Posts filed under ‘Environment’
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/.
A Pragmatic Approach to Green Product Development
Balaji Jayaseelan
Why do companies talk about and pursue ‘green’ products when there is often very little resonance among consumers? Is it because it is the right thing to do? Does it offer a competitive advantage to their brands? Or is it a strategy to achieve cost savings through energy and waste reduction?
It depends upon who you talk to.
There are some companies that get it right with the consumers and become successful, while others are constantly looking at ways to get it right. For the latter companies, here is my advice for a possible approach towards greener product development.
At Newell Rubbermaid, our first step is to understand that there is no such thing as a ‘green product’. Every product has potential trade-offs and we need to understand what ‘green’ attributes can be a good incremental value or a game changer. Some of the methods in understanding consumer relevance are through market research, either by primary or secondary insights and/or benchmarking with your peers and competitors.
Questions we need to answer to influence green product development in early stage gate processes are:
- To what extent are your consumers interested in ‘green’ products?
- To what extent are your consumers demanding ‘green’ for your product categories in particular?
- To what extent are consumer ‘needs’ related to environmental issues being met in the marketplace?
- To what extent are market trends forming that might drive greater desire for green solutions among consumers, retailers, and governments?
- Are there certifications/Eco labels available in the market that resonate with the core consumer of this product? To what extent is certification required to make a credible claim for this product category or market segment?
It is important that we understand these answers before we influence green product development. In the case of existing products, we should map out the green benefits using product mapping exercise like Value Analysis and Value Engineering. For those of you in pursuit of the green products,
- What kind of roadblocks have you found in innovating green products?
- Are we constantly looking out metrics to measure the green attributes to our revenue growth in our brands?
- What kinds of Green platforms do the consumer really care?
- What are the other effective methods to map out green attributes in our products?
Balaji Jayaseelan is Program Manager of the Global Environment and Sustainability group at Newell Rubbermaid. He is in charge of providing strategic advice to business units on a wide range of sustainability issues including energy/climate change, waste management, product claims, green product innovations and Life cycle management. He is a Chemical Engineer and holds a Masters in Environmental management concentrating on Sustainability. His professional interests and research focus on designing different models on socio-economics towards sustainable development and innovating green products. You can reach him at saravana.balaji@newellco.com.
Confronting Conflict Minerals
Gary Niekerk
Most environmental professionals don’t hang out with the Wall Street crowd. We don’t typically have a lot of designer suits and six figure bonuses (although I do own a pair of wing-tipped safety shoes). However, Wall Street and environmental, health and safety (EHS) are a little more connected these days than you think. What I’m referring to is a piece of legislation buried in the 800-plus-pages of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, called “SEC 1502 – Conflict Minerals”.
The intention of SEC 1502 is to increase transparency in the minerals supply chain, with the hopes of reducing the terrible violence in parts of Central Africa related to the minerals trade. This somewhat controversial regulation is garnering a lot of attention as the final rulemaking is expected in the next few months.
If your company manufactures products where, “conflict minerals (tin, tantalum, tungsten, or gold ) are necessary to the functionality or production” of the product, you could be one of the 5,000 or more public companies the SEC estimates may be impacted by this legislation.
NAEM will be covering the topic at the upcoming EHS Management Forum on Oct. 19-20, where I’ll talk about Intel’s approach to this complex issue. For more information, please contact our Corporate Social Responsibility team or read the white paper we wrote about trying to achieve a ‘conflict-free’ supply chain.
In the meantime, I’d love to hear from you. What are you doing to address this important issue? What are some of the unique challenges this legislation will present for your company?
Gary Niekerk is the Director of Global Citizenship for Intel Corp., where he works on corporate strategy related to sustainability, corporate reputation and stakeholder management. He has spent 25 years working with employees, customers, and stakeholders to protect and build the brands and reputation of some of the world’s leading high-tech companies, including Hewlett-Packard Co., Apple Inc. and Intel Corp.
What’s the Prognosis for Hydrofracking?
Dania Nasser
Today we are kicking off a new series on the Green Tie, featuring the ‘Emerging Leaders’ within our membership. Dania Nasser is a student member of NAEM, pursuing a master’s degree in Environmental Management at Yale University.
In the wake of New York State Governor Andrew Cuomo’s decision to consider lifting the ban on hydrofracking, it seems like the term and the debate have gone mainstream.
As you probably know, hydrofracking (hydraulic fracturing) is a method by which natural gas stored in layers of rock is extracted through the use of chemicals, water and pressure to break through the rock and recover natural gas.
