focus on the activities that will best achieve their sustainability goals. In the end, an organization needs to identify what will make them sustainable and then follow their creative instincts to get there.
It is altogether wrong for outside entities to impose constraints and artificial requirements on these organizations. After all, the sustainability journey is a voluntary journey and one that is made for the future well-being of the planet, the people and the organization itself. Outside requirements that dictate how to be sustainable do not promote the creative ideas or the innovative processes that leading companies need to develop. Since it is in an organization’s self-interest to move as far along the sustainability path as possible, this should be a decision that is made by the organization itself.
Let sustainability remain a voluntary program, directed and guided by the individual organization. If they succeed, they will be around for a while. If they don’t succeed, do we really think that they will survive? Let’s keep artificial requirements out of the sustainability arena. What do you think?
Dick Pastor is Vice President at Shaw Environment and Infrastructure. He has more than 42 years of experience in the environmental field, including 18 years of government service with the Pennsylvania Department of Environmental Resources and 15 years with the United States Environmental Protection Agency. Before joining Shaw he was Director, Environmental Services for Wal-Mart Stores Inc., where he developed the environmental management and services program for the company, going from a staff of 1 to a staff of 27 professionals. He also played a significant role in the early development of the company’s sustainability program.
Are you ready for the best Forum ever?
Steve Walker
We’re just about a month away from the 19th annual EHS Management Forum in Tucson, Ariz. and I certainly hope that you’ve registered because this is a must-attend event. I’ve been working with the Forum Planning Committee since early this year to assemble yet another set of outstanding keynote and breakout session speakers. While others may have laid claim to the moniker of the “best Forum ever!”, I think that you’ll be hard pressed to find a better array of EHS and sustainability experts anywhere else.
It all starts with our breakout sessions. As you know, NAEM draws from the best-of-the-best when it comes to EHS and sustainability practitioners – primarily our own members. We’ve kept an eye on the tactical and technical basics with the “Foundational EHS Excellence” tract. That’s accompanied by our hot-topic tracts of “Defining & Delivering Sustainability” and “Supply Chain Strategies” where you’ll hear what’s working for other companies. Finally, the “21st Century Leadership” tract will showcase decision-makers’ strategies for future success. All-in-all, there’s not a single breakout session that wouldn’t make for an excellent stand-alone workshop.
We all know that it’s the keynote speakers that get top billing, and we’ve secured some great thought-leaders there as well. We’ll kick-off with Andrew Winston who co-authored Green to Gold and recently released his latest book Green Recovery. In the latter, he encourages businesses to seize the opportunity presented by the current economic conditions and “get lean, get smart, and emerge from the downturn on top”.
The second day will kick-off with a look into the global economic, technology and resource trends impacting corporate sustainability. That conversation will start with Jason Schenker (President and Chief Economist at Prestige Economics), transition to Howard Brown (Founder of dMass) and wrap-up with some perspective from an NAEM member on what it all means to their company.
The final keynote will come from Eric Henry, President and co-owner of TS Designs. Eric’s learned first-hand just how global economic forces can impact a small t-shirt printer in central North Carolina. He and his team have innovated to keep their business profitable while remaining committed to sustainability along with their local community. Attendees will walk away with a keen understanding of how they go “from dirt to shirt in 750 miles”.
Between the always-incredible exhibitors and the Thursday evening event at the Savoy Opera House, we’ve got a full agenda that will leave you saying, “Now, THIS is the best Forum ever!”
Ergonomic Success Requires Leadership
Walt Rostykus
Over the years, I’ve met environment, health and safety (EHS) managers who are convinced that by driving safety and ergonomics through a grassroots approach, some day the initiative will catch on with supervisors, managers and company leaders as an infectious commitment.
“If you build it, he will come” may have worked for Ray Kinsella in the movie “Field of Dreams”, but let’s get real folks: This approach is a shot in the dark for quickly and effectively improving and sustaining safety and performance in the workplace.
Indeed, the key elements of leadership in maintaining an effective and sustainable ergonomic improvement process are no different than those of an EHS system, company culture, or any other aspect of a business. The bottom line is that leadership must occur from the top.
A wise person once noted, “What interests my manager motivates me.” This is the key to leading a safety and ergonomics process over time. Think about it: At work your priorities and activities are guided by how your manager tracks and measures your performance. It is our experience that when managers, engineers, supervisors and employees have a clear understanding of their involvement in the effort to improve workplace ergonomics (and they are held accountable to those expectations), effective workplace changes are made.
Yet leading an ergonomics process is not usually intuitive to many in top management roles. As an EHS manager, however, you are in a position to coach top management on the few things they need to do; simply put, they need to hold their direct reports accountable for ergonomics performance (see my prior blog on effective goals and metrics for ergonomics). The four most important things they can do to make sure this happens are:
- Set clear expectations (responsibilities, goals, roles, targets)
- Provide people with the resources, tools and training they need to meet their responsibilities
- Visibly and actively monitor and track progress
- Take action when expectations are not met
Fortunately this four-step approach is not foreign to managers and supervisors. They follow some form of these steps to complete work, build widgets and manage production. Leaders in safety should apply the same approach (accountability) to influence, guide and lead their organization to success. It’s all about planning, managing and following through.
