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Wednesday, April 29, 2009

What is next for the sustainability team?

Last week the newspapers were full of green content. The New York Times, Washington Post and The Wall Street Journal all contained extensive coverage of the EPA's Greenhouse Gas Endangerment Finding. And of course it was Earth Day too, so there were whole sections dedicated to how to be greener.

I see a sea-change in the language used at green conferences in the USA. Until recently climate change was rarely mentioned. I was often the only one using the terminology. Others preferred to refer to energy efficiency and energy security. Now, we go down the line on a panel and one by one everyone talks about climate change. It seems like one of the mainstays of corporate social responsibility has been achieved - recognition in USA government and business circles that climate change is an issue caused by humankind and that needs to be addressed through government and business action. So what next - have we achieved what we need to?

Well of course, sustainability includes a lot more than environmental issues. Social and economic sustainability are just as important. But in the climate change space there is still much to be done too. The subtitle in The Wall Street Journal item about the EPA's endangerment finding was 'Businesses Brace for Costly New Rules as EPA Declares Warming Gases a Threat'. We cannot rest until subtitles like these read "Businesses celebrate a regulatory framework that will mitigate climate change and the cost of adaptation'.

The article goes on to comment "unless superseded by congressional action, the EPA ruling eventually could lead to stricter emissions limits".

It is tempting for companies to use the expertise of their sustainability professionals to identify whether compliance with congressional or EPA action will be less expensive. But there will be plenty of people in corporations assessing these operational costs. The CSR team should be the voice in the company representing the far greater cost of adapting to climate change and identifying which approach is most likely to avert climate change.

It is also tempting for the CSR professional to use their expertise to become immersed in compliance and offsetting. These are critical roles, but the role of CSR is to be the advocate for those issues that are beyond legal requirements and beyond the need to make a short term profit. Once it is law or compliance, the CSR exec needs to move on and ensure they are looking further ahead and continuing to push the envelope.

Monday, April 27, 2009

Guest Blog Post: Wal-Mart Stores, Inc

Kim Saylors-Laster is Vice President of Energy at Wal-Mart Stores, Inc. Kim joined Wal-Mart in 1994 and is currently responsible for all of the electricity and natural gas procurement within the United States, as well as providing guidance to energy markets within Wal-Mart's International trade areas. Additionally, Kim is an executive champion of a number of renewable energy causes within the Wal-Mart Sustainability Network.

A few weeks ago, I received, through the World Resources Institute Green Power Market Development Group, photos of BT’s recently completed solar project at its company headquarters in El Segundo, California. Though I had only briefly visited with the BT team previously at WRI Green Power Group meetings, I immediately emailed Kevin to congratulate the BT team on the completion of the impressive solar project and to see if there were any key learnings that could be shared with Wal-Mart to help us as we investigate the feasibility of solar shaded parking lot structures for our Wal-Mart Stores and Sam’s Clubs.

Wal-Mart is always looking for new and innovative ideas for incorporating more renewable energy into our operations, and despite the current economic conditions, we remain committed to accelerating and broadening our sustainability efforts. One of Wal-Mart’s long-term company-wide goals is to be supplied by 100 percent renewable energy at our operations around the world. We believe doing so will make Wal-Mart a stronger company and a better neighbor, today and in the future.

Though we have not yet tested a solar shading parking lot system, we are using solar energy at 20 facilities in California and Hawaii. When fully implemented, we estimate the total solar power production from these sites could be between 16 million to 18 million kilowatt-hours per year and reduce greenhouse gas emissions by 7,000 to 8,000 metric tons annually. Each solar power system installed is expected to provide up to 20 to 30 percent of the power for the store and clubs on which it is installed. We have been encouraged by the results of this pilot program and are hoping to expand it over the next few years.

We are also excited about opportunities to purchase renewable wind energy. Last November, we announced a deal with Duke Energy on a major purchase of wind power that is expected to provide up to 15 percent of Wal-Mart’s total energy load in approximately 350 Texas stores, clubs and distribution centers. That’s equivalent to the annual usage of more than 20,000 average American homes.

In addition to increasing our energy efficiency, Wal-Mart’s energy department is helping our suppliers improve the energy efficiency of their facilities through the Supplier Energy Efficiency Project (SEEP). Wal-Mart representatives visit supplier manufacturing, distribution and administrative offices to provide professionally engineered solutions for lighting, heating and air conditioning appropriate for each building. SEEP customers may expect potential savings of between 15 to 50 percent on their future electric bills.

Like BT’s efforts, Wal-Mart’s ongoing commitment to renewable energy projects such as these helps us build a more diversified energy portfolio. The research and innovations this effort inspires creates even more opportunities for advancements in clean energy. Wal-Mart will continue to use the results of our own renewable energy projects, and innovative projects such as BT’s solar installation at its corporate headquarters, to adopt additional solutions to achieving our goal of being supplied by 100 percent renewable energy.

Thursday, April 23, 2009

Solar Installation - how long does it take?

