Sustainability Rankings, Metrics and Measurements – Not Just a Black Box Anymore!

Our organization produces the Southeastern Corporate Sustainability Rankings. Each year, we post the Ranking of over 200 publicly traded companies headquartered in the Southeast and how they are progressing on their sustainability journey. That may seem like a small number when compared to the EU directive that impacts almost 18,000 companies, but I am still amazed at how many on our list do not even register as having moved beyond compliance. But, another blog post for another day.

This past year’s release was our 4^th year and we added a new sponsor, Homrich Partners.  Education and awareness are drivers for creating and promoting the Southeastern Corporate Sustainability Rankings and we have found a kindred spirit in Homrich Partners. With HP, we will expand our education offerings and assist companies in deepening their understanding of the metrics, measurement and evaluations used in force-ranking the companies. We both agree; Rankings should not be about a ‘black box’ or ‘the man behind the curtain’. If we ask reporting companies to be transparent regarding their products, processes and their path to sustainability then Rankings should be equally transparent.

So, teaching the test and reviewing the answers before Ranking season begins is mission critical for us in 2014. If your company is on the Southeastern Corporate Sustainability Rankings, stay tuned for key dates for live webinars with CRD Analytics, our metrics organization, and the Homrich Partners thought leaders as we crack open the box and pull

Build It and They Will Come

Do you remember E. F. Hutton?  They were one of the largest and most respected American stock brokerage firms around in the ‘70’s and ‘80’s.  The firm was known for its advertisements based on the phrase, “When E. F. Hutton talks, people listen”. The commercial usually involved a ‘yuppie’ remarking at a dinner party that his broker was E.F. Hutton, which caused the loud party conversation to come to a dead stop to listen to him.

It seems Wal*Mart has become E. F. Hutton of Sustainability.  And when Wal*Mart speaks, suppliers listen. This week, it was reported that Walmart put suppliers on notice about removing chemicals from their products if they want to remain in good favor with the giant retailer.

This is great news for Wal*Mart shoppers-and for those who aren’t!

Why?  Wal*Mart is committed to being the low cost provider. We know this is their DNA and will continue to be but what makes this especially good for  Wal*Mart shoppers is they will no longer have to choose between a product they can afford and a product that is safe.  Wal*Mart has provided suppliers with a list (caution flag-not available to the general public) of chemicals not allowed in products on Wal*Mart shelves and requires that a supplier transition to a safer chemical or non-chemical alternative. Suppliers cannot replace a toxic chemical with another of equal or unknown concern.  Wal*Mart‘s stand is “all suppliers are expected to reduce, restrict and eliminate use of priority chemicals using informed substitution principles.” Low cost AND safe. It’s no longer an either/or. Score one for Wal*Mart shoppers!

But why is this good if I am not a Wal*Mart shopper? Enter the butterfly effect.

I had a wonderfully enlightening conversation early in my ‘green’ career with Scott Seydell. Scott currently chairs the Global Green board for Mikhail Gorbachev’s Green Cross (Geneva), and is chair emeritus of the GreenBlue Institute and a founder the Sustainable Packaging Coalition.  As a consultant to Wal*Mart, he shared a story of the time Wal*Mart decided to increase recyclables coming onto their loading docks.  To continue to do business with Wal*Mart, companies had to conform. “Do you think manufacturer’s doing business with Wal*Mart continued to make recyclable and non-recyclable packaging?”, he asked. Obviously not. They converted to one standard, the Wal*Mart standard, and every retailer they did business with benefitted.

Same here. Do you think Johnson & Johnson will continue to make a toxic version of No More Tears and a non-toxic version of No More Tears? If you are not a Wal*Mart shopper, then chances are you will buy this product at Kroger, Target, Walgreen, CVS, Publix, Rite-Aid, Safeway, Whole Foods, BI-LO, Wegmans, Harris Teeter, or Winn Dixie and a host of other outlets that will retail this product. Multiply this by the sheer volume of consumer goods companies doing business with Wal*Mart and the vast amount of retails outlets where their products are sold.  Thank you butterfly effect.

