Guest Post: Inter-Business Network - Sustainability Lessons from Japan

Shizuo Fukada has developed a response to my April 09 post “Sustainability Lessons From Japan” Fukada-san is a colleague on the Global Leadership Network of AccountAbility. http://www.accountability21.net/

Shizuo (Ricky) Fukada is President of Inter-Business Network (IBN), a Japanese company specializing in CSR and Sustainability. Until June 30^th ‘09 he was corporate advisor to the Board of Directors Office at Omron Corporation , which he joined in 1994 as associate director of the Corporate Communications Headquarters. He has a total of 34 years experience in business, including 23 years of overseas assignments to the United States. He has been involved in many CSR initiatives including being Chair of Keidanren’s(JBF) Council for Better Corporate Citizenship since 2000.

Corporate management and governance style in each developed country is based on many factors and elements, but in my opinion, cultures and history are the biggest elements. The characteristics of Japanese corporate management style are largely based on historical agricultural background and wisdom in team work and collaboration, and in harmonious relations and equality in sharing harvested grains. Those are the basis to consider, when you discuss about employer/employee relations and about a smaller gap of income between the employer and employee. In Japan we have an "equality of the result" philosophy rather than "equality of opportunity" (like in the States). For a successful outcome, one shouldn’t be in conflict with the cultural philosophy. The more I experience in business, the more I believe that you cannot just imitate other's style or methods to manage a company: The challenge then is, what methodology to use, when you make investment overseas like from Japan into the US?

Obviously, there are pros and cons of the style and management systems of different companies in different countries. As we all experience at this time, global financial crisis and business turmoil, caused largely by lack of financial international systems to manage flow of money and other corporate activities. So, we are now in an era where it is not the case of US vs. Japanese corporate governance - which is better or not. We need to learn more about those differences, to wise up, to come up with new innovative management systems to bring corporate operations under control. Global competition is becoming more complex and we need Harvard-type wisdom and epoch-making innovations.

Complimentary Webinar - Beyond Best Practice

On Tuesday September 1 at 12.00 pm Eastern, I am speaking at a webinar for the World Resources Institute (WRI) and the Association of Climate Change Officers (ACCO) titled "Beyond Best Practice – The Next Generation of Corporate Climate Leadership".

My co-panelists are Erin Meezan – VP of Sustainability, Interface and Samantha Putt del Pino – Co-Director, Business Engagement in Climate and Technology, World Resources Institute. I will talk about BT’s Carbon Stabilization Intensity target within the context of broader corporate approaches to carbon reduction. The event is complimentary and you can register for it here.

World's Largest Companies Not Doing Enough

An excellent report,The Carbon Chasm , has just been released by the Carbon Disclosure Project. In the interests of full disclosure I should say that the work for the report was conducted in conjunction with BT and that our Chief Sustainability Officer, Chris Tuppen, wrote the excellent foreward to the report !

The report is very readable and only 14 pages. The primary focus is the significant gap between the current commitments of the world’s largest companies with what is required to avoid catastrophic climate change. the report concludes that, overall, companies need to double the pace of their carbon reduction activities.

Also identified is the broad range of different target methodologies across corporations, in particular comparing absolute approaches with intensity based approaches. (At BT, targeting has evolved from an absolute target for UK operations to an intensity based target for entire global operations. The target is linked directly to climate stabilization.)

The report also contains some interesting comparisons on the percentage of companies with carbon reduction targets. Here are a few factoids from the report; 84% of European companies, 71% of American companies and 66% of Asian companies have carbon reduction targets. 100% of Electricity Utility companies have targets compared with only 54% in the Energy sector.

Many quotes in the report, including IBM, PepsiCo, Boeing, The Coca-Cola Company, Johnson and Johnson and Chevron.

Would be great to hear what others think on the 'chasm' and the contrast between absolute and intensity based reporting.

Postscript: November 2009 - Autodesk has announced an approach using a demanding intensity based target called C-FACT - Corporate Finance Approach to Climate-stabilizing Targets. Read a guest post from Autodesk's Emma Stewart on their new target

Does EMS Implementation Correlate with Environmental Action ?

