Archive for September, 2011

September 29, 2011

The Port of Portland – Opportunity in Systems Integration

Chris Forney, Brightworks Sustainability AdvisorsChris Forney, Senior Sustainability Advisor

In Part One of our interview with The Port of Portland (click here to read), we learned how one leading public agency integrates sustainability throughout their organization and empowers their staff to play a role. Part Two continues the conversation and uncovers examples of the opportunities created by systems integration.

 

Five Gears of Sustainability Engagement

Chris: At Brightworks, we’ve been looking at businesses and their relationship to sustainability through a lens developed by Peter Senge in The Necessary Revolution. Gear One is just complying with regulations, and Gear Two is volunteering to do a little more. Gear Three organizations are really partnering change with opportunity creation, and by Gear Five they are redesigned with sustainability as a well-defined core value in all business decisions. It seems like the Port is at “Integrate,” or Gear Three or Four. I can see that integration across your organization; it’s in your HR department and in your strategic and business plans.

Five Gears of Leading for Sustainability

Five Gears of Leading for Sustainability

Dorothy Sperry, Environmental Affairs Manager: We’re probably at “Partner Plus.”

Rachel Wray, Environmental Outreach Manager: Our alternative fuels usage is close to Integrate. We’ve made choices over the last eight-to-nine years to move toward alternative fuels, well ahead of it being chic.

Dorothy: We have an energy management strategy that includes partnerships and looks really long term at our energy use. And we buy 100% renewable energy credits to offset our energy use. We have air quality goals that are a little more rigorous than other agencies, and our energy strategy includes those goals.

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September 15, 2011

Politics, SuperPACs and the Planet

Scott Lewis, Brightworks CEOBy Scott Lewis,Brightworks CEO

As another political campaign season heats up, we reflect on the role of politics, elections and policy on the prospects for a sustainable, equitable future.

Those of us who would aspire to influence the future – to help foster the emergence of a world that provides for the well-being of all people and our fellow inhabitants of the earth – must constantly take a hard, honest look at the context in which we work.

And no single contextual element carries as much leverage as the political – the world of laws, administrative rules and regulations, and the people who enact and enforce them on a daily basis. Local, regional and national government — and the rules made or not made, enforced or not enforced, by the people who go to work daily in those public offices and agencies — determine how much arsenic comes out of power plant smokestacks, which species will survive or go extinct, or how much of our energy mix will come from climate-changing fossil fuel or renewable solar and wind power.

We must scrutinize and reform the political mechanisms that determine who holds office and what powers they have, if we intend to shape the trajectory of our future and that of our descendants.

Laws Matter

Whether you get involved or sit on the sidelines, our laws have a HUGE impact on outcomes: ecological, economic, and social justice. Make your voice heard.

Pay Attention to the Extreme

In a political system as large and complex as ours, there are good guys, bad guys, and like most of us, people who can be counted on most of the time but make occasional missteps. The problem for the planet, I would contend, lies mostly at the extreme end of the spectrum, where the corrupting influence of money on power reigns. The forces at work there are so large, the decisions so far reaching and the impacts of those decisions so profound, they overwhelm the expanse of otherwise honest, everyday policymaking.

For example, according to the U.S. Office of Management and Budget, mulitnational oil and gas companies are set to enjoy $53 billion in royalty-free drilling over the next 25 years and $36.5 billion in taxpayer subsidies over the next decade. Whether this fact correlates with the industry’s $282 million of political spending since 1990, including $17 million of political contributions to congressional campaigns in the 2010 election cycle alone, one can only speculate. In that one election cycle alone, over 20 congressional candidates received at least $100,000 from people and political action committees associated with the oil and gas industry, according to the Center for Responsive Politics.

It seems safe to assume a causal linkage more probable than the possibility that those companies give away millions of dollars purely out of their charitable good will.