Kurt, my climbing instructor from several decades ago, was a great illustration of how not to lead by example. His immortal words “Do as I say, not as I do” sent a mixed message. While he told us to wear the correct helmet and always climb while belayed, he climbed bare-headed and without a lifeline. He was technically knowledgeable, but clearly not a leader.
On the contrary, Dave Packard, Bill Hewlett and Bob Hall were true leaders, who set expectations for performance (including safety) and held people, including general managers, accountable for the quality and safety of their workplace.
Whether you base your company ergonomics program on Occupational Safety and Health Administration (OSHA) models, the Safety Management System, lean manufacturing or continuous improvement, strong and visible leadership by people in top management is critical for ensuring that engineers design tools to fit the first time; employee teams reduce exposure to work-related musculoskeletal disorders (WMSD) risk factors before injuries occur; and that employees adjust their own work stations to best fit them.
If improving ergonomics is a priority for your organization, does your top management team lead by example? Have they set performance expectations, goals, and clear roles? Do they track performance?
If not, what have you done to best prepare them to lead?
Sustainability rankings: Which are real, which are rubbish?
Richard Crespin
Albert Einstein once said that not everything that counts can be measured and not everything that can be measured counts. While I remain a dyed-in-the-wool free market capitalist, the measurement systems we’ve used to date have gotten us in a hole with disasters economic, environmental and political.
In 2000 the world had 21 sustainability-related ranking systems; we now have more than 100. As a result many folks now want to know how to prioritize the “real” rankings from the “rubbish”.
As Executive Director of the Corporate Responsibility Officers Association I represent you: the responsibility and sustainability professional. I know the difficulty different reporting regimes pose. I also know how hard it is to rate companies because I serve on the Methodology Committee for Corporate Responsibility Magazine’s 100 Best Corporate Citizens List. As a result, I have discerned a few hallmarks of the better rating systems. Here’s what I can offer as a guide to prioritizing ratings:
- Transparency. Their methods, criteria, and decision-making should be public. Any commercial relationships between the rater and the firms on its list should be clearly disclosed as well.
- Consistency. While evaluation criteria continue to evolve, the rating should have some constancy year-over-year. The criteria should also be applied evenly to all companies in the rated universe.
- Relevance. A list should relate to your company’s industry, brand or strategy.
- Acceptance. Pay more attention to lists that have broad acceptance and/or use widely accepted criteria like the Global Reporting Initiative.
- Prediction. The most effective rating systems will predict future performance. This is the “holy grail” and will likely remain elusive for at least another 10-15 years. To be predictive a rating needs to incorporate a full business cycle’s worth of data, typically 30+ years. No rating system that I know of has been around that long.
What do you think? Are these the right criteria for evaluating information requests? When it comes to the flood of sustainability surveys, what is your strategy for responding? Which do you respond to? Why?
Richard Crespin is the Executive Director of the Corporate Responsibility Officers Association and chair of the upcoming COMMIT! Forum on Sept. 26-27 in New York. To participate in the conversation about the “New Rules for Disclosure” visit http://www.commitforum.com/index.php/agenda/.
The Considerable Challege of Setting Goals
Bruce Klafter
Inside most companies it may seem at times that we are virtually awash in goals, targets, objectives, incentives and other means of spurring us to action. Like many things in life, “too much of a good thing” can be counterproductive, but there is no question carefully formulated goals are critical to environmental, health and safety (EHS), and sustainability programs. As the great philosopher Yogi Berra once stated: “If you don’t know where you are going, you’ll end up someplace else.”
On October 19 at the NAEM Forum, we are going to explore a number of questions related to goal setting, but principally the “how” of it.
What makes setting an enterprise wide sustainability goal a tricky proposition? Here are some of the factors I believe come into play:
- A good deal of data is required and in many cases our data is missing, incomplete or lagging;
- Benchmarks are important, but can be misleading because no two companies are situated in exactly the same place;
- Multi-year goals are usually advisable, but the longer the duration of the challenge, the greater the uncertainty that creeps in. How many of us accounted for a global recession in 2009?
- Top-level participation is essential, but a certain amount of background is necessary and time and attention are hard to come by;
- How ambitious does your company wish to be, i.e. how far should the goals be stretched or how much risk of failure will be tolerated?
- How do the goals relate to overall company strategy or do you have the right people in the room to set the goals?
- What will it cost to attain the goals (a near certain question from your friendly CFO)?
Please add your questions to the mix and we will answer them all at the Forum (at least that’s my goal!)
Bruce Klafter is Managing Director for Environmental, Health and Safety (EHS) at Applied Materials, Inc., where he also heads Corporate Responsibility and Sustainability. He will be speaking during the “Sustainability: Defining your Program, Setting the right Goals” session as part of NAEM’s EHS Management Forum on Oct. 19-20 in Tucson.