I am in the London this week catching up with colleagues. I noticed an article in The Daily Telegraph earlier in the week commenting on a study by theUK Government’s Environment Agency. The study looks at small and medium sized business and reports a 75% drop in those operating a basic environmental management system (EMS) and attributes it mainly to the current economic climate. Interestingly though, the number of small and medium businesses reducing energy and water consumption had doubled and the proportion reporting that they were recycling waste and taking action on reducing environmental damage have also increased significantly.

I find the contradiction in these figures interesting; a drop in the numbers of businesses operating environmental management systems but a reported increase in taking positive environmental action. I had similar findings from the Green IT study we did recently that I will write more about in the next couple of weeks.

Do Sweat the Small Stuff

I returned from a trip to Israel this week where I was castigated for emptying the warm remains of my water bottle onto the ground. The Israelis, as well as being blunter than New Yorker’s and willing to castigate a tourist, see water as a precious commodity. That is reflected and reinforced through seemingly trivial behaviors.

My mother-in-law castigated me for folding the page corner of a paperback I was reading to my daughter. I am a lover of books and would never dream of doing that to an antiquarian book or a contemporary hardback book, but what does a contemporary paperback matter? But my mother-in-law was right (brownie point for me for admitting it!). With a small and probably insignificant act, I was reinforcing a behavior I didn’t want to encourage in my daughter or myself.

Despite the message from this Dilbert cartoon, the little things do matter in corporate sustainability too, even if they are low on the materiality scale. I see it all the time at work. Employees want to put effort into reducing cup usage and using double sided printing in the office environment even though it is low on the materiality scale for a business that runs massive data centers and produces bills and customer collateral for the consumer market. But if we do not support and reinforce the small things, we undermine our people’s confidence to tackle the big things too.

Of course we must not do the small things at the expense of the big things – that is green/white washing. But supporting and encouraging those local and very visible activities sets the framework for the priorities and creates an environment in which our people will be increasingly creative and innovative at tackling the big issues we face.

SEED Award for Solar Installation

We just learned that BT Americas has won a SoCal Environmental Excellence Development (SEED) award for our solar installation in El Segundo, Los Angeles. The award program is run by the South Bay Business Environmental Coalition. Our award was in the category of Carbon Footprint Reduction.

I posted about the installation a number of times during construction.

BT is a large global company and has the opportunity to be recognized in large programs such as the Dow Jones Sustainability Index (DJSI). But there is something I find especially rewarding about local recognition such as this. Especially so in El Segundo, where there is a focus on the environment from the City (the award ceremony will be hosted by the Mayor Kelly McDowell) and from the business community. It highlights the connection between local action and global impact.

Guest Post: Xerox

5 Steps to Sustainability Success

By Patricia A. Calkins

Patricia Calkins is vice president, Environment, Health and Safety at Xerox Corporation. She is responsible for policy and strategy development and strategic implementation of all EH&S and sustainability programs at Xerox worldwide. Calkins is also a member of the external advisory board for the University of Michigan’s Center for Sustainable Systems and a member of the board of trustees for the Nature Conservancy Central and Western New York Chapter.

During tough economic times, organizations today struggle to justify a meaningful investment in green initiatives, because they perceive the efforts will generate added costs, not concrete business benefits.

This misperception presents a major problem for global sustainability progress. In order to launch and maintain a substantive sustainability strategy in a profit-oriented organizational structure it must deliver a definable ROI.

There is a pragmatic solution to this problem. I believe it is possible for businesses today to develop environmental initiatives that will make a quantifiable contribution to both the environment and the bottom line. At Xerox, we know first hand that what is good for the environment is also good for business thanks to a decades-long commitment to sustainability.

Here are 5 steps to achieving sustainability success in your business:

1. Explore the entire value chain of your business

Don't narrow your focus to one functional area. Open your mind to improvements and innovations that could reduce environmental impacts throughout your value chain, from beginning to end. When you take time to consider all of the working components of your value chain, you will dramatically expand the playing field for smart green initiatives.

2. Use disciplined, quantitative analysis to identify your best opportunities

Analytical tools and methodologies developed for proven quality management programs like Lean Six Sigma can help you identify problems and opportunities that will produce the biggest benefits in the shortest time frame. Goals and metrics align and empower the organization. Establishing these will enable more people to contribute and you will accomplish more than you ever dreamed possible.