This is such an enormous undertaking. How do you do this without imposing impossible hurdles on the suppliers?  After all, increased costs to implement this by the vendors will show up in the prices customers pay, right?

How?  First, in increments.  Wal*Mart is starting with a few product categories but a large amount of chemicals. Product categories include health and beauty aids; cosmetics and skincare; baby care products; pet supplies; and household laundry and cleaning products. More will follow.  The criteria for (priority) chemicals are those that meet the classification as a “carcinogen, mutagen, reproductive toxicant, or is persistent, bio-accumulative, and toxic; or any chemical for which there is scientific evidence of probable serious effects to human health or the environment which give rise to an equivalent level of concern.”   This has resulted in priority chemicals that must go.  This is a huge undertaking across a vast supply chain. Once on the shelf at Wal*Mart, consumer goods companies want to stay there. So, as the song says, ‘whatever Lola wants, Lola gets.’ Great start, IMHO.

If the butterfly effect is true, this will be a welcomed Tsunami.

Stay tuned.

Is Integrated Reporting a Game Changer?

I say, “Lead, follow or get out of the way -change is coming, AGAIN!.”

As sustainability practices began to surface as the ‘new normal’ for businesses,  companies interested in adopting sustainable business practices were counseled that the approach to sustainability had to be integrated, systemic, strategic, and become the company’s DNA. However, some companies approached sustainability as a ‘to-do’ list.  Light bulbs changed? Check; recycling? Check; recycled paper in the copier? Check; Thermostat down? Check.

Hopefully, corporate America has come a long way on the journey of sustainability and while reaching the peak of ‘Mount Sustainability’ may never be achieved, it does provide a strategic path to traverse.

GreenBusiness WORKS began in 2007, right in the beginning of the sustainability surge and the bleeding edge of the economic downturn. Not a good time for consultants but a great time for companies to understand that sustainability means conservation. And conservation equates to savings. (Perhaps a bigger force was at play that ignited the appreciation of the efficiencies sustainable business practices offered.)

This belief in the need to integrate sustainability into strategy led GRI to co-convene the International Integrated Reporting Committee (IIRC). 

Together, with the Prince’s Accounting for Sustainability project (A4S) and the International Federation of Accountants (IFAC), the IIRC is tasked with creating a globally accepted concept and reporting framework for integrated Reporting.

Corporate accounting will take a deeper dimension. Integrated Reporting will emphasize the fundamental link between financial and non-financial performance, and how they flow from and to core business strategy.  This format will present the risks and opportunities the company faces, integrated with disclosure on environmental, social and governance issues. By reinforcing these connections, Integrated Reporting can help business to take more sustainable decisions and enable investors and other stakeholders to understand how an organization is really performing.

Companies can prepare for the inevitable integrated reporting by exercising high quality disclosure on financial and non-financial performance in their sustainability reports.  Companies that have not previously reported sustainability information may be unprepared for integrated reporting and may find themselves playing catch up as this game changing business approach takes a fundamental hold on the investment community.

The Pilot Program is underway and being conducted under the auspices of the IIRC, a powerful, international cross section of leaders from the corporate, investment, accounting, securities, regulatory, academic and standard-setting sectors. GRI plans to offer its usual and customary opportunity for Organizational Stakeholder input.  There are a few USA companies participating out of the eighty or so registered (as of September 12, 2012)  including Edelman, Microsoft Corporation, Jones, Lang LaSalle, Prudential Financial, Cliffs Natural Resources, The Clorox Company, and Atlanta’s own Coca Cola Company.  What is of interest also is the commitment by five stock exchanges (NASDAQ, Johannesburg, Egypt, Istanbul and Brazil) to work through the World Federation of Exchanges on integrating ESG into capital markets.

Global game changer?  I think so! 

Will Integrated Reporting Be a Game Changer?

I say, ‘Lead, follow or get out of the way!’

As sustainability practices began to surface as the ‘new normal’ for businesses, companies interested in adopting sustainable business practices were counseled that the approach to sustainability had to be integrated, systemic, strategic, and become the company’s DNA. However, some companies approached sustainability as a ‘to-do’ list. Light bulbs changed? Check; recycling? Check; recycled paper in the copier? Check; Thermostat down? Check.

