Posts filed under ‘Sustainability’
Two Tipping Points to Sustainability (and other Takeaways from the 2012 NAEM Forum)
Adapted from a post that originally appeared on the Fleishman-Hillard CSR & Sustainability practice group blog.
Robert Axelrod
Some phrases take on a momentum all their own. Such was the case at NAEM’s recent 20th annual Forum, as Deputy Director Virginia Hoekenga introduced Paul Hawken, eco-visionary and best-selling author of“Natural Capitalism: Creating the Next Industrial Revolution.”
“His book changed my life,” she said.
It’s a sentiment I can well appreciate, having emerged from the Forum with a new perspective – at least with regard to two conditions that are necessary for reaching the “sustainability tipping point” that MIT-Sloan Management Review claims we are now approaching.
The first is a sense of complicity. While the conference offered keen insights on what corporations, governments and non-governmental organizations can do, and are doing, to promote a more sustainable future, the fate of our planet is – to paraphrase The Rolling Stones – after all, up to you and me.
Until we as individuals resolve to waste less, recycle more and make and demand greener choices, a tipping point in the right direction is likely to remain elusive. According to a study cited during a session on green marketing, 95 percent of consumers entering grocery stores said they would consider buying “green” products. Only 22 percent actually did.
In a session on life cycle analysis, we were told that nearly one-third of mankind’s global carbon footprint results from food production. Yet about that same percentage of household food purchases end up in the garbage. Add to that the fact that residential recycling rates remain stubbornly modest, and hybrid vehicle sales make up only three percent of the automotive marketplace, and it’s easy to see a lot of low-hanging fruit still on our own vines.
Sure, inadequate infrastructure, artificially high pricing, partisan politics and market confusion create barriers. But it will take individual accountability, not just corporate responsibility, to get us over the hump.
A second condition that would accelerate our journey toward sustainability is greater savings for greener choices. According to the 2012 GfK Roper Green Gauge Report, consumers’ overall willingness to pay more for greener goods has declined in recent years. But depending on the product category, 40 to 60 percent are still willing to do so. This is what researchers and marketers call the “green premium”. It’s related to the common refrain among green marketers that “all things being equal” (i.e., price and performance), more people are apt to buy greener products.
What? A green premium? All things being equal? How about a green discount? What about lower prices for environmentally preferable products and services? If driving carbon, risk, materials and waste from the value chain is truly worth something, why not let that be reflected in the asking price?
Of course, not all greener choices command a premium, but many do. And yes, some green products or services cost more to bring to market, but others cost less. Or would, if the economies of scale were there.
I’m not suggesting that companies subsidize greener products. But charging more for these choices simply because under certain conditions they can, may be short-sighted. Wouldn’t it be better to build brands, increase sales and ultimately create healthier, more sustainable bottom lines by sharing the value of greener products with the people who purchase them?
In reflecting upon my experience at the 2012 EHS Management Forum, I’m a more discerning and informed person for having attended. I have a better understanding of how nongovernmental organizations help companies with limited resources engage with stakeholders around the world; how EHS skills transfer to the broader discipline of sustainability/CSR; and how a coating used in toilets can be applied on buildings to proactively remove nitrogen oxide from the air.
If we are what we think, then the conference did indeed change my life.
Effective Green Marketing Begins with Credible, Green Products
Al Iannuzzi
More and more companies are learning they can reduce their environmental and social impacts by minimizing the impacts of their products. Major companies like GE and IBM are making sustainability a platform for growth and funding significant advertising campaigns, while CEOs are talking about the good that their products are bringing due to their sustainability improvements.
The most important thing these campaigns must do is to clearly communicate the benefits of these eco-improved products. Based on my experience in product design and marketing at Johnson & Johnson there are three keys to proper green communications.
1. Have a credible product story: At J&J, we do this through our Earthwards® greener product development process, a four-step process that enables product developers to easily understand how to make products more sustainable. (I will be talking more about this at NAEM’s upcoming EHS Management Forum in Naples.)
