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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.

Views: Basic Psychology Can Empower Energy Efficiency

The SSC Team October 15, 2015 Tags: , , Strategic Sustainability Consulting No comments

Enjoy this post from the blog archives:

Most people are not aware of how much energy they are using (or wasting). Many feel as though they have little control over their monthly utility bills. However, social scientists suggest that if people were made aware of 1. their power usage costs in real time; and 2. how those costs compare to their neighbors and others in similar situations, energy conservation would be enhanced because of people’s desire to outperform.

According to Scientific American, new technology may improve awareness of our energy use and help push peoples desire to conserve energy.

One example of such new technology was employed by Southern California Edison utility which gave its consumers an Ambient Orb - a ball that sits on one’s table and communicates wirelessly with the local power grid. During peak demand hours, the ball glows red. When electricity prices are lower, the ball grows green. After only a few weeks, residents using the Ambient Orb decreased their power consumption during peak periods by 40 percent.

Competition and the ability to compare energy usage with one another may encourage further saving. A study was conducted in a small California town where all residents were notified about their energy consumption in previous weeks as well as the average consumption in their neighborhoods. Included with each month’s utility bill, individual homes were given a smiley face for bellow average consumption and a frown for an above average bill. This simple expression prompted excessive users to cut back and encouraged savers to continue saving.

These examples seem to illustrate a fundamental misconception – that being more energy efficient will somehow make life more difficult or less comfortable. A more reasonable conclusion may be that comfort is relative. Meaning, some people may actually want to do their laundry late in the evening or early in the morning if they can save money.

The article articulates another simple point - knowledge is power. People should be informed about their energy use in more effective ways!

Have you seen other technology that uses positive reinforcement or active awareness to encourage more sustainable behavior? Let us know in the comments!

Dispatch from SSC summer 2009 Intern Paul Turaew

RILA’s 2015 Retail Energy Management Report: 3 Takeaways

The SSC Team September 22, 2015 Tags: , , , , Strategic Sustainability Consulting No comments

By: Alexandra Kueller

Last week, we took a look at RILA’s Retail Sustainability Management Report, and today we’ll be looking at RILA’s Retail Energy Management Report.

Earlier this year, the Retail Industry Leaders Association (RILA) announced their brand new Retail Energy Management Maturity Matrix, which hopes to be a tool that will be used by retail executives, individual companies, and industry-wide to help companies focus on energy management. In September 2015, RILA released their Retail Energy Management Report that uses the matrix to analyze energy management initiatives from over 100,000 RILA member companies.

Taking the 23 dimensions related to energy management RILA has identified from six key sectors, the report looks at where the companies rank in terms of maturity: are they starting, just standard, excelling, leading, or at the next practice already. RILA presents their key findings from each dimension, then provides resources for companies to reach the next level, case studies to look over, and how to get involved on a greater scale.

Here are three observations that really stood out to us:

Dedicated energy management teams

At 85%, a large majority of the retailers surveyed indicated they have at least one fill time energy staff person, with the average company retaining about 3 full time staff members. Despite only 15% of respondents not having a full time energy management staffer, roughly 50% of the companies indicated that they use a third-party or consultant to help with their energy management. With energy management often linked to sustainability, less than 25% of the energy teams report to their company’s sustainability/CSR department, instead a lot of the energy teams report to either the Facilities or Real Estate departments.

Continuous energy management improvement

From 2014 to 2015, all dimensions except for five saw improvement in overall energy management. The sectors People & Tools and Energy Consuming Systems saw the biggest gains, with almost every dimension hitting the maturity level of “standard”. While there weren’t significant strides from last year (except for “Food Service”), the growth is still positive. As more robust energy teams and goals are put in place, there will hopefully be an increase in energy management maturity in the future.

No one has hit a plateau

And speaking of increasing energy management over the next couple of years, many retailers indicated that there are many new initiatives in place. RILA has even forecasted that many of these new initiatives, plans, and goals will help push many of the retailers to an average maturity level of “excelling”, with some companies reaching “leading” status. Even retailers that are currently at “leading” or “next practice” have indicated that more work is going to be done with energy management within their company.

