Guest Blog Post: EMC

Greenwashing? Or Greenbashing?

In his March 4 blog entry, Kevin quite rightly points out the frequency of accusations of greenwashing, which are coming fast and thick in the blogosphere as well as the more class media (905,000 hits on Google and 539 books on Amazon). He suggests that companies can "avoid the label by taking the right actions on sustainability." That would indeed be true if accusations of greenwashing were actually correlated to taking the wrong actions in the majority of cases. But I'm not at all sure it's true.

First of all, let me go on record as abhorring companies that knowingly "spin" their messages to sound as though a product or action is environmentally friendly when it is anything but. They confuse the market, invite cynicism, and generally make a bad name for all companies that are trying to do the right thing. Nor do I have a lot of sympathy for complete ignorance and am happy to denounce claims that bamboo cigarette holders will save the planet.

But there are other less worthy targets for the label. There is the slightly naïve company (or, more likely, marketing communications person) who is genuinely proud of positive steps that were taken in their own right, but hasn't looked at them in the greater context of materiality. I'd rather see us teach these folks then publicly castigate them. But OK, so public humiliation may not be pleasant, but it is educational.

What about the more aggressive companies that push the edge of the envelope, by necessity running up against the untested and controversial, and then getting slapped down for their efforts? I can just see the execs at peer companies saying "Thank goodness it wasn't my company out there in front". Yes, people were educated by the criticism, too. They were taught that taking risk is a really bad idea if you don't want to end up on the front page of the paper.

And then there's the "whitespace" situation in which a company is doing something relevant and material, so gets chastised for something else they haven't (yet) done, even if it's far less material. Perhaps we shouldn't publish anything - but then how to defend to your stakeholders why you were bypassed by all those "100 Best…" lists and responsible investment indexes?

I was asked during a panel session recently whether private industry was "doing enough". Nope, we're not. Not by a long shot. But constant media attacks on those that are trying isn't going to speed up progress.

Maybe the critics should start applying the test of materiality to their own diatribes.

Kathrin Winkler is Sr. Director, Corporate Sustainability at EMC Corporation, where she has a history of taking on entirely new roles in which she has to fill in the interstices between more traditional functions. Kathrin (aka "Kate") took on the full-time sustainability position in July of 2008, and maintains her own blog Interconnected World where she documents her personal and professional journey. These views are her own and do not necessarily represent those of her employer.

Smart Trade with Four Dimensions

This week, I will be presenting my Four Dimensions of Sustainability framework at a Women in International Trade Association (WIIT) event on climate change and its international implications. The Honorable Branko Terzic will join me in the discussion. He was a speaker at a British American Business Association energy and environment event I organized in DC last year. He is both a knowledgeable and entertaining speaker. Monica Dorhoi of World Bank will moderate the discussion.

I encourage my readers in the D.C. area to attend this event. It will occur on Friday, April 3 at 12:30 p.m. at the Ronald Reagan International Center.

How Sustainable is Train Travel?

It is Thursday afternoon and I am on an Amtrak train on my way back from speaking at the Ethical Sourcing Forum in Manhattan. I just took a look at the Arrive magazine in the seat pocket in front of me and it was the March /April "Special Green Issue". It is pretty good for a seat pocket magazine and includes a well written feature on the challenges and opportunities of wind energy.

One thing took me by surprise. In the editorial, Joe Boardman, President and CEO of the publication, explains that rail travel is about 17% more energy efficient than air travel and 21% more efficient than automobiles on a per passenger mile basis. I had been sitting here on the train thinking how green I was being going from DC to NY by train rather than flying or driving. 17% and 21% is better than nothing, but it doesn't seem that much better in the grand scheme of things. I had thought the train would be 80% or 90% better - after all, it doesn’t have to get off the ground and I always understood that to be the most energy intensive part of air travel.

According to Freight on Rail a UK based partnership of the rail freight operators, per tonne carried, road transport will requires between 4 to 7 times more energy than rail. – The case for rail, Railfuture 2004. That is more like I would have expected.

Does anyone know where the 17% comes from or how to reconcile these two data points?

Teleconference: Obama Administration’s Priorities in Energy & Environment

Next week we will have a second complimentary British American Business Association teleconference with an overview of the Obama Administration's stated priorities in Energy & Environment and the implications these will have.