2. Meet your customers’ product demands: Understanding what’s important to your customers helps inform greener product design. For example, our hospital customers are interested in reducing waste and energy, so any product improvements that address this issue should be emphasized.
3. Appropriately communicate the product’s greener attributes: We are very careful to communicate the greener attributes of products. The Earthwards® process helps because we know that any claims we make come through a rigorous process. One of the best ways to insulate your product from “greenwashing” is to use credible third party verification of your claims. This reduces the possibility of making a mistake. Also, research indicates that customers tend to gravitate towards products that have third party verification.
In your experience with green product development and marketing, what are some of the strategies you’ve used to explain the value proposition to your customers? How have these products fared in the marketplace? Have they helped you gain competitive advantage?
Al Iannuzzi is a Senior Director in the Worldwide Environment, Health & Safety department at Johnson & Johnson, and author of the new book, “Greener Products: the Making & Marketing of Sustainable Brands” (CRC Press 2011). He will share more insights from his experience at NAEM’s EHS Management Forum on Oct. 17-19 in Naples, Fla.
Leading the Way in LCA Means Defining Boundaries, Success
Scott Kaufman
As consumers continue to inquire about the environmental footprint of the products they purchase, companies are beginning to respond with life cycle analyses and green product labeling. This week we caught up with PeerAspect founder Scott Kaufman to discuss the challenges of life cycle analysis and how the development of new standards could help improve product transparency efforts.
GT: For those who are unfamiliar with the term, how do you define life cycle analysis (LCA)?
SK: There are five main stages of a product’s life cycle, and life cycle analysis is a cradle-to-grave accounting of the environmental impacts of a product or a service for each of those stages. For each of the main stages of the life cycle, you have resource inputs in the form of materials and energy, and environmental outputs– emissions into the water and air). A full LCA accounts for all those raw inputs and outputs and translates them into environmental impacts. A carbon footprint is an LCA as well, but one that is limited to the global warming impacts.
GT: When it comes to supply chain, how far do you go?
SK: That’s the question of where you draw the boundaries and where you cut off your efforts to actually measure things. You could theoretically go on forever by going down to the most minute detail and never stop measuring. There is, unfortunately, no perfect answer to that question. The only solution to that is to have industry standards that everyone agrees on. This is what we’re going to agree on. So when we measure a specific type of product, we know that it’s a fair playing ground with other people who are doing this kind of work.
GT: Isn’t it possible that when a company reduces its impact in one area, it increases its impact in another area?
SK: It’s like Whack-a-Mole, right? I think that that’s part of the issue I saw with just doing carbon footprinting. I think that carbon gets a lot of the attention, but sometimes, when you make a reduction in carbon it might kick up in another impact area. So you want to be as broad, but as thorough, as possible. So it’s important to have specialists with knowledge of the supply chain issues we’re talking about so that they can identify those tradeoffs.
GT: Life cycle analysis is an exciting concept, but it’s still in its nascent stage. How do you evaluate a product’s LCA in the absence of widespread disclosure and common standards?
SK: It’s still fairly new, but I would that that’s not a reason not to do it.. Yes, there are leading edge companies that are blazing trails and that’s one reason to be in that camp of companies is to be defining the rules as you do the rules. The companies that are pursuing this area are, by default, defining the rules of the game.
One example of that is the beverage industry. The Beverage Industry Environmental Roundtable is a group of roughly 16-20 companies such as Pepsi Co., Coca-Cola Co. and Diageo that got together and basically wrote a set of product category rules with the help of a consulting group, non-profits and Columbia University. So standards exist but it depends on the industry and the companies within the industry that want to take a leadership stance.
The cross-industry body that’s doing the most work and has the most industry buy-in is The Sustainability Consortium. They have the most funding, the most momentum and have done the most work marrying nongovernmental organizations and academic inputs as well. I’m feeling pretty optimistic about what they’re going to do based on that.
GT: What is the role of third-party entities in the LCA process?
