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Where Sustainability and Boards of Directors Intersect

The SSC Team January 25, 2018 Tags: , , , , , , , , , Strategic Sustainability Consulting No comments
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With consumers and Wall Street continuing to put pressure on companies to be open about their sustainable practices, boards of directors are feeling the pinch. Investors certainly expect that board members understand and help prepare for challenges. Investing in sustainability is increasingly seen as a risk mitigation strategy, particularly now that it is clear that there is a connection between sustainable efforts and how companies perform.

There are a number of sustainability issues — climate change, water scarcity, labor inequality, product safety — that impact the bottom line. By understanding the impact of these risks on their companies and incorporating that information into the decision making process, boards can meet the demands of a growing number of investors around the world — and unlock real business opportunities.

This Greenbiz.com article, How to Build a Board that’s Competent for Sustainability, was an excellent round up of how to manage boards effectively when it comes to sustainability issues.

 

When an environmental or social issue impacts production and more, board members must respond. And it’s the job of the corporate staff, from investor relations to corporate secretaries to sustainability officers, to help the board become fluent in these sustainability risks — so that directors can understand why it matters to their business and what they can do about it. While some would say you could simple add a member or two to the board who is well versed in sustainable issues, a report recently release by Ceres suggest you should build a sustainably competent board.

 

How to build a sustainably competent board

Key suggestions include integrating sustainability issues into board recruitment and educating directors on sustainability issues and why it’s critical for them to engage with external stakeholders, including investors and experts on sustainability issues. The end goal is totally straightforward and by tackling material sustainability risks as a group, the board can ask the right questions, support or challenge management as needed and make knowledgeable decisions on strategy and risk.

 

There are other important elements that can assist in this process such as investor relations. Investors have long paid attention to board composition, including leading the charge calling for more diversity on corporate boards. Now that focus has grown to include climate competency, with major investors including CalPERS, CalSTRS, Blackrock and State Street (PDF) demanding that boards bring on climate-competent directors.

To work on this transition, the sustainability department and investor relations team can pair up to help educate directors when it comes to sustainability issues. They can prepare educational materials and sessions, report on material sustainability issues and discussion to boards and involve boards in materiality assessments, including ongoing updates of the business case for managing sustainability issues. Materiality assessments are particularly important. A growing number of companies are putting in place formal process to assess materiality sustainability issues. Board members should be involved in these processes to provide input, as well as to vet the results.

Finally, corporate staff can help the board engage with investors and other expert stakeholders on the topics important to the company through outreach to stakeholders or by creating advisory councils that have sufficient expertise to engage with directors and help brief and prepare board members for investor engagements on sustainability issues.

If a board wants what is best for the company, it’s clear that establishing a focus on sustainability issues will be good for business. Would you like help making the case to leadership on the power of sustainability, contact us! 

What is Augmented Reality and Why is it Important to Integrate it into Sustainability Advocacy and Strategy?

The SSC Team December 26, 2017 Tags: , , , , , , , Strategic Sustainability Consulting No comments
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While the technology for augmented reality is still in its infancy, the capabilities are proving that AR could be key to helping bridge the gap between data and understanding data.

While reality is three-dimensional, the incredible amount of data we now have available to us to help inform our decisions and actions remains trapped on two-dimensional pages and screens. This gulf between the real and digital worlds limits the ability of many to fully take advantage of the incredible depth of information provided by billions of smart, connected products (SCPs) worldwide.

In “Why Every Organization Needs an Augmented Reality Strategy” Michael E. Porter and James E. Heppelmann examine what AR really is along with it’s evolving technology, how companies should deploy AR, and the critical choices that they will face when it comes to integrating AR into strategy and operations.

So what is augmented reality? It is a set of technologies that superimposes digital data and images on the physical world in a way that can release untapped and uniquely human capabilities. More broadly, AR enables a new information-delivery system, that could profoundly impact the way data is structured, managed, and delivered online. While the internet has dramatically impacted the way that information is collected, transmitted, and accessed, its model for data storage and delivery—pages on flat screens—does have limits: It requires people to mentally translate 2-D information for use in a 3-D world.

This is not always an easy task — think about that Ikea direction sheet you had to work with the last time you put together a dresser and you understand the challenges.  But by superimposing digital information directly on real objects or environments, AR can provide people with the opportunity to process the physical and digital simultaneously, eliminating the need to mentally bridge the two, improving the ability to rapidly and accurately absorb information, make decisions, and execute required tasks quickly and efficiently.

AR is poised to enter the mainstream with one estimate putting spending on AR technology at $60 billion in 2020. AR will affect companies in every industry and many other types of organizations, from universities to social enterprises. In the coming months and years, it will transform how we learn, make decisions, and interact with the physical world. It will also impact how enterprises can assist their customers, train employees, design and create products, and manage their value chains, and, ultimately, how they compete. While challenges in deploying AR remain, pioneering organizations including Amazon, Facebook, General Electric, Mayo Clinic, and the U.S. Navy, are already implementing AR and seeing a major impact on quality and productivity.

So you get the basic concept, but might still be uncertain as to why AR will be necessary? Take this example from The Guardian about climate change and how people have a very difficult time making long-term decisions (or even accepting it’s reality) because they do not see it happening right in front of them and therefore don’t see a reason to worry. Scientist and artists have already come up with some super creative ways of using augmented reality to help people see and feel the future if we don't do something today. Including the app After Ice which helps may help those who don’t understand the dangers of climate change experience the impact from wherever they are standing making it “real” for them in a way that reading or diagrams hasn’t been able to do.

Other interesting uses of AR include White Noise, an installation that pits realtime data on consumption against conservation — consumption almost always wins. Or artist and designer Catherine Sarah Young collaboration with scientists from Singapore-ETH Future Cities Laboratory and the University of Applied Sciences and Arts, Northwestern Switzerland, last year to develop the exhibition The Apocalypse Project: House of Futures which speculated about the future of our environment through a the lens of high fashion. The interactive projects allowed visitors to discuss their ideas about what makes a sustainable planet and a desirable future.

While AR won’t be a part of every business tomorrow now is a good time to get ahead of the game and start to think about how this incredible technology could help your business better tell its story of serve it’s customers or employees. It may seem like the future, but it is going to be a part of our every day life before long. 

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.