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Using sustainability to avoid risk

The SSC Team February 21, 2017 Tags: , , , Strategic Sustainability Consulting No comments

The evidence that sustainability can be good for business is overwhelming. Most of the case studies, examples, and analysis that has been done show positive links between a sustainable approach to environmental and social issues, and corporate profits, Thus far, the research has been primarily focused on direct operational efficiencies (like retrofitting your office lighting to save money and reduce your carbon footprint), innovation (using biomimicry to drive new product development), and productivity (ie. more engaged employees take less sick leave).

Over the past few years, there has been an increasing amount of discussion about the nexus between sustainability and risk management. And for corporations operating in complex supply chains in a globally-connected economy -- well -- effective risk management can be the difference between success and failure. Below, we take a look at three articles that shed light on why companies still struggle to incorporate sustainability into their risk management practices (and vice versa).

Has sustainability become a risky business? This GreenBiz article by John Davies reviews a report by Ernst & Young. The key takeaway: While more companies are concerned about increased risk and the proximity of natural resource shortages, corporate risk response appears to be inadequate to address the scope and scale of some of these challenges. The free report looks at six corporate sustainability trends with a strong focus on the internal influencers of corporate performance (CEOs and boards), as well as external forces ranging from governments to shareholders and investors.

Playing It Safe Is Riskier than You Think by Bill Taylor in the Harvard Business Review makes the case that "difficult and uncertain times are often the best times for organizations to separate themselves from the pack, so long as their leaders are prepared not to stand pat." While not directly about sustainability, this article certainly supports the notion that economic turmoil is no reason not to be ambitious about tackling big sustainability challenges.

Research: Why Companies Keep Getting Blind-Sided by Risk by Mary Driscoll in the Harvard Business Review presents fascinating insight into why companies (and their executives) are not succeeding at identifying and mitigating risk. Survey findings indicate that most organizations’ leaders did indeed express concern about the impact of political turmoil, natural disasters, or extreme weather. But the findings also show that the people at the front lines of the business were hamstrung by a lack of visibility into risk. Nearly half said they lacked the resources needed to adequately assess business continuity programs at supplier sites. Many relied on the suppliers filling out perfunctory, unreliable checklists. There are some big lessons here for sustainability practitioners! 

We are focused on helping companies use a "lens of sustainability" to spot risk earlier, broaden risk response options, and more effectively mitigate risk within their operations and all along their supply chain. If this work strikes a chord with you, please get in touch with us. We'd love to hear from you!

 

How to Set Carbon Reduction Goals

The SSC Team February 16, 2017 Tags: , , , Strategic Sustainability Consulting No comments

Enjoy this post from the SSC archives.

Based on a presentation by the EPA, we picked up some great nuggets of advice for companies seeking to establish credible and meaningful carbon reduction goals.

KEY COMPONENTS OF A CREDIBLE GHG REDUCTION STRATEGY:

  • Begin with a corporate-wide GHG inventory (base year) of Scope 1 and 2 emissions, with Scope 3 emissions included if relevant to the goal. Annual tracking and reporting of progress is a must!
  • Build an emissions inventory plan, which institutionalizes progress and ensures high quality data. Make sure you know where the data is coming from, who is responsible for managing it, and where (and why) assumptions are being made.
  • Determine a GHG reduction goal, based on a complete and verified inventory. While independent, 3rd party-verification is best, it can be expensive. Consider beginning with an internal auditing and assurance process.

WHAT MAKES A STRONG CARBON REDUCTION GOAL?

  • Absolute reductions are important--don't just rely on efficiency improvements to lower carbon-per-product, carbon-per-revenue, or carbon-per employee trends.
  • Consider your company's goals against projected GHG performance in your sector--are you aligned with industry expectations? (And if you are wildly different from your peers, do you have a good reason as to why you are different?)
  • Goals should be achievable within 10-12 years--ambitious enough to need a decade to execute, but not so lofty as to lose touch with reality.
  • Public commitment from a company's executive leadership adds credibility and gravitas to the goal!
  • Make it specific to your company's operations, and beyond "business as usual".