SK: As companies increasingly model the life cycles of the products they produce, there is a greater need for a third-party to look at those models and make sure they accurately represent the environmental effects. A lot of the time, companies are making a public claim that a particular product has less of an impact than a product made the good old-fashioned way. If we’re going to make real reductions and make real progress toward more sustainable products, we need to make sure that these models and these claims are vetted.
GT: As standards are developed, ESG analysts may start looking to LCAs as a reflection of a company’s performance. How do you account for the ‘use’ phase of the product, which contributes to a product’s footprint, but which are beyond the company’s control? Is it fair to evaluate a company’s environmental performance based on how consumers use its product?
SK: That definitely depends on the product. There are some products where most of the life cycle impacts are upstream, but certainly if you’re talking about something like an air conditioner, the consumer decisions play a large role. I certainly think that the action needs to take place before the consumer make the decision, ideally there would be a policy to ensure a clear set of rules everyone is playing by and there would be clear targets that everyone has to meet and we just figure out how to parse out the emissions allowances associated with that.
I know that the Consortium is handling this right now on a “check this box” basis, asking questions of their members, like, ‘Do you have a well-funded advertising campaign, informing consumers about the benefits of washing in cold water?’ An objective, but still broad ‘yes’ or ‘no’ question is the way to get at it first. I guess you have to start drilling down from there until you hit the jack pot.
Scott Kaufman is co-founder of PeerAspect, a global network of experts that helps companies verify environmental models and solve sustainability problems. He will be sharing more insights into the state of life cycle science at NAEM’s 20th annual EHS Management Forum in Naples, Fla. on Oct.17-19.
Sustainable Procurement is Efficient Government Spending
Nancy Gillis, Director of Federal Supply Chain for the U.S. General Services Administration, talks about the benefits of integrating sustainability into government purchasing decisions.
What’s the staffing and structure of your sustainability team?
Sandy Nessing
The slow (some would argue stalled) economic recovery has many companies again looking inward to find ways to do more with less. Staffing levels and work processes are among those areas being scrutinized to squeeze the maximum efficiency from the least amount of resources.
We’ve all been there. As a sustainability professional, I have seen this profession grow during the last six years from obscurity (even ridicule) to top level management. Like so many, I started as a solo act; today I have a team of three. But I was curious – what is the typical staffing level for sustainability at companies? If I had to make the case for a certain staffing level, what would that number be?
To get a lay of the land, I conducted an informal poll* of 15 companies – ten in the electric utility sector and five non-utilities. What I learned was that the numbers are all over the boards. Sustainability teams range in size from one person shops to teams in excess of two dozen. In the utility industry, the average is two to four-person teams with some as large as seven. The non-utility companies also varied widely but they tend to be somewhat larger and closer to the CEO than their utility corporate social responsibility (CSR) peers typically are.
Few have Chief Sustainability Officers – still a bit of a rarity – and everyone relies on people across their organizations to make it happen. I thought my informal poll would provide clarity, but the moral of this story is that it’s a numbers game that relies heavily on management’s commitment to sustainability. The higher the commitment, the closer you tend to be to the CEO but that doesn’t always mean you have the big teams. I don’t necessarily think I need a bigger team but at least my suspicion that we are doing quite a lot with fewer resources than some of our peers is an accurate assessment. I’m happy being in the middle of the average in our sector with my three-person team, thank you very much.
How is sustainability managed in your company and do you think there are sufficient resources to support it?
Sandy Nessing is the Director of Sustainability & ESH Strategy & Design for American Electric Power Co. Inc.. She wrote and published AEP’s first Corporate Sustainability Report in 2007 and in 2010 published AEP’s first integrated Corporate Accountability Report, a combination of the annual sustainability report and Annual Report to Shareholders. Follow her on Twitter at @Watts4U.
*This poll was not scientific in nature and asked five simple questions:
1. How many people are dedicated to sustainability?
2. How far removed are you from the CEO?
3. Do you publish a corporate sustainability report annually?
4. Do you have a dedicated sustainability web site?
5. In which part of the company is sustainability located?
Is it time for a quadruple bottom line?