Hopefully, corporate America has come a long way on this journey and while reaching the peak of ‘Mt. Sustainability’ may never be achieved, it does provide a strategic path to traverse.

GreenBusiness WORKS began in 2007, right in the beginning of the sustainability surge and the bleeding edge of the economic downturn. Not a good time for consultants but a great time for companies to understand that sustainability means conservation. And conservation equates to savings. Straight-to-the-bottom-line savings. (Perhaps a bigger force was at play that ignited the appreciation of the efficiencies sustainable business practices offered.)

This belief in the need to integrate sustainability into strategy led GRI to co-convene the International Integrated Reporting Committee (IIRC). Together, with the Prince’s Accounting for Sustainability project (A4S) and the International Federation of Accountants (IFAC), the IIRC is tasked with creating a globally accepted concept and reporting framework for integrated Reporting.

Corporate accounting will take a deeper dimension. Integrated Reporting will emphasize the fundamental link between financial and non-financial performance, and how they flow from and to core business strategy. This format will present the risks and opportunities the company faces, integrated with disclosure on environmental, social and governance issues. By reinforcing these connections, Integrated Reporting can help business to take more sustainable decisions and enable investors and other stakeholders to understand how an organization is really performing.

Companies can prepare for the inevitable integrated reporting by exercising high quality disclosure on financial and non-financial performance in their sustainability reports. Companies that have not previously reported sustainability information may be unprepared for integrated reporting and find themselves playing catch up as this game changing business approach takes a fundamental hold on the investment community.

The Pilot Program is underway and being conducted under the auspices of the IIRC, a powerful, international cross-section of leaders from the corporate, investment, accounting, securities, regulatory, academic and standard-setting sectors. GRI plans to offer its usual and customary opportunity for Organizational Stakeholder input. There are a few USA companies participating out of the eighty or so registered (as of September 12, 2012) including Edelman, Microsoft Corporation, Jones, Lang LaSalle, Prudential Financial, Cliffs Natural Resources, The Clorox Company, and Atlanta’s own Coca Cola Company.

What is deeply interesting is the commitment by five stock exchanges (NASDAQ, Johannesburg, Egypt, Istanbul and Brazil) to work through the World Federation of Exchanges on integrating ESG into capital markets.

Global game changer? I think so!

My Commitment to Sustainable Practices

Living in Atlanta requires a car if you live the way I do. I am always on the go. I run the business, I play tennis and golf, I go visit my brother and his family and friends on the farm, I visit friends OP (outside the perimeter) and I have business meetings  all over the city. GO, GO, GO is my life. Much of what I do requires owning a car and all that comes with it.

But, as my car lease was nearing the end of its life, I decided to take on a personal journey of a different sort. I decided that I would give up my car, for a year, and live carless in Atlanta. This adventure, as I refer to it, is not quite a week old because I gave up my car Earth Day 2010 to live a year, until Earth Day 2011.

As I was preparing for this adventure, figuring out how to turn in my leased car as seamlessly and as smoothly as possible, I made a colossal mistake. In doing so, I believe I have experienced what perhaps a lot of companies experience as they shift their business practices to a sustainable platform.  This mistake was going to cost me money that I had not planned on and I was faced with a significant dilemma. The mistake was in reading the lease termination date. I had committed to going carless, a more sustainable way of living, but now, it was not going to save me money; it was going to cost me money for a few months. I was going to be paying for a car that I was not driving.

So, I am in turmoil. What do I do? I have said I am going to do this. I have told the world, through the blog and loyal readers, that I am GOING AWOC-Atlanta WithOut a Car. I have told my Advisory Council at work. I have told all 200 plus greenies at SART, I have told friends and family and my professional family that I am giving up my car, Earth Day to Earth Day.  And, of course this is the week Atlanta INTOWN just finished a photo shoot and an article that includes a bit about me and this adventure. And of course, I just found out that Southeast GREEN, a site that gets over 100,000 readers, has posted my blog to their site. CNBC called and I talked about it to a reporter. It is a scary thing to have others so aware about your life.