One Congressional friend of big oil and gas, for example, is Senator James Inhofe of Oklahoma. His claims that global warming is, after the separation of church and state, “the second-largest hoax ever played on the American people,” would perhaps be more convincing if the senator had not received over $600,000 from the oil and gas industry and electric utilities in the past five years.

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September 14, 2011

The Port of Portland on “Super-Compliance”

Chris Forney, Brightworks Sustainability AdvisorsChris Forney, Senior Sustainability Advisor

If your company embraced collaboration and innovation from top to bottom, what could you achieve? The Port of Portland’s mission is to “enhance the region’s economy and quality of life by providing efficient cargo and air passenger access to national and global markets.” The Port has enmeshed its economic and community responsibilities with aggressive environmental goals by creating a healthy organizational culture for collaboration and innovation that finds opportunities in its challenges. Our presentation on the Business Case for Sustainability analyzes the value drivers of sustainability for any business. This two-part interview with the Port of Portland will share where and how this sophisticated organization found its business case for sustainability.

“Super-Compliance”

Chris: Dorothy, tell me about your role with the Port of Portland.

Dorothy Sperry, Environmental Affairs Manager: I manage the Environmental Management System (EMS) for the Port of Portland, which we use as a framework for implementing our environmental policies. The Port follows the general requirements provided by ISO 14000, an internationally recognized voluntary standard for EMSs. Conformance with the standards is an ongoing process. An EMS asks you to do the minimum required, plus whatever goals you prescribe for yourself. We started with the ISO standard, then implemented a systematic approach to setting environmental objectives and targets that address our environmental impacts.

Our environmental managers in the aviation and marine and industrial development departments are responsible for environmental management and compliance within their operating areas. They oversee high quality environmental staff. I work with them, wearing the “Port-wide” environmental hat for the organization’s environmental programs. We also have five environmental program managers focused on air quality, water quality, energy management, water resources management and waste minimization. The Program managers work in their more specific roles in operations and have a dual role in leading a program across organizational boundaries. This allows them to bring their direct experience in operations to development of policy and program objectives and goals.

Chris: Most organizations don’t just decide to be super compliant. How did the Port get there?

Dorothy: The Port Commission adoption of a Port-wide environmental policy jump-started the implementation of our EMS under the ISO 14000 standard. Just implementing the EMS opened a lot of conversations. It’s an integrated system, with many facets, and it encompasses everything we do that has an environmental impact.

The Power of Integration

Chris: The Port seems to really understand that creating change requires integration – not just hiring a Sustainability Manager to “handle sustainability” on their own. We’re seeing this with a lot of organizations, corporate or public.

Dorothy: For how we have to do business, it makes total business sense. We have a lot of environmental professionals here, but we don’t want them to be the environmental police. We want Port staff to feel like, “I can make a positive impact on the environment. I can change things.” Not, “The environmental department will tell me when I need to do something.”

Support starts at the highest levels, with our commissioners, directors, and senior managers and spreads out into the organization. Communication needs to be both top down and bottom up. Our business people need to understand what our environmental impacts are and how those impacts affect our business, and our environmental staff need to help articulate a clear business case for better environmental performance. It works both ways.

Rachel Wray, Environmental Outreach Manager: We’re constantly trying to improve. It requires ongoing, continued mindfulness.

Dorothy: It’s part of our new employee orientation. New staff members get trainings on the EMS and learn that everyone has a role; it’s not just a documentation system.

Chris: So your Human Resources department is involved as well.

Rachel: I gave a presentation to a group of new employees yesterday, which reviewed our environmental goals for the year. We talked about how we don’t always reach those goals, and that’s okay. What is important is that we have them and work toward them. It’s not the Environmental Management team that sets them. They’re set by staff, and staff helps effect that change. It opens the door for questions: What could be better? What could be different?

Dorothy: And potential employees we interview frequently mention our environmental goals and practices as a reason they want to work here.

Rachel: The Port has to think long term, not just focus on short-term crises. The Port has been around for a really long time, so how do we keep it successful? How do we keep finding solutions?