Looking to start a new sustainability project but need to gain support? Find out ways to gain that support for your new project or idea here!

Grow Your Sustainability Consultancy Business by Speaking Your Client’s Language

The SSC Team July 7, 2015 Tags: , , , , , , , , , , , , , , , , , , , , , Strategic Sustainability Consulting No comments
Enjoy this blog from the SSC archives: So, you know all about your prospective client and you’ve decided on the strongest business case for sustainability for their situation. Now it’s time to win them over and solidify the relationship with a smashing proposal or pitch.

1) Don’t think of a pitch as a sell, think of it as an educational opportunity

Don’t worry so much about whether or not the client is going to hire you at the time you are meeting with them. Instead, treat it like a customized webinar or mini-conference where you are showcasing your knowledge about sustainability, the realities of where the economy is heading, their specific opportunities in relation to sustainability, and what they will need to do to get ahead and effectively adopt sustainability in their corporate strategic framework. You are just showing them the raw ingredients, while keeping a hold of the recipe. 

2) Start at the very beginning, a very good place to start

So, you know all about sustainability. And you know all about your prospective client. Unfortunately, your audience, be it the CEO or a mid-level executive, may not know much more about sustainability than “I think it costs a lot, but everybody seems to be doing it.” Clear that up right away with a brief definition of strategic sustainability – use the definition you use for your own consultancy. Make sure the client know that sustainability is a business framework, not a philanthropic or public relations gesture. Drop a few names, too – Wal-Mart, GE, Nike, Rio Tinto, Toyota. It doesn’t hurt for your client to know that they are joining the ranks of commerce’s elite.

3) Stress the long term and a future of change

“Fundamentally, corporate sustainability is about exploring the next way your company will be successful, because almost all the things you currently rely on -- energy, supply chain, consumers, investors, regulation -- are going to change,” said David Bent from the non-profit sustainability organization Forum for the Future in a blog series for Greenbiz.com. Changing times demand that companies factor in future risks, such as rising energy prices, increased regulation, and pressure from consumers, into their strategic plans. Since many of these future risks and market changes are going to stem from environmental and social concerns, integrating sustainability principles into the corporate framework now, to address these issues now, isn’t just a “cost” to the business, it’s an investment in the future risk management. “You can’t predict ‘the’ future, but you had better be prepared for possible futures with a portfolio of strategies – and a business case – that ‘future-proof the company’ by diversifying your risk going forward,” advises Gil Friend, founder and CEO of Natural Logic. You must stress this fact to prospective clients – they will probably have to become sustainable eventually, but they might as well make some money doing it proactively instead of reactively. Just be sure to avoid scare tactics or pressure. The fact is: the world is changing, and change can be good.

4) Look to frame sustainability as a driver for innovation and opportunity

Find examples of “play-to-win” organizations that have used sustainability to tap into new opportunities (destroying the competition in the process) to help sell the concept. Companies are inherently competitive, but often are mired in a “compliance mentality.” Remind your audience that business is a battlefield; you might be able to tap into that competitive spirit. Use what you know about the company’s competitors or industry to highlight how the sustainability program may get them ahead of the game.

5) Present the client’s customized business case in a language that everyone can understand – shareholder value

It’s meat and potatoes time. You’ve briefly discussed sustainability, the risk of not acting, and the opportunity gained by taking action. Next is what they’ve all been waiting for – the business case. At this point, be fairly specific about what you feel the key “value drivers” of a sustainability program will be for this specific organization. First, present the business case. For example, an engineering firm with a zillion vacancies on its “careers” page and a reputation of an ‘old boys club’ may benefit from a sustainability program stressing competitive advantage – a program that will help its recruitment program, shape its industry, and help it become an early mover on new and emerging areas for growth (like green design, perhaps). Second, present the projected investment (in time and money) and the estimated return on investment (ROI). According to Friend, the business case has to provide a clear ROI in the financial, operational, and strategic dimensions. But be clear that ROI in sustainability isn’t only about short-term dollars and cents. When you are talking about elements like “recruitment” and “industry shaping,” be sure to clarify that these, albeit not short-term financial returns, are “indirect” returns. While direct returns include costs (lighting retrofits or waste-reduction), indirect returns ( impacts on brand reputational value, employee productivity and retention, product quality, community goodwill, etc.) can open companies to new business as much as any marketing plan while helping reduce risk. For an in-depth discussion on costing for sustainability, check out the book Making Sustainability Work by Marc Epstein. Third, use statistics, examples, graphics, and best practices, briefly but effectively, to back up your claims on how your proposed programs can directly affect shareholder value through direct and indirect returns. Finally, give the client a path on how a sustainability program for this value driver might be incorporated into their organizational framework.