So, I turned to trusted friends and advisors.  Do I move the date? Do I keep it? What about the money? What will the financial cost be if I stay the course? If I move the date, what will be the reputation cost? If I move the date, how do I justify it? I have already said EARTH DAY to EARTH DAY.  Will I need to do damage control on BRAND STEPHANIE? How will I explain it? How will I explain it to my Advisory Council, the green community, readers, friends, family?  How amazingly vulnerable I felt through this 24 hour period.

Move it to July since that is the month your lease is up. You can make that work….talk about energy independence, national security and July 4^th-wave the flag…etc…..was one lines of thought that surfaced. So,  I let that sit with me for about 30 seconds and NO, that did not feel good. I knew I was not speaking my truth, if I went that direction. I began to realize I would be GREENWASHING if I did that. Not acceptable to me. 

The only thing that felt good to me was Earth Day to Earth Day. I gave my word. But the money, I kept thinking. This is going to cost me real dollars, too. $1500 +/-  out the window was a hard pill to swallow.

One of my advisors, Rex, asked, “If you were a company, what would you do?’  That question began to reveal the answers to me. The proverbial CFL began to glow. I listened as he counseled me. And what did I notice? 

I felt my truth begin to wash over me. I had to stay the course.

I believe I have experienced a mini-mini-microcosm of what companies go through.  I believe this experience I have had  is what companies go through when they shift from traditional practices to a more sustainable business platform. And, as you know, this is what GreenBusiness WORKS advocates -make the shift and stay the course and now, I get it. I get on a deeper level, what we advocate and I get what I am advocating when I give up my car. I get the fear that can creep in when you have made a commitment and the financials begin to erode profitability.  I get what it feels like when your reputation is threatened. I get what it feels like when TRUST, and brand reputation may become tarnished. I get, on a super, super small scale (although it does not feel that way to me!) what Timberland’s CEO experienced when their supply chain was tainted with leather goods that were not harvested fairly. It was an honest mistake; an unknown error that crept into the journey. These situations present an opportunity to really define your character. For me, this has become an opportunity to see who I am and what I am made of and an opportunity to see if I am who I think I am and if I really believe what I say I believe.

Wow, all of that before I even gave up my car!

In the last few years, like many of you, I have become more and more conscious of the effects my life style has on the environment. I made some professional changes and I also made some personal changes.  What lies ahead excites and scares me.

So, I am giving it a try. Atlanta WithOut a Car.

Change is good, right? The noun, that is. It’s the verb that has me a bit uneasy! But, change keeps us alive and vibrant. Remind me of this if I start thinking I can’t, will you?

And click to join me in the blog community because I am Going AWOC – Atlanta WithOut a Car!

 

Newsweek and Edelman – Green Rankings Event

Recently, I had the  opportunity to attend Newsweek’s panel discussion of ‘Why Going Green Pays Dividends’. You may recall, Newsweek announced the Greenest Companies in America last September and the panel addressed corporate sustainability.

One of the outcomes for me was a shift in my thinking. Actually, it is one of those key points you already know, but addressed in this context  brought with a renewed commitment to operationalize my a-ha moment.

Rana Foroohar, Senior Editor, Newsweek International moderated and panelists included Anisa Kamadoti Costa, Director CSR for Tiffany’s; Tony Prophet, Senior Vice President, Hewlett-Packard (no. 1 on the Green Rankings); Annalyn Swan, Partner, ASAP Media; Sally Wilson, CB Richard Ellis and the most intriguing to me was Peter Lehner, Executive Director, National Resources Defense Council.

Peter unfolded the value of NGO’s to corporate America through a lens I had not previously considered. I am keenly aware of NGOs role vs. a NPO, but now more fully aware of why NGOs should be Corporate America’s partners.

As you know, NGOs perform a variety of activities and often shift the balance of the activities they pursue.  New to me was the classification: operational or campaigning.  Operational NGOs achieve small-scale change directly through projects while campaigning NGOs achieve large-scale change indirectly through influence on the political system.

