Page 45 – Sustainability Academy

As more and more investors are looking for data regarding sustainability, the line between financial data and non-financial data is becoming blurred.

Bloomberg’s Eric Roston writes “so here’s the paradox. If non-financial data, such as greenhouse gas emissions per dollar of revenue, is included in a financial reports for investors, how can it still be called non-financial?” Investors and companies are starting to define this reporting.

This reporting, referred to as environmental, social and corporate governance reporting (ESG), is on the rise in many corporations. Hank Boerner, chairman of the Governance Accountability Institute (GRI), shared with Bloomberg that much of this reporting comes in the form of a corporate sustainability report. The GRI has been collecting information of sustainability reports for 2012. While these reports exist, the data offers only a snapshot to investors.

Last year, 242 reports were issues and 186 of them followed the guidelines of GRI. This was an increase of 44 percent over 2010. Companies who have decided to incorporate their data into one report include Clorox, Northern Grumman, SAS, Genentech and Polymer Group Inc.

A recent report from Deloitte, “Integrated Reporting Navigating your way to a truly Integrated Report” may help your organization determine which information is material to your business.

Does your company have an integrated report? What are you experiences?

A new white paper from Ernst & Young asks corporate boards if they are ready for investors to focus on sustainability. According to GreenBiz.com, this is the third year in a row that sustainability has dominated major proposal categories.

Sustainable investors have gone mainstream, with the total votes in support of environmental and social issues reaching 21 percent in 2011. Investors are looking to companies to focus on the risks and opportunities that are associated with sustainability issues. Ernst & Young writes that this “reflect[s] the growing belief that a company’s environmental and social policies correlate strongly with its risk management approach and financial performance.”

As investors continue to seek greater accountability, they will challenge boards to further improve oversight on environmental and social issues, as well as increase the dialogue surrounding these topics.The white paper cites Microsoft Corp., Apple Inc., Hewlett-Packard CO, Chesapeake Energy Company, KB Home and PulteGroup Inc. as leaders in using engagement to achieve success.

As media coverage and legislation increasingly capture the eyes of investors, corporations will be asked to share information about the labor conditions of their global supply chain and the impacts of resource extraction practices.

For additional information on how investors are going to play an increased role in corporate sustainability in 2012, you can read the entire white paper from Ernst & Young here.

Have you seen an increase in investor questions on your company’s sustainability endeavors? Are these ideas you have already adopted?

Corporate sustainability, and the reporting that comes along with it, can be a goldmine of information for businesses. Many companies tend to overlook the information that is available in their own reports.

According to a new report by Deloitte and Touche, executives could be exposing their company to long-term risks if they do not closely evaluate or disclose the information that they have collected.

The report, “The Disclosure of Long-Term Business Value: What Matters” contends that “companies of all sizes should consider factors such as resource efficiency, business-model efficiency, the potential for innovation, brand strength and corporate culture as part of strategic decision making,” explains GreenBiz.com.

GreenBiz.com’s Heather Clancy utilizes the example of manufacturing. If the company opens a new plant they should look more at the long-term outlook, such as the outlook for water supplies.

Eric Hespenheide and Dinah Koehler, the authors of the study, note that CFOs have a unique advantage points in this situation. They have the ability to consider long-term results for a wide-range of stakeholders. CFOs can reach the customers, suppliers, consumers, employees, non-governmental organizations and communities that contribute to the overall success of an organization.

We’ve discussed how sustainability is important to the consumers. The Deloitte and Touche study realizes this as well. Two of their guidelines include the ripple effect of the supply chain and the ability to question whether your organization has a social impact.

By tracking information other than financials, including greenhouse gas emissions, waste-management policies, water consumption and corporate social responsibility, companies have the ability to take on a whole new dimension in the ever-changing business world.

By: Nikos Avlonas

Founder and President CSE

As corporate responsibility (CR) has grown rapidly over the past years, CR key issues are dynamic and therefore create the need for new, innovative directions in the development and implementation of effective and integrated CSR strategies.

Do Senior Executives of global large and mid-size organizations really understand the CR business case?

Have they embedded CR within their core strategies and supply chain?

Is CR viewed as an “extra” or a fundamental way to do business?

Although most executives in various research studies declare that CR is extremely important to their business, few organizations globally have integrated CR values into their core strategy and supply chain. There are many reasons why this is happening. One of them is due to the lack of appropriate awareness and education. CR is not yet a core course for the most American or European MBAs, while executives don’t devote much time to professional education in this area since they consider CR a ‘’soft’’ issue.

