What’s Real in Corporate Sustainability?

green barcode, corporate sustainability

Bar code made from grass blades isolated on white

You’ve seen the product labels. You’ve seen the claims on commercials. Corporations say they care about the environment.

Putting eco-friendly statements labels and commercials and then not doing anything about them is known as greenwashing.

How is a consumer supposed to know a company’s real commitment to sustainability?

You have to dig a little bit, but the news in encouraging. Corporate sustainability and social responsibility are good for the bottom line. Corporations now have more ambitious goals than they used to, so ambitious that they must call for outside help.

Corporate sustainability and the bottom line

Profit and sustainability

Profit and sustainability

Years ago, companies could reduce their environmental impact by beginning a recycling program or encouraging employees to turn off lights and shut down their computers over night.

Several large corporations, including Walmart, began such practices as redesigning delivery routes to save fuel and reducing packaging to reduce shipping weight years ago. They began to reduce the amount of waste taken to landfills. Some have already achieved zero waste to landfill.

Once corporations have implemented that kind of change, what next? Besides fine tuning existing practices, many corporations have become even more ambitious.

More and more companies are developing long-range sustainability goals. According to a poll conducted jointly by Siemens and Greenbiz, half of large corporations have at least five goals, and a quarter have ten or more.

The more ambitious the goals, the less likely a corporation is to have people with the necessary knowledge and time already working for them. A large majority, 80%, outsource much or all of the work of meeting the sustainability goals.

That figure rises to 88% among companies with at least $10 billion in revenue. They set their own goals and then hire companies with specific expertise for planning, implementing, and tracking results.

Small companies tend to focus on energy efficiency. Large companies are trying to reduce carbon emissions. Some have a goal of zero emissions. Some can use products and technologies that actually remove carbon from the atmosphere, thereby becoming carbon negative.

Other goals include waste reduction, water conservation, LEED certification and ending their participation in more distant problems like deforestation of purchasing blood diamonds. Corporate sustainability becomes a subset of broader issues of corporate social responsibility.

Many companies have hired Chief Sustainability Officers who report directly to the CEO. Corporate management realizes that, done correctly, sustainability efforts will not only reduce environmental impact, but also boost profits. The CSOs advocate sustainability to investors in addition to designing more sustainable products and practices.

Outsourcing corporate sustainability

earth from space

NASA photograph of Earth

Corporate sustainability is complicated. Conservation, for example, requires good cost estimates. It is difficult to assign the value of utility costs and other overhead to specific products.

Companies can easily look at their bills to see how much they pay for water or electricity. They cannot so easily discover where or how they are consumed.

The more ambitious a corporation’s sustainability goals, the less likely it is to have the necessary expertise in house.

A number of new companies make helping other companies meet corporate sustainability goals their core business.

The Energy Network Operations Center (EnerNOC) develops energy intelligence software, then partners with businesses, including utilities, to make reasonable estimates of how overhead affects specific products and operations.

By collecting and analyzing millions of data points, the software can help companies discover inefficiencies and waste, which they can then take steps to correct. It provides information suitable for everyone from top corporate officers to plant managers.

For example, EnerNOC helped La Crema, a winery in California, calculate the actual cost of a gallon of nominally free water from their onsite wells. It also helped it discover that it spent 40% of its energy bill on refrigeration. Armed with such data, the winery can make informed decisions about upgrading insulation and/or cooling units.

EnerNOC also helped Tesla test energy storage batteries at Jackson Family Wines. Tesla could test its product under real working conditions, and the data from the batteries enabled the winery to cut 10% from its energy bills by cutting peak demand. EnerNOC also enabled Jackson Family Wines to calculate the rate of return of installing solar panels on its rooftops.

Reduced emissions, energy and water conservation, redesigned products and supply chain, and other initiatives both move companies toward sustainability and help their bottom line.

SustainAbility takes a different approach to helping companies become more sustainable. Instead of software, it offers consulting on such issues as transparency, stakeholder engagement, and strategic planning.

Among other clients, it works with companies often considered environmental villains. It has

  • worked with Nike and other companies to achieve zero discharge of pollutants into streams.
  • helped Coca-Cola become involved in sustainable agriculture and sustainable water usage.
  • helped Royal Dutch Shell develop a pioneering sustainability report and communicate with the public with more transparency.

Many reflexively anti-corporate environmentalists question whether any multi-national corporation can be legitimately described as a sustainability leader. But at worst, every bit of progress by even the most hated companies contributes to sustainability by reversing historically bad practices.

The best in class (Adobe, Unilever, Nestle, Walmart, and Allergan) make it part of their mission to achieve net-zero energy use, move toward 100% renewable energy use, achieve zero waste to landfill, sell sustainable products, and have an increasingly positive social impact.

Walmart, at least, helps its suppliers consume less fuel and water and create less waste. They have learned that sustainability is profitable. And they can find plenty of help from specialists.

You can occasionally find stories about corporate sustainability and corporate social responsibility in the business section of your local newspaper, news magazines, and TV news coverage. You can look for more dependable stream of stories on the Internet.

Like right here at Sustaining Our World.

Let me know what you want to read about.

Why Sustainability Isn’t a Bad Word in Corporate America / Travis Hoium (Motley Fool, July 26, 2015)
As Corporate Sustainability Plans Grow, So Do Calls for Help / Barbara Grady (GreenBiz, July 23, 2015)

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