Centralized or Decentralized?

Does it make more sense to run EHS and sustainabity from a centralized corporate setting in a large business, or from the business/plant level?

There are at least two key parts of the EHS and Sustainability Program: strategy, vision and goals; and Executing projects. Ok, they're not mutually exclusive but it helps to have roles defined for each group.

A central or corporate group has to look across the enterprise, see what can be accomplished and then establish an overall roadmap to getting there. They're a fresh set of eyes, people who can bring resources and novel practices.

The plants need to provide input on what can be done, what personnel are available and then only they can work to meet the targets. It's critical to involve both; corporate staff setting targets without the plant won't work. Corporate staff have to be willing to work in a plant or on a project to help out. Each plant establishing its own goals and even capital leads to inconsistent execution. For example, one plant Controller I worked with approved energy efficiency capital as long as it was P&L neutral; savings>depreciation. But, that capital could have been put to better use in another facility. Thus the value of a strong, interactive, central group.

One without the other never works. It's the hard work and eyes at the plant level that can make things happen, identify gaps and find opportunity.

Working together--no matter who reports to whom--is the best way.

No Left Turns, and Other Heresies

I recently had the pleasure of meeting and speaking with Andrew Winston, co-author of Green to Gold, and a new book, Green Recovery.  He spoke at the NAEM Annual Forum in Tucson.

Andrew is a guy who really does seem to walk the talk.  He requested a vegetarian meal at dinner, and was familiar off the top of his head with which fish were harvested the most sustainably.  Much of his talk was on how to sell senior executives on the bottom line value of waste reduction, which parallels resource conservation. 

But, one part that struck me was Andrew's interest in innovation around sustainable resource management, and in particular the concept of a heretical idea.  An idea that is totally crazy, different, and has the opportunity to really make a major change in your company.  A couple examples that were cited were (of course) the Toyota Prius, and UPS' "no left turn" concept.  I can't imagine how fast the guy who suggested this got laughed out of the room!   But, UPS claims that the policy cut "28.5 million miles off its delivery routes, which has resulted in savings of roughly three million gallons of gas and has reduced CO2 emissions by 31,000 metric tons".   Not bad.

What's your heresy?

Ughh...How to Handle Product Stewardship.

Why is there a connection between the word "Sustainability" and Innovation?  To me, it's pretty simple.  Most of the really cool stuff in the field of sustainability hasn't been figured out yet.  It's going to take some pretty creative ideas and people to tackle the challenges we have ahead.

For example, consider product stewardship: managing the impacts of your products during and after their use.  There just aren't that many companies that have figured out how to manage products in a way that is BOTH environmentally preferable (as shown by lifecycle analysis), and financially viable.  If a product stewardship program doesn't meet these two criteria, it won't be a long-lived program; it will be a marketing campaign.

But, take Patagonia's Common Threads program.  Patagonia has changed the old adage to: "Reduce, Repair, Reuse, Recycle".  What a great way to change its customers behaviors.  This seems to make good sense for both the company and the consumer. 

On the reduce side, a comprehensive guide on its website describes how to care for its garments (Wash lambswool garments by hand in cool water with a bit of dishwashing liquid. Let the garment soak in the basin...) Patagonia says it repaired 12,000 garments last year. Consumers can either send or drop off garments, and Patagonia will fix them (presumably for a small price).  Take a look at the website for the other elements.

I highlight this effort as an innovative way for Patagonia to address one of the toughest challenges that I've seen: managing product impacts in a way that makes good business sense.

What's Behind Stop & Shop?

Customer Education Area At Stop & Shop's entrance
Chelmsford, MA

I have usually done most of my food shopping at Trader Joe's and Whole Foods--with the occasional Costco thrown in there.  But after reading about a new "high tech" Stop and Shop opening nearby, I decided last night to give it a try.  How can a supermarket be high tech?

 

What The Boston Globe didn't mention in its article on the store are the many sustainability features.  Sure, the store will be LEED certified, has the latest LED parking lot lighting, high-efficiency T-5 fluorescents inside and closed dairy cases, but there's more to the story than energy savings.

 

The new store is seems to be trying to address its real impacts and opportunities. 

• It was built from a defunct and abandoned movie theater; 
• There is a nutritionist on site;
• A free, supervised play area for kids;
• Free WIFI, a cafe, and tables to sit and enjoy;
• Organic foods (some at the same cost as conventional--from what I saw), and
• Better identification of healthy options.   

There is even a drive-through pick-up for busy families that make getting real food as easy as fast food.

 

It's nice that Stop and Shop has thought about its REAL impacts: its triple-bottom line of people, planet and profit.  And, it has done so in such a thoughtful manner. 