Today, sustainable development represents one of the most discussed topics, on a social, environmental, and economic level, mainly as a result of the latest critical transformational changes in all levels of society and adverse environmental impacts. Under this pressure, and due to the growing need for material and quality educational resources on CR and sustainable development, in its 57th meeting in December 2002, the United Nations General Assembly proclaimed the years from 2005 to 2014 as the Decade of Education for Sustainable Development (DESD), ’emphasizing that education is an indispensable element for achieving sustainable development’. Additionally, in October 2011, the European Commission announced its CSR commitments for the next several years. This initiative reflects the mutual commitment and the definition of specific preconditions from all the countries for the confrontation of key problems, but it also constitutes one strong motivation for citizens and organizations in order to act on the same basis.

Therefore, it is becoming more and more obvious that the role of CR Managers (Chief Sustainability Officers, or CSOs) is now more important than ever. Corporate executives must find new ways to address the social, economic, and environmental impacts of doing business “as usual,” and organizations must increase the degree to which employees of all levels and functions – not only managers or directors – comprehend, appreciate, embrace and practice the concepts of CR. Specifically for CR Managers (CSOs), required abilities and skills should focus on the alignment of the organization’s strategy with the values and principles of corporate responsibility; and realize that the effective choice of CSR activities and initiatives that address the stakeholders’ needs will constitute a competitive advantage to shape future leaders.

Adopting a more practical outlook, CR Managers and other Senior Executives have to be able to answer crucial questions such as:

What is my organization’s social and environmental impact?
How do I set goals and measure performance?
How can my organization utilize CR strategy/initiatives in order to stand out in comparison to the competition?
Does the supply chain strategy align with my CR strategy and board’s decision-making?
How do I create a CR culture and motivate my employees?
On which stakeholders groups do we need to put priority?
In which ways can I encourage/incentivize/initiate innovation internally?

The issues above constitute key everyday issues that experienced CR Managers from all sectors, around the world, come across every day. Such challenges will be addressed in implementing the appropriate CR strategy through integrated initiatives that respond to the business priorities, and through companywide awareness training programs that are consistent with corporate strategy.

Training programs, responding to the growing demand for awareness and education on issues pertaining to sustainable risks, environmental policy and future legislation, stakeholder engagement, and sustainability reporting, in all levels of hierarchy and in all sectors, are being developed to meet and exceed organizational requests originating from stakeholder demands. The aim of these programs is to train the professionals involved in all stages of the deployment of CR to effectively integrate principles and best practices into the corporate decision making system.

Well trained CR Managers, having an overall picture of their organization’s operations, are able to assist organizations in the CR long term journey supporting CR integration. Moreover, ownership of the trained senior business executives is critical in their organizations for the assurance of a long-term competitive advantage. Encouraging businesses to change existing economic and business models – differentiating their products and services to a “green” direction – gives them a high return on investment and elements of excellence and leadership, meeting new strategic objectives and corporate responsibility values.

Leading CR organizations as Heineken Group and Lloyds Banking Group have established a CR culture that is embraced by the company as a whole and is applied to all business processes; it is not treated as an add-on or a separate function. This allows organizations to identity business opportunities faster and act accordingly. Organizations embracing CR are able to measure performance and processes, assess the impact of their decisions and activities, and therefore, realize the true value of their practices. Establishing the “business case for CR” does not prevail anymore, but shapes the national and international agenda of the leading business community.

The Centre for Sustainability and Excellence (CSE) is a global Sustainability (CSR) strategic consulting and training organization providing in-house and open trainings that meet the needs and requirements of every industry and the business activities of every organization. As an Approved Course and Training Organization under the Institute of Environmental Management and Assessment (IEMA), and a GRI Certified Training Provider, CSE offers intensive professional learning opportunities to executives and senior level managers on Corporate Social Responsibility Strategies, Carbon Footprint, CR legislation, Sustainability Reporting, and Climate Change Leadership.

The Global Certified Sustainability (CSR) Practitioner and Carbon Strategy Practitioner courses have taken place in New York, Chicago, San Francisco, Toronto, Brussels, Athens, Dubai, and Tokyo. To date, CSE has trained over 5,000 professionals, including Fortune 500 senior executives, and governmental organization managers. The success of unique certified workshops relies on bringing together a diverse, yet small group of participants while engaging them in in-depth discussions and using interactive exercises, practical case studies and videos, and advanced training material to deliver the sustainability message.

Global Certified Sustainability (CSR) Practitioner – Upcoming Dates

Chicago, IL: April 26-27

New York, NY: May 31-June1

Toronto, ON: June 15-16

For more information, visit www.cse-net.org

Corporate Social Responsibility is in full swing in 2012. With consumers interested in what their favorite companies and brands are doing in terms of sustainability, corporations are spending more time and money on these initiatives.

But how is Corporate Social Responsibility defined? The World Business Council for Sustainable Development utilizes the following definition in their publication Making Good Business Sense: “Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as the local community and society at large.”

