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Integrate Total Cost of Ownership with Your LCA to Make Sustainable Choices

The SSC Team November 17, 2016 Tags: , , , Strategic Sustainability Consulting No comments

Sustainability professionals speak the language of quantifying carbon emissions. Most other business professionals, however, speak the language of currency. Budgets. Market fluctuations. Stock price. Cost of materials or labor.

For most procurement professionals, pricing out goods and services generally means looking at the bottom line cost per unit over time. For example, a restaurant chain looking at cloth versus paper napkins is factoring in the annual cost of purchasing and disposing of paper napkins versus the prorated annual cost of purchasing, laundering, and replacing cloth napkins over their useful life. It’s dollars and cents.

Where natural capital accounting is a way to present the balance sheet of an organization by factoring in environmental impact, total cost of ownership, or TCO, helps firms better integrate sustainability information into the procurement process.

By taking the LCA data and drilling into each stage in the life cycle and calculating an environmental “cost,” a firm can create a TCO framework for a product or service. Or, better yet, can create better procurement guidelines based on optimal TCO variables that balance environmental and financial choices.

A Big Leap

TCO work is not easy. It requires firms to “dive deep into the value chain, and look at factors including manufacturing time, costs of parts, research and development, and environmental sustainability. This includes emissions from suppliers as well as those of consumers using the products and services.”

However, by using TCO purchasing practices firms are finding new business opportunities by meeting the increasing demands of consumers seeking “green” goods and services, decreased overall costs as waste reductions are targeted, and helps firms focus on the long term benefits of spending more up front, for example on energy efficient or renewable energy technology, resulting in a net decrease in operational costs over time.

Just like natural capital accounting, TCO work is difficult, not quite standardized at the level of most carbon emissions calculators, and underutilized. We hope to see more firms take up both practices, further integrating the bottom line dollar with the bottom line for the environment.

 

3 Ways to Engage Suppliers on Sustainability

The SSC Team November 15, 2016 Tags: , , Strategic Sustainability Consulting No comments

We would like to get more involved in including sustainability initiatives during our procurement process and the selection of supplier process.  We want to work with our procurement team on this. What are some of the methods other organizations and companies have used in engaging with suppliers with their sustainability initiatives?

-- Barry Enix | Buckman

 

 

The question above was posed on the 2Degrees platform for sustainability professionals. It's a great question, and one that we frequently tackle in our work with clients seeking to push sustainability beyond their direct operational boundaries.

Here's what SSC President Jennifer Woofter said:

I find that effective supplier engagement needs three components: a policy element, a program element, and performance element.

The policy element is intended to explain the expectations that you have for suppliers in the area of sustainability. A supplier code of conduct, for example, will outline which sustainability issues (labor, environment, human rights, grievance processes, health and safety, etc.) you expect suppliers to address and comply with. Inserting similar requirements into supplier contracts, RFP/RFQs, etc. will ensure that the policy has "teeth" and can be used in contract decisions.

Supply chain programs including training and capacity building -- for both the suppliers themselves, but also for your procurement staff. Do purchasing managers know what to look for in a "sustainable" supplier? Are sustainability aspects incorporated into new vendor evaluations? What kind of auditing, self-assessments, corrective actions, and negotiation tools are available on each side? Robust programs will ensure that your policy isn't just a document on a wall somewhere, but is an active expectation lived out in day-to-day decision-making.

The final component is effective performance measurement. Sustainability professionals like to say "what gets measured gets managed" and it's essential that any supplier engagement program have effective metrics. You might begin with simple measures like "how many suppliers responded to our survey" or "how many suppliers attended our sustainability training," but generally I advocate moving to more outcome-based metrics such as "how much did serious incidents decrease after suppliers participated in our safety training?" and "how many tons of carbon emissions were suppliers who engaged with us able to reduce (as compared to non-engaging supplier)?" These kind of indicators will give you a much better sense of how effective your engagement efforts are -- and give you insight into what new initiatives are most likely to give you the results you seek.

Want to see what other sustainability practitioners recommended? Read the entire discussion over at 2Degrees.

 

TED Talks: Leadership – 5 Ways to Lead in an Era of Constant Change

The SSC Team November 10, 2016 Tags: , , , Strategic Sustainability Consulting No comments

Everyone loves a good TED Talk. Here’s one of our favorites.