Peter made a simple point.  He unraveled a thread about how NGOs shape corporate thinking by the issues they raise about public policy. Ok, not earth shattering so far, but what turned on the CFL for me was this: A partnership with an NGO gives corporate America the opportunity to affect their bottom line because NGOs affect policy. Policy affects how businesses can operate. That was my a-ha moment.

So, I am on the hunt for the NGOs that line up with corporate sustainability and environmental issues specifically in the Southeast, although geographical location is not a requirement.  I am signing up for their e mails, their blogs and  all that social media stuff these youngsters say are good for me. And yes, I will carve out time to be more active. Since I am in Atlanta, I do not have to look far for many terrific NGOs. And I hope you will join me wherever you are.

‘Got NGO?’

2010 – The Status of Corporate Sustainability

If you are in leadership within your organization and have not chosen to integrate sustainbility in your organization, please consider reading BusinessWeek Research Services (BWRS) 2009 white paper about their survey of 101 C-level executives.

The research program determined the attitudes and opinions of C-level executives with regard to the use and value of business analytics. The title of the report is Emerging Green Intelligence: Business Analytics and Corporate Sustainability The white paper can be downloaded from SAS on their web site http://www.sas.com/whitepapers/index.html

For those companies who are on the fence or have not begun considering the impact of sustainable business practices, perhaps this white paper will provide some insights for consideration. An executive summary includes the following points:

1. Although still in its adolescence, sustainability is being recognized by innovative executives for the opportunity it offers; more than half of executives are focusing on sustainability throughout 2009.
2. Sustainability is not a top-tier concern at the moment but is still a focus of many C-level executives.
3. Sustainability issues are driven by C-level executives, especially the CEO .
4. Additionally, in the last 12 months, half of organizations have increased their focus on sustainability, while two in five have kept their emphasis on sustainability the same.

If you are leading your organization down the path of sustainability, congratulations, the rewards are many. Companies that get their data together fastest will save money, improve performance, recruit and retain the best and brightest talent, answer customer questions and demands, and find new market opportunities.

If you have not decided to take these important steps, how will you compete? And how will address playing ‘catch-up’ with your stakeholders?

In my days of agency work, we would tell clients who waited until the last minute, ‘We can do it good, fast or cheap-pick 2!’ Like any project, a strategic plan that incorporates sustainability as a way of doing business,  will be a higher caliber when you can be planful. It’s less expensive when deadlines are flexible and mandates aren’t looming.

Why not consider deploying sustainability in your organization while choices are still in your business favor?
Stephanie

Leadership and Sustainability Practices, an Intriguing Combination.

The distinction between the two is really important for business sustainability. The combination drives prosperity.

The world needs a generation of sustainability leadership in the C-suite around the planet. There are good examples out there to serve as role models. At GreenBusiness WORKS EXPO 2009, we heard from a small business executive, Keith Kantor, CEO of Services Foods, who experienced prosperity when most companies were merely trying to survive. He did this by committing to sustainable business practices.  He inspired his team, navigated the change and the business expenses shrunk. And, not so amazing, profitability increased. Not rocket science, right?

We all love the word change; we even say we embrace it. After all, to admit we prefer to stay stuck in old and outdated ways does not sound like enlightened business practices. Maybe the reality is we love change, the noun, but not the verb!

Solving sustainability problems won’t bankrupt a company and does not even depend on a technology breakthrough. EXPO 2009 revealed numerous low cost, no cost changes organizations can adopt that don’t break the corporate bank and we already have technology required to shift to a sustainability platform. So what’s stopping us?

Sustainability depends on inspirational business leadership that can change what tasks their managers manage. Let’s concentrate on fostering leadership, then get out their way and allow them to lead.

Managers manage. Leaders inspire. Which one are you?

GreenBusiness Works EXPO Local Atlanta News Coverage

If you have not already checked out the article and video below featuring and following EXPO attendee Michael Maziar, please do so!  

http://www.11alive.com/video/?maven_playerId=immersiveplayerwrapper&maven_referralPlaylistId=search&maven_referralObject=882806343&maven_referrer=staf%A0

11 Alive News Article – GreenBusiness Works EXPO

Bloggers Blogging About GreenBusiness Works EXPO

http://www.betterworldtelecom.com/blog/?p=190