This definition is changing due to all the continued growth and expansion of the field. And it’s seeping more and more into the workplace. Increasingly, companies are releasing reports to provide consumers with transparency when it comes to social responsibility.

According to CorporateRegister.com, more than 5,500 companies around the world issued sustainability reports in 2011. That’s up from 800 a decade ago. The Rate the Raters report from SustainAbility.com found that more than 100 sets of ratings that measure which companies are most responsible. Forbes acknowledged that this will continue in 2012, as “the Global Initiative for Sustainability Ratings will endeavor to standardize the ratings framework.”

In light of the increase in reporting of sustainability, CSR programs are becoming a more important part of the workplace. A Hewitt & Associates study looked at 230 workplaces with more than 100,000 employee as, finding that the more a company pursues social and environmental issues, the more engaged employees are. The Society for Human Resources Management also found that morale was 55% better, business processes were 43% more efficient, public images were stronger, and employee loyalty were 38% better in companies that place an emphasis on sustainability programs.

This is essential for attracting new employees in the field. Linda Novick O’Keefe wrote for the Huffington Post: “The new generation of job-seekers places a high value on social obligation. 88% of new job seekers choose employers based on strong CSR value, and 86% would consider leaving if the companies’ CSR values no longer met their expectations.”

Which percentage would your company fall into?

In today’s society, sustainability is comparable to new technology. As the area continues to grow rapidly, those in the field serve as pioneers in crafting processes and strategies for continued growth. However, the profession is not set up for long-term success, as shown by a joint study from the Business Civic Leadership Center (BCLC) and the Corporate Responsibility Officers Association (CROA) found.

The State of the Corporate Responsibility Profession study surveyed CSR stakeholders, including academics, practitioners and recognized thought leaders. The findings showed that there is a long way to go in making sustainability a respected field and profession.

The BCLC and the CROA cited multiple characteristics that define a mature profession, included educational curriculum and career pipeline. These are lacking in the corporate responsibility sector, despite the increased of CSR positions within the workforce.

“Corporate responsibility as we know it today has only existed a few decades. The CR field is more intertwined than ever in smart business strategy, but it stands at a critical crossroads in its development into a mature profession,” said BCLC’s Stephen Jordan in a release.

Richard Crespin, contributor to Forbes’ The CSR Blog and executive director of the CROA believes the profession is stuck in the “chicken-and-egg conundrum.” Employers won’t put value into the profession without their being a body of knowledge behind it.

To show the value of corporate responsibility professionals, Crespin believes that they need to take their worth into their own hands. Learning more about the positions and industry will help create a body of knowledge. That way, young professionals will see a career in corporate responsibility as a sustainable position. They will reach out to organizations, like ours, who can provide them with training and certifications. Young professional will bring knowledge to the sectors that have yet to embrace corporate responsibility.

They have the growth of the profession in their hands.

On Tuesday, the Environmental Protection Agency (EPA) released it’s first rules on carbon-dioxide emissions for newer power plants. Under these regulations, new fossil-fuel-fired plants must emit no more than 1,000 pounds of carbon dioxide per megawatt hour.

These new regulations will probably not make an immediate effect on carbon emissions. The Washington Post’s Brad Plummer points that the newer plants already fall under this threshold and that regulations need to focus on conventional coal plants that emit more than 1,800 pounds of carbon dioxide per megawatt hour.

Plummer continues on to say that these new regulations will make it harder to build a coal-fired plant in the United States that can’t capture and store it’s own carbon emissions. The cost of collecting carbon emissions data is high and many companies cannot justify the costs.

Chief Executive Officer and President of the American Coalition for Clean Coal and Electricity, a coalition of coal-fueled power companies agrees. He told Environmental Leader that the rule would “make it impossible to build any new coal-fired power plants.”

However, this is a step in the right direction to control carbon emissions. These new regulations are the EPA’s way of recognizing that global warming is a problem and that the administration is looking for ways to cut emissions.

While it was expected that the EPA would be releasing additional regulations for coal-fired plants after the November election, EPA Administrator Lisa Jackson told The Washington Post that there are no plans at this time to address existing coal-fired plants.

THE NEED OF CARBON FOOTPRINT VERIFICATION AS IMPORTANT TOOL FOR TRANSPARENT REPORTING

Increasingly, leading organizations regard the mitigation of climate change as an important part of their role in society. Climate Change is becoming an ever-pressing matter and its mitigation more and more demanding from all members of society, including businesses and public organizations.

The origins of Climate Change are directly connected to Greenhouse Gas Emissions, which are the product of human activity. A wide range of interested parties regard Climate Change as one of the most important issues of our times and expect businesses to actively prove that they are part of the solution and not part of the problem. The issue of environmental protection is a target of prime importance for businesses and government organizations.

