Many tools have been developed to assist businesses, both big and small, in managing, monitoring, and improving their sustainability performance at all stages of the decision-making process.
An environmental or social assessment is a means of gathering information to ensure that the environmental and social implications of decisions are taken into account before those decisions are made. Assessments are usually taken before moving forward with a proposal or an individual project. An assessment is an important tool to:
Identify the significant social and environmental impacts of a project.
Incorporate environmental factors into decision-making.
Identify the potential benefits and disadvantages of the project.
Identify critical problems which require further studies and/or monitoring.
Minimize or avoid adverse environmental and social effects before they occur.
Examine and select from possible alternatives.
There are many different kinds of assessments, including:
Lifecycle assessment, which looks at understanding the full lifecycle of a product. ISO 14040 describes the principles and framework for lifecycle assessment and ISO 14044 sets out the requirements and guidelines (www.iso.org).
Technology assessment, which is carried out in order to determine which technology to use. It looks at the proposed technology, any alternatives, the requirements of the technology, and the pressures the technology places on the environment.
Opportunity assessment, which looks at recognizing potential opportunities that could lead to gain (e.g., reduction of energy and resource consumption and therefore cost of production).
Risk assessments, which explore the likelihood of an event occurring and the resulting severity of loss if that event occurred. Where there is a high risk involved in a project, the risk assessment will define how to mitigate or prevent it through proper controls to make the risk acceptable.
Environmental and social impact assessments (EIA, SIA), were introduced because of concerns regarding the effects that major development projects were having on society and the environment. The benefits were quickly recognized and it has now become established as an internationally recognized decision-making tool.
Assessments should be conducted as early as possible in the planning and proposal stages. Many of the major decisions about the location of a project, the scale, layout, or design, for example, are made at the very beginning and many of these can have a significant impact on the environment and society. Identifying these issues right from the start can allow an organization to prevent many problems before they occur. The commonly accepted steps include:
1. Screening. To decide whether or not a proposal needs an EIA and if it does at what level of detail.
2. Scoping. To identify the key issues and impacts that are likely to require further investigation.
3. Impact analysis. To identify and predict the likely environmental and social effects of the proposal and evaluate their significance.
4. Mitigation and impact management. To develop measures to avoid, reduce, or compensate for impacts, making good any environmental damage.
5. Reporting. To describe the results to decision-makers and other interested parties.
6. Implementation and monitoring. To put in place the plans agreed upon and continue to monitor them through audits.
When doing assessments keep in mind:
Many assessments fail because inadequate attention is given to identifying the effects that are most likely to be significant.
Stakeholder involvement in the early stages will not only help throughout the assessment process but also in gaining acceptance during the implementation phase after the assessment is completed.
Example: Conducting an environmental or social risk assessment
Identifying risks. Identify which risks a company is facing and where they are coming from. Risk can be explored from the following angles:
Sector- and company-specific risks. Start by considering the most obvious risks that are relevant to the organization. Look at the issues that organizations more advanced in sustainability are exploring.
Operational opportunities and risks. Look at how the organization impacts on stakeholder groups and broader society through its operations. Look at risks and opportunities throughout the full lifecycle of the product.
Stakeholder-related opportunities and risks. Consider who your stakeholders are, and what their risks are; look at the boundaries of responsibility the organization has for products and services.
Assessing and prioritizing risks. For each risk identified, consider what might happen, how it might happen, and how large the consequences will be. When an organization is faced with a number of potential sustainability-related risks, a matrix can be created to help prioritize the risks and establish their relative importance; the potential impact of the risks (high or low) and the likelihood of that impact (high or low).
Managing risks. Once identified and prioritized, companies need to proactively seek to reduce and manage these risks. Many risks cannot be eliminated but they can be minimized. Managing risks involves asking what can be done to manage any significant adverse occurrence, and who should be involved.
See if you can tolerate the risk and work with it, through improved environmental management techniques.
Work to reduce the risk through new technology, procedures, investments, and stakeholder engagement.
Eliminate the risk, for example, banning a particular chemical.
Transfer the risk when it is felt that the business has no control over it (i.e., through insurance companies).
Risk analysis should not be overly complex, so don’t ignore it because of inadequate understanding. Remember that many risks and opportunities are inter-related. Recognize the need to engage with stakeholders, and to share information and responsibility for any risk. Your performance and the performance of your customers and suppliers are intrinsically linked and sharing risks is therefore beneficial.
A business may have internal requirements, policies, standards, procedures or even external rules, regulations, or third-party requirements that they are required to follow. An audit is a check of how well they are doing at meeting these internal or external requirements. Audits are used as a tool to help a business measure and improve the performance of a project, a site, a particular product, or service. An audit can be a useful tool to:
Monitor the sustainability practices of suppliers and contractors.
Monitor the level of compliance with relevant regulatory and internal or group/corporate policy requirements.
Monitor the number of resources used or generated, such as water, energy, waste, and pollutants.
Identify improvement opportunities.
Establish a performance baseline.
The following steps show one approach to setting up an audit:
1. Determine who will conduct the audit. Will it be performed internally, or by a third-party auditor, for example, one that belongs to a commercial auditing firm?
2. Determine the scope. Will it be at a small level, such as an audit of recycling practices or waste at one location? Will it be of a particular product or service (design, performance, disposal), or of a process (manufacturing, management, design, procurement)? Will it be done by geographic location or organizational unit (company, division)?
3. Determine what you are auditing. An organization can audit just about anything. It might sound obvious, but make sure it is clear what is being audited.
4. Select objectives. Whether the audit is to check for compliance, management assurance, stakeholder assurance, or to provide information for decision-making, make sure the objectives are set and clear to all involved.
5. Choose indicators. Put in place indicators against which performance will be measured. This often includes legislative or regulatory and compliance requirements.
6. Conduct the audit. Conduct a quick self-audit in order to understand where you stand, in particular, if a third party is conducting the audit; this typically involves interviews with managers and personnel, detailed site inspections, etc.
7. Develop and implement an Action Plan. This should address shortcomings identified by the audit, by outlining specific actions required to meet the audit objectives, with appropriate budget allocation, program implementation, and monitoring.
8. Report. Write in non-technical language so that the information and questions are accessible to all, and the messages are clear and useful for those who need to use the information.
9. Focus on continuous improvement. Conduct the audits on a regular basis, and review and update the audit questions as progress is made in order to keep them focused and relevant.
Audits usually focus on compliance; however, compliance does not necessarily indicate operational effectiveness. Audits should go beyond reporting on compliance to covering effectiveness and providing managers with strategic information about how they compare to current best practice. They also need to look at behavior and so-called ‘soft’ issues, such as motivation, culture, and teamwork in order to assess behaviors that provide evidence of how such factors affect the performance of a product.
Example: Waste audit
Audits can also be used to identify, for example, how much waste is being generated and how to manage it.
Identify all points at which waste is generated.
Identify the origin of each type of waste.
Measure the quantity of each type of waste and its environmental impact.
Establish a method for the continued monitoring of waste levels.
Identify the current costs of dealing with waste.
Look at opportunities to reduce, recycle, or reuse the waste.
Set waste minimization targets.
Communicate the results to the company and get people involved in achieving the targets.
Environmental and social management systems
Organizations are adopting programs to help manage their environmental impacts on a day-to-day basis. An environmental management system (EMS) is a set of policies and procedures that define how a company evaluates, manages, and tracks its overall environmental impacts. It is a voluntary management standard that helps managers to identify and prioritize their key environmental impacts. It also provides a framework for setting clear objectives and targets for managing those impacts.
An EMS is important as a tool to ensure a company is compliant with regulatory and company requirements and knows the impacts it has on society. It helps focus an organization on priorities for actions and serves as a framework for putting ideas into practice. All EMS standards follow the same cycle:
Plan. Understand where the company currently stands (typically through an audit or assessment) in terms of legislative and regulatory requirements, existing environmental management practices, etc. This involves getting top management and employee support, setting objectives and targets, prioritizing actions, and creating an action plan.
Do. Ensure that there are established roles and responsibilities that are clearly communicated; and that members of staff are aware and trained to carry our responsibilities. Make sure they have the support they need to carry out their roles.
Check. Formulate a measurement system, establish and define benchmarks, perform regular audits. Check to ensure that what you planned to do actually happened.
Act. An EMS is most effective when used to review progress toward the targets and objectives set by a company to protect the environment. The procedures set in place to meet these objectives should be constantly examined to see if they can be improved or if more effective systems can be introduced.
The key elements of an EMS include:
Creating a policy. An environmental policy is a declaration of the organization’s overall aims and principles. It includes compliance with environmental, legal, and other requirements. The policy should recognize the impacts the organization has on the environment. It should be supported by senior management and the CEO. Such a policy should be reviewed regularly (for many this is annual).
Identifying and evaluating your environmental impacts.
Evaluate the impacts of your activities, products, and services. This allows the EMS to be focused on those environmental issues that are most significant so that resources and time are concentrated on these. The significance is often determined by considering the size, nature, frequency, likelihood, and duration of the environmental impact, the importance to stakeholders, and the sensitivity of the receiving environment.
Operational control, targets, and objectives. This information can then be used to identify control measures and to set objectives and targets for environmental improvements. An environmental program is put in place to turn objectives and targets into practical actions. People are assigned the responsibility for completing the tasks.
Monitoring, evaluation, and review. The EMS process is documented and procedures are established to ensure that everyone knows how the system operates and what is required. Progress is tracked through regular monitoring and audits. Effective communication internally is vital to keep people up to date. An EMS is a cyclical process of identifying, improving, and checking. Reviews are done periodically by management to ensure that the EMS is achieving the desired outcomes and that policies are being implemented.
This is a voluntary activity; however, increasingly companies are choosing to get certification for their EMS systems. These types of standards are becoming increasingly important, as many multinationals are requiring suppliers to have the standard.
A company can seek official accreditation for its EMS under one of several schemes at the national level (i.e., BSI in the UK), regional level (EMAS in Europe), or international level (ISO 14001). Others have developed their own specific national or international standards. Currently, China leads the world in the number of ISO 14001 certified companies; followed by Japan, Spain, and Italy.
Many international standards and networks started as attempts to help guide organizations on how to improve the consistency of their products (such as ISO 9001), reduce their impact on the environment (ISO 14001), or generally improve their environmental and social management. These programs are voluntary and involve a range of activities, from a simple commitment to investigate sustainability issues to the adherence to strict protocols for environmental and social standards.
‘Corporate responsibility standards, norms, principles, and guidelines aim to provide generally accepted reference points for improving aspects of social and environmental performance. Although mostly voluntary, some are emerging as de facto industry standards that provide the desired legitimacy, consistency and comparability required by business and its stakeholders.’
ISO 14001 is a series of voluntary, auditable standards designed to provide customers with a reasonable assurance that the performance claims of a company are accurate. ISO reviews all of its standards at least every 5 years in order to decide whether the standard should be confirmed, revised, or withdrawn (www.iso.org). Individual standards include:
Environmental management systems: 14001, 14002, 14004.
Environmental auditing: 14010, 14011, 14012.
Evaluation of environmental performance: 14031.
Environmental labeling: 14020, 14021, 14022, 14023, 14024, 14025.
Lifecycle assessment: 14040, 14041, 14042, 14043.
Greenhouse gas accounting and verification: 14064.
Social responsibility: 26000.
Event sustainability management systems 20121:2012.