Our speaker will be Christine Tezak, a well-respected analyst in the energy industry, and until recently Senior Vice President, Energy and Electric Utilities Analyst, at Stanford Group Company’s Policy Research Group. Christine will be addressing renewable portfolio and what it means for those who sell and buy power, pollution control rules, what do new standards portend, climate change and regulation of carbon dioxide and smart grid and transmission infrastructure - and leaving time for Q&A - all in one hour!

As before, I am extending complimentary participation to readers of CSR Perspective. Click here to register and to download audio and webinar information. Where you are asked to enter your BABC Chapter enter 'CSR Perspective'. I hope you are able to join us.

Organic food industry: Is it enough?

Sustainability of the food industry is a hot topic right now. After being largely ignored for years, the White House has now vowed to encourage a more nutritious and sustainable food supply. This is encouraging news for advocates of organic and locally grown food. But are 'organic' and 'locally grown' food sustainable answers to feeding our global population?

In the same way that carbon emissions are a common measure for tackling climate change, what measure should the food industry use to ensure that micro-efforts will be sustainable if replicated on a macro-basis.

I noticed a very interesting factoid in 'Lets Grow America' in the March/April issue of Mother Jones. The article is a fascinating illustration of the complexity of sustainability in just one industry sector. The item that caught my attention states, "In 1940 one calorie of energy produced 2.3 calories of food. Today it takes 10 calories of energy to produce each calorie of food sold at supermarkets."

My initial instinct is that if it takes more calories to create the product than the product provides then it is inherently not sustainable. That may not be the case if an unlimited supply of a renewable energy source is one of the inputs. But this metric still intrigues me.

Do you know what the target should be or other comparable measures that you would like to share?

Charity Ranking Programs

I’ve written several posts (Why weren't we at the top? and Ranking corporate sustainability performance) that have expressed my views on the pros and cons of programs that endeavor to quantify and rank a company’s corporate sustainability performance. Especially, in reference to those programs that try to cover all spheres of sustainability.

At the Corporate Advisory Council (CAC) of the American Red Cross this week we had very similar discussion about charity ratings programs. The issues were very much the same.

The very influential Charity Navigator recently downgraded The American Red Cross from a four star to a two star rating. Charity Navigator's ratings can significantly influence donations from individual donors. Ratings are based on publicly available information drawn from financial reports, IRS 990, that charities are legally bound to produce. This is a logical approach, but it also limits the breadth of information from which the conclusions can be drawn.

The ratings offer an evaluation of financial health relative to similar charities. This precludes evaluation of how many people are served by the organization per dollar spent for example, or the value of the service provided per dollar spent. These sorts of measures can generically be called return on mission and are perhaps an even better indication of a charities performance. But they are much harder to quantify from publicly available information and even harder to compare on an apples to apples basis.

I draw the same conclusions as I did in my December posts. These types of ratings programs have a part to play, but their limitations must be recognized. For ratings intended for public consumption there is an even greater obligation on the program organizer to express the limitations to their audience than there is for ratings intended for business to business consumption.

Signs of an Inflexion Approaching

There are tensions within government and business on both sides of the Atlantic in emissions reduction. I think it is a good sign, and one that reflects government and business moving up another notch in the seriousness with which they take emissions reduction.

On March 1, the Washington Post carried an article that referred to the House of Representatives abandoning a plan to make its offices carbon neutral. The article raised the uncertainties around what it really means to buy offsets and the lack of a widely accepted standard for carbon neutrality.

At the end of February the EPA issued new guidance for Green Power Partners raising minimum levels, clarifying and tightening rules around new renewables and future RECs, and clarifying rules about which party can make green power claims especially at leased facilities.

Similar things are happening on the other side of the Atlantic too. In the UK, DECC (Department of Energy and Climate Change) has issued new rules for carbon accounting that change the dynamics of how carbon reductions can be accounted and claimed. A number of companies, including BT and Tesco are questioning these rules and the impact they will have on development of renewables.

Government and business are taking the conversion to renewables more seriously than ever and looking more closely at how they are accounted for and credited. I think the dynamics of the examples above and their coincident timing are a healthy sign. These are important debates that should be happening and should be resolved in a way that best provides incentives for the development of renewables and reduction of emissions. We have some way to go, but we are approaching an inflexion in how we quantify and act on carbon emissions reduction.

Complimentary teleconference - UK and US efforts to stimulate a low carbon economy

The British American Business Council is holding a teleconference on Tuesday March 17th at Noon EST. The discussion will be focused on a comparison of UK and US efforts to stimulate a low carbon economy. I will be hosting the event with presenters Nick Bridge, Counsellor for Global Issues from the British Embassy in DC and Matt Kalman, Research Assistant on energy and environment at the Brookings Institution.