The results from a survey in more than 500 business leaders from China, Germany, India, Japan, the United Kingdom and the United States showed the following business attitudes towards climate change: 45% said that climate change was currently a major issue for their business, 59%- believe that climate change will be a major issue for them within 5 years. At the same time, climate change is not high on the list of strategic priorities for many companies. Only 5% named climate change as their top strategic priority and just 11% of business stated that climate change figures as their 2nd or 3rd strategic priority.

According to a study by the Natural Marketing Institute (NMI), almost 90% of the U.S. population believes it is important for companies to not just be profitable, but to be mindful of their impact on the environment and society.

All organizations emit CO2 from operations and production of products. Upon decision to reduce its environmental footprint, an organization must first detect its current impact to the environment. This means, undergoing assessment to calculate the CO2 emissions produced at all levels of the production line or the operation of the organization.

Over 3,000 organizations in some 60 countries from across the world’s major economies measure and disclose their greenhouse gas emissions, water use and climate change strategies through the Carbon Disclosure Project (CDP). CDP is an independent not-for-profit organization holding the largest database of primary corporate climate change information in the world. This data is made available for use by a wide audience including institutional investors, corporations, policymakers and their advisors, public sector organizations, government bodies, academics and the public.

A most important phase of the greenhouse gas emissions (GHG) calculation is the Data Verification of the data collected. Data Verification is the process of evaluating the completeness, correctness, and compliance of a specific data set against the method, procedural, or contractual requirements.

Data verification may be performed by personnel involved with the collection of data or by an external data verifier. In general, the distinction can be made between the person producing the data to be verified and the person verifying the data. An external data verification may be performed by specialized companies upon receipt of data packages to confirm the completeness of the data package. In most of the cases on site visit are required in order to verify all data provided.

Carbon Footprint verification is needed when calculating an organizations or a products carbon footprint as the organization minimize the risk of probability of error when collecting data. Verifying the carbon footprint of a product or an organization is important to ensure it is strong enough to communicate and demonstrate your organization’s positive approach to climate change.

The Centre for Sustainability and Excellence (CSE)- a global advisory firm with activities in more than 18 countries and offices in Chicago, Brussels and Athens, specializing in Sustainability Solutions and Climate Change – has the technical experience to verify carbon footprint for organizations and products in collaboration with myclimate – a non-profit foundation and international initiative with Swiss origins, myclimate is among the world leaders when it comes to voluntary carbon offsetting measures.

About Centre of Sustainability and Excellence (CSE)

The Centre for Sustainability and Excellence (CSE) is a global Sustainability advisory and training organization with offices in Chicago, Athens and Brussels. CSE provides the public and private sector unique and advanced services to achieve Stakeholder Value including practical tools for designing innovative Sustainability Strategies and Reporting, verifying Carbon Footprint, LCAs and applying global recognized Frameworks for measuring Sustainability. In the last 5 years, the company has developed 4 innovative tools that have enabled fortune 1000 companies, governments and academic institutions across America to address the Triple Bottom Line and achieving a Return on Sustainability (RoS). For more information, please visit www.cse-net.org.

OAKLAND, CA — The vast majority of multinational companies are pushing ahead with developing and implementing carbon management strategies despite a steep global recession that sent financial markets into a tailspin and took a toll on corporate balance sheets, a new report has found.

Yet company progress is often a reflection of regionality, with North American companies lagging their Australian and European counterparts in assessing their carbon footprints and devising ways to reduce them, according to the “Carbon Management and Offsetting Trends Survey Report 2009,” a study from EcoSecurities, ClimateBiz and Baker & McKenzie LLP.

Based on responses by more than 300 global companies, the report offers a snapshot of global corporate attitudes toward the voluntary carbon market and the role of carbon offsets within larger carbon management strategies. It follows the inaugural “Carbon Offsetting Trends Survey 2008,” which was among the first to probe the buyer’s perspective of the voluntary carbon market.

An average of 60 percent of companies in this year’s survey have taken stock of their greenhouse gas inventories, with more than three-quarters (76 percent) devising or executing carbon management strategies, which also include energy efficiency, waste reduction and recycling initiatives. Carbon offsets play a key role in these plans, with more than two-thirds reporting they have already bought offsets in the past, or expressed their intention of doing so before 2012.

Nearly 70 percent of all companies reported a positive view of carbon offsets, the purchases of which are motivated by the environmental benefits they offer (91 percent), in addition to carbon neutrality and marketing reasons (89 percent) and fulfilling their CSR commitments (79 percent).

By and large, buyers gravitate toward renewable energy projects, including solar (92 percent) and wind (86 percent). The most desirable region for projects tended to be those located in the U.S., likely a reflection of the respondents’ origins: Fifty-six percent of those in the survey hail from North America.

By ClimateBiz Staff

Published September 21, 2009

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