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Sustainability hits the bottom line - March 24, 2010
Sustainability: 20 expectations for companies by 2020 - March 14, 2010
How to measure the ROI of your sustainability, CSR efforts - March 11, 2010
Eco-Patent commons database provides sustainable business solutions - March 5, 2010
Sustainability Is a Growing Theme - March 4, 2010

Sustainability hits the bottom line

The impacts of dwindling resources, global competitive forces, and consumer demands have merged to send a powerful message to companies: sustainability is now part of the business equation.

» By: Lezette Engelbrecht » ITWeb
» Published: March 24, 2010

This is the view of Sven Denecken, SAP VP of sustainability co-innovation, speaking at the SAP Sustainability Summit in Johannesburg, yesterday (March 23).

According to SAP, pressure on the corporate landscape is three-fold: environmental, social and economic. “Companies have realised they cannot continue with business as usual, and that sustainability is about much more than just using green energy.”

Chris Perceval, director of corporate relations at the World Resources Institute in Washington says: “Sustainability is really about defining what the world will look like tomorrow, which is important for companies because it defines the context in which they need to operate and make a profit.”

“Sustainability is based on the understanding that economies and companies do not operate in a vacuum, but are tightly embedded into societies and the environment,” states SAP. “In order to make sustainability tangible for the business, organisations must go beyond 'being green' or philanthropic. They must focus on driving profitability, compliance, and their reputation through more sustainable and responsible behaviour.”

SAP's goal is to reduce its own carbon emissions to 2000 levels by 2020, and reduce the footprint per employee, through strategies such as reduced travel and teleconferencing. Its biggest sphere of potential impact, however, lies with its customer base.

According to SAP, it provides software to 75% of the world's businesses, giving it a powerful lever for driving sustainability. “Our customers' carbon footprint is around five gigatons – 10 000 times SAP's own footprint.”

SAP sees its role as both exemplar and enabler of sustainability. “We have to transform our own company to incorporate sustainability goals and be vocal about it, because if we're not walking the talk, we lose credibility,” said Denecken.

Forces of change

According to Frank Naude, principal of Business User solutions at SAP Africa, companies face challenges on a range of fronts; from more empowered customers to an increasingly mobile global workforce, and the rise of emerging economies like India and China. There's also increased risk and compliance policies, as well as disruptive technologies.

In working towards making the enterprise more sustainable, Naude argued the need to look at all aspects of an organisation: internal, outside communities, planet, and profit. “Once you have a strategy around sustainability you have to communicate it and plan for it at high-level.”

Denecken noted that the three long-term trends of economic, environmental and social change are merging. “We as companies live in a networked environment, and while the supply chain is not always in a company's control, if something happens in that extended network it affects the business.”

He added that the scarcity of resources and volatility of prices was something companies are starting to take seriously. “The concerns around CO2 are not going to go away; we have to start considering it in calculations, and building it into corporate strategies.” Finally, public awareness of sustainability topics and the need to tackle them means customers and stakeholders demand greater accountability, explained Denecken.

“Three to four years from now, no one in the marketplace will sell, implement, or successfully run solutions that don't touch on sustainability topics.”

All together

In building a business case for sustainability, explained Denecken, drivers include cost and regulation, maximising productivity, and gaining competitive advantage. “You have to link sustainability with profitability, and you can only do that if you tackle holistically all three trends and look not only at the risks but also the opportunities.”

He added that sustainability cannot be something done by a department somewhere, but must be seen as an overall goal every employee can contribute toward and have an impact on. “It has to be woven into the business, not just added as a layer on top.

“It's changing the way we work, and requires greater collaboration with partners and customers, to exchange information on the best practices and valuable investments.”

By consulting forward-looking partners in the decision-making process, companies can go back and turn strategies into practical solutions, and partake in co-innovation, Denecken noted.

“Usually companies are run purely according to financial drivers, but now they're beginning to understand sustainability is not just a side topic, and needs to be integrated into the overall strategy.

“Green can save a lot of money, and it's not something 'out there', it's happening right now.”

Source: ITWeb

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Sustainability: 20 expectations for companies by 2020

Corporate sustainability initiatives frequently – and often deservedly – get criticized for being more talk than action. Integrating environmental and social challenges into the business process can be a daunting task for even well-intentioned and well-resourced enterprises.