 

Congratulations, Stop and Shop.

Raking Leaves and Sustainability

As I was raking leaves from our lawn yesterday, it struck me that the leaves were winning!  I was fighting the wind and the leaves were right back where they started.  I hadn't thought much about a plan ahed of time. 

And, in many parts of life, that's okay. 

As Lewis Carroll wrote, "if you don't know where you're going, any road will get you there". 

But in most companies, it's helpful to have a strategy before you start on a project.  It doesn't need to be a 20 page document with gantt charts and diagrams, but just a sense of where you're going over two years. 

An example roadmap might look like this (just a sample, and more detail would be needed).  Put a person's initials next to each action.

0-3 months

• Conduct baseline assessment.  What CR activities are we doing now?
• Gather all utility bills and costs
• Benchmark competitors and customers to see where they are going
• Meet with local electric utility to see what programs they have in place
• Attend a local seminar or webinar on sustainabity approaches
• Subscribe to some leading online journals to educate yourself: justmeans, environmentalleader, the green biz are examples.

3-12 months

• Gather other environmental and CR data, such as waste, water, employee volunteering, customer queries
• Brainstorm an analysis of where the company's risks lie by using a What-If or other HazOp approach.  Look across the entire supply chain.  For example: product waste, a hazardous chemical used, high electric bills, community animosity, key supplier risk from potential use of children, etc.
• Conduct an energy audit at a "simple" facility, such as an office building.
• Meet with CEO to get a sense of his or her vision for the program
• Build and write down a charter for the sustainability initiative
• Identify representatives for an executive steering team.  For example: CEO, COO, Business Unit Leads, VP of HR
• Identify participants for a sustainability implementation team.  For example: A Plant Manager, head of Facilities/Real Estate, a key Product Manager, HR business partner
• Hold initial meetings with both of these teams

12-24 Months

• Execute some early quick wins, such as a lighting retrofit
• Develop an internal and external communications program.  Work with your Communications group; they are experts in this!
• Design some high-visibility, but low-cost programs, such as recycling in the office, composting in the cafeteria, low-carbon vehicle parking spots
• Put together a short annual report, with data, and maybe some initial goals and targets. 
• Assemble your first GHG inventory using Scope 1 and 2 emissions.  e.g., electicity, steam, gas, oil, vehicles.  Develop a pareto of ingredients.
• If applicable, answer CDP.  Keep the answers high-level for now

By starting with a roadmap, you will have a sense of where you're going.  You're more likely to succeed, and you know the next steps.  Large distrations can be put on the list, but don't derail your efforts.  And, even if you make changes, employees are more willing to participate and join a team if the strategy is clear.

How To Present Climate Data

There is a constant debate among companies setting climate change targets around whether they should be intensity based or absolute.  The arguments on each side include:

Intensity
- account for a rapidly growing business
- more honest if a business contracts (the result should also shrink)

Absolute
- a gold standard
- helps achieve the overall goal of reducing climate-changing emissions worldwide

Our experience was that the best approach is the provide both types of data, show trends, and also the reduction plan. 

Explaining the results is even better.

As a nice example, see Genetech's sustainability page:

The SSF site achieved a 3% reduction in total onsite energy use despite a net growth in square foot of 6%, which meant that energy use per square foot (a key metric in understanding our energy efficiency) improved by 10%.

Another great example is Baxter's incredibly thorough climate change page:

From 2005 to 2010, Baxter decreased net GHG emissions from operations by 7% on an absolute basis and 29% indexed to revenue, exceeding its 2010 target of a 20% reduction indexed to revenue. Baxter has extended its commitment to reduce GHG emissions by 45% indexed to revenue by 2015, compared to 2005.

Ok, here's the tough part: There has to be a commitment to an overall decrease (absolute).  Without this, the commitment is called into question.  My experience is that most businesses can find and cut 20% of their energy use through a comprehensive energy auditing, metrics and efficiency program.

I'll try to put some thoughts together on how to develop that target number.  What are your thoughts?

The Most Inspirational CEO

Ray Anderson, CEO, Interface Carpet, "The Way of the Plunderer"

People are tired of the old, weary powerpoint slides.  The new way to get attention? 

Video, pictures, interactivity. 

The most inspirational video I've seen is from Ray Anderson, former CEO of Interface Carpet.  Feel like you're alone out there in the corporate world?  Watch Ray.  Rather than a preachy, been-there look at corporate sustainability, this is a real CEO talking about how he saw the risk to his business and did something about it.  What a great way to start an executive steering team, or to show to employees. 

Other inspirational CEO videos?  Gary Hirschberg of Stoneyfield Farms.  Martin Madaus now at Quanterix.  Yvonne Choinard of Patagonia. 

