Jesper Bank
Environmental & Energy Management News
The good news: There is a business case for sustainability.
Several recent studies from leading scholars from Harvard and the London School of Economics confirm that companies with an operating model that integrates sustainability outperform their “old model” peers in the long run. Not just in terms of higher stock market returns, but also with lower debt costs and fewer capital constraints – this means improved risk management, less volatility and improved profitability [1].
The financial advantages of sustainability are not limited to lower debt costs and easier access to borrowed money. Perhaps more importantly it lowers the interest rate that professionally driven companies use to calculate the Internal Rate of Return for business ventures and projects. In essence it affects whether business ventures are accepted or rejected. An improved Internal Rate of Return means projects that would otherwise have been rejected will now be allowed to live and prosper, enabling companies to develop a higher ROI.
This improved ROI means a better bottom line and thus influences how investors perceive the performance and the risk of the company, and ultimately the market value of the company.
Since capital market participants are more willing to allocate scarce capital resources to firms with better performance and innovative business processes, sustainable brands are poised to build a lasting competitive advantage over their competitors in the long run.
This research-proven business case is great news for the sustainability champions within an organization, who often struggle with presenting a business case for sustainability initiatives that will get the CEO and CFO on board.
The bad news: The business case alone is not enough to get organizational buy-in
Few companies are born with an ingrained commitment to sustainability. For most companies it requires transformational culture change. The first step is strong leadership commitment, as the company’s identity needs to be reframed. Without strong leadership and vision, that is not likely to happen. The business case above could help pave the way for a dialogue with executive management, but will not make the case alone. In fact, companies that already have a business culture with strong capabilities for change, a commitment to innovation and high levels of trust in the organization are more likely to embed Sustainability in their Corporate DNA[2]. But it will still be a hard sell.
Once leadership is committed to a sustainable vision, one of the next steps involves establishing a new (sustainable) identity through employee engagement. This is where the sustainability department should join forces with the corporate strategy department, the business innovation team, the product marketers or whoever is responsible for business innovation and improvement in the organization. If the company is already applying collaborative idea management into its ideation process, this could be a fast track to transformational culture change.
Making sustainability everyone’s job
If you have executive commitment to sustainability, collaborative idea management can be a great way to create a sustainability driven culture. Collaborative idea management is a systematic approach to gathering and channeling ideas that enables you to:
* Utilize the diversity and collective creativity of all employees
* Ensure that the right ideas end up meeting your relevant sustainability and other business innovation needs
* Engage your employees across the organization in business innovation and improvement
* Provide participants with feedback and recognition
* Create transformational change to a sustainability and innovation driven culture
Collaborative idea management rests on 4 principles:
1) Invite anyone
Involving everyone in your organization in collaborative idea management will increase the benefits. As you source ideas from the entire organization and beyond to include customers and partners – you will have more ideas and thus increase the likelihood of getting quite a few really good ones.
Having broad participation in idea generation – inside as well as outside the organization – not only increases the number of ideas but also the range of perspectives resulting in greater diversity of ideas.
Collaborative idea management can serve as an instrument to empower creative employees, engage everyone in thinking about renewal and improvements, and to drive a culture of innovation.
2) Create a company-wide market place for ideas
Establish a ‘market place’ where sustainability needs can be launched as innovation campaigns as they are identified, and where ideas are automatically matched towards any existing sustainability and other innovation needs. In this way, collaborative idea management is implemented like an internal idea marketplace – an open network for the exchange of ideas on how to reduce greenhouse gas emissions, how to use less energy, how to reduce packaging and transportation costs, how to replace raw materials that are becoming scarce and so forth.
Some of the more successful solution providers combine gamification capabilities that incentivize people to participate as well as advanced prediction market analytics to validate the information that is collected, This idea market uses the “collective wisdom” of the participants to identify what the idea market expects to be winning ideas.
The notion that markets are the best aggregator of dispersed information is not new. The price of every stock that is traded is just a prediction market about a company’s future cash flows; traded commodities futures are just prediction markets about the future prices of the commodities.
3) Embrace Collaboration
Collaboration based on openness is a key feature of collaborative idea management. Collaboration will help surface new ideas, improve existing ideas, leverage expert knowledge in the organization, provide feedback to users and help business innovation and improvement managers select and act on the best ideas.