Dorothy: We don’t have endless resources so we have to make the best and most efficient use of what we have. Working toward environmental excellence should not necessarily cost your business more to operate; rather, it should contribute to increased efficiency and enhance the bottom line.

Rachel: We try to be fairly nimble because we’re a public agency that’s working for our money. Less than 5% of our operating budget comes from property taxes, so it’s our other revenue streams that allow us to exist. We do have to have an effective business model.

Integrating Empowerment

Port of Portland Headquarters

Transparency and collaboration at the Port Headquarters

Chris: There are a lot of organizations that can’t make decisions on these kind of initiatives due to internal gridlock, even if their intentions are good. What makes the Port able to move forward?

Rachel: Maximizing collaboration between staff was a very specific goal we identified during the design of our building, and our new office reflects that. We wanted to move away from top-down decision-making and make it physically easy to collaborate and communicate, which improves decision-making.

Dorothy: Collaboration is not something you can just force on people; you need to foster an environment where it can become part of your culture. We have many departments, business lines and varying financial models in our organization…but it all has to come together. We need to embody a systems model of thinking. The “it’s not my job, I’ll let someone else do it” model isn’t as productive.

Rachel: We want to encourage questions like, “This is my job that I have to do, but what else should I be thinking about?”

Click here to read part two of the conversation and learn more about how the Port’s sustainability commitment filters down to action.

September 13, 2011

Manufacturer Value Chains: Turning Sustainability Risks into Opportunities

Dave Newman, Senior Strategist, Brightworks Sustainable Systems GroupBy Dave Newman

Senior Strategist, Brightworks Sustainable Systems Group

Businesses with global value chains can find any of their three core responsibilities – meeting consumer demands and legal requirements while also making profitable products – suddenly disrupted by sustainability-related trends and impacts.

Sustainability related trends and impacts

Companies often have difficulty understanding how these issues may affect their value chain of suppliers, operations, customers and consumers. And if the issues are understood, how will they influence corporate strategy and deployment of resources?

We at Brightworks use a systems thinking approach that looks beyond the problem at hand to include all the related possibilities. Systems thinking enables companies to design and implement strategies that reduce market uncertainties.

How Unsustainable Practices Create Risk

The risks and uncertainties inherent in emerging sustainability trends and impacts can be illustrated by several examples:

  1. Energy costs: A primary economic threat for most companies, and especially in extended value chains, is the unpredictable, volatile cost of energy, mostly tied to the cost of oil. Oil is the material basis of many products and provides the primary feedstock to transport goods from manufacturers to markets across the globe. So, what happens when the price of oil rises from $90 a barrel to $125…$150…$200? These price fluctuations put profitability at a high risk.
  2. Consumer expectation: Consumers and customers vote with their dollars every day when they purchase goods and services. Growing numbers of global consumers do care about their environment and want to purchase products from companies they believe are good corporate citizens.
  3. Pressure from business: Businesses are also dictating the demand for sustainable practices among their suppliers. Walmart, for instance, introduced a Sustainability Index in October 2009 to their largest suppliers. Their goals were to help create a more transparent supply chain, accelerate the adoption of best practices, drive product innovation and ultimately provide their customers with information they need to assess a product’s sustainability. If a supplier receives a failing score, it may at some point be dropped as a Walmart vendor. Other well-known companies, including Proctor & Gamble and Staples, have introduced sustainability scorecards, ratings and performance targets for their suppliers. Expect more businesses to introduce environmental programs targeted to their suppliers. Those suppliers ignorant or dismissive of this trend stand to lose business.
  4. Legal risks: In 2009, the State Council of China announced that China will commit to reduce its carbon intensity (defined as a reduction in CO2 per unit of gross domestic product) by 2020. It is highly likely that the carbon intensity goal will bring with it a similarly serious commitment and effort on the part of the Chinese government. For many businesses, the Chinese commitment provides certainty. That’s not the case in the U.S. The Environmental Protection Agency formally declared that carbon dioxide from the burning of fossil fuels poses a threat to human health in 2009. However, this “endangerment” finding has been challenged in federal court. No one in the U.S. can be certain EPA or Congress will establish any CO2 regulations.