Organizational change expert Jim Hemerling outlines strategies for making change management a positive experience instead of a tumultuous one. He argues that a business in today's constantly-evolving world can be invigorating instead of exhausting. Watch this awesome TED talk where Hemerling outlines five strategies, centered around putting people first, for turning company reorganization into an empowering, energizing task for all.

 

 

Lobbying Isn’t (Always) a Dirty Word: Climate Change is a Very Special Interest

The SSC Team November 3, 2016 Tags: , , Strategic Sustainability Consulting No comments

The public discourse, especially in the current political climate, tends to take extreme positions on practically every issue. Of course climate change and climate change regulation is already quite a hot-button, but the act of lobbying itself – approaching elected officials to influence public policy – is often considered dirty politics.

In truth, those of us committed to smart regulations and international cooperation to help reduce the effects of climate change, can benefit from pressing our elected officials to take this issue seriously. U.S. voters head to the polls next week – make sure you know what your candidates’ views are on climate change – and organizations small and large should consider taking a stronger position and using their resources to help create a smart regulatory environment.

The deck isn’t stacked against the green companies

According to a recent study, more than $3.1 billion was spent lobbying on environmental issues between 2009 and 2014, and nearly half of that money was spent by firms lobbying for climate-protecting regulation.

Pacific Gas and Electric (PG&E) “openly supported a cap-and-trade system for carbon emissions, and even left the U.S. Chamber of Commerce over the organization’s vociferous opposition to carbon regulation,” and was the second highest spender lobbying on climate change in 2008.

Too few are using the government to help

The study also found that mostly the activist companies – very low emitters with a competitive advantage from increasing regulation – and the worst greenhouse gas emitters (gas, oil, coal, and the like) are primarily the ones taking the fight to state and national legislators. This means that there are hundreds of thousands of organizations that aren’t speaking up at all, allowing the major players to dictate the terms.

Integrate lobbying into your sustainability strategy

As companies develop sustainability strategies, be sure to include lobbying – at the local, regional, or national level –  in that strategy. Set the pace as a leader on the issues so you’re not caught playing catch up when legislation is enacted.

Is your organization integrating lobbying and outreach efforts into its sustainability strategy? Let us know where you've seen gains.

A 6-minute Guide to Better Sustainability Decisions

The SSC Team October 13, 2016 Tags: , , Strategic Sustainability Consulting No comments

Enjoy this post from the SSC archives. 

This video from Harvard Business Review introduces a methodology for helping you choose the best decision-support tool for your specific business situation. While the tool is not sustainability-focused, we found it fascinating to think about how to use a decision-tree model like the one presented for thinking about high-stakes decisions like:

•  Accounting for climate change impacts on capital investments.

•  Introducing new "green" products into the marketplace.

•  Rolling out a new telecommuting program.

•  Planning new freight routes for global distribution.

Watch this 6-minute video and let us know if you think this tool helps identify better ways to make high-stakes sustainability decisions?  Leave a comment or join the conversation on Twitter!

Best of the Blog for July 2016

The SSC Team July 28, 2016 Tags: , , Strategic Sustainability Consulting No comments

Each month, we highlight some of our more popular content on the SSC blog!

In case you missed them, here's a round-up of our most popular blog posts from this past month. These are the articles that received the most attention from our online audience. Check them out! 

  1. Free Learning Resources for Aspiring Sustainability Professionals
  2. Welcoming the New ASTM Standards
  3. Test Your Company's Strategic Sustainability Alignment
  4. Best Practices for Virtual Teams
  5. Closing the Gap Between Sustainability Strategy and Execution

If you like an article, please consider sharing it online via your favorite social media platform. Helping us grow our audience is the #1 way you can show your support for the work that we do.

The Trouble with Reducing Air Travel-Related Emissions

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

Enjoy this post from the SSC archives.

We were delighted to be interviewed recently by Bloomberg's, Ben Elgin, on the topic of corporate air travel (and why companies are struggling to reduce air travel-related emissions). SSC President, Jennifer Woofter, was quoted in his article,  "Handshakes and Body English Vex Corporate Carbon Cutting Goals":

"Airplane travel is an environmental no-no," says Jennifer Woofter, President of Strategic Sustainability Consulting in Herndon, Virginia. "A number of our clients are struggling with this."