The ISO 19011:2002 standard was introduced with the aim of applying a common and consistent approach to the auditing of both the ISO 9001 quality and ISO 14001 environmental management systems standards. The benefits of integrated management systems are now widely recognized, where a combined approach is helpful in minimizing the resource demands of operating a certificated management system.
Standards are also being developed by NGOs at an international level. Two examples include:
AA1000. Developed by AccountAbility, AA1000 is a set of standards based on principles for social and ethical accounting, auditing, and reporting.
AA1000 Purpose and Principles AA1000 Framework for Integration AA1000 Assurance Standard
AA1000 Stakeholder Engagement Standard
SA8000. Social Accountability International is a non-profit human rights organization dedicated to the ethical treatment of workers around the world. SAI’s social standard, called SA8000, is an auditable certification standard based on international workplace norms of International Labour Organization conventions, the Universal Declaration of Human Rights, and the UN Convention on the Rights of the Child.
In order to qualify, a company must follow standards relating to child labor, forced labor, health and safety, freedom of association and right to collective bargaining, discrimination, discipline, working hours, compensation, and management systems.
Tools for Greening Offices and Buildings
One of the most important ways to introduce sustainable practices into a company, and where most organizations start, is by ‘greening’ the office, whether that be a small room or a whole building. This can include changing the way that you buy products and services (procurement), the way that you build your operational headquarters, or simply the way that you use and operate the office space on a daily basis.
Several offices, proud of their efforts in this area, offer tours of their facilities to educate employees, business partners, and customers about their initiatives. There are many benefits to office greening programs:
Engaging employees. Many initiatives to green the office show results fast, giving employees successes to build on and motivation for their work.
Raising awareness. Putting in place office greening programs is an opportunity to educate employees about the impact sustainability can have on an operation and to show them how effortless sustainability actions can be.
Reduced costs. By increasing efficiency and minimizing waste, organizations are finding many opportunities to reduce costs in energy, water, maintenance, and materials.
Increased employee retention and productivity. Studies have shown that green building features can increase worker productivity and overall health and reduce absenteeism. Research has found it increased productivity by 3% to 16%.
Enhanced corporate reputation. Sustainability building and procurement show a commitment by a company to the environment, society, and its workers. Tax and regulatory incentives. There are an increasing number of incentives for building green or for redeveloping brown-field properties, for example.
Steps for setting up office greening programs
The following steps can be used when designing and implementing any office greening program:
1. Find out where you stand now. Audit your organization to see what you are currently using, where you are getting it from, and how much you are paying for it. This is useful in gathering information and establishing a baseline. Then, monitor how much energy, waste, recycling, and water you use and how much it is costing you so you can keep track of improvements.
2. Think about the business case. Understand the different direct and indirect benefits that can occur through office greening projects within your company.
3. Get everyone involved. No office greening program can be a success without employees getting involved. Office greening is all about employees changing the way they work in the office. Seek employee suggestions on where more could be done and tell people what you are doing or want to do.
4. Set goals and targets and develop a plan to achieve these and publish or share them with your team. Set goals and targets of what you would like to achieve. If in doubt, run a pilot project to see how it works.
5. Monitor and review your plan. Regularly look at your plan to take into account new products, technologies, or opportunities that may arise. Quantifying savings and benefits will also come in handy when looking at expanding office greening programs.
6. Communicate your successes and progress. Keep the whole organization informed and continue to renew their enthusiasm and involvement in the program. Let your employees know what is changing and how they can get involved.
Whether your company is building a whole new building, doing major renovations, or even minor changes, green buildings have moved from being the exception to becoming the norm. An extra incentive is that the price premium for green buildings is shrinking. Furthermore, even if there is an additional upfront cost, green buildings are typically less expensive to operate and maintain, provide work environments that boost productivity, decrease the environmental impacts of construction and operations, reduce worker health and safety liabilities, and improve corporate image.
All of these have potentially high financial and reputational benefits associated with them, especially if you consider that a 1% increase in productivity can easily result in savings that exceed the entire energy bill for many companies. For example, the ING Bank headquarters, which uses one-tenth the energy of its predecessor, has also lowered absenteeism by 15%.
❑ Select your site carefully (e.g., avoid contributing to sprawl, focus on redevelopment of sites).
❑ Work with the surrounding environment (e.g., the sun and wind direction).
❑ Incorporate health and safety concerns, including indoor air quality.
❑ Optimize energy and water efficiency.
❑ Redesign the interior workspaces including furniture selection. ❑ Design spaces that use daylight.
❑ Insulate properly.
❑ Integrate solar hot water heating into the design to minimize hot water heating bills.
❑ Think about the building’s end of life.
❑ Minimize the use of materials in the construction of the building.
❑ Where possible, use recycled, certified, and locally produced materials and eliminate waste by reclaiming construction materials.
❑ Choose building products that are sustainable, for example paints, certified wood products, etc.
❑ Landscape using local species that need little maintenance and water.
❑ Use compost and other organic techniques in maintaining gardens.
❑ Put in a green roof, which can significantly reduce indoor temperatures. This can either be by using materials that absorb less heat or by putting plants and grass on the roof.
Energy bills are an easily reduced cost for most businesses, yet many ignore this opportunity for an easy win. An assessment of ‘electric productivity’ in the USA indicated that improvements in energy efficiency could not only cut consumption by 30%, but also eliminate the need for more than 60% of coal-fired generation.
❑ Start by checking that your building performance, operations, and systems are operating optimally.
❑ Install energy-efficient light bulbs, which can use up to 80% less energy than regular incandescent ones.
❑ Use dimmers, automatic timers, and motion detection sensors to ensure optimal lighting throughout the building
❑ Consider retrofitting your office lighting – a well-designed lighting system using more energy-efficient lights can result not only in a reduction in your energy bill, but also in productivity gains.
❑ Regulate heating and air conditioning to be more energy efficient. If the air conditioning has ever left you feeling cold in summer, then it ’s wasting energy. Simply increase its setting by a few degrees to save significant amounts of energy.
❑ Change your electricity supplier to one that sells energy from renewable sources.
❑ Look at generating your own power by installing, for example, solar panels. Increasingly, governments are offering subsidies or other incentives to encourage this.
❑ Buy energy-efficient appliances; look for labels for recognized programs that provide a guarantee about lower energy use, such as the EU Energy Label.
❑ Turn down your heating, don’t heat empty spaces, and look at alternative heating systems such as solar heating. Put in place proper insulation and double-glazed windows.
❑ Turn off appliances rather than putting them on standby. Up to 8% of domestic electricity is consumed by appliances such as TVs, DVDs, stereos, and computers left on standby.
❑ Where available, use smart meters which allow customers to see energy use in real time.
Water is not only vital for society but to business as well. Less than 3% of all water on Earth is fresh water, and many countries are facing shortages of fresh water. All organizations, directly or indirectly, need and use water for their operations. Water has many hidden costs, including treatment, pumping, maintenance of pipework, effluent treatment, and discharge. Using water wisely cannot only save you money, but a strategic approach to water management can also enhance the reputation of your company.
❑ Reduce water consumption to save money and reduce the environmental impact of your operation.
❑ Install water-efficient fixtures, low-flow appliances, and devices to minimize wasting water.
❑ Check your systems for leaks and repair dripping taps.
❑ Collect rainwater from the roof of your building to water the garden instead of using tap water.
❑ Reuse water in manufacturing and rinsing procedures, reuse waste water.
❑ Don’t dump pollutants into the drains – dispose of them appropriately.
❑ Use biodegradable detergents.
❑ Water plants in the evening to avoid wasting water through evaporation.
Waste and recycling
Gone are the days when your responsibility for the waste generated by a business ends when the waste contractor removes it from the site. Today, a business must ensure they are disposing of waste in a responsible and legal manner. Companies are finding that they can save money and reduce liabilities by reducing the amount of waste they generate in the first place. They are finding that they sometimes pay twice for products, for example, paying to buy the product, and then paying to dispose of the product.
Reduce the number of materials bought and used
❑ Buy durable products, rather than disposable ones. Examine in-house repair schedules, maintenance agreements, and extended warranties as ways to extend product life.
❑ Stop multiple subscriptions of magazines, for example, when one copy can be shared.
❑ Coordinate product purchases and plan ahead to buy products in bulk to save time, money, and transportation and packaging costs.
❑ Purchase products with less packaging.
❑ SC Johnson removed wastebaskets from offices and placed them down the hall to reinforce the act of throwing items in the garbage.
❑ Purchase products in reusable, refillable, or returnable containers.
❑ Set up a reuse system, or use an existing system, that makes unwanted items from one department available to other departments, sometimes called Freecycle.
❑ Borrow items needed from friends or at work from other departments, for example through networks such as yerdle (Yerdle).
❑ Donate used materials to schools, NGOs, or other businesses that could use them. Some charities collect used materials and make money from recycling them.
❑ Set up recycling bins next to wastebaskets and inform employees what is recyclable.
❑ Look at options to compost.
Offices use and inevitably waste, a lot of paper in their regular operations. In fact, around 70% of office waste is paper. This ends up costing the company money and puts unnecessary pressure on forests. Consider that the energy used in the manufacture of five sheets of paper is equivalent to the energy needed to run an 80 watt light bulb for one hour. Given that the USA alone uses about 4 million tonnes of copy paper annually, that’s a lot of energy which goes into the manufacturing of paper!
❑ Use both sides of the paper where possible to minimize paper usage. Set photocopiers to print both sides as standard.
❑ Use print preview before you print so that you can see what you are about to print and whether it can be fitted onto fewer pages.
❑ Increase the margins and font size to fit more on fewer pages. ❑ Minimize the amount of ink you use by setting the printer on draft.
❑ Reuse paper printed on one side for drafts, fax cover sheets, or notepads.
❑ Buy paper that is post-consumer recycled content, unbleached and uncolored, and from certified sustainable sources such as FSC.
❑ Post information on bulletin boards or use e-mail rather than distributing paper memos.
❑ Buy erasable boards as an alternative to paper flip charts.
❑ Have reports easily available on a website so they can be viewed on screen.
❑ Don’t send out catalogs and brochures to people who don’t want them.
Modern offices are full of electronic equipment – it would be hard to imagine one without any. However, the electronics we rely on each day waste a lot of energy and generate a lot of waste – both e-waste at the end of their life and waste as a result of using them (e.g., printer cartridges). Many electronic products use between 1 and 20 watts just on standby and are often in this mode for much of the day.
According to the Energy Cost Saving Council, the average building owner can cut energy costs by up to 60% by replacing outdated, inefficient electrical equipment. Greenpeace has estimated that demand for new technology creates 4000 tonnes of e-waste per hour.
❑ Choose electronic equipment which minimizes the use of hazardous substances.
❑ Purchase computers that are easy to upgrade to maximize their usable life.
❑ Recycle computers properly by bringing them back to the manufacturer or retailer (where facilities exist) or donate them. Many manufacturers – such as IBM, Apple, Dell, and HP – have systems in place to recover these.
❑ Turn off computers when not in use, including monitors. Monitors account for around 50% of a computer’s energy use.
❑ Choose green data centers.
❑ Look at refilling inkjet cartridges instead of throwing them away for new ones. Recycle them after use.
❑ Buy solar-powered calculators and other devices to eliminate the need for batteries.
❑ Use rechargeable batteries.
❑ Rent, lease, or contract for services, instead of buying infrequently used the equipment.