ADDITIONAL CONSIDERATIONS WHEN SETTING CARBON REDUCTION GOALS:

  • Align your goals with what science tells us is necessary for climate-balance. For example, the IPCC recommends reductions of 20-30% by 2020, and 80% by 2050 (from 1990 levels).
  • Frequently review your emissions inventory for completeness, accuracy, and relevance. Determining your carbon footprint boundaries and data sources isn't a one-time process. It should evolve as your company evolves.

Want more information? Check out our carbon footprinting and CDP Reporting services, and download our white paper on the impact of employee commuting on your company's carbon footprint!

Conference Worth Considering: GreenBiz 17

The SSC Team January 26, 2017 Tags: , , , Strategic Sustainability Consulting No comments

Each year sustainability leaders from the world’s largest companies gather at the GreenBiz Forum to explore pressing challenges and emerging opportunities in sustainable business. The event offers a rich blend of presentations, workshops and networking opportunities framed by the State of Green Business report.

This year, join GreenBiz 17 in Phoenix, Arizona from February 14-16, 2017.

Come back inspired by what’s possible and ready to tackle your organization’s sustainability challenges.

Are you going? Let us know in the comments. 

Welcoming the New ASTM Standards for Manufacturing Processes

The SSC Team July 5, 2016 Tags: , , , , , , , Strategic Sustainability Consulting No comments

At SSC, we have been calculating environmental impact in manufacturing processes using process flow diagramming for years. When conducting life-cycle assessments, process-flow diagramming provides a visual and a data-based representation of every input and output in a manufacturing process to achieve the most accurate results. 

But mapping manufacturing processes becomes difficult because of the wide variety of technologies, inputs, outflows, variations inside of a single facility or lack of information from upstream or downstream. Additionally, the standards and software tools used to calculate processes can vary in their accuracy and be limited in their flexibility, unable to adapt to a wide variety of industries.

Complexity is par for the course when determining environmental impact of a manufacturing process.

The newly released ASTM International standard for calculating the environmental aspects of manufacturing processes (ASTM E3012-16), developed by the National Institute of Standards and Technology (NIST), promises to be a step forward in guiding sustainability professionals through a systematic and more comprehensive, yet flexible, way to calculate environmental impacts based on a graphical process-flow modeling.

NIST systems engineer Kevin Lyons, who chaired the ASTM committee that developed the manufacturing sustainability standard, describes it as similar as tracking financials. “You have to gather income and expenditure data, run the numbers and then use the results to make smart process changes — savings, cutbacks, streamlining, etc. — that will optimize your monthly budget,” he said. “We designed ASTM E3012-16 to let manufacturers virtually characterize their production processes as computer models, and then, using a standardized method, “plug and play” the environmental data for each process step to visualize impacts and identify areas for improving overall sustainability of the system.”

The updated database will help standardize terminology and structure of mapping and reporting manufacturing process impact, reducing complexity in mapping manufacturing processes, and thereby helping companies fully and accurately understand environmental impacts and work toward reducing them.

Are you ready to begin your product life-cycle assessment? Contact us for a quick briefing on whether your company would benefit most from a highly detailed analysis to broad-strokes, baseline assessment. Understanding your impact may not be as big of an investment as you might think.

 

 

 

Welcoming the New ASTM Standards for Manufacturing Processes

The SSC Team July 5, 2016 Tags: , , , , , , , Strategic Sustainability Consulting No comments

At SSC, we have been calculating environmental impact in manufacturing processes using process flow diagramming for years. When conducting life-cycle assessments, process-flow diagramming provides a visual and a data-based representation of every input and output in a manufacturing process to achieve the most accurate results. 

