Note to Suppliers: Manage carbon, or lose customers

Very interesting post today on Environmental Leader.  Here's a highlight:

To assemble the report, 44 CDP member firms reached out to 1,402 of their suppliers. About 51 percent of suppliers responded to the survey, 7 percent declined to participate and another 42 percent did not respond.

That's huge.  SEVEN PERCENT DECLINED and FORTY-TWO PERCENT DID NOT RESPOND.   700 companies either did not have the time, resources or requisite knowledge to respond to a request by some of the largest companies in the world with regard to their carbon management practices.

Eco-Catalyst: A Capital Idea

As I've been combing thru articles and skimming books that I'd like to spend much more time absorbing, I have recently come to this: the answer to sustainability is in true cost accounting. Well, at least if we approach it from that perspective and with that goal in mind – the ability to understand, acknowledge, and account for all the forms of capital responsible for our success, for our very existence – we will be able to achieve a level of sustainability.

This means we must rethink our current values and business practices, even our living practices. It means we must adjust to our new state of being, just as the industrial revolution and conventional capitalism were a response to the state of being in the late 18th and early 19th centuries. And isn’t it about time? Our new state of being requires that we understand our interdependence with natural capital and its limits (and therefore our own) within a global setting. We must change the fact that our current definition of economic growth does not adequately account for the cost of natural capital and values all expenditures based on $s spent regardless of whether society benefits or loses, whether the cause and effect are positive or negative. Too often the effect of consuming natural capital and the waste that is deposited into the ecosystem as part of that consumption, are not accounted for.

The challenge is large, but begins with some very attainable steps and goals:

Employ Systems Thinking

• assess entire system of your business: inputs & outputs (as well as their source and destination), resources, waste, available technologies
• establish value for resources that can't always be expressed in $s (human and natural capital)

Engage All Stakeholders

• identify all stakeholders and understand their role within your ecosystem
• apply systematic ways to capture and act on stakeholder input, feedback, and ideas
• employ strategies to address stakeholder concerns
• establish new systems of recognition and reward

Enable Innovation

• collaborate internally & externally
• partner with other businesses to expand your joint capabilities
• consider all ideas, however radical or simple
• look for quick wins, but make sustainability a long-term commitment

To survive - and ultimately to thrive - in the coming years and generations, we must address the need to redefine cost and value to include natural capital in our evaluation of 'growth', progress, and prosperity.

Influences for this post include:
Natural Capitalism, Paul Hawken, Amory Lovins, L. Hunter Lovins
Presentation by Jeffrey Hollender, CEO of Seventh Generation, at the University of Denver on 11/09/2009

Corporate Sustainability, Workforce Planning and HR Strategy

The information within this post is a direct result of a conversation Tanya and I had with Seema Iyer - Workforce Planning Strategist.  Seema has an amazing background serving in key strategic HR and Global Workforce Planning roles at both Sun Microsystems and HP.  The goal of our conversation was to delve into the HR Drivers of Corporate Sustainability.

The first part of our discussion centered around where HR Drivers of Corporate Sustainability fit into Maslow's Hierarchy.  This is a very interesting concept, which frankly requires additional thought in order to fully flesh out the mapping.  At this point, I'm setting aside the Maslow mapping.  Here's a more general hierarchy of some of the benefits of Corporate Sustainability:

• Employee Satisfaction and Attraction / Retention....
  
• Risk Management / 'Exceeding' Compliance Requirements.....
• Improving Revenue (top-line  growth)......................................
  
• Operating Costs, Tax Implications (expense reduction).............................
  
• Regulatory Compliance............................................................................
  

I know what you're probably thinking.  "Wait, the only 'HR item' in the hierarchy is at the very top!"  And you'd be correct.  That was Seema's position right from the start - the HR Drivers of Corporate Sustainability are realized only after several other key benefits are achieved.

CONCLUSION #1: Corporate Sustainability can have a very real impact on driving benefits in the HR realm, but there are a lot of 'foundational elements' that need to be covered before these HR benefits can truly be realized.

The next part of our discussion centered on the Executive-level HR-related KPIs where Corporate Sustainability has an impact.  Here's a high-level summary of what we came up with:

    Executive-level KPIs:

• Employee Satisfaction
• Mapping Sustainability to Specific Dimensions of the 'Great Place to Work' Survey
• Credibility
• Respect
• Fairness
• Pride
• Camaraderie
  
• Attraction of talent from top universities
• Executives present at top universities and engage students in dialog
• Students form opinions of company based largely on these interactions
• Students are looking for companies that operate in a sustainable manner and that take Corporate Responsibility seriously
• Not having a clear, strong message around Sustainability and CR is seen as a large weakness by students
• Less Important: Retention (unless voluntary turnover is in double-digits it's not a focus area)
• If voluntary turnover is in double-digits it's more likely due to management culture and nature of work
  

CONCLUSION #2: Corporate Sustainability has a major impact on attracting talent from top universities.