» By: Michael Connor » Business Ethics
» Published: March 14, 2010

A major new 84-page paper from Ceres, the investor and environmental group, seeks to address that issue by laying out an ambitious and detailed program with 20 expectations for companies to focus on and achieve by 2020. The 21st Century Corporation: The Ceres Roadmap for Sustainability “is a guide to companies on their journey to comprehensive sustainability – from the boardroom to the copy room – and throughout the supply chain,” says Mindy S. Lubber, President of Ceres.

The paper says companies must cut greenhouse gas emissions 25 percent below 2005 levels by 2020 in order to meet reductions called for by scientists who warn of catastrophic global warming. The paper also calls on companies to respond to societal issues. “It has become clear that it is not acceptable anywhere in the world to produce goods in unsafe or exploitative conditions,” Ceres says. “These are real business risks for global companies.”

Four Areas for Focus

To accomplish that, Ceres describes its vision of corporate best practices “that must come to represent the norm, not the exception.” The paper focuses on four broad areas: governance, stakeholder engagement, disclosure and performance.

In governance, “there is a growing expectation that boards of directors as fiduciaries should be informed leaders on sustainability issues that materially impact corporate performance and plans,” the paper says. Ceres suggests that a board committee have clear accountability for sustainability strategy and performance; that board nominating committees seek directors with expertise in sustainability; and that directors receive regular training in key sustainability issues.

In stakeholder engagement, the roadmap calls for companies to “regularly engage in robust dialogue with stakeholders across the whole value chain.” Recommendations include adoption of a “stakeholder mapping” process to identify, understand and track key stakeholder groups and how they are engaged on sustainability issues by key business units.

Companies should report regularly on their sustainability strategy and performance, according to the suggested roadmap. “Disclosure will include credible, standardized, independently verified metrics encompassing all material stakeholder concerns, and detail goals and plans for future action,” the paper says.

In operations, the Ceres roadmap calls on companies to “invest the necessary resources to achieve environmental neutrality and to demonstrate respect for human rights in their operations.” Performance should be measured “related to GHG emissions, energy efficiency, facilities and building, water, waste, and human rights.”

Sustainability as Economic Driver

In an introduction to the paper, David Blood, Senior Partner of Generation Investment Management, writes: “The interests of shareholders, over time, will best be served by companies that maximize their financial performance by strategically managing their economic, social, environmental and ethical performance. Central to this thesis is the explicit recognition that sustainable solutions will be the primary driver of industrial and economic development in the coming decades.”

Ceres has proven effective in the past in turning talk about environmental and social change into substance. The organization started with the so-called Ceres Principles, a 10-point code of corporate environmental conduct drafted in response to the 1989 Exxon Valdez oil spill. It launched the Global Reporting Initiative in 1997 and helped GRI organize as an independent organization.

Ceres also directs the Investor Network on Climate Risk, a network of 80 institutional investors with a collective $8 trillion in assets. The coalition was instrumental in pressuring the U.S. Securities and Exchange Commission to recently announce new guidance on climate risk disclosure for publicly-held companies.

Access: The 21st Century Corporation: The Ceres Roadmap to Sustainability
Source: Business Ethics

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How to measure the ROI of your sustainability, CSR efforts

Environmental sustainability and corporate social responsibility (CSR) among businesses are no longer “nice to have” ideologies. They are important parts of a company’s overall growth strategy.

» By: Sam Murata, President at SANYO North America Corporation » Environmental Leader
» Published: March 11, 2010

A recent PricewaterhouseCoopers study documented ways in which companies that report their sustainability efforts get better returns on their assets than companies that do not. Also according to a TIME poll conducted in 2009, 40 percent of consumers said they bought products or services because they liked the social or political values of the company. Nearly half of Americans in the poll said protecting the environment should be given priority over economic growth, and this comes in the midst of a recession.

However, taking actionable steps to become a sustainable and socially responsible company also typically requires a significant amount of capital and resources investment. Therefore, it’s critical to be able to demonstrate the value and return on investment (ROI) that putting environmental and CSR reforms into practice will provide. So what are the best ways to measure the ROI of a company’s sustainability and CSR efforts and effectively convince senior management these activities are worth the investment?

1. Begin with small projects:

Consider making small reforms over time rather than tackling multiple, large projects simultaneously. Through gradual transformations throughout the organization, it becomes easier to not only secure funding for the sustainability and CSR efforts but to also benchmark their impact. For example, consider making a company-wide commitment to replace all dry-cell battery supplies throughout the office with rechargeable batteries. Then in three to six months measure how using rechargeable batteries has impacted overall energy costs and battery supply costs.