Turning Risk Into Opportunity

With risks like these posing threats to manufacturers, no wonder leading companies are planning ahead instead of waiting to be disrupted.

Consider, for example, Nike’s goals for footwear manufacturing: zero waste, zero toxics and 100% closed loop systems by 2020. Waste from footwear production was substantial and often was incinerated or sent to landfills. In pursuit of its goals, the company sought to reduce post-manufacturing waste and responsibly manage its disposal. If Nike had viewed this as an issue-specific, isolated problem, it might have mitigated the risk by simply purchasing a different feedstock or attempting to recycle more. By viewing the solution as part of a connected system, Nike was able to achieve greater environmental and business results.

Post-production rubber from the creation of outsoles produced one of the largest waste streams. So the footwear sustainability team developed markets for post-production rubber. One buyer was Nike itself. Once the post-production rubber was ground up, it could be used as feedstock for rubber outsoles. Working with the footwear design team, Nike began to market “regrind” rubber in various models and use it for up to 5% of the rubber outsole.

The company then looked to develop markets in Asia and the U.S. for regrind rubber. One such market was artificial athletic fields that used reground, used tires. Nike successfully positioned its regrind rubber as superior. For example, it could be sorted by color, contained zero additional materials and did not mark footwear and field equipment.

Through the sustainable footwear team’s vision and action, Nike was able to meet corporate waste goals, responsibly manage factory waste and create income from royalties by licensing “Nike regrind” to artificial field developers.

A Lesson in Systems Thinking

Any enduring initiative within a business, including sustainability, requires a comprehensive approach. By focusing first on a set of goals to chart their course, and then viewing their goals and challenges as an interrelated system rather than an isolated problem, Nike reduced one of their manufacturing waste flows and transformed it into top line revenue growth.

All businesses run their own sustainability risks, especially if they sell to consumers or manufacture products. And like Nike, they have access to these corollary sustainability opportunities. Systems thinking helps businesses spot these opportunities and better position themselves to withstand the changing environment of regulation, consumer demand and energy volatility.

September 13, 2011

Is Sustainability Your Known Unknown: Using Sustainability Analytics to Make Confident Business Decisions

Josh Hatch, Director of Sustainability Analytics, Brightworks

By Josh Hatch

Director of Sustainability Analytics

Confident decision-making in tumultuous times requires a thorough understanding of triple bottom line and broader sustainability impacts. Using the sustainability lens may not influence each decision in a significant way, but it will enable businesses to identify opportunities, reduce risk and effectively communicate the sustainability impacts of their operations.

Effective organizations are learning that modern business decision-making and planning requires them to look beyond sustainability as a certification, rating system, goal or even a theory. They’re embracing sustainability as a set of decision criteria and a filter to be applied to any major business dilemma. Businesses that ignore sustainability’s strategic value do so at their own risk in an era marked by volatile energy and resource prices, evolving regulatory requirements and unforeseen financial, environmental and supply chain disruptions.

Titanic vs. Iceberg

Sustainability implications for businesses often hide beneath the surface until it's too late. Image via Robert M. Williams

Here are four steps leaders in sustainability are taking to build stronger, more resilient organizations:

1.  Establish Organizational Sustainability Bearings Before Setting Your Course

The first step isn’t necessarily the hardest in addressing sustainability—there are so many opportunities for low-cost/no-cost improvements that can be pursued immediately. However, many organizations suffer from the problem of setting broader organizational priorities and launching sustainability initiatives before fully mapping the relevance and impacts of these initiatives on their business.