While several states allow the practice, it has become a lightning rod issue for many communities. There is serious concern that disturbing the layers of rock and sediment to recover natural gas can result in drinking water contamination. Currently, the Environmental Protection Agency is studying the general impacts of hydrofracking and looking to release a Federal report and possible guidelines in 2012.
Few things worth doing, however, pose zero risk. Risk should be monitored and tracked closely, but not automatically used as criteria for eliminating viable options.
I was recently discussing the issue of risk surrounding hydrofracking with a neurosurgeon friend, and it occurred to me the extent to which the practice might be compared with brain surgery. Take for example, a brain surgeon undertaking a patient suffering from an aneurysm. The source of the aneurysm is not always clear, and sometimes exploration for the source of the bleeding can cause more harm than good—but this is a major risk that doctors take. Doctors are able to take this risk because of all the risk mitigation that doctors take, such as years of practice and study, the latest equipment and time-tested procedures.
Hydrofracking poses a similar set of risks and obstacles. Just as with surgery, the risks must continue to be vetted and addressed. The same process is necessary to ensure proper practices and procedures set in place for hydrofracking.
If hydrofracking is increasingly seen as a viable option for recovering additional domestic energy, the concerns that have caused the controversy surrounding hydrofracking must be addressed. Areas that must be further addressed to ease anxiety surrounding hydrofracking include readying infrastructure and monitoring technologies, developing best practices, as well as working to carefully plan and manage the impacts of hydrofracking.
How do you weigh the risks of practices such as hydrofracking? How do you address the concerns internally as well as externally?
Dania Nasser is a student member of NAEM, completing a master’s degree in Environmental Management at Yale University. She is currently Director of Environmental Affairs at a New York law firm specializing in environmental and construction law. She is a member of NAEM’s Emerging Leaders group and the Board of the Manhattan Chamber of Commerce Green Finance Committee.
Community Engagement is Key in Climate Action
Mark Posson
In helping my local municipality develop a Climate Action Plan, I reviewed several articles discussing the barriers to individuals and households making behavioral changes to reduce greenhouse gas emissions. An estimated 38 percent of the United States’ overall carbon emissions comes from household energy usage, which means significant changes in household behavior are necessary for our country to meet its greenhouse gas emission reduction goals.
Government regulations are driving technology changes, such as higher appliance-efficiency standards, but efficiency improvements alone are not going to do it. Individuals must make better energy usage choices in their daily activities to achieve needed usage reductions. Passing regulations is easy; changing decision-making and behavior is not.
Do I carpool or drive alone? Do I weatherize my home? Do I replace my incandescent bulbs—with CFL or LED? Do I need that light on? How and where do I set my thermostat?
There are multiple barriers to behavioral change and there is no silver bullet. The specific methods of intervention are best tailored to the specific change and outcome desired. There are, however, some common elements to making lasting change:
- Make it easy: Free community programs for energy audits and retrofits both educate and make immediate changes with only a phone call.
- Make it financially attractive: Show people the payback so they see what’s in it for them. Communicate the cost of leaving a light, power strips and electronics on when not in use; and the ease of turning them off. Rebates and credits may be needed to get some to act or to balance the financial equation.
- Make sure it works: Poor quality of a service or product will create only headwinds for implementation. Go with what works and shoot for the best.
- Provide timely gratification: A lower utility bill next month or an instant rebate is superior to a tax credit next April.
- Take a multi-pronged approach: Don’t rely on just one method. Easy, financially attractive, well-understood changes have a better chance of being adopted and maintained.
Reduction of greenhouse gases is only one of the many environmental improvements we are trying to tackle. As environmental leaders, we need to further integrate social science with the environmental science to achieve better use of our natural resources. The next increments of improvement will be the hardest as we are will need to address the individual behavior of the earth’s residents.
What methods are you using to change the behavior of your organization and community to make better environmentally-sensitive decisions?
Mark Posson is the former Director of Environment, Safety and Health at Lockheed Martin Space Systems Company and the current Chair of the city of Pleasanton’s Energy and Environment Committee. Mark enjoys fishing, hiking, biking, racquetball, time with the family and public service.
Water stewardship: Paralyzing complexity or competitive advantage?
Nick Martin
The message from stakeholders and investors is clear: Companies are expected to govern and begin disclosing water-related business risks. Historically, most companies have been able to simply acknowledge water as one of many important business issues. Much has changed in the past few years, with water positioned as a competitive issue and expectations trending towards quantification of water-related financial liability.