More to follow in a subsequent post....

Off the Cuff: How Education Plays Into It

What better place to focus sustainability efforts than schools. It’s where we learn new ways of thinking, new behaviors, and have the opportunity to explore, research, and innovate. Our experiences permeate how we act in our homes (both backwards to the homes we are leaving and forwards to the homes we have yet to create), what we bring to our jobs, and how we impact our world. Some new reports on how our schools are performing and what they’re up to in the sustainability arena are worth checking out:

• College Sustainability Report Card 2010 http://tiny.cc/K7d6D
• Net Impact's 2009 Business As UNusual guide http://tiny.cc/DDga5

Green Recovery - Getting Lean - Travel Less: Telecommuting

In his new book, 'Green Recovery', Andrew Winston espouses 'Getting Lean' as a cornerstone strategy for companies looking to emerge from the economic downturn as a more sustainable entity. As Winston states: “Get Lean on Stuff, Not People.” According to 'Green Recovery', one of the four pillars of 'Getting Lean' is “Travel Less: Telecommuting and Teleconferencing”. In the book, Winston references the telecommuting successes of Sun Microsystems, stating the following benefits:

• In 2007, Sun downsized its office space by 15%, avoiding $64M in real estate costs
• Home-based employees were working three more hours per week than office-based employees 
• The total energy footprint for home-based employees was down more than 5,000 kilowatt-hours per year 
• Home-based employees were happier, in part due to the avoidance of 80 hours of commute time and $1,700 in gas and wear and tear on their cars 

And now, the rest of the story... No, the rest of the story isn't some ugly exposé on the inaccuracy of the information. The fact is that there is actually a lot MORE positive information that 'Green Recovery' understandably wasn't able to delve into. And how do I know this? I know this because it was my job. At that time I was Principal Program Manager of Eco-Responsibility at Sun. 

 

Here's the step-by-step breakdown:

> We understood that many of the benefits of telecommuting had long been touted, but never quantified in a systematic, reliable manner.

> We wanted to deliver this quantification at both the individual employee level – to personalize the benefits of telecommuting, as well as at the corporate level – to include in our inaugural CSR report.

> We developed a strategy for capturing the relevant data which included: actual employee commute behaviors; 'baseline' and 'post' measures of various dimensions of employee satisfaction; and 'baseline' and 'post' measures related to eco-awareness and the eco-impacts of telecommuting.

> Teletrips (www.teletrips.com) was selected as our commute tracking technology partner. The Teletrips solution provided a very easy-to-use interface for our participants to enter their profile information, which included the distance they lived from their primary work location and satellite work locations, as well as their vehicle make and model which was used to input fuel efficiency data from an EPA database.

> I developed a survey to capture data on employee satisfaction and eco-awareness.

> The baseline survey was administered prior to the launch of the commute tracking training. From the baseline survey, 55% of the responses fell below the previous year's Employee Satisfaction level.
 

> The commute tracking training also included educational content focused on raising the eco-awareness of the participants.

> Our tracking participants entered their actual commute behavior into the Teletrips tracking tool and in turn received a weekly report that detailed their actual savings in terms of time, direct and indirect costs, and GHG emissions avoidance. On the backend, I received reports with the same information in aggregate.

> As part of the program, I published a bi-weekly briefing that illustrated the aggregate-to-date metrics, along with additional educational information focused on building eco-awareness.

> I administered the 'post' survey at the close of the commute tracking program. From the 'post' survey, 100% of the responses were above the previous year's Employee Satisfaction level (an increase of 45% over the baseline results). One item was of particular interest. The percentage of favorable responses to the survey item “I would recommend Sun because of the environmental benefits associated with the OpenWork program.” jumped from 68% to 85%.  (Note: OpenWork is the overall program, of which telecommuting is a large component.)

> Across the entire survey – the total percentage of favorable ratings increased from 73% to 89%.

> After the close of the commute tracking pilot, I took the data we had captured and extrapolated it across our employee population to determine the net impact at the corporate level. In truth, prior to the extrapolation, I actually removed a couple of outliers from our data capture. These outliers were telecommuters who lived more than 90 miles from their primary office and they significantly skewed the results in a positive manner, but we elected to remove them in order to report the impacts in a more conservative manner.

