Posts tagged ‘Carbon Footprint’

Turning environmental metrics inside out

Howard Brown

Since attending NAEM’s “Measuring Corporate Sustainability” conference last month, I’ve been thinking about the enormous quantity of data that environmental, health and safety (EHS) managers have to collect in order to respond to environmental, social and governance (ESG) research surveys.  I am convinced we are measuring the wrong things.

ESG issues are extremely important; the amount of time and money spent on surveys is itself an indicator of corporate recognition of its importance.  But as Bob Kidder, CEO of Chrysler, once told me, “You get what you measure.”  The reason we measure is to learn so we can modify our behavior and improve.

Managers are now spending so much time assembling data and responding to rating surveys, they often find they don’t have enough time to work on making things better, even when the data makes clear which actions would be most effective.  The present cacophony of indicators, measurement systems, and analytical models is scarcely effective for guiding improvements.  A company can do extremely well in one system and be at the bottom of the pack in another.  And it’s hard to know why.  Something is broken – or to put more positively – the system of reporting hasn’t matured enough yet to be really useful.

With more than 100 rating firms, plus dozens of academic, government, and NGO surveys, managers have to do triage to determine which surveys to participate in.  Pick the wrong survey and end up with your CEO asking why the company got a poor rating.  To make things worse, the transparency expected of participating companies doesn’t apply to the rating firms themselves.  EHS managers don’t know how the data will be used, weighted, combined, or analyzed in the process, nor do they know if a particular model is appropriate for evaluating their company.  More importantly, the rating systems are designed for external stakeholders and are rarely designed to be useful to companies themselves for strategic planning.

Perhaps the single most frustrating thing about the status quo is that almost all of the ratings systems rely on negative motivation.  It’s about avoiding negative consequences – risks to brand value, stock price, and legal liabilities – rather than encouraging positive ones.  This leads companies to continue treating environment as a necessary cost of doing business rather than as a tool for improving business performance.

When I spoke with environmental managers at the conference, I heard Bob Kidder’s words ringing in my ears.  The measurement chaos is causing companies to focus more on improving their scores than on improving business performance.  We need to turn our thinking inside out.  Our primary goal has to be performance, not the score.

I’m convinced that solving our environmental challenges calls for an approach that isn’t dependent on coming up with ever more sophisticated models and statistical averaging and indexing techniques for rating the negative impacts of entire corporations.   The world is too complicated to objectively measure those impacts in a consistent and standardized way.   And companies are too different to be compared in this way.  We need an environmental performance measurement approach that is simple and conceptual.

The answer is to focus on managing resource use, rather than on managing the consequences of using the resources. Or in other words, focus more on reducing the inputs than on reducing the unintended outputs.

We also need to focus performance measurement on products rather than whole companies. This can be done if companies identify the real value each of their products delivers to customers. The critical issue is ultimately how much resource mass does it take, and should it take, to deliver a given amount of value to customers.

Think of it this way.  Everything that comes out of a company and causes environmental problems was once a resource and was then lost due to inefficiency or lack of knowledge.  Pollution is nothing more than valuable resources lost in process and released where they don’t belong.  If you don’t use the resource in the first place, you can’t spill it, lose it, or waste it.  You also don’t have to pay for extracting it, refining it, transporting it, making it into useful components, etc.  And you don’t have to worry about the environmental impacts of doing all that.

We need to measure the value we’re delivering to customers in relation to the resource mass required to deliver that value.  Every time that you reduce product mass without reducing the value delivered, the savings are multiplied all the way back through the supply chain.

Companies must learn how to look at their goals in terms of the functions their products serve.  From this perspective, a battery company should not think of itself as a battery company but as a portable energy company, while a washing machine company should think of itself as a clean clothes company.

This is the only way to truly align environmental metrics with business metrics.  When you’re reducing resource inputs, you’re reducing costs, you’re reducing environmental risks, and you’re reducing fines.  But most importantly, you’re gaining competitive advantage.  The more companies think about delivering the most performance for the least mass, the greater advantage they’ll have in the marketplace.