New ideas are formed when people of different backgrounds, expertise and interests communicate and collaborate with each other. Therefore, cross pollination through collaboration across units both internally and potentially with external stakeholders, such as suppliers and customers, is important to spark innovation.
4) Use feedback and recognition
The innovative power of an organization can be boosted by appealing to the drive for self-realization among employees. Having your idea published for everyone to see, receiving many view hits, comments and a high ‘idea market value’ can be a huge reward in itself. Recognition does not have to be in the form of material or monetary awards. Building reputation and being recognized is a core human driver. It is no different in the idea management process.
If your company is already embracing the four principles of collaborative idea management or has a culture that could readily embrace them, there is a fair chance that you could fast track to making sustainability everyone’s job.
 As an engineer, I hate to admit this. But for a long time, I used to think that achieving something, such as reducing your energy or water usage or increasing productivity, was the end all. You are doing good for your organization. Period. But this is not the whole battle. Documenting and presenting your achievements effectively to stakeholders is as important. If you succeed in meeting your goals, great; you will reap financial and clean energy benefits. But if you don’t document your triumphs and communicate it properly to your customers, employees, stockholders, etc., then you’ve missed the opportunity to show the program’s success and impact that will benefit both your organization and your own career. While we engineers like to achieve physical success, writing a sustainability report is essential, as well, although not necessarily one of our strengths.
If you are involved with a team writing a sustainability or CSR report, start by evaluating your audience. Who is likely to read it? What may those that actually read it look for? It is likely that people with different interests will read the report. People in Financial will be interested in the program’s monetary gains (how much money was saved); people in Environment or Sustainability will want to know GHG emission, waste and other metrics; people in Marketing will look to see how this can be used to further sell products or improve the company’s image. Therefore, make sure to include diverse bottom line facts in the report, so readers can glean satisfaction from it from their points of view.
As engineers and scientists, we take pride in data to prove our point, and data should be part of such a report to demonstrate indisputably what we say we achieved. However, it is important not to overwhelm the reader with data. A small number of summary charts or tables showing before and after are most effective. Bar graphs and pie charts are best to visualize a comparison. Make sure data is normalized to a business metric (GHG emissions / ton of product or / square foot of space) and can be benchmarked to compare to other facilities (including those of competitors).
Perhaps the most critical part of the sustainability report is the Executive Summary because, silly as it sounds, even people who this is important to are pressed for time and may not read the whole report. The Executive Summary must provide basic information and make an impression. So make sure not to write this hastily, throwing it together as the end of your reporting effort. Do not copy and paste from other sections. Make sure it is clear with key bottom line information for the different audience groups.
Herb Oringel for NWEAC
 The Mid-Hudson Regional Sustainability Plan’s final public meetings will take place Tuesday, November 27th at 6:30 PM in Kaplan Hall’s Great Room within SUNY Orange’s Newburgh Campus; and Thursday, November 29 at 6:30 PM at the Westchester County Center, 198 Central Ave., White Plains. In each session, a presentation of the draft regional sustainability plan will be followed by a question/ answer session and open discussion.
The Plan is one of ten such collaborative initiatives taking place around New York State as part of Phase One of Governor Cuomo’s Cleaner, Greener Communities program. The draft Plan compiles regional trends related to land use, infrastructure, energy, transportation, and environmental practices and identifies project ideas that could significantly improve the economic and environmental health. The plan is expected to be finalized by the end of 2012.
Share your views online, and read the draft plan, at www.EngageMidHudson.com
TIP: Book your Comprehensive Home Energy Assessment with a certified contractor today. The assessment is offered through New York State Energy Research and Development Authority’s ENERGY STAR program. Find out how your home can be sealed, insulated and better equipped to save energy and money.
 There has been some discussion lately about large EHS consulting firms beginning to staff up in anticipation of a lot of “catch up” work as the recession ends. These firms advertise quite a bit that because they operate many offices located, in most cases, around the world, and offer a wide breadth of technical services they are the best firms to provide comprehensive, multi-sector EHS assistance to companies, municipalities.
However, in many instances, small consulting firms – even solo practitioners – can offer a competitive alternative to such huge firms. Because of the recession many highly experienced EHS and energy professionals laid off from their former large firms have founded their own consulting firms, and these small firms provide client companies with a viable alternative when procuring consulting services. Depending on the project, these small firms can provide services that are equal to or superior in quality for a lower cost than those provided by the large consulting firms.