However, growing disclosure pressure isn’t the same as providing pragmatic “how to” for characterizing and quantifying water-related business risks. Moreover, characterizing the risk is only the beginning. The real challenge for companies is how to strategically prioritize risks and opportunities, build necessary competencies, and drive local water management plans. Why is water such a challenging, and potentially paralyzing, business issue you ask? Consider these factors:
- Nearly every activity, product, or business transaction uses water in some form – yet, there is no substitute;
- Water is both a local and temporal issue with potentially widely varying conditions (e.g., floods and droughts can occur in nearly the same location);
- Water, in general, is difficult to bound, measure, transport, and define access rights;
- It’s challenging to justify water-related strategic or capital investments based upon traditional ROI calculations;
- Cross-functional participation and solutions are required, including engagement up/down a company’s supply (value) chain; and,
- It is widely considered a human right, placing it in the sweet spot for media, political, and stakeholder attention.
What does this mean for companies that have yet to fully embrace water as a core business issue? There are two basic options:
- Start or accelerate a water strategy soon and possibly stay “ahead of the curve” thus determining your own pace of implementation; or
- Do the Basics – hedge your bets that water will not directly impact your company and expectations will stagnate. Given that water appears to be a resilient issue, companies that hedge could face monumental leaps to catch up to peers and meet stakeholder expectations in the near future, especially given the complexity and location-specific aspects. The cost of inaction could be significantly higher than self-paced implementation.
So, the first question many companies ask is how fast do they need to move? Well, the direct impact of water issues on any given company depends upon a range of variables including sector, size, brand recognition, and public image. First, let’s look at what we are seeing:
- Publications – recently published materials appear to be trending towards standardized buckets of water risk: Physical; Regulatory; Reputation; Investment. This has translated the business risks into simplified, real world concepts for a wide-range of stakeholders and investors to more easily comprehend and formulate inquires.
- Surveys – increasing number of non-governmental and supply chain surveys, including the second annual CDP Water Disclosure Project questionnaire, have significantly increased transparency of existing corporate strategies and knowledge gaps.
- Corporate Reporting – more companies are reporting water metrics, as well as water footprints, product life cycle assessments, and intensity indicators.
- Initiatives – water-focused NGOs and collective action partnerships have increased exponentially in recent years ranging from advocacy to standard development.
Collectively, these actions have provided investors and stakeholders with confirmation that 1) water is in fact a real business and investment risk; 2) a majority of companies are not proactively addressing the issue; and 3) water can be effectively managed, quantified, and reported on as demonstrated by the small number of corporate leaders in this space.
Nick Martin is an Associate with Antea Group. He will present ideas for developing a water strategy during NAEM’s webinar on “Water Risk Management” on June 21.
Recognizing the “unsung” environmental heroes
Carol Singer Neuvelt
In honor of Earth Day, I’d like to take a moment to recognize and thank you, our members, for your contributions to the health and safety of our planet.
While much of the public discourse about improving the environment focuses on individual actions, few understand or know how to address the large scale impacts of corporate activities. This is essentially what environmental, health and safety (EHS) managers do by creating company-wide systems to reduce pollution, improve worker safety and, now today, move the conversation about sustainability forward.
Without your tireless work to lessen corporate environmental impacts, we would not have achieved the return of clean waterways, reclaimed land in urban centers, widespread recycling and the expectation that workers will return home each night safe and sound.
This comfort and security, largely held in the developed world, is a profound luxury we often take for granted.
To take it a step further, we don’t often get the opportunity to learn about what goes into the design, manufacture and delivery of the products that make our lives comfortable. From the ability to cook food in the warmth our well-lit homes, travel freely across the globe and share information instantly using home computers, we all rely on a host of modern industries to sustain our daily lives. But as Dr. Daniel Goleman asserted at last year’s EHS Management Forum, these modern comforts have many unseen impacts. Your work helps minimize these negative impacts, allowing the rest of us to enjoy the benefits of these products we rely on.
So today, I take my hat off you each of you, and join with the rest of the NAEM staff in saying ‘thank you’ for the work you do to protect our environment and keep workers safe on the job.
We’ve come a long way, and I’m excited to watch you address and solve the challenges that come before us.
A delicious way to green your diet
Take a bite out of your carbon footprint with today’s “at home” tip from NAEM’s Green Tips Guide, an employee engagement handbook:
Tips for greening the workplace
Happy Earth Week! Below is the first of three videos featuring easy ways to minimize your environmental footprint from NAEM’s Green Tips Guide.