The event is free to members of the BABC and to readers of my blog! Click on here to register and to download audio and webinar information. Where you are asked to enter your BABC Chapter enter 'CSR Perspective'. I hope you are able to join us.

Green goes Mainstream

The lead article "Data Centers: The Next Generation" by Marta Bright in the March/April edition of Oracle's magazine includes comprehensive examples from small and large companies (including BT of course!) that are implementing leading edge technologies in data centers.

The article seamlessly covers the efficiency of data centers and business performance. In a very short period of time we have gone from questioning the validity of environmental concerns, through viewing it as a stand alone issue to where we are today - placing it squarely as a mainstream business concern equal with operational effectiveness and business performance. Integrating it with other business needs is where green needs to be if we are going rise to the challenge in a sustainable way. I welcome Oracle's positioning.

The Scale of the Challenge

Sometimes it is the personal impact that can help underline the scale of a challenge. On my 13 mile drive into the office this morning I heard the great news that work is going to begin this month on the extension of the Washington DC Metro system out to Dulles Airport. I sometimes avoid the drive and the association emissions by teleworking. But I enjoy coming into the office and being with colleagues, so I don’t do that every day. The Metro rail extension should be great news for my commute as it involves extending the line from the Metro station nearest my home out to a new station that will be within walking distance of my office.

The extension will be completed in 2013 - so I only have to wait four years until I can leave the car behind and take the train to work.

But then I realized that although the Metro service is available now into DC, I still often drive when I have a meeting downtown. Why? To take the Metro, the station is two miles from my home, so I have to start my journey in the car anyway. Parking can be unpredictable in DC, but I can always find something, whereas after 10 am there is often no parking at the Metro and I end up driving anyway. Metro plus parking costs just short of $10.00 and takes about 50 minutes door-to-door. Driving plus parking costs $16.00 but takes a very predictable 25 minutes door-to-door.

I am thrilled that the Metro rail extension is on its way, but I think this small example illustrates the scale of the challenge we face in just one component part of creating a more sustainable infrastructure.

What about Whitewash?

The media and blogosphere is all over greenwash and rightly so. But what about its namesake, whitewash. I view the move from philanthropy as the central component of CSR, towards a much broader view of sustainability, as an important evolution. In the Four Dimensions of Sustainability, I use carbon emissions as the vehicle to illustrate the dimensions but the principles apply equally to economic and social sustainability – the impact of companies on the economic and social well-being of the communities in which they operate.

A responsible company needs to compare the impact of its charitable giving (dimension - inform and influence) in any particular sphere, with the impact of its products and services in the same sphere. In some situations, companies will find that their impact through the way they offer their services into the market place is an order of magnitude greater than the opportunity for change through their philanthropic giving. Whether it is an ICT company putting philanthropic dollars into digital inclusion, a food company funding nutrition education or a bank foundation subsidizing education for economically deprived communities on fiscal responsibility, the CSR professional also should be considering the impact of the company’s products and services on that community.

Corporate philanthropy has and will continue to provide enormous value to society. I would argue that it becomes whitewash at the point that it detracts from attention to the in-life and enabled impact of the products and services produced by the company.

What is Greenwash?

The blogosphere is full of accusations of greenwash and I think there is some justification. I intended that the Four Dimensions of Sustainability framework would add to the understanding of greenwash and help companies avoid the label by taking the right actions on sustainability.

The first part of the test seems to be reasonably straightforward. Let’s say for the sake of an illustration I were to introduce 50% hybrid vehicles into my vehicle fleet, I shouldn’t claim in my communications that this in itself makes me a green company unless my vehicle fleet contributes a significant proportion of my emissions. This is a pretty straightforward materiality test that sits within the direct dimension of the Four Dimensions of Sustainability.

But we need to go further and ensure that actions and communications on sustainability are also consistent across the four dimensions (within the context of materiality).

For example we might be less understanding of a company that has reduced the in-life energy consumption of its products and publicizes the green benefit (dimension – in life), but is pursuing a policy path (dimension – inform and influence) that is designed to undermine constructive legislation and regulation on climate change. Or a company that communicated to its customers that its products and services can help them reduce their footprint through substitution (dimension – enabled impact) but had done little or nothing to reduce its own footprint.

I would maintain that conflicting or inconsistent actions between the dimensions (within the context of materiality) is a sign of greenwash and stakeholders should call it out as such.