Who inspires you?

What is Real Sustainability Leadership?

What does it mean to be a sustanable business?  Is it reducing waste?  Cutting emissions?  Using less water?  All of these things?

A business isn't a sustainability leader unless it's influencing others to change.  I learned this when the CEO came to me and said, "you're doing great work in the electrical rooms, in the boiler rooms, and behind the walls.  But no one knows what you're doing.  You need to make it more public, and get employees to change the way they think about the environment--at work AND at home."

He was right.

Changing the behavior of employees.  Is that okay for a business to do?  Maybe what employees do at home is their own problem.  But work and home life overlap now.  People bring work home with them, and what they see outside of work can influence their behaviors when they badge in.

I was really struck last week when I heard a comment from Linda Charpentier.  She said that after she toured our facilities she went back to Boston Sand and Gravel and implemented a few of the things she'd seen.  Employees can do the same at their own homes.

Maybe it's obvious, but you can't be a leader all by yourself.

Mistakes in Communicating With Executives

At the AIM Sustainability Summit today I heard companies discussing how to engage executives in sustainability. 

It struck me that there are at least three key internal stakeholder groups that need to be kept informed on progress.  And, these meetings and groups seem elusive to us as Sustainability Leaders. How do we get something out of them? 

The ones I find the toughest are Project Steering Teams, Executive Steering Teams (who provide overall guidance and license to take time from other priorities to get sustainability work done), and Board of Directors level reviews. 

Implementation Steering Teams - If the project is big enough, and it's going to last for a year, it needs this.  Every month.  Get it on the calendars early.  Don't forget someone who might not be directly involved, like the product manager or MIS lead.  Each meeting has to have a defined agenda, and open actions list.

Executive Steering - these are the senior VPs that can release funds, assign people, and set priorities when there is a conflict.  For instance, do we put people on X sustainability project, or Y other project.  It's critical to get them engaged in the meeting, bring real directional steering questions, and be clear on what is needed from them.  A head-nod at the end isn't enough.

If it's a simple project review and everything is on track, skip it.  You might as well just email the results.  The beauty of this meeting is that it is a tool to get the right resources.

Board Level - Maybe it's 20 minutes a year.  That's all you get, and you have six topics to cover--but what an opportunity!  Like most CFOs, the board isn't about counting pennies, it's about lowering risk to the business, strategy, long-term.  This is the place to tell the stories, show pictures, and give overall multi-year approach.

Energy Efficiency Pays

Just calculated that we saved 43% off our utility bills over the past year at home by switching to Geothermal from oil.  A 5-7yr payback--depending on whether you think fossil fuels are going to increase in price.  And, the system isn't smelly, is more comfortable and reliable. 

I heard story after story at the Groom Energy conference last week from people like Jeff Holmes at Genzyme and Danny Beaudoin from Harvard about how companies can save money through Enterprise Smart Grid technologies, such as what Enernoc offers, and simple energy efficiency.  Cool stories from Al Scarameli at Beacon Capital on eliminating waste in their portfolio.  Anyhow, with demand/response, when the grid is stressed, the Enernoc notifies participants who curtail lights, turn up set-points and save energy.  That means the ISO doesn't need to turn up those dirty coal plants on the hottest summer days.  Companies save money, get paid by Enernoc and the grid works better.  It's not the future: it's now.

But, is curtailment the NEW baseline?  I mean, if companies can curtail usage on command, do they really need those lights on anyway?  Good response from Enernoc's Gregg Dixon: Smart grids are a pathway to finding more efficiency measures.

Sustainability and a Blog? What's the Point?

Well, I have to give some credit to my friend Paul Baier for getting me into this!  I'm no expert at Blogging, but I know how to use a computer and write, so I'm halfway there.

At lunch today, we must have covered 10 topics of corporate sustainability implemetation in less than an hour.  Why not share this with others who are struggling to get their own programs started?  As Paul put it, I guess I've been-there, done that.  I'm also learning every day, and I hope this is a chance to get advice, input or even debate on some topics that are emerging now.

Some key topics that I'll try to touch on--one every few days--are:

• Where should Sustainability report?
• Are EHS and Sustainability the same thing?
• What is the real business case behind being a Sustainable business?
• What are the 3 required ingredients to a successful program?
• Where do you start?
• What did I do wrong, and I'd NEVER do again!
• Is a Lean business sustainable--or is reducing waste enough to call yourself sustainable?
• Who are the gurus?  the must-reads, must listen-to, people who have "been there"
• How can you make a business case for those NPV neutral projects?
• Conferences and exciting meetings coming up (I'll do this more often--there are so many)

What am I missing?