But mapping manufacturing processes becomes difficult because of the wide variety of technologies, inputs, outflows, variations inside of a single facility or lack of information from upstream or downstream. Additionally, the standards and software tools used to calculate processes can vary in their accuracy and be limited in their flexibility, unable to adapt to a wide variety of industries.

Complexity is par for the course when determining environmental impact of a manufacturing process.

The newly released ASTM International standard for calculating the environmental aspects of manufacturing processes (ASTM E3012-16), developed by the National Institute of Standards and Technology (NIST), promises to be a step forward in guiding sustainability professionals through a systematic and more comprehensive, yet flexible, way to calculate environmental impacts based on a graphical process-flow modeling.

NIST systems engineer Kevin Lyons, who chaired the ASTM committee that developed the manufacturing sustainability standard, describes it as similar as tracking financials. “You have to gather income and expenditure data, run the numbers and then use the results to make smart process changes — savings, cutbacks, streamlining, etc. — that will optimize your monthly budget,” he said. “We designed ASTM E3012-16 to let manufacturers virtually characterize their production processes as computer models, and then, using a standardized method, “plug and play” the environmental data for each process step to visualize impacts and identify areas for improving overall sustainability of the system.”

The updated database will help standardize terminology and structure of mapping and reporting manufacturing process impact, reducing complexity in mapping manufacturing processes, and thereby helping companies fully and accurately understand environmental impacts and work toward reducing them.

Are you ready to begin your product life-cycle assessment? Contact us for a quick briefing on whether your company would benefit most from a highly detailed analysis to broad-strokes, baseline assessment. Understanding your impact may not be as big of an investment as you might think.

 

 

 

Can You Attract Low-Carbon-Focused Clients and Investors?

The SSC Team June 7, 2016 Tags: , , , , Strategic Sustainability Consulting No comments

From the Fortune 500 to retail investors, corporations and individuals are looking to fund green companies and projects. Additionally, B2B companies are increasingly setting sustainability thresholds for suppliers. 

You can make your company attractive to the low-carbon marketplace in a number of ways:

Start reporting: One of the simplest ways to start on the path of attracting the green investment community is to clearly communicate your sustainability efforts and their results. If you aren’t generating a transparent, comprehensive sustainability report, then you are communicating that you do not and have not acknowledged your impact or risk in the face of climate change. By simply reporting on sustainability metrics, you are communicating that your organization is “on it.”

Seek certifications: Look to third-party certifications, in your industry or in a wider industry role, to begin building a validated sustainability strategy that follows best practices. From B-Corp certification to Energy Star (for electronics and appliances) to LEED to ….there are dozens of certifications that signal that your company is serious about following accepted sustainability standards.

Get on “a list:” There are a number of index funds put together based on corporate qualifications and certifications, or you can be added to a green stock listing. Of course, your sustainability efforts or products must be robust to qualify.

Issue green bonds: Starbucks recently made the news for issuing $500 billion in green bonds to fund its sustainability programs. Offering green bonds to investors to fund your sustainability efforts can serve two purposes: generate capital to fund larger-scale sustainability efforts and signal that you’re serious about the investment in the program.

Are you looking to improve your supplier scorecard performance and attract more green business? We have experience with dozens of supplier scorecard metrics and reporting standards to help open doors for your company.

 

Can You Attract Low-Carbon-Focused Clients and Investors?

The SSC Team June 7, 2016 Tags: , , , , Strategic Sustainability Consulting No comments

From the Fortune 500 to retail investors, corporations and individuals are looking to fund green companies and projects. Additionally, B2B companies are increasingly setting sustainability thresholds for suppliers. 

You can make your company attractive to the low-carbon marketplace in a number of ways:

Start reporting: One of the simplest ways to start on the path of attracting the green investment community is to clearly communicate your sustainability efforts and their results. If you aren’t generating a transparent, comprehensive sustainability report, then you are communicating that you do not and have not acknowledged your impact or risk in the face of climate change. By simply reporting on sustainability metrics, you are communicating that your organization is “on it.”