All those other little things
Sustainable procurement of supplies and services is the primary way to introduce green concepts in offices and facilities. According to UNEP, the best procurement processes address the following:
The maximum value for money (price, quality, availability, functionality).
Environmental aspects of goods over their entire lifecycle.
Social aspects (issues such as poverty eradication, labor conditions, human rights).
Below are some tips that can help
❑ Use cleaning products that are biodegradable and environmentally friendly. Hire cleaning service companies that use environmentally friendly products.
❑ Buy recycled, reusable, recyclable, biodegradable, energy-efficient, water-conserving, non-toxic, locally available products (paper, glass, etc.).
❑ Buy reusable cafeteria dishware. Reusable dishes are often cost-effective over the long term compared with disposables.
❑ Buy organic, fair trade, free-range, local products for the kitchen such as coffee, tea, sugar, etc.
❑ Don’t use bottled water; where possible drink tap water instead.
Commuting to work
As cities around the world grow larger and traffic congestion gets worse, the daily commute can take hours out of each day for many employees. Have you ever noticed how many cars during the morning rush hour have just one person in them? Promote the use of carpooling, public transportation, or other more sustainable forms of travel as much as possible.
Consider commuting by motorbike or scooter – they cost less to purchase and run, take up less space, and are easier to park. GlaxoSmithKline in the UK has a bike scheme where employees who bike to work get a voucher which can be used at bike stores.
A bike mechanic paid by the company comes in every two weeks to repair bikes. There are facilities for cyclists to change, shower, and iron their clothes. Each cyclist costs the company approximately £400 per year, while a car space costs over £2000. Registered cyclists now make up more than 10% of the site’s employees. The company has also hosted a one-day conference designed to illustrate how cycling can fit into various types of travel planning.
By public transport
❑ Prepare a public transport information pack with prices and times of routes to work.
❑ Make a policy to use public transport for business purposes where practical.
❑ Arrange a taxi for staff using the bus for times when they may work late.
❑ Provide salary advances to pay for season tickets or provide them for free.
❑ Where possible, explore alternatives to traveling by plane – such as trains and buses – especially for flights of less than 2 hours.
❑ Explore telecommuting options for employees to work from home.
❑ Give a freecycle helmet . . . or bike to your employees.
❑ Put up a cycling notice board for routes, bike repairers, and organizations.
❑ Provide incentive schemes such as salary advances to buy bikes on installment.
❑ Buy an office bike and link up with a local bike store for regular maintenance.
❑ Install shower and changing facilities for employees who choose to walk, run, or bike to work.
❑ Provide a secure place at work to store bikes.
❑ Use cycle couriers for delivering small items within the town or city.
❑ Provide a roadside assistance program for bikes that have a mechanical failure (e.g., see the Royal Automobile Club of Tasmania’s Bike Assist program).
❑ Promote the health benefits of cycling to work.
❑ Provide bicycle commuter benefits including, in some countries, taking advantage of tax-free reimbursements for bicycle expenses.
❑ Promote the benefits of walking to work for those who travel short distances by car.
❑ Organize a walking club at work as well as activities to keep employees active during the lunch hour.
❑ Promote good driving techniques. Simple techniques can reduce fuel consumption by as much as 25%.
❑ Ensure regular maintenance to maintain fuel efficiency and vehicle longevity.
❑ If you buy new, buy small, fuel-efficient models. ❑ Consider carpooling or joining a local car club.
❑ Consider off-peak commuting to help reduce traffic congestion and save time traveling.
❑ If you need to use a taxi look at green options, for example, London’s Go Green Car has a fleet of hybrid cars.
❑ If you are moving from one office to another look for moving companies that provide reusable plastic containers as opposed to cardboard boxes.
Organizing green events and meetings
Most organizations host events, meetings, seminars, annual general meetings, and other conferences on a regular basis. Regardless of whether these are big or small events, they all consume resources, cost money, and produce waste. Planning green events is about incorporating sustainability elements into traditional meeting planning.
Hosting a green event can help conserve energy and reduce waste, which saves money and provides an opportunity to raise awareness of issues. One event organizer replaced bottled water with reusable containers and bulk water dispensers, saving US$15 000 with this simple step.
The IUCN, an international conservation NGO, produced a guide to help the 8000 delegates at its 2008 congress make environmentally smart decisions at different stages of their trip to, and stay in, Barcelona. It was part of the IUCN’s effort to practice what it preached at the event on sustainability and conservation. For those who didn’t want to print the whole manual, they could just print out the one-page summary included at the back.
❑ Meeting or no meeting. Explore alternatives to meeting in person, such as teleconferencing, video conferencing, and webinars.
❑ Make your meeting meaningful. It seems obvious, but make sure your meeting is as useful as possible for the participants to justify them attending.
❑ Make your intentions clear. Set priorities and make sure all involved in the organization are aware and included.
❑ Look at visible and non-visible. Look at visible issues (recycled program material) and non-visible ones (energy and waste management plans).
❑ Facilities. Choose a location that is easily accessible (e.g., direct flights, public transportation, etc.). Check for locations that have they're own environmental and social priorities and run/operate green buildings.
❑ Food and beverages. Serve food that is sourced locally, fair trade, organic. Also think about how the food and drinks are served, for example by using mugs instead of disposable cups and bottles.
❑ Accommodation. Support hotels that are part of green accreditation programs, such as GreenKey and the green tourism label in the UK, or that have their own environmental policies.
❑ Transportation. Inform participants of public transportation and walking routes. Organize shuttles instead of taxis (these can provide good networking opportunities for participants).
❑ Procurement. Choose suppliers with sustainability policies and products. Look at options such as renting rather than purchasing.
❑ Get people involved. Seek sponsors to help provide sustainable products. Consider getting the community involved. Tell attendees what your sustainability plans are during the conference and tell them what they can do to get involved (e.g., recycle, give back name tags, turn off lights).
❑ During the event. Limit the distribution of paper during events by having USB ports for people to download handouts or use e-mail. Provide a reusable registration package. Look for ‘sustain-able’ promotional products (or have none). Conduct registration and confirmation online. Measure your progress (i.e., how much paper is used, waste generated).
❑ Post-meeting. Publish proceedings online and report on lessons learned. Have an on-site drop-off for attendees returning material that can be reused for other events or donated to local community groups and schools.
❑ Sustainable tourism. If participants are coming from abroad, give advice on sustainable tourism options in the area. Provide opportunities during the event to introduce participants to local food, culture, music, etc.
Putting together a green team
Employees are often very interested in sustainability issues and want to become engaged in moving their company forward in this area. The response to this has been the creation of ‘green teams.’
Other than getting employees engaged, green teams can provide an important avenue for companies to identify opportunities on how to become more sustainable and implement these ideas. They can also prove a driving force in pushing the company’s overall sustainability objectives forward.
❑ Put together your team. Green teams can be either formal groups or informal groups. Start by networking and speaking to other employees to see who might be interested in joining.
❑ Survey members of staff. Talk to employees to find out what issues they are most interested in to determine the focus of the team. You can also organize brainstorming sessions to gather a wide range of ideas to start with.
❑ Get support. Actively recruit employees into the team who have the power to make real changes happen. For example, if you want to work on greening the building make sure you have someone from facilities on the team.
❑ Focus on action. Green teams often take a double role of raising awareness and putting in place real goals and programs. Look at ways to create value for the company by reducing costs and creating new business opportunities.
❑ Get executive support. Make sure you have the right people on your side, for example, management, so that decisions can be made quickly.
❑ Set specific goals for a certain time period so everyone is working collaboratively on a few priorities.
❑ Communicate with the group. There are many tools out there to help communicate with the rest of the team and other employees, including newsletters, e-mail lists, wikis, posting blogs, or starting an online group (e.g., through Google, Ning, or Yahoo!).
❑ Organize lunchtime meetings.
Organize meetings (with lunch included) focused on raising awareness or coordinating action. Invite guest speakers. Keep these meetings light and fun but relevant to people’s jobs.
❑ Have fun with it. Green teams at eBay started a ‘funky mug’ contest, where employees brought mugs from home to replace disposable cups in the office.
❑ Share best practice and challenges. Put in place mechanisms for employees to share success stories in implementing sustainability and get help with challenges they are facing. This is especially interesting in large companies that operate in several offices or across several countries.
❑ Present case studies. Present examples from across the company and your industry of projects that have worked which could be done in your office.
❑ Keep track of your successes. Keep track of how you do and celebrate your successes with the rest of the office.
❑ Keep it relevant. If people aren’t attending meetings, or it is the same people showing up over and over again, change the focus of the meetings to make sure they are more relevant and interesting to others in the office.
❑ Recognize those involved. It is important to recognize those individuals who are putting in the most effort. Have senior staff recognize them or have HR make the green office program part of the job description. Green office programs can be a great professional leadership opportunity for staff.
❑ Provide more strategic guidance as well. Green teams are not just about putting in place recycling bins. Increasingly they are involved in the sustainability strategy of the company.
❑ Create programs for the whole office to get engaged in.
Deloitte’s ‘Greening the Dot’ initiative involved offices choosing from among 37 different greening projects. A ‘Greening Toolkit’ that included implementation instructions and communication tools was given to each office. The result was that over 29 000 employees got engaged in implementing over a thousand green-ing projects across nearly a hundred offices in just the first six months.
One of the main reasons organizations give for not getting involved in sustainability programs is cost. At the same time, increasing evidence clearly shows that many programs may cost more in the short run, but will actually save money in the long run. So, in response to these cost concerns, many innovative pricing strategies are being developed to help pay for business sustainable activities. One such strategy is performance contracting.
According to the International Institute for Sustainable Development, ‘Performance contracting is a means of raising money for investments in energy efficiency that is based on future savings. It enables money that will be saved as a result of the introduction of a new energy-efficient technology to be used to offset the cost of financing, installing and operating that technology.’
This means reduced risk to the lending organization as the contractor takes on the risk of not achieving savings. There are several ways to structure a performance contract:
First out or guaranteed savings. All the contractor’s costs are repaid annually out of the savings as they accrue. The length of the contract (typically 4–8 years) is usually determined to ensure that all costs are paid out by the end of the contract period.
Shared savings. The business and the contractor agree to share the savings over the contract period. The actual cost of the measures is not included in the contract, and the business has no obligation to pay off those costs. Shared savings contract terms are usually longer – up to 10 years.
Chauffage. A performance contractor effectively takes over the operation of a customer’s utility or production facilities, makes upgrades to them, and often pays the customer’s utility bills. In return, the customer pays the contractor a regular fee equal to the utility bills before the project or some other negotiated fee.
Other innovative financing strategies include green building tax credits and leasing services instead of purchasing equipment. Some programs are being developed that base repayment on ‘green’ savings, such as the Green Loan Initiative of the City of Toronto and the Billion Dollar Green Challenge ( greenbillion.org). The builders repay the loan through funds that would otherwise be spent on heating, cooling, and electricity.
This blog has introduced sustainability and a wide range of tools being used to implement it in organizations around the world. It has presented various tips and ideas on how employees and businesses can get more active and engaged in sustainability, and how sustainability can be explored to positively influence a business in terms of both reducing costs and potentially increasing revenue, while also having a positive impact on the environment, and society as a whole.
However, individuals are not only playing a role in bringing sustainability forward through their jobs. People create both the supply and the demand for products and services, create the innovations and push for change. Individuals make decisions on a daily basis as employees, as consumers, and as citizens that have a direct impact on sustainability.