Joanne Jones
Whether you use the words triple bottom line, or people, planet and profit, I really think there is something missing from how we evaluate our sustainability impacts. What about our impact on our customers? It is my opinion that the customer or “patrons” is missing from the triple bottom line.
When the internal sustainability team at Heritage Environmental Services started defining our sustainability reporting boundaries and assuring materiality and inclusiveness for our business, we were certain that a major pillar of the program was missing. Sure, the programs through the International Organization for Standardization (ISO) take a more in-depth look into providing a quality product or service, but the Global Reporting Initiative’s (GRI) product responsibility section just doesn’t cover developing sustainable long-term relationships with the customer base.
In defining our sustainability goals, we determined that highly strategic endeavors such as transparency through sustainability reporting and ethical business practices fall into the “patron” line (along with development of new waste reuse and recycling options for our customers). Our profit line is more focused on our goals of increasing return on assets and decreasing internal consumption of significant resources (including energy).
As more and more companies move toward completing Scope 3 of their carbon footprint analysis, work is underway to get involved with your supply chain’s sustainability efforts (e.g. Carbon Disclosure Project’s Supply Chain Program). Aren’t we the supply chain for our patrons? Don’t we need to be cognizant of meeting their sustainability needs? How can we sustain our business if we don’t sustain our customer interactions and relationships? What do you think?
Should we add a fourth P?
Joanne Jones is the Director of Sustainability for Heritage Environmental Services where she is responsible for development and growth of internal company sustainability programs. Since taking this new role at Heritage, she managed the creation and publishing of an Interim Sustainability Report and is working on the company’s first Global Reporting Initiative (GRI) report.
Employee Engagement Advice from ThyssenKrupp’s “Green Girl”
Sasha Bailey
Over the course of the last few years, I have acquired quite a few pseudonyms: the Green Girl, the Recycling Lady, Green Team Leader, Head of the Glee Club, the-hateful-woman-who-took-my-desktop-printer …you get the point. (By far my favorite is ‘head of the Glee Club’) But at the end of the day, when all the number crunching and reporting and return on investment talk is over, if your employees do not get on the bandwagon, all the corporate mandates in the world will not help you meet your sustainability targets.
As the official head of the Glee Club, I have come to recognize several truths regarding employee engagement:
- One: You have to meet people where they are. Basically it does no good to talk to an office manager like an engineer and an engineer like an office manager. Their priorities are different; thus, they hear messages differently.
- Two: Everyone likes contests. Everyone. No matter how much you are may think, “People at my company would never get involved”, I’m here to tell you they would. Amazingly, people (and by people, I mean full-grown adults) love pizza parties. (You – shaking your head – trust me. They do.)
- Three: People want to hear positive things and think happy thoughts. Skip the polar bears and water shortages. I don’t mean to sound callous, but you are going to help the bears much more by getting people involved in up-cycling candy wrappers as part of their office sustainability initiatives than not doing anything at all.
- Four: Lip service looks exactly like lip service. It is amazing how keen people are on detecting nonsense. If your managers and executives are not committed to employee engagement, why would the employees commit to it? A CEO in a T-shirt and jeans planting trees will take you further than 1,000 witty emails or polar bear pictures.
- Five: Put the “glee” in glee club. Don’t put someone in charge of your employee engagement initiatives unless they have personality! Information has to be engaging enough for someone to click the link or open the email.
To some, the above may sound like I am advocating silly contests with butterflies and wood nymphs, while ignoring the real issues. The fact is, I am capable of talking life cycle analysis and carbon footprints with the best of them. But in the last five years, I have learned that to get people to participate, you first have to get them interested. And to get their interest, you have to be someone they want to hear. You have to have a voice that does not judge or preach or tell them what to do, but rather a voice they start to trust* and actually enjoy hearing from.
*Little disclaimer: On average, I receive 7-10 emails a month from random employees tattling on coworkers for wasting paper, making green suggestions or just asking me advice on which brand of laundry detergent to use or where to take used batteries. The upside is that I also get dried mushrooms from an employee in Maine, photos of people’s gardens and every chain email out there about grandmothers remembering ‘before it was green’. I LIKE being trusted!