Seek certifications: Look to third-party certifications, in your industry or in a wider industry role, to begin building a validated sustainability strategy that follows best practices. From B-Corp certification to Energy Star (for electronics and appliances) to LEED to ….there are dozens of certifications that signal that your company is serious about following accepted sustainability standards.

Get on “a list:” There are a number of index funds put together based on corporate qualifications and certifications, or you can be added to a green stock listing. Of course, your sustainability efforts or products must be robust to qualify.

Issue green bonds: Starbucks recently made the news for issuing $500 billion in green bonds to fund its sustainability programs. Offering green bonds to investors to fund your sustainability efforts can serve two purposes: generate capital to fund larger-scale sustainability efforts and signal that you’re serious about the investment in the program.

Are you looking to improve your supplier scorecard performance and attract more green business? We have experience with dozens of supplier scorecard metrics and reporting standards to help open doors for your company.

 

Sustainability Regulation and Reporting Refinement: More of Everything in 2016

The SSC Team April 12, 2016 Tags: , , , Strategic Sustainability Consulting No comments

From the Paris Climate Talks to changes in the GRI, we keep seeing the needle move toward regulation and refinement in sustainability reporting. We’ve said it before, and we will say it again, sustainability reporting is no longer optional.

Companies that aren’t aligning their strategy around sustainability now are soon going to be left in the dust – or maybe even taken to court as governments are increasingly enacting legislation that requires companies to report on sustainability factors.

Here are three solid examples of this trend, and three good reasons that every organization should be collecting data on sustainability for the inevitable day that the reporting becomes a business requirement.

1.     Governments: We recently wrote about the UK’s Modern Slavery Act. This is just one of dozens of national-level legal requirement cases around the globe. From Japan to Norway, governments are using laws and the courts to push toward transparency – and action – on sustainability issues.

2.     Reporting Trends: A recent article series from GreenBiz compared different environmental reporting tools – GRI vs SASB vs IR – and their various focus areas. In Part 2 of the series the author analyzes how different “sustainability topics” have shifted between the annual financial report and the sustainability report. Essentially, annual financial reports have consistently been held as required documentation to give insight into company performance. As sustainability topics become material to a company’s financial position, these topics are shifted from the sustainability report and into the annual report. Our thought: Soon sustainability as a whole will be material to investors, so you better be reporting.

3.     Reporting Framework Refinements: Has anyone looked at the new CDP reporting requirements? The days of ‘interpretation’ may be coming to a close as organizations like CDP start to require clarification and specificity in reporting impact. The most significant change in the CDPs reporting this year, in terms of data, is the reporting of Scope 2 emissions based on the new GHG Protocol Scope 2 Guidance. By factoring in market-based and location-based electricity information to calculate a CDP score, companies will be called out for which energy providers they choose – and will be rewarded for choosing green energy (or in some cases, building green energy into their own grid).

Sustainability reporting requirements keep on coming, pushing the field far from the bad old days of greenwashing and closer and closer to the heart of what it means to integrate sustainability into core strategic planning for lasting, long-term impact.

Partnering with an experienced consulting firm like SSC, with the background knowledge and experience, to understand legislative impact, stay ahead of reporting trends, and choose the appropriate reporting framework is crucial. Contact us today to talk about your CDP report or carbon footprint analysis. 

 

 

 

Parent company of Puma provides detailed look at its Environmental Profit & Loss methodology

The SSC Team December 17, 2015 Tags: , , , , , , , , , , , Strategic Sustainability Consulting No comments

This summer, Kering, the parent company of the clothing and footwear manufacturer, Puma, not only published its EP&L, the environmental footprint of the company’s operations translated into monetary values, it published the entire methodology as an open-source tool for others to use.

The EP&L analyses the impact of Kering’s supply chain from raw materials to retail outlets and reports the impact in monetary terms.

In an article about Kering’s decision to open-source the methodology, the company’s CEO said, “Our EP&L has already served as an effective internal catalyst to drive us towards a more sustainable business model. I am convinced that an EP&L, and corporate natural capital accounting more broadly, are essential to enable companies to acknowledge the true cost on nature of doing business.”