6) Don’t frighten them off

Although you may have made an amazing pitch with ROI analysis that just can’t be denied, a client may still balk. “But we don’t have $150,000 for a lighting retrofit, even if we know it will save us $300,000 over the next six years…” Yes, it may be ideal if you could tackle each value driver head on, re-write the strategic plan, and reorganize the company, but, more likely, the financial minds at your prospect’s firm are going to be reluctant to loosen the purse strings. To help ease them into the process (and help you begin to form a long, trusting relationship), break it down into steps. Begin with saying, “Now that I’ve presented the strategic sustainability framework that will eventually deliver the most value to your organization, let’s talk about where we begin. Every journey starts with a series of small steps…” At this point, have one or two programs that will work as small but effective pilot programs for this broader sustainability plan. Try to find the one or two manageable programs with the lowest-hanging, least expensive fruit, and suggest that the client give them a try first. The pilots will help you build credibility with the CFO’s office, as well as awareness throughout the rest of the organization. Hopefully by achieving documented success with the first few pilot programs, the company will continue to draw on your services to expand into the more complex strategic development of their sustainability program (that you were the architect of).

7) Be straightforward about the business relationship

Once you’ve delivered the presentation (no more than an hour of their time) and have some concrete offerings available for them (green audits, waste audits, pilot ‘Green Team’ programs, stakeholder engagement initiatives, or whatever your other pilot programs were) be ready for questions. Know how long each program will take and what it may cost if they suddenly want to go whole hog. Be prepared to answer detailed questions about customer service, your ‘next steps’ in project development, your experience, your resources, costs of your service, as well as costs directly to them (retrofits, training investments, life-cycle-analyses, etc.) and the overall estimated ROI for each suggested program. Instead of spending your time trying to convince the client through testimonials of how great you are, just do what you do best: consult them. Show them what you know and use examples from research or from your past experience to illustrate how they, too, can meet their goals, transform their business, reduce their risk, and increase shareholder value through sustainability. You are simply the person with the tools to help them get the process started. Find out how you can become a better sustainability leader in one of our latest blogs.

Seven Questions to Focus Sustainability Leadership

The SSC Team May 12, 2015 Tags: , , , , , , , , , , , , Strategic Sustainability Consulting No comments
Enjoy this 2012 article written by SSC president Jennifer Woofter that was featured in Environmental Leader: Sustainability leadership is a challenging issue I’ve seen crop up in a variety of situations recently, including:
  • Lower-level employees on a volunteer green team, trying to steer their companies down a greener path
  • Newly appointed Chief Sustainability Officers (CSOs) charged with the momentous task of integrating sustainability into the C-Suite
  • Sustainability consultants that have buy-in from the client’s leadership, but are struggling to push it down into individual departments
In many cases, the people involved are facing a leadership crisis. And as a result they aren’t clear about their role, able to generate momentum, or equipped to get others on board. Sometimes they are spinning their wheels, other times they are bulldozing their colleagues. They might be all talk and no action, or “all action” without an overarching story to tie everything together into a larger mission.  The list of symptoms can be endless and exhausting. I was delighted, therefore, to come across, “7 Practical Questions That Will Multiply Your Influence.” David Dye, founder and President of Trailblaze, Inc., argues that the stuff of leadership, “has nothing to do with the title that comes after your name or power to force people to act. It has everything to do with what is in your heart.” Touchy-feely sentiment aside, his seven questions resonated with me from the perspective of the sustainability leadership crisis. I’ve listed them below, along with my thoughts on each question’s pertinence to sustainability leadership. I hope that it helps to spark something in all the current and future sustainability leaders out there!