Sasha Bailey is the Strategic Communications Manager for ThyssenKrupp Elevator-Americans Operating Unit, where she is responsible for creating and implementing high level communications strategies for all business units within the Americas as well as acting as the press and media liaison.
The Most Important Weapon in the Sustainability Toolbox
Bruce Klafter
Pop Quiz: What is the most important skill sustainability professionals need to do their job?
An understanding of lifecycle analysis? The ability to calculate a greenhouse gas inventory? A command of climate science? Experience with kaizen, poke yoke and genchi genbetsu (all Japanese supply chain management concepts)?
In my humble opinion, the most important and oft-used tool is an optimistic outlook. The reason for this somewhat surprising conclusion is that sustainability managers are typically working to exert influence across an organization, which may mean working without authority or as I like to say “working without a net”.
In the job descriptions I’ve written for the sustainability family at my company, this trait is referred as “a positive attitude and passion for sustainability.” A number of organizations that have taken a more exhaustive and scholarly approach to identifying job skills have also singled out “passion”, “enthusiasm” and a “positive attitude” as a key skills or attributes for people working in this emerging field. For more information, you may refer to studies from the International Society of Sustainability Professionals, the Boston College Center for Corporate Citizenship and the Corporate Responsibility Officers Association.
When confronted with our colleagues’ protests that they lack the time, the resources, the bandwidth, or simply the interest to support a sustainability initiative, what is the best response?
My thesis is that a negative response (e.g. expressing disappointment, anger, exasperation) is never the right response. After all, if the sustainability team cannot maintain a belief that the initiative will happen eventually, then it is hard to expect your colleagues to form that belief. My experience has been that persistence and patience usually pay dividends at some point. Some of the projects I am currently working on took nearly three years to take hold, with a change in management and current events helping drive a greater sense of urgency. To my counterparts in NAEM and elsewhere – keep a smile and keep on plugging away!
Bruce Klafter is head of Corporate Responsibility and Sustainability at Applied Materials, Inc. and leads the effort to fulfill the Company’s commitment to sustainability in the design and implementation of business strategies and worldwide operations. He serves as the champion for Applied Materials’ green programs and manages a variety of reporting, employee engagement and other strategic projects aimed at enhancing the company’s global citizenship programs. Mr. Klafter additionally directed the Company’s Environmental, Health and Safety (EHS) programs for several years and began his career at Applied Materials as its first EHS legal counsel.
Aligning Sustainability Goals, Vocabulary
Sandy Nessing
When it comes to sustainability, defining it depends on who you talk to. That was eminently clear recently when the Electric Utility Industry Sustainable Supply Chain Alliance (“Alliance”) held a stakeholder roundtable with about 30 suppliers to the industry. The objectives were to identify and share best practices, hear about challenges and to network.
Not surprising, there were two familiar themes that came from the discussions. The first was that suppliers and utilities are in agreement that sustainability is a bottom line business issue. Suppliers and utilities said that if making changes to business practices improves their return on investment, they wouldn’t hesitate to do it. The second theme was the need for more consistency around the definition of sustainability. There was unanimous agreement that the overall inconsistency in defining sustainability within a company or an industry makes it challenging to understand the vision or to justify investments without certain payback. (On the flip side, some suppliers said they never would have undertaken changes to reduce water use or improve energy efficiency, for example, if the Alliance hadn’t asked about it.)
The suppliers have a good point about the need for clarity. I’ve heard these same types of complaints with regard to safety performance expectations for contractors. Every utility has different safety standards and requirements for contractors and the lack of a single set of industry expectations is confusing, putting contractors and company employees at risk of harm.
Without clear direction and a business case, how can we set expectations? I believe the Alliance is on the right track with its vision for a sustainable supply chain and much progress has already been made. But based on the feedback from suppliers, there’s still a lot of work yet to be done. Not the least of which is to more clearly define what a sustainable supply chain looks like for the electric utility industry.