Many believe that one person cannot make a difference, yet all of the things that people do on a daily basis collectively add up to make a difference. If employees start exploring these ideas in their jobs if consumers start asking companies to provide them with sustainable choices, and if citizens actively engage in strengthening their communities, that is when things will really start happening.
As an employee – leading by example
As seen throughout this blog, employees interested in sustainability have several choices when it comes to career paths and getting engaged in such issues, including working:
In any company. The main way for employees to get involved is by driving social and environmental change from within any company and at any level. Regardless of whether your company is fully engaged in the sustainability debate, these are tools that can be used to strengthen the business.
In a ‘green’ job. With increased greening among all industries is coming a wave of new careers, most of which are an environmental or social twist on old professions. Engineers are doing research on renewable energies, people in finance are getting involved in trading carbon credits or microfinance within mainstream institutions, while architects are designing green buildings. In fact, most, if not all, of the topics introduced in this blog have careers attached to them.
In a ‘green’ company or other organization. A company does not need to advertise ‘green’ jobs in order to attract diverse talent. Increasingly, as companies embed sustainability into their operations, sustainability is becoming part of a growing number of jobs, in particular, if you choose companies that are active in this area and even though it might not be advertised as a sustainability-related job.
As an entrepreneur. Whatever kind of business you decide to start, whether it has a social or environmental mission or not, there are many ways you can run your business that support the principles of sustainability from responsible sourcing, to greening your products, offices, and services.
Regardless of the job, you can:
Make suggestions. Identify areas where you think improvements could be made to make your job, your products lines more sustainable.
Have a job review session. Spend time with your team and your boss to evaluate how sustainability could be incorporated into your current job description.
Get rid of unsustainable rules. Keep a lookout for rules in your organization that limit you and others from exploring and putting in place more sustainable options. Get involved in activities organized by your company. Many companies have events organized to get employees involved in sustainability, either within the company or in the community. Get involved in these activities. If there are none that interest you, organize one.
How to turn any job into a green job
1. Look at your company’s position on sustainability. Does your company have a sustainability strategy? Does it produce a sustainability report? If it does, take a look at it and see how this relates to your work. If it doesn't ’t have a strategy, again, why not work to create one?
2. Get involved in office greening programs. Get involved in activities that are already happening in your offices, such as recycling and employee engagement programs. If these don’t exist, start them. Green teams are increasingly involved in more than just putting recycling bins in offices. Many are involved in creating and carrying out company sustainability strategies as well.
3. Create a coalition. Speak to people in the company to connect with others who are interested or are already working in sustainability. Talk to people outside the company to learn about how they are working on sustainability within their own companies.
4. Take a look at your job. Explore ways to incorporate sustainability into what is already in your job description and the goals of your team. Are there places you could cut waste? Engage your suppliers? Change the way something is designed? You know your job best, so you are ideally placed to see how and where changes can be made.
5. Stay informed. Look at professional or other organizations to which you already belong to see what they are doing in this area. Sign up for daily updates to keep informed. Take a course or attend an event, a conference, or speaker series to learn more.
6. Volunteer your time or expertise. Volunteer your time and expertise on sustainability initiatives happening in the company and outside in the community.
7. Give feedback. The people who do the jobs are in the best place to provide insights on how to do things better. If you see something that could be done better, in a more sustainable and efficient way, in the workplace speak up about it.
8. Support others in their activities. Be supportive of the work that your employees or colleagues are doing in this area. Give employees and members of your team time to explore sustainability in the workplace or in the community.
9. Share your experiences. Write articles, speak at events and to others to share your experience in working on sustainability issues in the workplace, the challenges you have faced, and how you overcame these. Speak up on the areas you think need more work.
10. Be positive, but constructively critical. Rather than saying something won ’t work, look at contributing to the discussion and working through ideas to see if and how they could work.
As a consumer – putting your money where your mouth is
The most important sector of them all, and the one that everyone is a part of, is the rapidly growing consumer sector. There are 7 billion of us on the planet, each making decisions on a daily basis that affect businesses and society. As a consumer, you can look at:
What you buy. Companies provide products because they believe there will be, or there is, a demand for them. As a consumer, choosing to support the products that you believe are good sends a strong message to companies. Where you choose to buy those products from – such as retail stores that support the same sustainability values as you do – is also important.
What you choose not to buy. Just as important as what you buy is what you choose not to buy. Choosing not to buy brands that have unsustainable practices and letting them know will send a clear message to those companies that they need to change in order to gain loyal customers.
By giving feedback.
If you want to know what the companies you buy from are doing in this area, or want them to provide more information or safer products, contact them and give them feedback. Companies such as Dell have created social networks where customers can provide direct feedback through two-way channels (http://www.dellideastorm.com). The goal is for you, the customer, to tell Dell what new products or services you’d like to see them develop.
PLEASE think before you buy: A simple guide to making choices as a consumer
When faced with a choice of products, think about:
Packaging → Look at the packaging. Is it over-packaged? Is it under-packaged? Can I reuse the packaging? Is it recyclable?
Location → Look at where the product is from. Is it produced locally or far away? Look at the store you are buying it from. Are you buying from a small independent store, a cooperative, a large store? What do you know about the sustainability policies of that store?
Essential → Do you really need the item? Can you live without it?
Alternative → Are there alternatives that are more sustainable? Can you buy the product in bulk or in refillable containers?
Story → What is the story of the product? What company produced it? What information is on the label about that company and what do these labels tell you about the product? What are the ingredients?
End of Life → Is the product durable? Is it disposable? Is it easy to recycle? Can I bring it back to the manufacturer? Can I donate it to charity when I am done or pass it on to someone else to use?
As a citizen – be active in your community
All individuals, apart from being consumers and employees, are also citizens and members of a community. As part of their community, they can have a significant influence on sustainable and unsustainable practices in this realm as well.
Lifestyle choice. How one chooses to live one’s life has a significant impact. Whether you choose to participate in community activities, bike to work, or have a second car all has an impact.
Many of the same tools and frameworks used to apply sustainability to the business can be applied at home. This includes reducing water and energy usage, recycling, and disposing of waste appropriately.
Get engaged in discussions. Attend public consultations and meetings designed to collect citizens’ views on how to make the community stronger.
Support your local community. Communities have a range of projects that you can engage in, whether this is a festival looking for volunteers, choosing to buy from local businesses, or taking part in recycling programs to help minimize waste.
Be an active shareholder. Companies need to listen to shareholder concerns. Look at where your money is invested (including through pension funds) and get engaged.
Start a project. See something in the community you would like to change or that is missing? Start an initiative yourself. Chances are there are plenty of others in the community who agree with you and are willing to get engaged.
Participate. Many individuals around the world have a choice in who runs their countries and their communities but do not make their choice heard. Rather than complaining about how ineffective something is – whether it is government, regulations, infrastructure, or education – voice your opinion either through voting or supporting the causes you believe in.
What Will the Future Bring?
This blog has aimed to introduce you as employees, as consumers, as citizens, as students, as managers to what is happening in the area of sustainability with the hope that some of these things will be relevant to your business and will inspire action.
The encouraging news is that this blog isn’t full of nice-to-have ideas; sustainability is increasingly being embedding into businesses of all sizes, in all industries, and in all parts of the world. Businesses are seeing that this isn’t about throwing money away or even doing the right thing, it is about good business and this is why sustainability is increasingly part of mainstream thinking.
No one knows exactly what the future will bring. Here is one take. Sustainability becomes the norm. This blog explores sustainability as the balancing of social, environmental, and economic issues in a way that is beneficial to both business and society. However, for others, sustainable means the financial sustainability of a company, the ability of a company to continue to operate over the long term.
The two words will increasingly connect until one day soon, they will mean the same thing. There will be no sustainable tourism, it will just be tourism . . . no sustainable office furniture, it will just be furniture. The minimum standard will be products and services that are sustainable and best practice could be something altogether different, products that give back, that do more.
From perceived benefit to actual. It will increasingly be easier to know how a company is actually doing as opposed to how it is perceived to be doing. In the same way that you can easily understand how a company is doing financially by looking at the numbers, soon there will be ways to know clearly how a company is doing in terms of sustainability. Sustainability information will be stronger and it will be incorporated with financial information.
Direct to indirect. Some companies are just starting to get involved in sustainability. Their activities usually involve either doing the bare minimum, or many small, separate activities that are unrelated and happen in relative isolation. Tomorrow will see these small activities coming together into larger, stronger, and more integrated strategies that cover the whole organization and all their activities.
Companies will look beyond the direct impacts they have on the environment and society – for example, through their energy use and the waste they create – to indirect impacts such as the footprint of not just their suppliers but also the suppliers of those suppliers. This will lead to moving away from quick fixes on parts of the system, to a greater appreciation of how to strengthen the system as a whole.
Increased transparency. Today a company that is working in sustainability can prove it through different certification programs and eco-labels, while companies that are not sustainable (and even in some cases those that are doing harm and are not compliant) have no information on their labels to inform consumers of this.
In the future, this may be the other way around. The norm will be sustainability, and all companies who do not uphold these basic, sustainable standards will need to provide information as to why and how on their labels. Labels will clearly show the amount of waste a product generates throughout the process and inefficiencies both in production and use.
The elephants will start dancing. There are certainly major players in the world, groups that because of their sheer size have power and can have an important influence in pushing the sustainability agenda forward. Although slow to change, once these groups start it brings with it a momentum that changes everything.
Look out for big companies making and implementing ground-breaking commitments to sustainability and asking more and more from their suppliers, their employees, and their customers. Look out to see how emerging market countries get engaged in these issues. Look toward the world of the SMEs, who have power in numbers and who, once they get engaged as well, can have a crucial collective impact. Look at the poor who, through the emerging world of micro everything, are starting to not only be served but play a significant role.
Creating enabling environments. Many sustainability activities that businesses are encouraged to take part in are not possible unless they are working in an environment that allows this.
If the city they work in does not recycle, if it does not have bike lanes or proper public transportation, if it does not have rules and regulations to create level playing fields, if it does not have alternative energy options, a company and its employees may struggle to put parts of their sustainability strategy into place. Look for cities to become smarter in terms of how they generate, distribute, and use water and energy. Look out for cities that focus on people, on communities.
Embedding sustainability into education. How do you ensure change occurs relatively quickly? By educating the new generation of professionals. If you want accountants, analysts, architects, politicians, and managers to change the way they work, then incorporate sustainability into the way that they learn their profession.
This means embedding it into mainstream teaching programs to reach the whole profession, not just those with a particular interest in it. Look for schools to embed sustainability in the way they teach at all levels, from primary school to high school, in professional training programs and specializations.
Anything goes. Look out for completely new ways of doing business. Look out for sustainability innovations to come out regardless of whether times are good or times are bad. Ultimately, the future will be whatever we make it.
Twenty-one wise words of advice
Sometimes it works, sometimes it doesn’t. The pilot and execute as a way to move your ideas from theory to action. Have the freedom to make mistakes, and learn from them. Be willing to take those chances. As Thomas Edison once said, ‘I haven’t failed, I’ve had 10 000 ideas that didn’t work.’
Be patient. It didn’t take a week to develop wind farms or solar panels. Things take time and effort. Companies can be slow to change, but when they do they bring lots of weight.
Keep an open mind. Question assumptions, ask yourself why you do things the way you do and if you couldn’t do things differently. Answers often lie within. Organizations are made up of an incredible amount of ideas and wealth that they regularly fail to tap into: their employees and their customers.