2. Poll your customers:

Customer surveys and polls can be useful in helping to gauge how changes in your organization’s sustainability and CSR practices affect their perceptions of your company and brand loyalty. Ask them if they notice and value any particular sustainability and CSR initiatives and how that has impacted their perceptions of the products or services your company offers. Once you’ve determined what specific sustainability or CSR initiatives your customers value most, you can then refine your offerings to meet their specific preferences.

3. Leverage the success of other companies’ green efforts:

Highlight the successes of other large organizations which have already made significant investments in their sustainability and CSR initiatives. By sharing examples of these types of success stories it will become easier to convince your management team of the importance of applying those same principles to your own organization. For specific examples of America’s most sustainable companies, a good source to reference is Newsweek’s “2009 Green Rankings”, a rating of the 500 largest U.S. companies on their sustainable practices.

4. Publicize your green initiatives:

Perception is reality. Therefore, publicizing your sustainability and CSR initiatives will add tremendous value and credibility to those efforts. Take advantage of opportunities to make others aware of your commitment to being conscious of the environment and a socially responsible company through all marketing, public relations and sales activities.

5. Have realistic goals:

Recognize that the tangible ROI benefits of your sustainability efforts won’t happen overnight, so it’s important to set realistic and achievable goals that can then be built upon over time.

Source: EnvironmentalLeader.com

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Eco-Patent commons database provides sustainable business solutions for free

The Eco-Patent Commons was launched in January 2008 by IBM, Nokia, Pitney Bowes and Sony in partnership with the World Business Council for Sustainable Development (WBCSD) based in Geneva, Switzerland.

» By: Leslie Berliant » EnergyBoom.com
» Published: March 5, 2010

The WBCSD brings together some 200 companies from over 30 countries and 20 industrial sectors in a shared commitment to sustainable development through economic growth, ecological balance and social progress.

The premise of the Eco-Patent Commons is to allow environmental protection innovations and solutions to be easily shared so that anyone that wants to bring environmental benefits to market or to their own operations can use these patents. It was also designed to promote cooperation, collaboration and new innovation among businesses that are developing environmental solutions.

The Commons database contains over one hundred eco-friendly patents from eleven companies; the original founding members plus Bosch, Dow, DuPont, Fuji-Xerox, Ricoh, Taisei and Xerox. Based on the concepts of open source software, the patents have all been pledged to the public domain.

The Eco-patent commons has been the first organized effort to make patents available, without royalty, to help enable the world community to reduce waste, pollution, global warming and energy demands. Participating companies and universities choose the patents that they want to pledge, so are able to retain those that are essential sources of income.

The Commons is open to the public and displayed in a searchable database. All of the patents provide direct or indirect environmental benefits such as energy conservation or efficiency, pollution prevention (source reduction, waste reduction), use of environmentally preferable materials or substances, materials reduction and increased recyclability.

The main difference between dedicating patents to the Commons versus directly to the public is that the Commons allows the pledger to terminate the patent to those who assert patents against the pledger. The Commons also allows a pledger to assert patents, outside the field of the Commons, against another pledger without losing rights inside the Commons.

For those looking to develop environmental solutions, the database provides free and easiy access to patents that can be leveraged to improve the environmental aspects of their operations or innovations. It also provides those facing an environmental challenge to connect with those that have already found successful solutions.

Recent patents added to the Commons include a technology developed by Dow to enable more efficient production of olefins - the basic building blocks for many materials used in packaging, electronics, adhesives, and durable goods - by reducing energy and material consumption in the process. These patents help make olefin production more efficient through increased catalyst lifetimes, and less increase in pressure drop over time in the reactor, which reduces the frequency of catalyst replacement. Also recently added is a wastewater treatment method developed by Fuji Xerox.

In addition to Xerox Corporation’s eleven pledged patents that cover a process that cuts the time it takes to remove toxic waste from soil and water from years to months, the company has also pledged a patent that covers technology that makes magnetic refrigeration less harmful to the environment.

Source: EnergyBoom.com

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Sustainability is a growing theme

For years, companies have suggested changes to bread-and-butter business school courses. But recently, firms have begun to try to make their mark on another subject: social responsibility and sustainability.

» By: Alina Dizik » The Wall Street Journal
» Published: March 4, 2010

Some companies are taking a hands-on approach to help train potential employees, using real projects in an effort to help students move beyond case studies that are quickly becoming outdated.

Students "really need to go and dig into the behind-the-scenes operations. If we don't give [them] that opportunity, they come out handicapped," says Dave Stangis, vice president of corporate social responsibility and sustainability at Campbell Soup Co.