Conviction Alone Doesn’t Compel Change
Kimberly Wallis
This month in our ‘Emerging Leaders’ series, we introduce you to Kimberly Wallis, a master’s candidate at Duke University’s Nicholas School of the Environment, and a student member of NAEM. This summer she worked on energy issues as an intern with the Union of Concerned Scientists.
These days, a job in the hand is definitely worth more than two in the bush. No elected official is going to even consider a move that might cost their constituents jobs. So, convincing legislators in Ohio to invest in renewable energy, rather than in coal, one of their main industries, seems like a hard sell. Vague statements about ‘the green economy’ and ‘green collar jobs’ aren’t going to cut it with the legislators or with their constituents. “Maybe I would get better pay at a wind farm,” thinks the technician. “But I don’t know where these jobs would come from, or how many they would be. I’m better off just sticking at my old job.”
How many, where, and how much? Those are the questions the Union of Concerned Scientists (UCS) tried to answer regarding clean energy jobs in the Midwest states, including Ohio. It’s hard to convince people to give up the status quo for uncertainty, even if evidence shows that the change will be beneficial, so UCS put resources into erasing some of that uncertainty. As an intern there this summer, I helped paint a picture for Ohioans of what a different future might look like.
How would the change affect a household’s monthly energy bills? What would the net jobs increase be, not countrywide but in Ohio? In short, how would investment in renewable energy and energy efficiency impact the daily life of an Ohioan, and is it worth giving up the certainty of the status quo?
It’s not enough to tell people what not to do. It’s not even enough to tell them what to do instead. “Better the devil you know” – and uncertainty is always a devil. Painting a picture of what the future could look like gives people something to strive for, whether they are in your community or in your company. It’s the difference between a mission statement and a vision statement – and as the vision becomes more specific and tangible, it becomes more persuasive.
A call to “decrease waste!” or to “reduce GHG emissions!” isn’t going to convince anyone to give up the security of the status quo. What are you offering them instead, is the question.
When it comes to making the case for new EHS and sustainability programs, what tactics have you found to be most effective?
Kimberly Wallis is a graduate student in environmental management at the Nicholas School of the Environment at Duke University, where she focuses on energy issues and effective communication. She is particularly interested in how individuals and organizations change.
What is the relevance of ISO 26000?
Lina Azuero
The concept of social responsibility is not new. It has been around since the 70s, when early discussions on the role of organizations in society began. What is emergent, is the momentum social responsibility has gained and the shape it has taken.
The momentum is everywhere, evidenced through the different principles, conventions and guidelines now available on the topic or its elements, and their level of adoption. Some examples are the United Nations’ International Labor Organization Conventions, the United Nations Global Compact and Social Life Cycle Guidelines; Equator Principles; Global Reporting Initiative (GRI); Social Accountability 8000; AA1000 Series and more recently the ISO 26000 Guidance on Social Responsibility.
So I’m not going to spend time on the momentum, but rather attempt to discuss the shape social responsibility has taken… And yes, this is where ISO 26000 comes in handy.
ISO 26000 is a voluntary, non-certifiable standard, whose value lies in the attempt to compile all of the different elements of social responsibility in one place, define its evolved concept and provide ways to integrate it into the organization. In the past, social responsibility would be seen as purely philanthropic and/or volunteering efforts. While these are important, we now acknowledge that social responsibility requires understanding society’s expectations and evaluating the organization’s capacity to respond them, so that no false expectations are created. In addition, ISO 26000 also defines the seven core subjects that (at a minimum) need to be considered when thinking about social responsibility: governance, human rights, labor practices, the environment, fair operating practices, consumer issues and community involvement and development.
Thus said, I’d like to make a point clear: The appearance of ISO 26000 doesn’t mean other guideline documents on social responsibility or related aspects are no longer valuable or needed. Contrary to that, they are complementary. The challenge becomes understanding how they interact and at which stage of the process to use them. ISO 26000 is filling a gap between high-level aspirations and reporting by providing a good basis for the “how”.
As with everything, social responsibility has its passionate supporters and detractors. However, if organizations are interested in staying in business for the long-term, social responsibility has to be part of the agenda. So, I’d like to end with a quote from Marc Epstein’s book, “Making Sustainability Work” that really helps getting this point across:
“The issue of whether companies should consider their social responsibility or the impact on their activities … is no longer up for discussion…The challenge has moved from “whether” to “how” to integrate corporate social, environmental and economic impacts—corporate sustainability—into day-to-day management decisions.”
Lina Azuero is a management consultant with CDM, in Cambridge, Mass. She has a graduate degree in Business and Management from Harvard University, and a B.A. in Business and Management from the University of La Sabana in Bogota, Colombia. She is a candidate for a master’s degree in sustainability and environmental management from Harvard University, where her research has centered on social and environmental life cycle assessment in supply chains. She will be presenting during NAEM’s Sept. 8 webinar “New ISO Standards and the Impact on EHS and Sustainability”.