As with many articles, the final quote is but a smidgen of what we have to say on the topic. Since it didn't make the final cut in the Bloomberg article, we'd like to share what we know on the question of "Why are companies struggling to reduce their air travel?" 

AIR TRAVEL IS CONNECTED TO IMPORTANT EMPLOYEE PERKS

While promotions and raises may have hit the skids during the recession, one of the perks that many employees have been able to hang on to is the annual conference, training event, or trade show.

Employers need to invest in the professional development of their staff, and many workers enjoy the benefits of getting out of the office environment to learn something new, network with industry peers, or showcase their talents.

Companies can reduce air travel to a certain extent, but if even a portion of the workforce travels periodically for professional development reasons, it's going to be difficult to find additional air emissions reductions without sacrificing employee morale and engagement.

GROWING TELEWORK CAN MEAN INCREASED AIR TRAVEL

We have several clients who have dramatically increased the ability of their employees to work from home. This policy has significantly reduced employee commuting-related emissions (from driving to and from work each day) but occasionally results in more air travel when virtual workers relocate to remote areas. Instead of driving each day, they may fly into the corporate office once a month, or once a quarter. Those air miles add up quickly.

THE COST OF VIRTUAL MEETINGS IS STILL SIGNIFICANT

Let's not ignore cost. While there are a number of pretty amazing free tools (Skype and join.me are two of our favorite), companies that need high-resolution, ultra-secure video presence need to shell out a pretty penny. And it's not enough to install a videoconferencing center in your corporate office -- you also need one in each of the connecting locations. It might make sense to install a system in each of your branch offices, but what about the locations of your major suppliers, or at the headquarters of your prospective customers? Nope, that won't work -- most of the time you will still need to send people out to do business in a face-to-face setting.

Of course, the biggest roadblock is one that is covered in detail in the Bloomberg article, the fact that an electronic handshake just isn't the same as spending time in the physical presence of another person. So while we do counsel clients on how to reduce unnecessary air travel, we also face reality: most businesses will need to maintain some level of air travel and the best option is to look broadly at the entire picture (telepresence, commuting, air travel, professional development, and the sales process) and find a balanced approach that makes good business sense. 

Curious about how to better measure and manage commuting-related emissions? Download our free white paper on Reducing your Organization's Carbon Footprint:  Addressing Commuter Related Emissions. The

The Trouble with Reducing Air Travel-Related Emissions

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

Enjoy this post from the SSC archives.

We were delighted to be interviewed recently by Bloomberg's, Ben Elgin, on the topic of corporate air travel (and why companies are struggling to reduce air travel-related emissions). SSC President, Jennifer Woofter, was quoted in his article,  "Handshakes and Body English Vex Corporate Carbon Cutting Goals":

"Airplane travel is an environmental no-no," says Jennifer Woofter, President of Strategic Sustainability Consulting in Herndon, Virginia. "A number of our clients are struggling with this."

As with many articles, the final quote is but a smidgen of what we have to say on the topic. Since it didn't make the final cut in the Bloomberg article, we'd like to share what we know on the question of "Why are companies struggling to reduce their air travel?" 

AIR TRAVEL IS CONNECTED TO IMPORTANT EMPLOYEE PERKS

While promotions and raises may have hit the skids during the recession, one of the perks that many employees have been able to hang on to is the annual conference, training event, or trade show.

Employers need to invest in the professional development of their staff, and many workers enjoy the benefits of getting out of the office environment to learn something new, network with industry peers, or showcase their talents.

Companies can reduce air travel to a certain extent, but if even a portion of the workforce travels periodically for professional development reasons, it's going to be difficult to find additional air emissions reductions without sacrificing employee morale and engagement.

GROWING TELEWORK CAN MEAN INCREASED AIR TRAVEL

We have several clients who have dramatically increased the ability of their employees to work from home. This policy has significantly reduced employee commuting-related emissions (from driving to and from work each day) but occasionally results in more air travel when virtual workers relocate to remote areas. Instead of driving each day, they may fly into the corporate office once a month, or once a quarter. Those air miles add up quickly.