Howard Brown is founder of dMASS and chairman of o.s.Earth. For more than 20 years as CEO of Resource Planning & Management Systems (RPM), Inc., in New Haven, Conn., he worked with companies such as Duracell, Avery Dennison Corp., Exxon Mobil Corp., General Electric Co., Deere & Co., Whirlpool Corp., Warner- Lambert Co. and Pfizer Inc. to establish or enhance their environmental practices and performance.

June 13, 2011 at 9:00 am 5 comments

How to green your ride…safely

Cut your carbon footprint with today’s transportation tip from NAEM’s Green Tips Guide, an employee engagement handbook:

http://www.youtube.com/NAEMorgTV#p/u/29/kYmh1hNnf0A

April 20, 2011 at 11:45 am Leave a comment

The Carbon Gold Rush

Carol Singer Neuvelt

If you type “carbon footprint” into Google, you are likely to get upwards of 5 million hits, a sign of the recent gold rush-like interest in measuring the amount of carbon dioxide (CO2) consumed by a person, a building, or a company.  For most businesses, this interest has prompted initiatives to measure and reduce greenhouse gas (GHG) emissions.  According to a recent NAEM poll, 75 percent of companies surveyed identified energy management and reduction as one of their top three sustainability priorities.

But there are many ways to reduce a company’s impact ranging from altering an existing manufacturing process to switching suppliers, or even changing the personal behaviors of a company’s employees.  So, how do companies really compare?

Like many environmental and sustainability metrics, there is a lot of variation in how companies set goals and report GHG emissions.  Because greenhouse gas reduction goals and programs are not being consistently developed, even the participants in the EPA Climate Leaders program use drastically different language.

Some have set goals specific to their category and segment.  Best Buy Co., Inc., for example, has pledged to reduce its emissions by 8 percent per square foot (from 2005 to 2012), while Burt’s Bees, Inc. plans to reduce its GHG’s by 35 percent per dollar sales (from 2006 to 2011). Still others, like Sprint Nextel Corp., have committed to absolute reductions of 15 percent by 2017, or pledged to become carbon neutral, as Dell, Inc. has, by 2012.

So with all the inconsistencies, how do we know which companies are finding “pay dirt” by making genuine strides, and who are just shuffling the pan?

When we did our first NAEM climate change event in New York in 2006, most companies were just trying to get a baseline measurement of their emissions. As we prepare for our upcoming Corporate GHG Strategies conference in Chicago in August, we’ve seen a huge jump in the number of companies who have met their initial goals and now are making progress toward more ambitious GHG reductions.   Across the board, however, companies continue to face common challenges such as developing clear boundaries, instituting long-term management processes and achieving authentic results.

While I strongly encourage transparency, I believe that many of the rankings out there are ultimately less important than the existence of actual programs and decision-making processes that help bring about real reductions over time.

Because as far as Mother Nature is concerned, relative success is just not good enough.

Understanding that one size will never fit all, I’m curious to know what metrics you think are most useful to understanding actual GHG reductions? What do you think is the best way to compare companies regardless of industry sector?

June 3, 2010 at 4:36 pm 4 comments

Wrapping It Up For the Holidays

Singer

Carol Singer Neuvelt

From Black Friday to today’s Cyber Monday, our consumption and spending greatly increase this time of year. This post-Thanksgiving focus on purchasing, spending and “doing” has highlighted the fact that our personal choices DO make a difference.

Professionally, we focus on processes & creating systems that allow us to measure our progress. As the saying goes, “What gets measured; gets managed.”  So on a personal front, I ask “how do I measure the impacts of my decisions?”

Looking to have a bit of fun with this, the staff at NAEM researched a number of the carbon footprint calculator sites to measure impact. We had mixed results and were surprised to see that very few of the calculators took into account anything beyond utilities and transportation.

Here’s a selection of sites with different methodologies.  I’d like your opinion from the perspective of EHS & Sustainability managers who measure and manage every day.  Take a look at these sites and share what you found most surprising. Did ordering take-out three nights a week greatly increase your footprint – just like it did to mine? Did your utility usage count for almost nothing compared to the impact of your daily commute? Which sites are your favorites (NAEM definitely has a few!) and which ones will you share with your peers & family?

Finally, how do these calculators influence you as you’re revving up to buy & wrap your holiday gifts?

 

December 1, 2008 at 4:32 pm 3 comments


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