I am often asked how long it took to build our solar installation in El Segundo.

The installation has approaching 3000 modules, a combination of a raised tracking system over the parking lot and fixed panels on the roof. It will produce just short of a 1 M KW hours of clean electricity per year.

From initial concept through to 'power on' it took us just about two years.

The idea was raised in February 07 by a colleague in our commercial contracting team who saw the window of opportunity with the CA incentive rebates. Much though I am disappointed I didn’t think of it (!) I am thrilled that employees throughout the organization are participating in environmental initiatives. The same colleague championed the project from start to finish.

With initial internal approval, we released the RFP in May and a vendor and solution was decided upon in July. A couple of design alterations required renegotiation and extended the timeline.

We held a big public launch event with HRH Prince Andrew and BT Chairman Sir Michael Rake in February 08 and work commenced in earnest in the summer of 08. Much of the work was below ground or on the roof, so although progress was being made, little was visible at the site until towards the end of the calendar year. Finally, in a short period of only a few weeks at the end of the 08 calendar year, the panels went up on the raised lot over only a couple of weeks. January and February 09 saw some testing, approval and sign off process and here we are now with a working system.

I am sure there are a couple of places where progress could have been quicker. But with four parties involved, financing partner, integrator, ourselves and our landlord, there are inevitably a number of things that have to be socialized and agreement reached and I am pretty pleased with the time line.

We have just launched an employee residential solar program for our US employees. I plan to provide some insights into how that is going in a future post.

Wednesday, April 22, 2009

The Impact of Earth Day

It is Earth Day today. A day designed to inspire awareness and appreciation for the environment. It feels like only last month it was Earth Hour - and that’s because it was. In fact, Earth Hour took place less than a month ago on March 28th.

Is it worth having all these special events or do they just allow us to ease our conscience for a day and then go back to our normal behavior for the rest of the year?

I think these events are very valuable. There is a lot to be said for concentrating action into a short time span and the motivational impact of knowing you are participating with millions of others. I can vouch for the fact that after every one of these special events I am approached by additional volunteers who want to get involved and who stay involved in new activities.

Of course, we don’t see people maintaining 100% of the activity they put in on Earth Day for the rest of the year. But if participants increment their ongoing activities by just 5%, the day will have made a great contribution.

Thursday, April 16, 2009

Uptime Symposium and Miami University of Ohio Event

I have just returned from speaking engagements at two contrasting conferences. Together they demonstrate the breadth to which sustainability is becoming embedded in business practice.

First, I attended the Uptime Institute Symposium in New York with about 1,500 people for the week long event. The symposium focused on energy efficiency in data centers with a very tech savvy audience. I spoke on a panel with Eric Olsen of BSR on the broader sustainability landscape for corporations. In the late afternoon, I attended a valuable keynote by Bill Weihl, Green Energy Czar at Google, who described his very practical top ten lessons learned.

I then joined a more intimate conference, entitled Managing Risk to Achieve Strategy in the Post-Financial Crisis World. There were about 150 attendees at the Miami University of Ohio. Dr Brian Ballou and Dr. Dan Heitger, co-directors of the Center for Business Excellence, organized the conference and were excellent hosts and facilitators. The participants were a mixture of business folks, and MBA and accountancy students.

What was I doing there you might ask? I asked the same when I was approached to be a speaker. The morning presentations from risk management professionals at Marathon Oil, Estee Lauder, Convergys and Cintas opened my eyes to the power of the link between sustainability and enterprise risk management. I cannot hope to do justice to the synergy between the two in a blog post, but would encourage you to take a look at a paper on the topic by Dr Ballou and Dr. Heitger.

Bruce Johnstone, Managing Director and Senior Strategist at Fidelity Investments, presented a truly superb keynote on the economic crisis.

I spoke on the Four Dimensions of Sustainability and provided CSR practitioners a perspective that I hope was helpful to the participants.

As with Net Impact, the enthusiasm of the students energized me. Many from the school welcomed me, including my table hosts Scott and Marissa, who promised to comment on my blog. And for the record, a simple hello won’t cut it. I am looking for an insightful critique of something I said!

A lot to be said for the networking potential at big conferences, but somehow I find that smaller events provide even more opportunity for real engagement with others.

Wednesday, April 15, 2009

Corporate Responsibility Officers Association - Board of Governors

The newly formed Board of Governors of the Corporate Responsibility Officers Association was officially announced yesterday. I was pleased to be invited to be a member of the Board. The CRO Association will cover a number of topics. Among them, will be the CRO's list of 100 Best Corporate Citizens that is especially well known.

I have a particular interest in the role of the corporate social responsibility officer and in developing the professional standing of that role. I know that between myself and colleagues in other companies the role varies from compliance to advisory to public relations; from environment to poverty to health and from developing profitable business opportunity to charitable giving. I made reference to this in my January 09 post 'Issue Advertising and the Role of the Sustainability Officer'. I am hoping that one of the things the CROA will be able to contribute to will be increasing the structure and recognition of the role and in so doing, will enhance the professional standing of practitioners.