I have seen it from both sides, having worked for two huge firms and now heading my own small EHS and energy consulting practice. Here are six advantages of using a small consulting firm:
1. Personalized service. At most small firms, the owner himself or herself serves the client, and work is conducted by the owner or a trusted senior staff member. Through this arrangement, the client speaks directly to “the boss” and does not have to go through channels as is required at a large consulting firm.
2. Expert service. With a small firm, the client gets the direct benefit of the owner’s or senior person’s many years of experience unlike at some large firms where projects are shuttled to junior staff. The small firm’s owner or experienced practitioner has direct involvement in the project from start to finish.
3. Passion. Most small firms are thrilled to have a client’s business, as even one good project can positively impact their workload. This differs from a very large firm where a given project is one of many. Small firms tend to take the time to build close personal relationships with their clients. While large firms care for their clients too, small firms are almost always quite appreciative of their clients’ business and give that extra effort to please (sometimes providing “extras” beyond the Scope of Work) because their level of service is a direct reflection of the owner and the firm.
4. Flexibility. Of course, a disadvantage of using a small firm is the limited depth of experience compared to a large firm. No one can know everything. However, there is a growing tendency among small companies to create teams to expand the breadth of their expertise. For example, I was recently involved in a teaming arrangement with 3 other small firms representing other sub-specialties that were needed to deliver detailed greenhouse gas reporting services. A Fortune 50 company compared the capabilities, personnel, and experience of our team to those of a huge consulting firm, and chose ours – based on merit! That large firm did not have expertise in all 4 areas that we had. The evaluation did not even consider that our cost was lower than the big firm’s.
5. Lower costs. Of course, small firms have lower overhead costs (e.g., reduced office expenses, few or no non-technical employees, such as HR and marketing) than large firms. Project labor costs also tend to be lower with a small firm because there is less duplication of services (a second or third person reviewing the work of junior staff at a large firm). Therefore, in most cases, smaller firms can perform the same work at a significantly lower cost.
6. Local know-how. Many small firms have an intimate knowledge of the regulations and even the unwritten procedures in the states where they practice. At many large firms, staff must perform projects in many locales and may lack experience in all jurisdictions. It is important to receive services from practitioners who have actual experience in your locale.
Companies seeking EHS, sustainability, and energy consulting services should consider both small and large firms in addressing their needs. While some situations may be better suited to a large firm, many can be solved just as well, if not better, by the right small firm.
There is a profound change going on in business attitudes as seen in several business publications recently. A growing focus for companies is on conservation of energy and other natural resources (i.e., water, raw materials, etc.) they depend on for their product. Lately, there has been relatively great volatility in the global supply and demand of many of these, meaning risks (both cost and even business survival – of not being able to make your product in a reliable manner at a reliable cost) are real and potentially significant. For most industries, costs for energy and natural resources are a greater percentage of overall business costs than ever. Controlling these costs – or at least keeping them stable – are of growing concern.
 What is driving this price and availability volatility? Our global economy. Currently, we have about 7 billion people on Earth, but of these about 1 billion are “like us”: high energy and resource users. If you are reading this article, you probably are using a smart phone, personal computer, printer, or some combination of all three. And if you own and use these, you probably also own and operate one or several TVs, music systems, automobiles, go on frequent trips, and can control your comfort (heating and cooling) with the touch of a few buttons both at home and at work. Yes, you are a high energy user. There is nothing wrong with this. We work hard and deserve to use and enjoy the latest technologies. But this comes at a cost. According to the demographers who study this, by 2050 we will have about 9 billion people on Earth, but of greater concern is that we will triple the number of people who are high energy and resource users, over 2 billion additional middle class people in less than 40 years. Why? Because of economic growth in the BRIC countries. This is not a theoretical exercise based on a computer model. We are seeing frequent reports of large numbers of people in China, India, Latin America, etc. trading in their bicycles for automobiles, their multifamily, poor housing accommodations for larger, single family, climate-controlled homes, etc. This drives up global demand and prices for all of us gasoline, water, building materials, etc. However, the resources that everybody on Earth needs to prosper and grow into this lifestyle (energy, drinking water, chemicals, cement, plastics, food) are, for the most part, finite. Therefore, based on discoveries of new sources and availabilities of such resources, both shortages and gluts of these resources have and will continue to occur, affects resource availability and price and the very the operations of any company or plant. For example, natural gas prices are currently quite low in the U.S. because of new sources being successfully exploited. Oil and coal, the fuels of choice in most of the developing economies, leads a growing global demand that will cause their prices to increase for all. Companies dependent on oil and coal to supply heat for processes or comfort will likely be hit hard in the bottom line by future volatility in energy prices and perhaps even availability of the fuel.