This new push is part of a larger effort among corporations to integrate social concerns beyond donations and once-a-year volunteering. The effort is being met with both gratitude and skepticism from business schools, which say that despite the emphasis on integrating these hot-button topics into the curriculum, it's business as usual at recruiting time. Few hiring managers, they say, ask students about corporate-responsibility training or indicate it's a priority.

Still, for their part, companies say that working with business schools is important to ensure a new generation of workers sees corporate responsibility as a bottom-line booster, not just something to feel good about.

"My whole goal in this [role] is to mature the curricula," says Mr. Stangis, who finds that many M.B.A.s—even those studying the subject—need to better understand how to implement CSR-related initiatives so they can have a real impact and business tie-in. "I don't think we are turning out the kind of students that we need to in this field."

Mr. Stangis, who heads up efforts on Campbell's impact on childhood obesity and sets metrics around sustainable agriculture, spends a few days a week with professors and students at business schools like the University of Pennsylvania Wharton School, Columbia Business School, and Drexel University's LeBow College of Business. He's working with Wharton students to produce a study on sustainable agriculture, packaging, and employee engagement based on an internal Campbell report.

"What I want them to figure is what's really cutting edge," says Mr. Stangis. The job of the students is to figure out "what the best companies are doing in this space."

So far, the companies most involved in corporate social responsibility are the ones that have already seen their bottom line and brand awareness increase, says Liz Maw, executive director of Net Impact, a corporate social responsibility-related nonprofit with 157 M.B.A. chapters at schools around the world.

That group is growing. Companies work with the group as a way to fill their own needs, says Ms. Maw. This year, Net Impact has 40 corporate sponsors, compared to 19 in 2006—a shift in line with increased interest in the field, Ms. Maw says.

Corporate sponsors pay dues, which start at $10,000 a year, and are provided a direct connection to business students who are interested in social-responsibility jobs and projects.

The shifting importance of corporate responsibility within business schools is felt in other ways, too.

After a decade-long relationship with the University of Michigan Ross School of Business, Neil Hawkins, Dow Chemical Co.'s vice president of sustainability and environment health and safety, was asked to guest lecture about climate change in a strategy course that is a requirement for all full-time students. In the past, his lectures and efforts were relegated to sustainability-related elective courses.

"These are M.B.A.s of all different stripes and colors and going to work in many different sectors," and have sincere interest in the field, says Mr. Hawkins, who is based in Midland, Mich.

Mr. Hawkins now spends more time on business-school campuses, including Michigan and University of California Berkeley Haas School of Business, he says. Mostly, he's sharing details about Dow's internal sustainability initiatives. Mr. Hawkins says he provides key metrics of Dow's approaches to sustainability and asks students for analysis on how to implement Dow's 2015 Sustainability goals, measures that the company hopes to roll out in five years.

For full-time business students, this kind of real-time information helps them to move past the theoretical concepts in what is still an emerging field. That's a plus, says Ms. Maw, because teaching corporate social responsibility is still relatively new and students benefit from companies that act as laboratories of sorts.

For some firms, speaking about internal initiatives doesn't translate into hiring socially responsible M.B.As. Intel Corp. director of corporate social responsibility strategy and communication, Suzanne Fallender, says she regularly speaks at business schools about many of the company's sustainability initiatives. But, she says that the skills aren't needed to be hired into a post-M.B.A. job.

"I think we are far off from seeing it [as part of] the job requirements," she says, even if it does give prospective hires an advantage.

That sentiment, say school professors and administrators, points to a disconnect on part of the companies: There's enthusiasm in the classroom for imparting corporate responsibility and sustainability concepts, but hiring managers attending campus recruiting sessions says it's rarely something they quiz candidates about.

Interest among students at the University of Michigan Erb Institute for Global Sustainable Enterprise, which offers a specialized M.B.A./Master of Science program from the School of Natural Resources and Environment, and provides sustainability-related education initiatives,has grown in the last several years, says Rick Bunch, managing director.

But his team and the students have had to do most of the outreach to find full-time positions where graduates' skills are valued, he says.

"The majority of our students are not trying to go into sustainability staff positions, but are trying to go into business units" where they can impart these skills, says Mr. Bunch.

At Campbell, Mr. Stangis is working to integrate those skills into the competencies required for new hires, but says that it still isn't a requirement in recruiting.

Dow Chemical doesn't require the training for all M.B.A. recruits. But Mr. Hawkins points out that the company offers jobs for business-school graduates for which sustainability experience is a must.

Source: The Wall Street Journal