Tuesday, April 14, 2009

Sustainability lessons from Japan

Improvement is often best informed by changing your perspective and looking at yourself through a different lens.

Sen. Chuck Grassley's recent remarks that executives of AIG should consider following what he described as the Japanese model of shamed corporate executives: apology or suicide, were outrageous. But his reference to Japanese executives did get me thinking. In the US we have a perception that Japanese business executives subordinate their personal interests in favor of the interests of the business. And I think we have a level of admiration for that. I suspect US businesses would regain a lot of confidence amongst stakeholders if we could move the dial closer to the Japanese model in this respect.

And what about the workforce? Underlying most unionization debates is a basic lack of confidence in the USA of whether unions have the best interests of the business at heart. Rather we have a perception that they put the individual workers interests ahead of the sustainability of the business. I hear repeatedly that our resistance to ‘freedom to associate’ guidelines is a point of difference in many global discussions on ethical labor standards. In contrast, I recall a recent discussion as I was developing a sustainability framework with CSR peers from Japan. One of the dimensions was approach to unionization. The contrast between the approach of the American participants and the Japanese participants to unions was striking (pun intended). My Japanese peers described a mutually trusting relationship.

I am also intrigued by the harmonious approach of Japanese corporations. Take Canon’s corporate philosophy to ‘Achieve corporate growth and development while contributing to the prosperity of the world and the happiness of humankind’. I see it reflected in an integrated approach to sustainability across Canon’s website.

Or Omron, a Japanese manufacturer of electronics components and solutions based on sensing technologies. Omron’s mission is ‘No matter what challenges the future brings, we will continually develop new solutions to help build a safe and sustainable society where people enjoy peace of mind.’ I see this reflected absolutely in discussions I have had with Omron’s CSR representatives.

I suspect that if we are willing to listen carefully, we in the US have much to learn from the Japanese in the sustainability space.

Wednesday, April 8, 2009

A Fresher Washing and Drying “Sustainability” Cycle

A number of you have pointed out an error in one of the illustrative examples in my white paper The Four Dimensions of Sustainability. Perhaps I focused too much on green washing and whitewashing, but didn’t pay enough attention to clothes washing.

I quote clothing as an example of a product that does not have a 'product in-life' carbon footprint. However, I was wrong. It has been pointed out to me that when you wash and dry your clothes you consume energy and generate emissions. According to the
Citizens Action Coalition Education Fund in Indiana, "appliances such as your refrigerator, clothes washer and dryer, dishwasher and electronics (TV, computer, audio and video systems, etc.) account for about 20% of your household’s annual energy bill.” Further, "by using a clothesline instead of your dryer, you can save 1,016 pounds of CO2 annually.”

Washing and drying clothes can add up to 5% of the carbon footprint of an average household

Moreover, as far back as April 2007, Marks and Spencer over in the UK realized this and started to encourage their customers to wash clothes at a lower temperature. "From today, Marks & Spencer will encourage its customers to help reduce their impact on the environment by lowering their washing temperature to 30°C, saving around 40% energy per wash. Independent tests also show that around 70% of M&S clothes(ii) can be effectively washed at 30°C, without any significant reduction in performance of everyday washes. Over the coming months,
Marks & Spencer will re-label almost three quarters of its clothing ranges to include the words ‘Think Climate – Wash at 30°C’ on the garment care labels.”

Therefore, the next draft of my paper will not include this example!

Monday, April 6, 2009

Should business invest in renewables while the rules are shifting?

I wrote earlier on my blog a post Signs of An Inflexion Approaching highlighting changes in carbon accounting rules for businesses on both sides of the Atlantic.

These can be a tough times for businesses that have been first movers. Rules change, and what seemed like the right decision at the time suddenly looks less so going into the future. A carbon neutral position can become invalidated or seemingly regress by either a company or a government entity, such as the recent example of the US House of Representatives
abandoning plans to make their offices carbon neutral.

But that is not how we should be judging. It is the actions of the businesses and governments that stepped into the fray before things were clear that have been the catalysts to crystallize the landscape and help facilitate decisions on rules and frameworks.

The investments of these first mover organizations will not have been wasted. These companies and other organizations will be able to inform policy and rulemaking and will be ahead of their competitors both in adapting quickly, based on knowledge and experience, to the new rules.

And enlightened government will ensure that rule and their timescales for introduction do not penalize first movers. I see this in the timescales for the new EPA rules for Green Power Partners that allow companies to adjust before the rules take effect.

Some businesses will have to sacrifice a little pride and revisit carbon reductions in the light of a new framework - but this is the worst case.

The ground is going to continue shifting for some time before rules become clear. But businesses should not wait. Renewables decisions should of course include scenario planning as would any other business decisions, but they should go ahead where they make commercial sense. And government should recognize the valuable contribution of first movers and the damage it would do to other potential actors if the whole market is paralyzed into inaction until all the rules are clear.

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