Don’t just do it like everyone else. Not all green initiatives are created equal, don ’t make promises that you can’t (or won’t) deliver on. Be different.
Keep it relevant. Make sure it makes sense. Products need to solve a consumer problem and work. Get involved because it is something you value, not because it is the thing to do.
There are no shortcuts. There are many tools that have been created to help in your efforts, but none will provide assurance against failure or success. Use them as guidance and part of a larger strategy. There is no black or white. Perhaps polluting maximizes shareholder value by saving money, but the public response does not. Your actions have unintended consequences, both negative and positive.
Work together. There is an increasingly wide range of experience within organizations in different industries and different countries. Customers want to be more involved. Work with others. Be active, not defensive. Sustainability strategies developed in a defensive manner lead people to miss opportunities.
11. It is all about balance. You don’t have to do everything, but what you do decide to do should be done well.
12. Everything is connected. Just because you don’t see it, it doesn’t mean that it is ’t there. Decisions you make have an effect far away. Don’t see the world in silos, everything is connected.
13. Focus on the problem, not the symptoms. It is not about putting a filter on polluted water before it is released, it is about looking at why the water is polluted in the first place.
14. It doesn’t need to be perfect. Be honest and open about your efforts and what you are trying to do. Be flexible.
15. Do something different. Get out of your comfort zone. Read something different to find inspiration, see what others in completely different industries and fields are doing in sustainability.
16. Don’t just complain; do something. Complaining about something is fine if it is constructive and helping to move things forward. Get involved.
17. Unlikely events are common. The fact is that unlikely events happen more often than one thinks. No one can predict the future.
18. Not everything that looks green is green. Just because something looks green, and sounds green, it doesn’t mean that it is green. Sustainability is not a PR exercise; it is a way of operating.
19. Do it right the first time. Rather than doing it wrong over and over again.
20. It doesn’t really matter how it starts, or why it starts. What matters is how it continues.
21. Enjoy it!
Trends and new ideas
Zero and 100%
It is one thing to aim to reduce energy use by 20%. Even 50% seems impressive. But when companies make goals to reduce energy use or waste by 100% one stops to listen. And this is exactly what many organizations are doing. We are also increasingly seeing zero and 100% as targets when it comes to products being made with 100% natural ingredients, 100% organic, zero chemicals, zero emissions, etc.
Some have been at this level for years, such as Xerox who set up a waste-free factory in the mid-1990s. Coca-Cola has set a goal to recycle or reuse all of the plastic bottles they use in the US market so that zero bottles go to landfills. Over 30 companies have committed to carbon-neutral status, including HSBC, Nike, and Interface.
IKEA is looking to be 100% fully powered by renewable energy. It does make one wonder why it hasn’t all been done before and makes you realize what is possible.
Getting your customers involved
Companies are increasingly turning to their customers and the general public to help them come up with new designs, new products, and even new strategies. These kinds of initiatives are not just strengthening companies but providing an alternative to traditional marketing, increasing transparency in the company, and even providing a new vehicle for recruiting.
My Starbucks Idea is an online platform where the public can propose ideas on how to make the company and its products better. P&G created Connect + Develop with the goal of having at least 50% of its new products derived from ideas generated by non-employee experts. Unilever has realized that there are a lot of challenges in sustainability that they do not yet have the answers to enable them to move forward.
To help, they have created an online platform which engages civil society, companies, and business to come up with creative solutions to help the company hit their sustainability goals. Innocentive is an online platform that aims to get the public involved in finding solutions collectively for global challenges.
The dashboard in a car gives the driver accurate, up-to-date information that the driver needs to make decisions and to know what the car is doing. This is most noticeable in the new generation of hybrid cars, which provide feedback to the driver on how efficiently they are driving. Many managers are frustrated by the lack of this sort of information, which would enable them to make wise decisions on a day-to-day basis.
By taking advantage of the power of modern information technology, various organizations, such as IISD, have developed what they call Dashboards of Sustainability, which illustrate in real time the complex relationships among different issues by combining evaluation of social, economic, and environmental performance within countries or regions.
Other dashboards can be posted in a common area where building users can see and track their ability to reduce energy consumption, such as water and electricity. Dashboard projects have been implemented in several college dormitories, where students hold contests to see which dorm can cut energy consumption the most.
Philanthropy, when companies donate resources – whether that be money, time, or goods – to charitable causes, is changing. Companies are increasingly applying rigorous procedures and are looking to finance genuine solutions with clear impact targets, and also ensure that every dollar spent is spent furthering community and business objectives.
They are looking to donate resources to causes that are in line with their own material issues and many are trying to reach very concrete goals, such as building knowledge about potential new markets and informing areas of innovation through their giving. Companies such as Cisco (through its Network Academies) have learned how to create foundation strategies that complement both community needs for high-tech training and company interests in supporting the creation of a highly technically skilled and more valuable workforce.
Transformation of partners
As companies are looking to explore more of the sustainability tools and options covered throughout this blog, they are looking for NGOs and partnerships with other organizations that will help them. Therefore, NGOs can play a role not just in influencing business to change, but also in being part of that change. According to
Gib Bulloch from Accenture, ‘international NGOs will have to go through a fairly transformative change process if they are to operate effectively with, influence and engage the private sector in a new breed of development coalitions. And it’s imperative that they fulfill this important role. We believe the required transformation is already underway, but the impact and nature of the change varies quite significantly across different organizations.’
Furthermore, as a business relies increasingly on partnerships with NGOs to do work on the ground, there will be a need to ensure the transparency and accountability of the NGOs themselves to ensure that companies are actually doing what they say they are doing and that the NGOs are too.
Why do initiatives fail?
1. Organizations don’t clearly understand what sustainability means. They interpret it as being philanthropy, giving money to community groups and generally giving money rather than saving or making it.
2. They don’t set clear priorities. It is one thing to have a mission statement saying you are sustainable, but unless you have clear priorities and goals, and ways to reach these, you are ’t really moving forward. Make sure these are realistic.
3. Information overload. Some organizations try to do everything at once and get overwhelmed by the amount of work required and all the roadblocks and challenges they encounter. Take things at a pace your organization can handle.
4. Doing it alone. Great things are almost never done alone. You can still be competitive and share information with your peers to help you all move forward.
5. No leadership. If senior management, the CEO, or managers, in general, are not supporting the initiative actively, they will never have the pull they could.
6. Making assumptions. Don’t create a more expensive green product and assume that someone will buy it just because it is better for society. Use sound business judgment.
7. Incentives. You could have a fantastic vision, plans in place, targets, and a great management structure, but unless employee and company incentives match up with what you are trying to do you will encounter problems.
8. Burnout. Employees care and want to get involved in supporting a company’s sustainability strategies; however, a company needs to allow involvement without burning employees out by overwhelming them with too much work. Channel employee enthusiasm with clear project goals and assign roles and responsibilities.
9. Auditing. Nothing in business is a one-off thing. Sustainability is not just a box you can check once you put up a website and send out a press release. Be clear on where you stand when you start and continuously check to see how you are doing and what you could do better.
10. Lack of resources. Make sure sustainability projects have resources attached to them, whether that be people, time, or money. Without these, they won ’t be able to explore their full potential.
‘The old, adversarial model of business–NGO relations is being eroded; companies that learn to build constructive cross-sector partnerships gain a competitive advantage in new markets, as well as make an active contribution to development. For their part, many development actors recognize that partnering with the private sector can bring benefits, such as innovative technology, scale, and a sustainable model to finance their efforts.’
The environment in which organizations operate is becoming increasingly complex due to everything from regulatory and voluntary requirements, environmental and social issues, to the increased expectations of stakeholders for transparency and accountability. Organizations are finding that engaging with stakeholders is providing them with opportunities to better understand the challenges they face, to understand and mitigate the risks, and also to explore new opportunities including innovations to products, processes, and strategy.
Engaging with stakeholders is nothing new, but the level of engagement is becoming more sophisticated, as diverse groups continue to learn how to leverage and maximize the outcomes of these relationships. Although in the past engagement started in response to a negative issue, companies are increasingly being proactive in this area.
Stakeholders are those groups who impact and/or are impacted by the company and its activities. This can include but is not limited to:
employees and their families;
academic NGOs/international organizations;
Why is stakeholder engagement important?
Better informed decision-making. Stakeholder engagement gives an organization a clearer picture of external and internal threats and opportunities. Management can get better information and therefore can make better decisions.
Spot problems before they occur. Engagement can help organizations spot trends and issues that may impact their activities as well as possible solutions. It also allows them to assess and manage risks by identifying problems before they occur. The mining industry uses stakeholder engagement tools to engage communities and their representatives prior to breaking ground.
Legal and voluntary obligations. At a basic level, organizations are required to engage stakeholders in their activities and disclose information through different legal requirements (e.g., US Sarbanes– Oxley Act, Japanese law of promotion of environmentally conscious business activations), as well as voluntary obligations (e.g., GRI, the Global Compact, SA8000, and the Equator Principles).
Increased transparency and credibility. Companies such as Nike have multi-stakeholder review committees which work with them on the development of their CSR report. As a result of stakeholder dialogue and subsequent feedback, Nike has been disclosing an unprecedented amount of information about its operations.
Access to resources. Companies benefit from a wealth of experience, expertise, and resource sharing by engaging stakeholders. Resources can be technical, human, knowledge, physical, and financial, and can include better access to information and networks, greater reach, improved operational efficiency, more appropriate and effective products, and services, etc.
Identify opportunities. Engagement allows organizations to better understand their customers and their needs in order to develop new products, processes, and services, as well as enter new markets. Working with different partners allows a company to see issues through a different lens and come up with creative and innovative solutions.
FedEx partnered with the Alliance for Environmental Innovation to reduce the environmental impact of their vehicle fleet, hoping that the new hybrid electric vehicles will replace the company’s 30 000 fleets, leading to significant reductions in environmental emissions.
Making an impact. According to the IBLF, ‘working separately different sectors have developed activities in isolation – sometimes competing with each other and/or duplicating efforts and wasting valuable resources.’ Because partners have similar goals, the idea is that they can accomplish more by working together.
Provide a ‘License to Operate.’ When company performance departs from stakeholder expectations, outrage results which can put in jeopardy not only a company’s social license to operate but also potentially its regulatory license. High levels of outrage are disastrous for corporate/industry reputation.
Free prior informed consent. The consent of groups impacted by a company’s operations must be given freely, without coercion, manipulation, or undue influence of pressure. These groups or individuals should be provided with all relevant information in relation to the proposed activity before the activity starts and they must agree to the activity. Increasingly, regulations require companies to get this.
How to engage with stakeholders
Determine who the stakeholders are and what issues are significant to them. Engagement goes beyond identifying those groups that could have an adverse effect on a company’s activities to actively engaging with those that could also be helpful. Engagement may focus on one group of stakeholders or several and may involve a different group of stakeholders depending on the issue or project. Stakeholders can be determined:
By responsibility. People for whom you have legal, financial, or operational responsibility.
By influence. People who are able to influence the ability of your organization to meet its goals and influence others.
By proximity. People that your organization interacts with most.
By dependency. People who are dependent on your organization such as employees, their families, and customers.
By representation. People such as heads of local communities, trade union representatives, councilors, etc.
The more information you gather about who your stakeholders are and what issues are significant to them, the better able you will be to engage effectively.