From making the business case for sustainability to assessing carbon asset risk in monetary terms, and finally to reporting environmental results using natural capital accounting, more and more companies are moving toward currency as a way to plan, assess, and evaluate environmental performance.

This move makes sense, considering we live in the age of global capitalism.

Kering’s EP&L, along with World Bank’s WAVES initiative, the World Business Council for Sustainable Development’s Valuation Guide, the Natural Capital Coalition, and others, provide strategies to implement natural capital accounting into the sustainability reporting process.

If your company is interested in producing a sustainability report using principles of natural capital accounting, let us know! And check out our analysis of how Puma stacks up to other athletic apparel companies.

How to earn respect as a sustainability leader

The SSC Team December 10, 2015 Tags: , , , , Strategic Sustainability Consulting No comments

When trying to lead a sustainability program from the inside, you may find that getting internal buy-in from your peers, managers and executives is the toughest part of the job. This is especially true when sustainability and CSR don’t get a lot of respect as a corporate priority.

Consider the situation from nay-sayers perspectives, though, and you can begin to see why sustainability (and you) aren’t favorites at work:

  • The CFO may be thinking: why was sustainability “forced” on my, and why does it always seem to be spending more money than it saves?
  • The COO may be thinking: have CSR programs really delivered anything meaningful to the company, or is it just a feel-good initiative that’s taking people away from their “real” jobs?
  • Department heads may be thinking: Do sustainability people do anything except for harp about recycling all the time?
  • The Director of Communications may be thinking: I just want to tell a good story. Why do the sustainability managers always want to bring up our weaknesses?

The industry, the corporate culture, the history of the company’s performance, the physical location, and many other factors may contribute to how your co-workers, subordinates, and leadership view the role of the sustainability leader.

In a recent article in the Harvard Business Review, Jim Whitehurst, the CEO of Red Hat, a security software company, gives some solid advice about earning respect inside a corporate culture.

Sustainability leaders may want to pay special attention to Whitehurst’s advice.

  • Show passion for the purpose of your organization and constantly drive interest in it. Even though you may have a TON of ideas on how your company can quickly change and make significant environmental gains, you should frame those ideas and the positive change they can create in language that speaks to the purpose of the organization itself. If internal stakeholders see sustainability programs as strengthening the business as a whole, and not just some ancillary reporting department, they will begin to respect sustainability’s role in the organization.
  • Demonstrate confidence. You may be asking employees who are not under your direct supervision to make changes to purchasing habits, reporting protocols, and behavior. You need to ask them with respect and confidence. Conveying confidence for a program that is supported up the chain-of-command will help establish you – and the programs you are implementing – will encourage others to follow your lead.
  • Engage your people. One of the biggest complaints about sustainability may stem from the top-down approach to change. Of course, you’re gathering the data, interpreting the reports, and making recommendations – but those who have to change because of a recommendation may come to see your role as an arbitrary rule imposer. As you look at programs and policies that affect department function or employee behavior, ask for input, ideas, and thoughts about how to implement change. You may get some great ideas from unexpected places.
  • Don’t be a know-it-all. You may know a bit about sustainability, but you probably don’t know a lot about the detailed work of the different functional areas in your company. By showing passion for shared company goals and values, being confident in your own role, and engaging people in different areas of the company, you will begin to build a positive reputation. But, you may also misstep. By “owning up” as Whitehurst says, you should frankly address when something doesn’t go as planned and help the team build a work-around together.

Managing sustainability is a difficult role in many corporate systems as sustainability is not a supervisory, but more of an advisory, department. This makes it even more important to earn respect with internal stakeholders. By doing so, you will really see the full effects of sustainability programs and help integrate sustainability into the fabric of the company’s culture.

Working on a tough sustainability project where internal stakeholders are pushing back? Let us know in the comments.