What are you doing to offer clarity around ‘sustainability’ for your customers and suppliers? What definition of sustainability do you use?
Sandy Nessing is the Director of Sustainability & ESH Strategy & Design for American Electric Power Co. Inc.. She wrote and published AEP’s first Corporate Sustainability Report in 2007 and in 2010 published AEP’s first integrated Corporate Accountability Report, a combination of the annual sustainability report and Annual Report to Shareholders. Follow her on Twitter at @Watts4U.
Product Stewardship: It’s Not a One-Size-Fits-All Challenge
Chris Nelson
With product sustainability and stewardship issues becoming more important and complex in the marketplace it’s still unclear to many organizations what is the best approach in finding ways to create business value and manage risk associated with product sustainability and stewardship.
More than 100 EHS and sustainability leaders attended NAEM’s Product Stewardship Conference last week in Framingham,Mass. to discuss product sustainability and stewardship issues. It’s rare when you get that many people together to discuss these topics so there was a lot of great information and insights shared between the attendees.
The topics varied and included the challenging global product regulatory landscape, leveraging life cycle management to create business value within an organization, managing supply chain transparency and reporting issues, and the different ways to design and implement product sustainability programs.
The thing that really caught my attention was how greatly companies differ in their approaches to creating value and managing risk from a transparency and performance improvement perspective, both key pillars to any product sustainability and stewardship program. The following are a few examples of the strategies companies are taking.
Intel shared the approach they were taking to address the pending conflict minerals reporting requirements in section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Conflict minerals such as tantalum, tungsten, tin and gold are an increasingly challenging issue within the supply chain, from the mining and extractive industry to downstream manufacturing companies in the electronics industry. Intel’s serious approach to providing transparency about the sourcing of conflict minerals, was quite admirable and isn’t something you see every day. The company believes transparency is “foundational to fostering understanding and acceptance in order to move suppliers along the sustainability maturity curve.” Since transparency is a critical part to any sustainability program so I’d suggest taking a look at a video Intel has created which explains how they are establishing a conflict free supply chain.
It was also very interesting to hear how APC Schneider Electric and WESCO International Inc. are using product sustainability programs to address customer requirements and create differentiation in the marketplace. These represent very good examples of the challenges of balancing transparency and environmental performance as part of a product sustainability program.
APC Schneider Electric has developed a ‘green premium’ program that focuses on the transparency and reporting of the environmental performance on a selected group of its products. These products must meet international standards and regulations such as RoHS, REACH and End of Life in addition to having a published and third-party-verified life cycle assessment. Because there isn’t an environmental performance threshold to the program per se (other than meeting international standards and regulations) their definition of ‘green premium’ revolves around transparency and less on improved environmental performance of the product. It will be interesting to see how their program evolves over time as they’ll likely need to answer more questions about the environmental performance of their products as this information is made available to customers and stakeholders.
Wesco has a fabric-based solution for laying cable in duct work called MaxCell. Across its life cycle, this product has superior performance related to carbon emissions, but the company struggled to communicate an effective ‘sustainability story’ to their customers. Ultimately Wesco chose to work with Carbon Trust, a third-party certification body, to verify their product carbon footprint. Although the company chose not to use the Carbon Trust certification logo, it still went through the verification process to confirm its environmental performance claims and as a demonstration to customers that the product would continue to reduce carbon emissions over time.
It’s clear that companies are challenged in finding ways to create business value and manage risk with product sustainability and stewardship. The level of transparency a company chooses to provide depends on the overall strategy, and each decision brings its own benefits and risks.
What are the elements that shape your product stewardship strategy? How is your company adapting to the demands of product stewardship?
Chris Nelson is a Partner with ERM, a leading global provider of environmental, health, safety, risk, and sustainability consulting services. He leads ERM’s Global Product Sustainability Services Practice which is focused on helping ERM’s clients design and implement product sustainability and stewardship programs that create business value from preferential environmental and social outcomes.