A company must also consider a stakeholder ’s capacity for and willingness to engage:
Power and reach of the representative. Not all NGOs are the same. There is a huge variety of global and local NGOs: broad versus narrow scope, some work alone and others work as part of networks, some are campaign-focused while others are more collaborative.
Knowledge of the issue. Be clear about the representative’s knowledge of the issue, they may know as much, more, or much less than you do. Different stakeholders will use different vocabulary to express ideas of sustainability. Spend the time to make sure that everyone is on the same page before discussions begin.
Experience working with business. While business may have little or a lot of experience working with different stakeholders, the stakeholders themselves will also have different levels of experience. Some, such as the World Wildlife Federation and the World Conservation Union, have specific divisions that focus on working with business.
Others, in particular, small-scale NGOs, may not have experience and may not have sufficient capacity to engage. This does not mean that engagement should not be attempted, but capacity issues should be accounted for.
Strengths and Weaknesses. Consider the strengths and weaknesses of your own organization as well to engage with stakeholders.
What level of engagement? Low levels are adequate for solving or addressing minor challenges, but engaging more deeply has the potential to enable more sustained changes and transformation. At earlier levels of engagement, you are able to engage more stakeholders while higher levels (e.g., partnership) require more resources. The level of engagement will depend on your strategic engagement objectives and may be different for different stakeholders.
Ignore or monitor. An organization chooses not to engage or communicate with stakeholders and hears their concerns through letters, protests, and websites.
An organization puts together messages targeted to particular stakeholder groups such as brochures, reports and websites, speeches, conferences, and so on, and gets involved in transactional relationships, for example, grantmaking.
Consult. An organization collects information from stakeholder groups directly through surveys, focus groups, workplace assessments, one-to-one meetings, etc.
Dialogue. An organization works with the stakeholder to gather information and advice but goes a step further by exploring different perspectives, needs, and alternatives.
Collaborate. An organization gets involved in two-way dialogues such as advisory panels, forums, participatory decision-making processes, joint projects, voluntary two-party or multi-stakeholder initiatives, driven by both the company and the stakeholder (e.g., global stakeholders on Dow Chemical ’s Sustainability External Advisory Council have been meeting since 1992).
Partnerships. Both organizations share the risks and benefits of engagement. They look for synergies between competencies and resources; these can be between companies, companies and NGOs, joint ventures, alliances (e.g., Lafarge worked with CARE to develop its health policy in Africa).
How to engage? A company seeking to engage with stakeholders should consider:
1. Why does it want to engage? Engagement should not be an add-on or one-off activity. A company needs to strategically think about why they want to engage.
2. What should it be engaged in? Engagement can be focused on a particular issue, a process, a product, or a decision. It could be related to new policy, where to build a new site or help in entering a new market. Sometimes there is no specific subject for engagement and the engagement is focused on developing a dialogue between groups. Be clear about how this is going to benefit the business and what changes you are willing to make based on the engagement process.
3. What are the strategic engagement objectives? Think strategically about what you want to get out of the engagement. This can be anything from developing a new approach or managing risks to just gathering more information. Agree on the rules of engagement. The most important indicator of success is clearly tying the stakeholder engagement to a strong business need. This means that there is a clear link to core strategy, resources to support the engagement, and genuine business interest in the outcome.
4. Spend time getting to know each other. The success of engagement is often based on the degree of respect in the relationship that has been built over time. Spend time building the relationship, understanding the strengths and weaknesses of both organizations. Minimize uncertainty by agreeing on clear goals and policies and providing the information to act on them.
5. Build internal capacity. Assess your organization’s internal capacity for engagement and understanding of the issue. Engagement is part art and part science, and different skill sets are needed, as well as new forms of leadership.
6. Embed it into the organization. Engagement should be managed like a business function; it should have a clear strategy, objectives, timetable, budget, and allocation of responsibilities. Engagement should be part of performance evaluations for leadership. It should also focus on strengthening the company’s ability to respond to the issues and opportunities brought up by the engagement process.
7. How can success be measured? Ensure that goals and milestones are established and that mechanisms exist for monitoring performance and tracking achievements. Continually revise engagement performance and make needed adjustments. Ensure that there are mechanisms in place to take the learnings and put them into improving your business. Share learning and follow up.
8. Establish grievance mechanisms. Stakeholders – in particular individuals, workers, and communities whose human rights are negatively impacted by a corporate operation – increasingly have access to grievance mechanisms through a growing range of organizations such as the International Council on Mining and Metals for mining-related grievances and the Compliance/Advisor Ombudsman of the World Bank Group for projects funded by the International Finance Corporation.
Manage expectations. Some stakeholders want to open a dialogue while others will expect specific operational changes or adherence to certain performance standards. Be clear about what your and their expectations are.
Understand the potential obstacles to participation. Consider the specific cultural circumstances of the engagement such as language, customs regarding social interaction, and gender issues, the scale at which the representative operates – global or local, understand that stakeholders often have limited financial means and staffing capabilities.
Be transparent. Provide the stakeholders with enough information so that they can contribute to the process. Be open and honest during the process. Have clearly defined lines of communication.
Get in early. Relationship building takes time. Stakeholder dialogue should not be hurried: start early, invest in planning and preparation, and allow people time to learn from and with each other. Allow for sufficient resources to support the engagement.
Don’t wait until there is a problem to engage. Often, interacting with stakeholders is viewed as low priority but when a conflict or crisis does arise the absence of an established relationship can challenge communications. Stakeholders are less likely to give a company they don’t know the benefit of the doubt, and making contact with stakeholders in a reactive mode can create lasting negative perceptions as well as questions over whether a company is being genuine.
You don’t have to be perfect. Stakeholder dialogue can often be messy, disjointed, and even chaotic at times. Remember to be transparent, open to new ideas, empathetic, listen and reflect. Focus on quality, not quantity. Take it seriously.
Understand what the risks are. What are the risks associated with engaging? What about with not engaging or with engaging poorly? Be patient. Partnerships take time.
‘The fact is, the prevailing approaches to CSR are so fragmented and so disconnected from business and strategy as to obscure many of the greatest opportunities for companies to benefit society. If, instead, corporations were to analyze their prospects for social responsibility using the same frameworks that guide their core business choices, they would discover that CSR can be much more than a cost, a constraint, or a charitable deed – it can be a source of opportunity, innovation, and competitive advantage.’
Until recently, the management of social and environmental issues was largely driven by external factors and the response by business mostly tactical and communications driven. Today these issues have ascended to the corporate agenda as issues that are increasingly ‘real.’ With this increased awareness and acceptance is coming a slow, but necessary shift to mainstream these issues into the overall strategy of a company.
If sustainability is a puzzle, the strategy is the centerpiece which keeps everything together. Incorporating sustainability into strategy not only shows that a company is taking these issues seriously, more importantly, it ensures a real organized effort rather than small, unconnected activities. It inspires employees and mobilizes the whole company and its supply chain toward common goals that benefit both the company and society at large. The goal: that sustainability is so integrated it becomes hard to distinguish from the day-to-day business of the company.
Why is it important?
To take full advantage of opportunities. Partial or bolt-on approaches don ’t work. Although individual projects across the organization can have limited success, an organization will not truly see the benefits of sustainability unless it is integrated into a company’s strategy at all levels.
To mobilize the whole company. A strong, clear, and inspiring sustainability strategy can guide the actions of employees and get them motivated and excited. A company can better understand its business and maximize the indirect benefits which a coordinated approach to sustainability can bring.
Stakeholders are asking for it. Shareholders, regulators, customers, employees, and business partners are increasingly expecting companies to explore these issues and can tell the difference between a company that takes these issues seriously and one that does not.
The risk is changing. Business is being confronted with an increasing variety and number of risks. A business ’s ability to achieve its objectives depends on being able to recognize and deal with these. Recognize that not all risk is a downside and that some risks also present opportunities.
No longer just for ‘high-risk’ companies. Sustainability has moved beyond being an issue just for companies in sectors like oil and gas, who have an obvious impact on the environment and society. Today, companies in virtually all industries are affected by sustainability issues.
Differentiation. In today’s business reality you can’t just do what everyone else is doing, you need to be different, unique. In addition, companies can shape their industries. There is a lot of room for companies to become leaders locally, nationally, regionally, and internationally in these issues.
The key concepts
Embedding sustainability into a company’s strategy involves developing an understanding of what the issues are, how they will affect the business, and its ability to continue to do business in the future.
Understand the wider business
Understand how sustainability-
Understanding risks and magnitude of risks
Sustainability strategies sustainability strategic options
Goals and targets company
Working and learning from others
Companies active in influencing wider change
Getting things right the first time
Identifying and involving stakeholders in strategic decisions
Working with others
The wider business environment
An organization needs to understand the broader environment in which it operates and how this environment can and will affect their operations. Several tools already used by managers are being expanded to include relevant sustainability issues. These tools are being used not just to see the big picture, but also to explore what the future may bring and how this may affect the way they do business. Based on this information, an organization can decide whether they are interested in just keeping up with the change, or playing a key role in shaping their industry.
ESTEMPLE: PEST (political, economic, social, and technological trends) is one such tool. It is a process technology that outlines how forces in the larger business environment will change over time. This process has been expanded further to include other trends:
Economic. Health and director of the economy (or economies) in which the firm competes. Variables include GDP levels, inflation, interest rates, money supply, unemployment, and disposable income.
Social. This can include demographic variables such as population size, age structure, geographic distribution, ethnic mix, income distribution as well as tastes, fashions, attitudes, and values.
Technological. This can include understanding current technologies (e.g., products, processes, materials), as well as emerging or undeveloped technologies.
Ecological. This can include concerns for the sustainability of the physical environment, greenhouse gases, waste disposal, environmental policies, and energy consumption.
Media. The increasingly important influence of media on business, politics, and society – as an opinion former and shaper – and its power to affect outcomes.
Political. This can include government stability, alignment at the international level, taxation and fiscal policy, foreign trade regulation, social welfare policies.
Legal. This can include employment law, health and safety, and product safety.
Ethical. This includes the rising number of codes affecting the ways a business should operate, which increasingly have a financial impact on the company’s performance.
Understanding where you stand
A range of widely used management tools can be applied to help guide your thinking on sustainability, whether it be for a whole company or for a particular activity. Because these are familiar tools in business, they can be a good starting point for a conversation about sustainability. ‘Five forces’ is a tool widely taught in MBA courses, used to analyze the competitive forces that shape an industry and that can influence business profitability. The five elements it considers are:
How hard is it for new companies to enter this industry?
The threat of new entrants is usually based on the entry barriers for that market, or in other words when it is too time-consuming or expensive to enter easily. This can include, for example, patents for green technology. While usually new entrants to a market are considered a threat, sometimes this can turn out to be a good thing.
For example, when Clorox entered the green cleaning product market with its green cleaning brand Green Works, rather than taking away market share from other smaller brands such as Seventh Generation, it actually played a role in growing the overall market.
The threat of substitute products or services. As with competitors, today new innovative products and services are not just affecting their own sectors, but can also have a huge impact across sectors. New forms of service delivery are bringing in greater profits while also enabling companies to build customer loyalty and long-term competitive advantage. Many consumers, are looking to switch to more sustainable options once they become available.
Rivalry among established firms. Who are the existing competitors in the industry and what is the level of competition? In the past new innovations and companies usually only affected specific sectors; however, today innovations in sustainability are impacting across sectors regardless of the size or location of the company. Many companies are choosing to work together to further sustainability issues, for example through initiatives such as labeling schemes.