1. What do you really want?

“In the middle of a leadership crisis, nothing provides clarity like this question. What do you want to happen as a result of your leadership in this situation? Sometimes you’ll find that you’ve been acting from an entirely different set of motivations than what it is you want deep down, where it matters.” For Sustainability Leaders: Sustainability is a cross-departmental, cross-functional, cross-issue, cross-stakeholder endeavor – and the truth is that you can’t please everyone all the time. Be clear about what YOU really want out of the “sustainability leader” role. Is it to radically transform the company? Inspire the CEO? Show up the CFO? Execute the plan and make your targets? Show that going green can be profitable? Use this position as a stepping stone to another job? Be clear, specific, and honest with yourself.

2. Do you know (and are you working out of) your values and personal mission?

“Self leadership begins when you know your own values and understand your purpose – what make your heart sing and come alive in the universe. When you work from this energy, it’s naturally attractive to like-minded team members and you motivate almost without knowing it. If you haven’t done this work, I strongly encourage you to find a coach or mentor who can help you explore what matters most.” For Sustainability Leaders: Think beyond sustainability for a minute: what makes you tick? Do you love to collaborate, and work best in a meeting or team environment? Or do you love to be alone in a room, running the numbers a dozen ways to figure out the best way to optimize a process? Are you a voracious reader who thrives on big ideas? Or are you an “on the ground” details player? Understanding your values, working style, and motivation will help clarify your leadership style.

3. Are you choosing problems or trying to avoid problems?

“Solving problems is central to meaningful leadership, but many leaders fall into a trap of trying to avoid problems. We don’t get to choose whether or not we’ll have problems … but often we DO get to choose which set of problems we’ll have. Effective leaders don’t spend time trying to avoid problems. Rather, they put their energy into working on the right set of problems – the ones that get them closer to their vision. For example: Do you want the discomfort of learning how to address poor performance or do you want the discomfort of a team with poor morale and worse results? Do you prefer the pain of changing your strategy or the pain of discovering your team is no longer relevant? Do you risk vulnerability and apologize for mistakes or do you avoid taking blame and lose credibility?” For Sustainability Leaders: This is a crucial lesson that we need to learn over and over. Because sustainability is a complex issue, we can tackle it through a variety of lenses – and thus choose our problem set. Do you prefer to focus on pushing a more radical sustainability strategy and risk making no substantive progress for months, or focus on smaller, incremental steps that may not really change “business as usual”? Do you want to risk C-suite ire by pushing for ground-up employee engagement, or risk alienating lower-level employees by pushing a top-down sustainability plan? Each choice has pros and cons, so be thoughtful about which problems you choose.

4. Do you really want things to get better?

“In question #1, you looked at what you really want, deep down. Now it’s time to look at the cost. If you’re going to change things, it’s going to include risk, discomfort, being misunderstood, sacrificing other goals, etc. Are you willing to accept the consequences of pursuing your vision? If not, you can’t possibly expect your team to come along with you.” For Sustainability Leaders: If you push for a radical sustainability agenda, you may find yourself stalemated (or worse, fired) for being too aggressive. If you move more slowly, you may look back in 10 years and realize you haven’t accomplished much. Either way there are consequences for your leadership style, both for yourself and for the organization you are leading. Can you identify the risks you face as a result of your sustainability leadership? Are they acceptable? If not, what do you need to change?

5. Are you working for your team or yourself?

“Time to take a hard look in the mirror … no one will truly know the answer to this one but you. When your decisions are in your heart and your head, before you’ve given them a voice … are you filtering them through what’s best for you or best for your team? Are you saying “I” … or “we”? It’s okay to include your own well-being in your decisions (you are one of the team after all!), but if your team isn’t at the core of your leadership decisions, your credibility will quickly erode.” For Sustainability Leaders: I’d expand this question to include: whose sustainability are you working for? Is it your own (including having a job that pays the mortgage), your organization (including being profitable and competitive), or the world (including a radical transformation of our economy and social structure to account for natural and social boundaries inherent in a sustainable system). These goals aren’t totally either/or, but there are often trade-offs that need to be considered. For example, a sustainability consultant needs to consider whether they are working themselves out of a job by helping companies set up sustainability programs. (I believe that there will always be a role for sustainability consultants, but that’s another article altogether.) Sometimes, pursuing a radical sustainability agenda will NOT be in the best interest of a company – rather, a more strategic, leading-but-not-sticking-your-neck-out-too-far approach is best. Be cognizant of the trade-offs of your sustainability leadership approach. You’ll need to be able to address them with your colleagues.