> One other conservative aspect of our CSR report data – we 'backed out' energy used by employees while working from home. For the 2006 report, I developed a model of the typical home office setup and factored in assumptions such as employees spending more on heating or cooling as a result of not setting their programmable thermostats up or down by two degrees during the day.  The resulting output of my model showed that the average energy use of an employee working from home was 52% of their energy use in the office. For the 2007 CSR report, a colleague ran a study to monitor and quantify the 'at home' energy usage profile. The result of this study showed that the average energy use of an employee working from home was 51% of their energy use in the office.

> One final interesting takeaway: based on anecdotal data, employees on average 'gave back' 50% of their avoided commute time, which for Sun meant the equivalent of over 100 FTEs worth of productivity 'reinvested' into the company.

As for teleconferencing...I'll save that for another post. But as a teaser, don't believe for one minute that you need to invest $250K per site for a quality high-definition solution. Would you believe 10% of that?!

Eco-Catalyst: The Sustainability Index – It’s not the work of just one

Even if (or perhaps especially when) it’s a giant like Walmart. The name Walmart does not usually fall lightly in my presence and generally evokes a strong response. Realizing the potential the largest retailer has to influence the awareness and actions of so many – suppliers and consumers alike – I’m attempting to approach the Sustainability Index spawned by Walmart with a positive outlook.

The Sustainability Index, as Walmart will happily admit, is not meant to be specific to one retailer, one industry, one market segment. It is for all and to be owned by all. So many organizations have already made tremendous strides in this arena and will have much to contribute. And that’s a good thing, because in looking at the extent and content of their sustainability reporting as well as the somewhat lacking ‘15 Questions for Suppliers’, Walmart could use some help. The work is not trivial and will take years to develop. The Sustainability Consortium and organizations like the World Resources Institute will help create a consistent framework for companies to report and consumers to understand the sustainability of their products.

If Walmart is truly serious, this is a huge opportunity. They must be committed, however, and not only at the expense of others. They must be willing to work in partnership with their suppliers rather than just making a lot of demands. They need to understand and communicate the full depth of their slogan - “Save Money, Live Better” - so that it includes not just $s, but environmental and social costs and benefits as well.

They won't be serious unless we're serious. It is up to all of us. If you shop at Walmart and they are profiting from your purchases, you can demand better quality, more choices, and a reduced footprint. As a consumer, you will be able to make more informed choices. If you supply to Walmart and they are profiting from your products, you can demand that they share in the effort to bring sustainable products to market and recognize as well as communicate the benefits. As a supplier you can leverage this collaborative challenge as an opportunity to improve your products and increase your value.

Whether something termed a ‘super-center’ can ever be considered sustainable, is up for serious debate. In the meantime, the Sustainability Index initiative will bring us closer to a clearer understanding of:

• what we are spending (and in turn saving) - as much in terms of less visible resources like water, energy, and fair labor as out-of-pocket $s, and
• how it will better our lives - not only by immediate gratification thru use or perceived status, but also long-term waste reduction, improved health, and a thriving ecosystem.

Regardless of how I might feel about Walmart, that's a good thing.

Eco-Catalyst: Drive to Survive, Strive to Thrive

I'm somewhat of a newcomer to the term thrivability, but I understand it is beginning to replace sustainability in some circles. I heard it at a recent meet-up event focused on social responsibility, so I decided to give it some thought. It appears to be a question of degrees and/or extent of progress.

Sustainability is about survival. It’s about equalizing what is now very clearly an off-balance relationship between availability of resources and their rate of consumption. To reach sustainability, we must reduce consumption and waste while increasing the rate of renewal to the point where they are equal.

Thrivability goes beyond that to create a world where the scale is tilted in the opposite direction and we are renewing more than we are consuming. In a thriving society, there is no such thing as waste. Not only will the act of consumption always produce new resources, but we will also have offset the damage of our previous consumption habits.

As I see it, if we can't at least reach sustainability, then thrivability will also be out of reach. So, taking the approach of setting repeatable and attainable goals of sustainability - Drive to Survive - while still pursuing the aspiration of thrivability - Strive to Thrive - seems to be a good course of action.

These concepts aren’t new, but they are emerging in new ways and on new frontiers. Perhaps if we use the Stockdale Paradox as quoted in Good to Great as our guide, we will achieve sustainability and evolve into a thrivable society.

- Tanya Lehmann, The Eco-Catalyst