The power of buyers. Who is buying the industry’s products and how easy is it to negotiate with them? Many organizations that have made a commitment to sustainability are now also looking at the products and services they are buying. One example is The Warehouse, New Zealand’s largest mixed retailer, who in 1999 declared a national corporate goal of zero waste. In order to reach this goal, the companies it buys from – its suppliers – were given radical packaging reduction targets.
The power of suppliers. Who supplies the industry’s inputs and how hard is it to negotiate with them? This includes raw materials, labor, and expertise. For example, some suppliers of green products and services charge a premium for the products, not just because of high costs associated with them, but also because there is a higher demand for these products with not a lot of suppliers offering them.
SWOT is another strategic planning tool used to evaluate a company's or project’s strengths and weaknesses in relation to the external opportunities and threats. It is also used once objectives have been identified to help in pursuing those objectives. For example, a traditional SWOT analysis conducted on labor issues within the supply chain of a company could look like this:
Strengths. These are attributes of the organization that help in achieving the objective. For example, the company has partnerships with some NGOs who specialize in this area. Some of their suppliers have sustainability-related certifications.
Weaknesses. These are attributes of the organization that is harmful to achieving the objective. For example, the labor practices of some of the company’s suppliers are not known and could be bad.
Opportunities. These are external conditions that are helpful to achieving the objective. The company could have access to new customers if all of their suppliers meet the minimum or high labor standards. Suppliers themselves will also benefit as higher labor standards can create a more stable and productive workforce.
Threats. These are external conditions that are harmful to achieving the objective. Poor labor standards could become known by the media or stakeholders and have a serious effect on reputation and ability to keep customers.
Different organizations have been looking at how to better incorporate sustainability into the traditional SWOT analysis, for example the World Resources Institute’s work around a sustainability SWOT (or sSWOT). The elements of this include:
Environmental challenges. Look at which environmental challenges impact your business/project and connect these with other big trends that are shaping future markets. For example, links between climate change and future commodity costs.
Threats. Where are environmental challenges creating broad threats to future business value, both directly and indirectly? For example, how may higher costs or supply chain disruptions threaten a company’s own costs or its suppliers, customers, or markets?
Opportunities. Where is there a growing gap where you can create new solutions for environmental challenges? Look at those threats where current and best practices are not sufficient to meet the scale and pace of the problem. For example, a company that manages fleets of corporate cars might see an opportunity in the lack of affordable low-carbon vehicles or financial incentives for sustainable transportation.
Strengths. In what unexpected ways can you apply your strengths to environmental challenges? Start with your competitive advantage but also broader strengths such as corporate culture. Include conventional strengths or new and creative ways of leveraging existing competencies.
For example, GE and DuPont have remained on top because of their ability to adapt and apply core strengths and are now positioning themselves to provide solutions to environmental challenges.
Weaknesses. Look at your vulnerabilities, obstacles, risks, or blind spots and potential partners who could help in bridging some of these gaps. For example, a water utility and electric power utility may want to partner to manage water resources more effectively amid changing climate conditions and ensure an adequate supply for the community.
Act. Prioritize and act on your findings. What can you do in the near term, mid-term, and long-term? What should you invest in today so that you can lead markets tomorrow?
According to the WBCSD, ‘The challenge for the corporate sector is to understand how different sources and magnitude of risk are likely to affect them (positively or negatively) over the long term. In order to gain that understanding, companies need to take a genuinely holistic approach that includes a consideration of sustainability as well as commercial, political, and societal risks.’
A business’s ability to achieve its objectives depends on it being able to recognize and deal with risks. Not managing these risks properly can have a major impact on business reputation and also on financial, social, or environmental performance, as many so-called non-financial risks can rapidly become material. Business is being confronted with an increasing variety and number of risks relating to sustainability. Global population increases are leading to increased demand and scarcity of resources like clean water.
With increased interconnectedness related to growing population densities comes greater levels of international trade and significantly improved information sharing across the globe. Increased globalization of markets has led to increased complexity in the way businesses operate. A threat may build slowly from a number of small events, but one of those events can be the catalyst that sets off an uncontrollable reaction. A relatively minor incident in one country can have a bigger impact elsewhere.
The WBCSD identified a list of mega-risks, part of the ever-increasing variety of risks that companies are confronted with, that present unprecedented challenges as well as potential opportunities to companies and governments alike. These include:
Energy and climate. The environmental impacts of rising energy production and consumption are introducing uncertain-ties to industries, such as oil and gas, reinsurance and agriculture.
Demography. As the population continues to grow, population dynamics are at the root of almost every trend shaping tomorrow's business climate.
Intangibles. The value of corporations is increasingly made up not of tangible assets such as property and land, but of intangible assets such as reputation, brand, trust, and credibility – up to 75%.
Globalization. Globalization is creating increasing interdependence, making it all the easier for dangerous viruses, pollutants, and technical failures to spread. The legal framework in which companies do business remains local, even though the world has ‘gone global.’
Political risk and terrorism. Political risk is by no means a new threat, but changing political realities have amplified its magnitude and thereby its capacity to disrupt critical systems.
Ecological risk. The world economy depends on a base of natural resources that is showing signs of severe degradation. Without improved environmental performance, future business operations will be exposed to additional risks such as rising prices for water, materials, and waste disposal.
Litigation risk. There has been an exponential increase in society's willingness to get involved in litigation, primarily driven from the USA.
Infrastructure and security. Health services, transport, energy, food and water supplies, information and telecommunications are examples of sectors with vital systems that can be severely damaged by a single catastrophic event or chain of events.
Pandemic and health risks. Despite a century of rapid progress in improving human health, many people still do not have access to basic healthcare or hygiene to protect them from infectious agents in the environment, and many new and serious risks continue to grow.
Innovation and technology.
New technologies offer substantial benefits but are seldom risk-free. In some cases, the risks are not always obvious at the time of introducing a new technology, for example, freons and the ozone hole.
For business, these mega risks translate into:
Market risks. For example, regulatory bans, reduced market demand for products, degradation of product quality by environmental factors, customer boycotts.
Balance-sheet risks. For example, remediation liabilities, insurance underwriting losses, impairment of real property values, damage assessments, and toxic torts.
Operating risks. For example, costs of cleaning up spills and accidents, risks to workers, safety from handling hazardous materials, the rise in prices of material and energy.
Capital cost risks.
For example, product redesign to meet new industry standards or regulations, costly input substitutions to meet new industry standards or regulations.
Sustainability risks. For example, a competitive disadvantage from energy or material inefficiencies, the impact of mandatory take-back rules, future taxes and regulatory restrictions.
Legal risks. For example, companies being held responsible for actions that were legal at the time but later determined to be harmful.
Liability risks. For example, penalties and fines, higher insurance premiums, product liability costs, site remediation costs.
Reputation risks. For example, attacks on your image, bad-mouthing of your product, and boycotts.
For many, sustainability begins as an exercise in identifying and managing risks to the business. The risk is often defined as those things that stop or limit a company from achieving its objectives. However, this is only half the story. As the WBCSD puts it, ‘the traditional approach to risk has been fragmented, largely reactive and focused on the short term.
Because risk is multi-dimensional, managers tend to associate it with loss, rather than weighing up the downsides against the upsides.’ It is crucial for companies to understand the risks posed by sustainability issues and decisions facing an organization, where they are coming from, and how to mitigate them. It is also important that companies go beyond just identifying risks to also exploring the opportunity presented by taking risks, for example in terms of new products and services.
Companies have taken a wide range of different approaches when it comes to their sustainability strategies. Some companies take a whole-company approach while others approach it separately. Some examples include:
Sustainability at the heart of how a company does business. For some companies, sustainability is an integral part of how the company chooses to do business and is at the core of their business model from the start. Ben and Jerry’s ice cream company is focused on making business decisions based on their values, as well as the power of their business to change the world for the better.
They have been making all-natural ice cream since 1978 and are focused on what they call ‘Values-Led Sourcing,’ supporting suppliers who are also trying to make the world a better place with, for example, fair trade chocolate, cage-free eggs, and strawberries from leading-edge sustainable agricultural practices.
Companies who have reinvented themselves through sustainability. Other companies such as Interface, a carpet manufacturer, did not start out being focused on sustainability. The founder became committed to industrial ecology after reading Paul Hawken’s The Ecology of Commerce in 1994. Their vision today:
To be the first company that, by its deeds, shows the entire industrial world what sustainability is in all its dimensions – people, process, product, place, and profits – by 2020, and in doing so to become restorative through the power of influence. They aim to do this through a whole-company approach, integrating sustainability into everything they do. Based on their experiences over the past 14 years in this area, the company now provides a peer-to-peer advisory service for business.
Staying ahead of the pack. While some companies start with a focus on values and doing the right thing, others quickly identify the incredible range of business opportunities sustainability can present. The CEO of GE recognized this and launched ‘eco-imagination’ in 2005, a business initiative to help meet customers’ demand for more energy-efficient products and to drive reliable growth for GE. ‘While we had investigated other corporate socio-environmental programs, we knew they didn’t make cultural sense for GE.
Metrics and accountability are major reasons why GE continues to flourish after 130 years, and the building blocks for the initiative could be no different . . . Simply put: ecomagination had to make money for our investors.’ In 2011 ecomagination reached US$105 billion in revenue. Ecomagination products have increased by 34 new products, bringing its total number to 142, and the revenues from these products have continued to grow at twice the rate of total company revenues.
Companies testing out the success of sustainability brands. These are companies that do not necessarily have a sustainability strategy but are experimenting with sustainability through acquisitions or new product lines. This is often done to try new things out before committing the whole organization, and to learn lessons that could be applied to the organization as a whole.
Clorox, a company known for its cleaning products, moved into the area of sustainability with the acquisition of natural personal care company Burt’s Bees. Burt’s Bees, a leader in the field of business and sustainability, chose Clorox because they found a partner with a shared vision who allowed them to continue to work independently. For Clorax, Burt’s Bees provides a business model for them to learn from.
Companies adopting different shades of sustainability. Many leaders in this area have not changed what they do; they are now using sustainability as a tool to do it better. Sustainability becomes an extension of what the company already does. Companies such as IKEA and Marks and Spencer haven’t necessarily changed their products, but they have changed how those products are sourced, the ingredients, their packaging, etc.
Companies expanding their focus. Some companies are adopting sustainability practices by expanding the range of products and services they provide as a response to increasing and changing consumer demands. Several traditional oil and gas companies such as BP and Shell have expanded the focus of their operations to include new forms of renewable energy such as wind, solar, and biofuels.
There are a growing number of companies around the world that have a sustainability story to tell. Pick the companies you buy from and look at their websites and annual reports to see what they are doing.
Goals and targets
Companies that are taking sustainability seriously are setting goals and objectives to guide their actions. Having a clear set of goals focuses on the organization in a common direction. More importantly perhaps, having clear and inspiring goals will motivate employees. Goals should:
Be clear. Goals should be clearly understood. Have objectives framed so that all members of the team know whether or not they have been achieved? There should not be so many that they are difficult to follow.
Be credible. Goals should be realistic and believable. They should be put in place for the short, medium, and long-term and you should show the steps needed to reach those goals. In addition, don’t have too many. Be absolutely certain that your organization can and will live up to the standards you set.
Be consistent. Goals should be visibly supported by management and be incorporated into the way employees are rewarded. They should be used in making business decisions and should not contradict with goals that teams already have.