Without a solid understanding of the major and minor impacts and their relative proportions, sincere efforts can be made chasing relatively small gains. Metro, a regional government organization based in Portland, Oregon, enacted aggressive sustainability targets in 2003 for reductions in their major sustainability impacts—water, toxics, GHG, waste and habitat. However, they didn’t also conduct a thorough audit to develop a baseline, prioritize efforts and gauge progress toward the targets from their many programs and initiatives addressing sustainability.

Sustainability technical assistance from Brightworks ultimately provided them with the analytics to understand current sustainability impacts for each of their five goals, as well as the composition of those impacts. For instance, they targeted a water usage reduction of 50% by 2025. Our analysis identified how much water they were actually using so progress toward the target could be quantified. We discovered a single property (the Zoo) used 42% of their total water budget. Without seriously addressing water efficiency at the Zoo, the target will be difficult if not impossible to reach.

Confident planning requires this level of understanding of sustainability impacts. Major efforts should be focused on the biggest opportunities, while also ensuring appropriate attention is paid to minor, but meaningful, opportunities elsewhere in an organization. All companies need analytics to comparatively assess major and minor opportunities as well as to track their progress to justify further initiatives.

2.  Go Beyond Credentials by Applying a Sustainability Lens to All Major DecisionsBusiness Decision Making Criteria: Profitability, Marketability, Sustainability?

A few years ago, you only had to complete a GHG footprint analysis to assert your green credentials. But most of those reports just quantify the magnitude of one potential liability without providing mitigating solutions or a framework for considering the impact of future business decisions. Today, organizations must consider carbon impact and other sustainability factors in all major business decisions.

To respond to the outsized environmental footprints of their data center facilities, our clients have engaged us during site selection to consider the upfront impact on long-term water resource availability, carbon intensity of grid electricity, system development costs and green building incentives. They want to ensure their mission-critical facilities remain operational while effectively managing and limiting their resource consumption. Smart consideration of sustainability impacts at the front end of the project can result in selection of a site that has long-term water and energy security and a low carbon footprint. This reduces future risks from resource scarcity or carbon taxes.

3. Use Sustainability Analysis to Uncover Business Opportunities

This trend follows from a broader shift in perception. Not simply a static concept, sustainability is increasingly approached as a dynamic process. No longer do sustainability plans collect dust on the shelf. They must be actionable initiatives that relate to core business strategy.

The DOE Hanford Site faced federal requirements for GHG reductions across the board. Given the current traffic congestion, long commutes and rising gasoline prices encountered by their employees, they started by addressing the portion of their GHG footprint associated with commuting.

Responding to these challenges, Brightworks conducted a greenhouse gas reduction and cost savings analysis. We uncovered a future scenario so compelling that reductions beyond those required are being planned. Steps include expanding vanpooling, facilitating and promoting carpooling, condensing work weeks and relocating a significant number of employees to Hanford offices in Richland, Washington.

This combination of steps will save DOE and employees money, reduce emissions by more than twice the amount required by federal mandate and increase employee morale. The immediate savings possible will motivate Hanford Site to implement our recommendations ahead of schedule, and we expect they will look for reductions elsewhere in their operations.

4. Commit to Ongoing Improvement

Today’s sustainability leaders also continually address and re-evaluate their sustainability efforts. Consumers have a healthy amount of skepticism and insight into the legitimacy of sustainability efforts; only genuine efforts will allow your organization to avoid being seen as greenwashing. That’s why deft organizations are continually re-evaluating their business and operations for opportunities to align with sustainability practices.

After spending considerable effort renovating their event space—including energy efficiency upgrades, careful material selection and screening vendors for leadership in sustainability practices—Leftbank Annex in Portland asked Brightworks to conduct a thorough sustainability audit. They wanted to honestly assess the building’s strengths and weaknesses and identify additional opportunities for improvement.