3. Make sure the proposed improvement or innovation will deliver both economic and environmental benefits

In today's highly competitive business environment, quantifiable benefits are an essential requirement for any "smart way to green." So it's important to assess the win-win potential of any project before you begin active development. Economics is one of the three pillars of sustainability. If you put the organization out of business while launching your sustainability program, that is not a sustainable business strategy.

4. Think "partnerships"

To maximize your opportunity for success, you need to team up with suppliers, customers, outsourcing providers and other partners. At Xerox, for example, we work with all of the partners in our value chain to reduce waste, energy use, greenhouse gases and our overall environmental impact. It's all part of our effort to achieve one of our long-standing company goals: We want to operate waste-free manufacturing facilities that produce waste-free products that help our customers create waste-free work environments.

5. Be innovative

No question about it. Innovation is a vital cog in the big green machine. So when you begin working on green initiatives, think outside the box. Take a fresh look at the way you operate throughout your value chain or how you are evaluating cost to the business. And look for opportunities to innovate. It could lead to breakthrough results—for the environment and your business.

Beyond these 5 steps, you must be passionate about what you are doing. In a very real sense, it's a privilege to be involved in work of such far-reaching importance. If you let that sense of mission inspire you, you will bring a deep sense of commitment and determination to your efforts, which will inspire those around you. That, in turn, will help you become even more effective as a champion of sustainability in your organization.

SMART 2020 for the Mobile Sector

Vodafone and Accenture has produced a new report on the role that mobile communications can play in reducing carbon emissions. The report concludes that there is an opportunity to reduce emissions in Europe by 2.4% by 2020. Compare this with last year’s SMART 2020 report from the Climate Group and GeSi (and to which BT was a contributor), which showed that the ICT sector as a whole had the opportunity to reduce emissions by 15%. Certainly seems to be consistent in order of magnitude.

The Vodafone/Accenture report “Carbon Connections” follows a similar format to SMART 2020 looking at dematerialization, smart grid, logistics, smart cities and smart manufacturing, but as would be expected, pays closer attention to opportunities where remote and mobile applications can help. I am still processing the results and findings of the survey we did recently on awareness of Green IT amongst IT professionals. One of the preliminary findings though is that there is still a fairly significant lack of awareness amongst IT professionals of the extent of the role for IT and telecommunications services to reduce global emissions through substitution, business process change and promoting efficiency. So this report on the topic is valuable. “Carbon Connections” is worth a look if you are interested in the intersection between ICT and environmental sustainability.

The role of Metrics and ROI in Corporate Responsibility

“Metrics, metrics and more metrics. In many ways metrics drive the success of business. Multiple variables can be condensed to the common denominator of dollars and cents, pounds and pence. Many business failures could have been avoided for want of a business case.

But, the specificity of metrics also allow us to persuade ourselves that there is more science and more certainty than there may really be and that we fully understand the complex interactions of the real world. There are solid business cases behind some of the most spectacular business failures - perhaps those where metrics were allowed to lead decisions rather than inform them.

This dilemma is magnified when viewed through the lens of corporate responsibility.”

This post is an external perspective I was invited to write on the topic of ROI and metrics, for GE's just published 2008 Citizenship Report "Resetting Responsibilities."

The rest of the piece follows:

“If we allow them to, metrics can divorce us from the human impact of our decisions. Corporate responsibility addresses exactly those issues that are the biggest challenge for metrics. Corporate responsibility involves taking account of human well being, of impact on communities outside of the normal expertise of the business, of complex interactions, of shared responsibility and of long-term cumulative effects.

But corporate responsibility will be relegated to the fringes if it does not add value to the core business. The biggest impact of most companies on society and on the environment is through the products and services they put into the market. To engage here, we need to be able to articulate compelling and sound rationales of the benefit for the business as well as for the good achieved in the community. And to remain relevant we need to be able to demonstrate this value using the same tools of quantification as the mainstream business, including return on investment.

Perhaps this is amplified most when the return on investment for the business and the benefit for the community are in conflict. Responsible businesses must have the courage to identify, articulate and quantify both sides of that conflict. In these situations though, to implement corporate responsibility fully is to embrace that our decision-making will not be conveniently packaged in a return on investment calculation captured in a spreadsheet and some metrics. As with business as a whole, metrics must not lead our decisions, they must inform them."