THE COST OF VIRTUAL MEETINGS IS STILL SIGNIFICANT

Let's not ignore cost. While there are a number of pretty amazing free tools (Skype and join.me are two of our favorite), companies that need high-resolution, ultra-secure video presence need to shell out a pretty penny. And it's not enough to install a videoconferencing center in your corporate office -- you also need one in each of the connecting locations. It might make sense to install a system in each of your branch offices, but what about the locations of your major suppliers, or at the headquarters of your prospective customers? Nope, that won't work -- most of the time you will still need to send people out to do business in a face-to-face setting.

Of course, the biggest roadblock is one that is covered in detail in the Bloomberg article, the fact that an electronic handshake just isn't the same as spending time in the physical presence of another person. So while we do counsel clients on how to reduce unnecessary air travel, we also face reality: most businesses will need to maintain some level of air travel and the best option is to look broadly at the entire picture (telepresence, commuting, air travel, professional development, and the sales process) and find a balanced approach that makes good business sense. 

Curious about how to better measure and manage commuting-related emissions? Download our free white paper on Reducing your Organization's Carbon Footprint:  Addressing Commuter Related Emissions. The

Test Your Company’s Strategic Sustainability Alignment

The SSC Team June 23, 2016 Tags: , , , , Strategic Sustainability Consulting No comments

Integrating sustainability deeply into core business strategy is the only way to build a truly sustainable business.

A recent article in the Harvard Business Review broke down the three elements of business alignment: defined long-term purpose, strategic effectiveness, and organizational effectiveness.

Your purpose is your direction - an aspiration to achieve something greater in the world. Strategic effectiveness includes the steps and plans taken to achieve that greater purpose. Organizational effectiveness is the technical, human, physical, and capital resources and capabilities a company has to support the strategy.

As organizations continue to face growing risk posed by climate change, there are many ways they are responding. Some companies “greenwash” or come perilously close, stating sustainability goals in a purpose/mission statement or misleading through relatively meaningless or deceptive sustainability "reports," while not assigning any strategic or organizational resources into actual progress toward a more sustainable business model.

A few organizations develop strategic plans that include aspirational goals and benchmarks along sustainability metrics, but then don’t ever fund the work (think, government).

Other organizations invest money in organizational effectiveness, like focusing heavily on waste reduction to save money and achieving a semblance of sustainable performance as a byproduct of that work, but likely not making any real progress toward reducing impact in a more meaningful way or aspiring for overall organizational sustainability.

Many companies are somewhere in the middle, picking and choosing where to aspire, plan, and invest resources, but alignment is missing across the business as a whole.

Fully integrating sustainability in all three of these areas – purpose, strategy, and organizational effectiveness/resources – is the only way to truly create a sustainable business. And, if you follow the logic of the article’s authors, this will result in a successful business as well.

Are you ready to start on the path of creating a meaningful sustainability strategy?  

Test Your Company’s Strategic Sustainability Alignment

The SSC Team June 23, 2016 Tags: , , , , Strategic Sustainability Consulting No comments

Integrating sustainability deeply into core business strategy is the only way to build a truly sustainable business.

A recent article in the Harvard Business Review broke down the three elements of business alignment: defined long-term purpose, strategic effectiveness, and organizational effectiveness.

Your purpose is your direction - an aspiration to achieve something greater in the world. Strategic effectiveness includes the steps and plans taken to achieve that greater purpose. Organizational effectiveness is the technical, human, physical, and capital resources and capabilities a company has to support the strategy.

As organizations continue to face growing risk posed by climate change, there are many ways they are responding. Some companies “greenwash” or come perilously close, stating sustainability goals in a purpose/mission statement or misleading through relatively meaningless or deceptive sustainability "reports," while not assigning any strategic or organizational resources into actual progress toward a more sustainable business model.

A few organizations develop strategic plans that include aspirational goals and benchmarks along sustainability metrics, but then don’t ever fund the work (think, government).

Other organizations invest money in organizational effectiveness, like focusing heavily on waste reduction to save money and achieving a semblance of sustainable performance as a byproduct of that work, but likely not making any real progress toward reducing impact in a more meaningful way or aspiring for overall organizational sustainability.

Many companies are somewhere in the middle, picking and choosing where to aspire, plan, and invest resources, but alignment is missing across the business as a whole.

Fully integrating sustainability in all three of these areas – purpose, strategy, and organizational effectiveness/resources – is the only way to truly create a sustainable business. And, if you follow the logic of the article’s authors, this will result in a successful business as well.

Are you ready to start on the path of creating a meaningful sustainability strategy?