In addition to validating their venue’s strengths, we identified creative solutions to respond to their unique constraints. For example, part of the venue’s appeal is as a historic building with original brickwork and large windows that provide a beautiful city backdrop for events. In their renovation, Leftbank Annex prioritized energy efficiency equipment, but they were limited in their ability to further insulate the building envelope. We recommended a partnership with a solar provider using third-party financing. Leftbank Annex would benefit by reducing their reliance on grid energy without compromising their aesthetic appeal, gaining a system paid for upfront by the solar developer (and paid off by energy bill reductions) and showing a visible commitment to renewable energy.

At the conclusion of our study, our client demonstrated a real understanding of ongoing improvement, stating: “Having you do an annual review, or asking for your advice before making a major investment, would probably be a very smart thing to do. Every decision we make needs to build off this foundation.”

It appears few companies today haven’t considered sustainability in some way. For many, however, sustainability remains a known unknown—something that is dismissed as irrelevant until it becomes the peril too close and large to avoid. What will separate the leaders and winners of tomorrow will be the ability to turn the demands of sustainability on their business into a known known—something that can be managed.

Companies that consider and reconsider the relationship of sustainability to their business will adapt quicker. And competitors that dismiss sustainability as extraneous or too costly will be left behind.

September 10, 2011

What If HR Owned Sustainability?

by Nate Young

Brightworks’ Education Coordinator

If you believe conventional wisdom, Human Resources (HR) doesn’t warrant a seat at the table for discussions about sustainability. Unfortunately, this is one instance where conventional wisdom is misguided.  The HR department not only deserves a seat, it might be the appropriate group to take charge of sustainability programs.

Depending on the firm, sustainability is managed by any one or more different departments. For instance, consumer-facing companies often recognize sustainability as a significant brand builder and so direct sustainability initiatives through the marketing department. Manufacturing companies that have little public interaction often only understand sustainability as regulation. They put legal departments in charge of compliance and provide little or no forward-looking environmental or social engagement.

So Why HR?

There are multiple reasons to assign HR a central role in your firm’s sustainability initiatives. Here are three:

  1. One important benefit of a robust sustainability platform is the attraction it holds for young, motivated, sustainability-minded professionals. (I’ve talked about attracting great employees before on this blog.) If HR isn’t on board with nurturing that attraction, let alone following through on employees’ professional development, they could find themselves at a distinct disadvantage versus their peer firms when the great young talent goes elsewhere.
  2. When companies go through major structural changes, HR is deeply involved in easing employees through the transition. Given the magnitude of behavioral change that many companies must undergo to effectively integrate the triple bottom line into normal business operations, HR must be involved. In an examination of HR’s role in sustainability initiatives, researchers Hitchcock and Willard found that “because of the lack of HR involvement in most sustainability efforts…many organizations are making many unnecessary implementation mistakes.” Giving HR a seat at the table as new sustainability initiatives are discussed and subsequently rolled out can help ensure employees up and down the organization understand and support the new goals.
  3. HR plays an important role in measurement and verification of corporate initiatives. In many cases, HR departments track employees’ performance according to job descriptions or other predetermined metrics. Having sustainability embedded into performance expectations – and then measured – is critical to ensuring the initiatives are successful. Having HR on board with this crucial aspect from the beginning ensures expectations are clearly articulated and effectively measured.

Back to What If…

While it’s clear the HR department can’t control every sustainability initiative, they should at least be at the table for the discussion. Elaine Lees, Partner and Advisor at Generator Group, an HR consulting firm, summed it up nicely:

Sustainability will be successful in a firm only once it is integrated throughout the life-cycle of every employee; before they are hired, sustainability makes the firm attractive, sustainability is present in the employee orientation process, written into their job description, and followed through in their development plans. These are all aspects of business controlled by HR and they should rightly have a say in their rollout!

Is this HR's role in your sustainability initiatives?

To what extent do you involve HR personnel in the process of “greening” your firm? While I won’t go so far as to guarantee success, I am confident that growing HR’s role gives new sustainability initiatives a better chance at success. And success, after all, is what we are after.

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