Therefore, your role as EHS or Sustainability Manager may need to change in the coming years as companies recognize the importance of conserving usage and diversifying sources. Instead of protecting your company’s emissions and discharges from violating rules and from damaging the local environment and worker and public health and safety and counting carbon and other parameters, your role may also include managing the needs of these valuable, dwindling resources. The less dependent your company is on energy, water, etc. (i.e., the less needed to produce the same amount of product), the lower your company’s costs and business risks are. Similarly, the ability to diversify your sources of energy, water, raw materials, etc. (i.e., ability to combust more than one fuel type, multiple agricultural raw material sources and areas for fresh water) will result in a much lower risk of not having a key resource available and to keep manufacturing your products consistently and to meet your business goals.
For example, I worked on a project several years ago for a U.S. manufacturer which wanted to build two new manufacturing plants in Southeast Asia making certain consumer products. One of their major concerns was the source of energy to power large boilers to produce the large amount of heat needed for prodution. We investigated sources of energy easiest available in that country, including renewable sources, and modeled likely long-term prices. We recommended (and the client accepted) designing the boiler system to combust one fossil fuel and one renew-able fuel source (local, easily regrown trees) for these new plants. These are the most available long-term energy sources, and will reduce their risk of running low on energy.
Business leaders are beginning to acknowledge this critical challenge. Therefore, your role in your firm may grow to include managing critical resources. You may need to keep track of the availability and of prices of these resources and contribute to determining and implementing strategies for your processes concerning usage of natural resources to conserve their use and diversify sources.
Management of natural resource usage does not only involve minimizing your direct dependence on those that you need to make your product, but also should include minimizing their need for use in your products used by your customers. For example, if your products force your customers to have to use (and spend) more on energy to operate them, then your customers will begin to investigate alternatives that are more energy efficient. Conserving resources by your products makes them more competitive.
So watch out for the new buzzwords of resource management being important to a well-being of a company given their growing relative costs. Provide the technical expertise and work with your business professionals to reduce costs and risks for long-term gains.
(Continued from Another Congratulations to SUNY - First-Ever System-Wide Sustainability Conference: A Look Back)
Students at Empire State College study independently at 35 locations across the state or online through its Center for Distance Learning. However, Davis added that, “we travel and we print, so we are always looking to do better for the state and for SUNY and to meet our own targets for sustainability.”
SUNY College of Environmental Science and Forestry President Cornelius B. Murphy Jr. delivered the keynote, highlighting areas in which his institution has sought to lower that campus’s carbon footprint. He showcased some of the “student-driven” measures ESF is undertaking, including a diesel fuel reclamation program, the heating and energy system for the campus portal building and the campus’s work with its forest acreage to sequester carbon monoxide.
 Speaking of climate change, he said that this generation has a moral commitment to make the investment in a green future, for the sake of future generations. “I have eight grandchildren and it is my grandchildren whose lives will substantially change. Their children may never see a sugar maple turn color, there will be reduced availability of water resources in their lifetime, and increased cost and reduced availability of agriculture.”
Both presidents have signed the American College and University Presidents’ Climate Initiative.
More on the power of SUNY
The SUNY system holds its first large-scale sustainability conference this September! 85 participants – SUNY sustainability officers, and representatives from other state agencies and the private sector – gathered at SUNY Empire State College for the first systemwide conference for SUNY sustainability officers Monday and Tuesday, Sept. 19-20.
Thirty-two SUNY colleges were represented at the conference. (Who was there? Look to the end of this article.)
“We think we are pretty sustainable because we don’t have many of the activities that a traditional campus has, plus our modes of delivery to part-time learners leave a much smaller footprint,” said SUNY Empire State College President Alan R. Davis in welcoming the attendees to the conference.
More on SUNY's great "greening efforts" and why they're so committed to making a difference!