6. What can I do to bring about the results I want to see?

“I love this one: it moves us from victim to leader. When you find yourself frustrated at circumstances, upset that people “just don’t get it,” or discouraged that things didn’t go as you hoped, you’ve got a choice: Bemoan the unfairness of the universe (which inspires no one!). Or look at the situation and see where you can take action. Just asking the question completely reframes the situation and can transform a gloomy attitude in seconds.” For Sustainability Leaders: This is a great question when you find yourself in a stalemate, frustrated by your lack of sustainability progress, or thwarted by a system that doesn’t seem to be moving in step with your vision. Take a different approach and ask yourself: what three actions can I do today to move the ball forward? Maybe it’s scheduling a meeting with your boss to discuss revamping your task list. Maybe it’s buying the latest sustainability book to get inspired. Or maybe it’s taking a day off to recharge your batteries.

7. Are my people better off as a result of their time with me?

“This is what James Hunter calls “the ultimate leadership test.” If the answer is yes, keep going. If the answer is no, examine the reasons why. Do you need to improve your skills? Do you need to wrestle with some of the earlier questions on the list?” For Sustainability Leaders: Sustainability isn’t just about reducing your organization’s carbon footprint or finding more eco-friendly packaging. At the end of the day, sustainability leadership is about people: are they engaged? Do they share a common vision of what the future looks like? Can they see their own individual role in the journey? Your job as a sustainability leader is to help people say yes to sustainability. So, how are you doing? What does it take to be environmentally sustainable in the retail industry? Find out here!

How Sustainability is Saving Chinese Textile Mills Money

The SSC Team April 16, 2015 Tags: , , , , , , , , Strategic Sustainability Consulting No comments

By: Alexandra Kueller

It’s no secret that China is not an environmentally progressive country. Beijing is plagued by air pollution, over 100 cities are facing water scarcity issues, almost a third of China’s rivers are too polluted for human contact, and to top it all off, as a nation China is one of the highest emitters of carbon dioxide. 

One of China’s largest polluters are their textile producers. Responsible for roughly 50% of the world’s fabrics, textile manufacturing is a very environmentally un-friendly process that results in high energy and water use. The industry is responsible for the being the third largest dischargers of wastewater and the second largest user of chemicals in China. 

All hope is not lost, though. With the help of the National Resources Defense Council’s (NRDC) Clean By Design program, Chinese textile manufacturing facilities are using green tactics to not only reduce energy and water consumption, but also help them save money as well.

The NRDC recently released a report stating that the 33 textile mills that are using the Clean By Design program are saving an estimated $14.7 million annually. By going after the “low-hanging fruit” – the low-cost, easy to implement projects – the textile manufacturers are helping to make a strong business case for sustainability.

Here are some of the ways the Chinese textile mills have not only reduced their environmental impact, but also saved money along the way:

Electricity Reductions

10 of the 33 textile mills went after projects that helped reduce electricity consumption. While the average reduction was only 4%, some of the more impactful projects yielded a 9% reduction with over $21,000 in annual savings. As a bonus, this project paid for itself in only a month!

Water Reuse

31 mills implemented 53 projects that resulted in an average of 9% water savings, with some of the top mills reducing water consumption by 20%. A lot of the reuse efforts focused on targeting process water and grey water, because those tended to yield the largest and most cost-effected reductions. Some mills installed a water treatment process, and that initial investment of $7,600 paid for itself in three months.

Energy Recovery

Through 173 projects that focused on electricity reduction, every participating mill saw an average reduction of 6%, with the top mills seeing a 10% reduction in energy. A majority of the projects saw efforts to recover heat from exhaust gas, water, and oil due to the fact that they produced that largest, most cost-effective reductions: a $500,000 investment yielded roughly $650,000 in annual returns.

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