Be challenging. Have elevating objectives that are personally challenging, inspiring, and important. Sometimes more progressive goals are easier to reach than smaller ones. Clothing manufacturer Patagonia is working to meet its goal of recycling 100% of its products through its ‘Common Threads ’ garment recycling the program, where customers can return used clothing which is then turned into new products.
Be communicated. Systems should be in place to collect, compile, and report on these goals. Progress toward goals should be reported on frequently, internally and, where relevant, externally.
Be celebrated. Build enthusiasm for goals and celebrate reaching those goals.
Be continuously evolving. Goals should be evaluated on a regular basis. P&G provides information on their sustainability goals yearly, along with the progress that has been made. In early 2009 they announced significantly increased targets for 2012 reflecting the company’s continued commitment and progress in sustainability.
Be catchy. Package your goals in a story that is easy to remember and which inspires employees and stakeholders. Herman Miller’s ‘Perfect Vision’ initiative is a strategy to achieve a wide range of corporate sustainability targets including zero waste to landfills, zero hazardous waste generation, and a carbon-neutral operational footprint by the year 2020.
Companies aren’t just creating goals, in many cases, they are choosing to make this public and once they go public there is no turning back. The Clinton Global Initiative, for example, is an initiative focused on turning ideas into action. Through its ‘Commitments to Action’ initiative, members translate practical goals into meaningful and measurable results aimed at addressing global challenges.
Working with others
In the area of sustainability, no company is expected to figure it all out alone. Businesses are coming together in networks at the local, national, and international level to share best practices and lessons learned, to create minimum standards, and to push the agenda forward.
In fact, a lot of the progress being made is because of the increase in strong and meaningful collaborations. They play a key role in bringing like-minded companies together, providing a space for them to share lessons learned and raise awareness of the case for sustainable business.
These networks also provide a range of tools and advice on how to put sustainability into practice in their businesses, give organizations access to different sets of expertise, competencies, and perspectives of partner organizations, and allow them to share/reduce the amount of risk and costs sometimes associated with moving forward. There is also evidence that companies that derive profits from their sustainability efforts are far more likely to be taking a collaborative approach.
But they go beyond this, collaborations also provide a space for the business sector and often other partners such as NGOs and governments to create visions of what the future of business may look like and help to organize and drive more systemic change. The National Business Initiative, a group of leading companies in South Africa, for example, has influenced government policy in areas ranging from education and housing to skill development, tertiary education, and energy efficiency.
This blog presents a wide range of different coalitions which generally fit into the following areas:
Companies that work with each other. This can be several companies collaborating on one issue or project (e.g., Refrigerants Naturally) or on several issues (e.g., company network Business for Social Responsibility). It can also be two companies, even competitors, working together – such as Ford and Toyota (see Trends in this blog for more).
Companies collaborating with NGOs or government. NGOs have credibility among stakeholders and a distinct set of competencies and strengths. This can be a company working with an NGO (e.g., Nudie Jeans working with the Fair Wear Foundation) or several (e.g., WWF’s sustainable business network).
Single-industry collaborations. This is when companies, NGOs, and governments come together around a very specific industry (e.g., Sustainable Apparel Coalition) or issue (e.g., Roundtable on Sustainable Palm Oil).
Multi-industry collaborations. Companies, NGOs, and governments are increasingly coming together across industries to work on several issues in this space (e.g., UN Global Compact) or one specific issue (e.g., FSC).
With so many options, how can an organization choose which groups to work with? Here are some things to look at:
What themes or issues do they cover? Networks will either pick a few issues and focus exclusively on those or, in some cases, operate at a much broader level and explore the issues that are important to their members. The Rainforest Alliance works to conserve biodiversity and ensure sustainable livelihoods by transforming land-use practices, business practices, and consumer behavior.
Who coordinates them? Networks can be coordinated by any number of groups, including governments, NGOs, the UN, or businesses themselves. Most organizations are already part of a professional or local network of some sort, many of which have started to work on sustainability and provide resources for their members (e.g., national and international professional accounting bodies such as the IFAC and ACCA).
Where do they operate? There are networks operating at local, national, regional, and international levels. Some groups operate at a national or local level but are themselves part of a larger, sometimes international network. The WBCSD is a global network of companies committed to improving the long-term sustainability of their own operations.
The network brings together over 200 international companies from more than 35 countries and 20 major industrial sectors with a shared commitment to sustainable development. The Council also benefits from a global network of more than 55 national and regional business councils and partners.
Who are they aimed at? Is the network aimed at organizations working in a particular sector or is it aimed at businesses at a broader level? Is it mainly for large companies or for small ones or both? Who are the other members? Is this a group of organizations you are interested in working with? ICLEI – Local Governments for Sustainability is a network for local governments around the world working on sustainability issues. Cities and towns of all sizes from over 84 countries are members.
How do they work in practice? Being part of a network takes time and resources from a company, therefore the decision to join should be taken seriously. Different networks will require different commitments from members; signing on to a code of conduct and upholding certain minimum standards – some have mandatory sustainability reporting requirements. The Sustainable Business Network in New Zealand has a membership fee structure based on the turnover of the company so that small companies pay less in membership fees.
What are the benefits of joining? Joining a coalition means that you will be an active participant, so think about whether it makes sense for you. Does the network have influence? Will it help you stay ahead of the game? Does it focus on issues that are material to your business and your stakeholders?
For example, the Sustainable Apparel Coalition is an industry-wide alliance of apparel and footwear brands, retailers, and suppliers working to develop an index that measures the environmental performance of apparel products. As one member of the Sustainable Apparel Coalition stated, ‘we need a common language before we can be competitive.’
IKEA recognizes that by cooperating with companies, trade unions, and organizations, they are able to learn, share experiences, and accomplish more than they could have done by working on their own. Cotton is one of the most important raw materials for the company; however, conventional cotton growing and processing consumes large amounts of water and chemicals. In order to help guide their strategy, they have chosen to work with different networks:
Work with WWF focuses on better management practices in India and Pakistan, environmental practices that enable farmers to reduce environmental impact, improve e-efficiency, maintain crop yields, and increase their gross margins. Work with the Better Cotton Initiative aims to promote measurable improvements in the key environmental and social impacts of cotton cultivation worldwide to make it more sustainable.
Work with UNICEF aims to prevent young girls from working on cottonseed farms in southern India and instead make sure these children gain access to quality education.
IKEA also provides, as do many other companies, a list of the organizations they work within their annual reports.
One of the most important roles that a company can have in society is influencing and driving change at the highest level. Much of the emphasis when it comes to sustainability has been focused on a company’s own direct impacts, things like tonnes of emissions or amount of raw materials used. However, increasingly there is a much wider recognition of the influence companies have and could have on other parts of the business environment, the way they and their peers will do business in the future.
Although traditionally companies have pushed for less regulation, there is a growing number that is pushing for tougher regulation. Companies are recognizing that if they invest the time and resources in becoming more sustainable and being beyond compliant, then they can benefit from this and also stay ahead of their competition when the standards are raised. There are countless ways that companies can influence larger changes:
Create an even playing field. According to personal care company Burt’s Bees in the USA, ‘78% of people think that natural personal care products are regulated – 97% of people think they should be . . . the fact is, they’re not.’ The company pushed for a clearer definition of what ‘natural’ is, and is not, in the US market.
The result was the Natural Standard for Personal Care Products launched on May 1, 2008, which required products labeled or branded as ‘natural’ to be made of at least 95% all-natural ingredients and to contain only those synthetic ingredients allowed under the standard. Prior to this, companies could label a product as ‘natural’ when they had as little as 1% natural ingredients. This helps Burt’s Bees as over half of their products are 100% natural and they are working on the rest.
Companies influencing other companies. Companies are not only using their influence to bring about change at a policy level but also in other companies. In 2007 the Aspen Ski Company removed Kimberly-Clark products from all its facilities. It even renamed one of its ski runs, which for over 40 years had been called ‘Kleenex Corner.’
According to Matthew Hamilton, the manager of Community and Environmental Responsibility at the resort, ‘We will not consider using any Kimberly-Clark products until the company has committed to not source from endangered forests, dramatically increase its use of recycled fiber, and source from certified sustainable logging operations.’ As a result, they have been able to enter into an environmental dialogue with a company 160 times their size.
Companies influencing decisions made by the government by lobbying. The Mary Kay cosmetics company, which has always focused on giving women the chance to succeed, took their founder’s passion one step further to try and stem violence against women. The company actively lobbied the US government to reauthorize the Violence Against Women Act, and the saleswomen from the company spoke to legislators about the importance of renewing it.
In 2006 they succeeded, as the act was reauthorized into law. Levi relies on Guatemala for materials, so when the US government in 2001 was looking at whether Guatemala should continue to enjoy duty-free exporting to the USA, they found that they did not have adequately enforced labor laws.
So instead of lobbying the US government, Levi went to Guatemala to lobby the Guatemalan government to strengthen labor laws. More recently, 70 large companies such as BT, IKEA, Google, and Unilever signed a joint declaration urging the European Union to set tougher climate change goals.
Views on lobbying relating to the government are mixed. Some say companies need to take an active role in pushing sustainability, while others argue that because of their power, they can push for changes that may not be in the best interests of society as a whole. But it can also work the other way around. Because there is a relative lack of transparency about a company’s lobbying efforts, it is very difficult to know what they are actually lobbying for.
Some countries require companies to disclose certain information about lobbying; however, this rarely includes the positions they are lobbying about, but rather just the amount of money being put into lobbying, and these regulations are often poorly regulated. Corporate lobbying is sometimes not aligned with sustainability policies, and in some cases can even be against those policies and positions.
Although some companies do the lobbying themselves, others are taking part in lobbying through other means, such as by funding other groups who do the lobbying for them (in some cases NGOs) or by being members of groups who are lobbying on different issues.
However, there are increasing initiatives happening on the voluntary front to increase transparency around lobbying. The Global Reporting Initiative has two reporting indicators on lobbying that reporting organizations are asked to report on: public policy positions and participation in public policy development and lobbying; and the total value of financial and in-kind contributions to political parties, politicians, and related institutions by country. GlaxoSmithKline, for example, in their annual report lists all the trade associations they are part of, what other groups they are working with, and what their positions are.
Bringing it all together. Many companies work on lots of initiatives independently across the company, but will increasingly need to bring these together into a more coordinated effort in order to maximize the benefits.
Taking it beyond the specialists. Sustainability is not just the job of people with the word in their job title. A sustainability strategy is not much use if employees themselves who want to get engaged have no role to play in it.
Having a clear message. More often than not, employees seem unaware of the strategic directions and priorities that their company has put in place. The goal is not only to communicate the strategy clearly but also to get people involved and excited about carrying it out.
Understanding the risks. Pursuing sustainability strategies can also bring with it certain risks. If sustainability is’t taken seriously within the organization it can be viewed as greenwashing. It can also raise unrealistic expectations by stakeholders.
No one size fits all. Many organizations are looking for a standard that specifically outlines what a green company looks like in the same way that the LEED certification outlines what a green building looks like. Companies need to determine the strategy that works best for them, as no one strategy will work for all.
Silo thinking. For some businesses, the challenge is not to focus too much on one issue without putting in the time to properly explore other issues, which could potentially be more material to the business.
Boundaries of responsibility. Where do one organization’s responsibilities end and another begins? How can we consider an organization’s individual responsibility when it is participating in a socio-economic system which only rewards certain sorts of behavior?