SUNY Colleges in Attendance:
Binghamton University, Cornell University, Fashion Institute of Technology, Herkimer County Community College, Hudson Valley Community College, Jefferson Community College, Monroe Community College, Onondaga Community College, Purchase College, Stony Brook University, Sullivan County Community College, SUNY Adirondack, SUNY Buffalo, SUNY Brockport, SUNY Cobleskill, SUNY Cortland, SUNY Downstate Medical Center, SUNY Empire State College, SUNY College of Environmental Science and Forestry, SUNY Geneseo, SUNY Morrisville, SUNY Old Westbury, SUNY Oneonta, SUNY Orange, SUNY Oswego, SUNY Plattsburgh, SUNY Potsdam, SUNY Upstate Medical University; SUNYIT; University at Albany and the University at Buffalo.
 Marc's blogs have provided many reasons for a company to go "green", including "The 8 Purely Buisness Reasons To Go Green" found on www.CCESworld.com. Well, now a pretty viable 9th one has come up. A recent published study from the University of Minnesota shows that among S&P 500 companies those that emit lower quantities of greenhouse gases (GHGs) have a higher value, based on stock price, than those that emit more carbon. Those companies that the market believes are more efficient, effective, and business savvy are indicative of their carbon emissions. And what’s more important to a CEO and the corporate suite than stock price?
Well, if this is true what aspects of sustainability have the biggest impact on stock price?
Is it the savings of fuel usage and reductions of other operational expenses? Is it new
revenue associated with products to address consumer “green” demands? Is it
confidence that a company with good environmental, social, and governance (ESG)
performance will grow, weather business storms, and have great value?
Business publications are beginning to document environment and sustainability data and posting it up for the public to see. Bloomberg now posts ESG performance data for
its customers to use to make investment decisions. This is a premium of information for
investors, as currently sustainability and ESG data are not required by the SEC.
Another area of concern to investors is risk. A company with a robust sustainability
program with an energy and fuel savings program will normally succeed in energy and
financial risk reduction. Reduced need for energy, as well as obtaining fuel from
multiple, diverse sources will reduce your risk of being short of fuel and not being able
to make or transport your product, a key risk that could depress one’s value.
What is the relationship between sustainability and business growth? If a company
begins to manufacture or re-brand some products as “green”, and is successful and
grows revenue and profit, is it because of its sustainability program or because of smart
business acumen – successfully responding to changes in the market? Perhaps both.
Therefore, there is not a clear picture on exactly how ESG initiatives impact shareholder
value, although recent studies do show this correlation. However, good business data
can provide information for strategic planning to give sustainability leaders the proof that
their initiatives are resulting in positive business successes. More research will be
needed to better pinpoint the relationship.
 Businesses actively using a Buy Independent/ Buy Local (BIBL) campaign have actually benefited from stronger revenue numbers. In fact a survey showed that they actually experienced double the sales growth, over the last year, over businesses who didn't. While the survey cannot prove causality from the BIBL campaign, it does prove that the campaign works and encourages other businesses to seek this alliance. In addition, the campaign also serves to making the public more aware of their importance and power in sustaining local businesses, and made customers more loyal. In fact "the most influential community campaigns inspire residents to recognize their power and responsibility to guide the community’s future", thus hoping to change individual behavior from being a mere consumer to being a responsible citizen.
"In city after city, independent businesses are organizing and building an increasingly powerful counterweight to the big business lobby on issues as varied as tax policy and global warming. Local business alliances have now formed in over 130 cities and collectively count some 30,000 businesses as members. These alliances are calling on people to choose independent businesses and locally produced goods more often, making a compelling case that doing so is critical to rebuilding middle-class prosperity, averting environmental catastrophe, and ensuring that our daily lives are not smothered by corporate uniformity.
Driving is down in U.S. over the last two years, while data from a dozen metropolitan regions show that houses located within walking distance of local businesses have held value better than those isolated in the suburbs, where the nearest gallon of milk is a five-mile drive to a superstore." This is where local business, local living, and sustainability all work in unison.
for complete articles follow links
http://news.yourolivebranch.org/2011/02/09/5-ways-to-help-your-community-go-local/
http://www.yesmagazine.org/new-economy/a-new-deal-for-local-economies
Check out Wal-Mart's Sustainability Strategy.
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