Five strategies for corporate sustainability

Accelerate green initiatives through awareness, leadership, technology, stakeholder involvement and innovation

There’s no denying the fact that we’re operating in an eco-aware economy. Glance at the cover of any major business or IT magazine and you’re sure to see at least one article focused on the lowering of corporate carbon emissions or the greening of IT practices.

Earlier this year, Garner Inc. highlighted 10 key predictions that would affect IT and business decisions in 2008 and beyond. Three of the items on the list were:

• “By 2009, more than one-third of IT organizations will have one or more environmental criteria in their top six buying criteria for IT-related goods.”
• “By 2010, 75 percent of organizations will use full lifecycle energy and CO₂ footprint as mandatory PC hardware buying criteria.”
• “By 2011, suppliers to large global enterprises will need to prove their green credentials via an audited process to retain preferred supplier status.” ¹

These and other green-related trends will have a profound effect on most businesses and government agencies over the next few years. How your organization reacts and communicates its efforts in environmental sustainability are important.

How can you begin to balance the risks and opportunities that environmental sustainability requires? What operational measures and behavioral changes can you pursue to improve enterprise-wide environmental sustainability? We offer the following five strategies.

1. Increase your company’s eco-awareness
Eco-awareness begins with an evaluation of your organization’s sustainability strategy. Start by measuring the consequences of your corporate activities in terms of tons of carbon, kilowatt hours or gallons of water. Once you’ve assessed your environmental impact, set realistic goals to reduce or offset those levels.

The next step is to embrace a green accounting methodology that you can trust. It should be auditable and the data points collected can be used for what-if decision making.

Another step that some eco-aware organizations have pursued is to establish a specific governance body or a sustainability council to guide green investments. To maximize corporate investment, this cross-divisional group coordinates strategies that might otherwise remain in functional silos.

Cisco Systems is an example of one company that has taken great strides to increase its eco-awareness and carbon conscience. The technology and communications leader made its environmental strategy a top corporate priority in 2007 and established the cross-departmental Cisco EcoBoard to develop a strategy for reducing the company’s carbon footprint and delivering ecologically sound products. Currently, Cisco is driving environmental initiatives in three areas: customer solutions, responsible operations and product stewardship. All three areas are measured and monitored through an executive dashboard for sustainability.

2. Lead with green in mind
The more aware your organization becomes about sustainability issues, the more its strategic plans will begin to reflect this new awareness. In particular, your short-term and long-term planning should include an evaluation of environmental risks and opportunities.

Executives should set goals and targets for sustainability and communicate these goals to everyone in the organization. Leaders should report on progress regularly and actively manage to reach goals by integrating environmental outcomes into business planning. 

Consider adopting a corporate sustainability report that complies with internationally recognized standards, such as the Global Reporting Initiative, which offers globally applicable “Sustainability Reporting Guidelines” for voluntary use. If you do begin following these standards, be proud of your accomplishments and integrate sustainability updates into your shareholder or annual reports.

ConocoPhillips in Norway is one organization that is leading with green in mind. When working in potentially hazardous environments such as gas processing units, conditions can change and the risks to people and assets can multiply in the blink of an eye. At the same time, operations on this scale are costly to maintain and, with fluctuating energy prices, controlling costs without compromising health and safety is a major concern. With a decade-long history of SAS usage, ConocoPhillips Norway is now deploying SAS Strategic Performance Management to help target resources and manage its business more effectively. The system combines data on various events (triggers) and their day-to-day follow-up within agreed procedures. Flaring – when oil or gas is burnt off – is also covered. Garbage disposal is yet another example, with SAS software helping to ensure that targets for scrap metal and recycling are met.

3. Involve stakeholders
Stakeholder engagement is a key ingredient in corporate sustainability. Customer advisory boards, nongovernmental organizations (NGOs) and supplier panels can all provide direct feedback to prepare you for market forces and demand transparency in your green initiatives.

Stakeholders hold you accountable to follow through with commitments, and they can be the source of inspiration for new products, services and solutions. 

In particular, engaging your suppliers as stakeholders in your strategic planning for corporate responsibility is critically important. Their supplies and processes directly affect your indirect carbon footprint. Even more importantly, the supply chain can deliver powerful market pressures when all suppliers are working toward a common goal. The combined activities of your supply chain can have one of the most substantial impacts on reducing total greenhouse gas emissions.

In one recent example, leading chemical manufacturer DuPont worked with the Environmental Defense Fund to engage a broad stakeholder community in establishing a process for ensuring the responsible development of nanoscale materials. While nanotechnology holds great promise during the “use phase” of the product life cycle, more information was needed to ensure that nano products were developed in a way that minimized environmental, health and safety concerns. The resulting Nano Risk Framework is a groundbreaking tool that will set a safe, level playing field for companies pursuing nanoscale materials.

4. Invest in technology
How can you use your existing business intelligence and performance resources to help with environmental sustainability?

If you have invested in a technology infrastructure that allows you to see and manage performance indicators throughout your organization, make it a priority now to add green goals to the list of things you’re already measuring.

Continue to break down information silos and learn how to leverage your intelligence platform to integrate and manage data assets that are related to your green initiatives. Understand what data is required for you to measure your corporate footprint with the Greenhouse Gas Protocol and to meet reporting standards of the Carbon Disclosure Project.

You should also work to understand data correlations so you can identify which metrics are the most important to improving sustainability, capitalize on talents in your human capital, and improve transparency internally and externally.

In addition to conserving energy and water, organizations are also looking at ways to reduce waste as part of their sustainability strategies. Waitrose is one of the UK’s best-known grocers, with a brand promise based on high-quality products, from fresh fruit and vegetables to packaged goods, combined with outstanding customer service. With some 190 branches carrying over 15,500 product lines – and 30 percent of the range new each year – Waitrose needs to ensure it predicts demand accurately to supply the right products to the right stores in a timely way. Ordering the correct stock is essential to maximize sales and ensure the least waste possible.

Now, with the help of a SAS demand forecasting solution and support from SAS partners, Waitrose is achieving more accurate store replenishment, satisfying the needs of its valued customers and balance sheet alike. Since the system rolled out, the branches have seen a reduction in stockholding of at least 8 percent and a fall in wastage of up to 4 percent. “We have achieved increased productivity, efficiency and financial gains across our 190 or so branches,” says Gail Richmond, Manager of the Branch Ordering Development at Waitrose. “We’d originally estimated a 2 percent drop in wastage, so this is far better than predicted”

5. Focus on innovation
Awareness, leadership, technology and stakeholder involvement are important in your green initiatives. But the most important factor in environmental sustainability is innovation. You have to set out to change paradigms, create new solutions and collaborate with customers in ways you never have before. 

Your corporate spirit attracts talent and capital to your organization. If you can lead and communicate with innovative green initiatives, you’ll also attract new customers and better retain existing customers. 

Novozymes is a Denmark-based world leader in bio-innovation. One of the ongoing objectives of Novozymes’ researchers is to consistently improve the enzymes that render a more cost-effective and sustainable process for producing commercially viable biofuels.

JMP statistical discovery software from SAS is an integral tool in Novozymes’ research; it plays a key role in designing experiments, analyzing data, and presenting the results of that data to colleagues and customers.

The result of Novozymes’ research is a huge reduction in the cost of producing biofuels from corn and cellulosic biomass through the use of enzymes. When it comes to setting your organization’s goals for sustainability, don’t think small. Think like Novozymes and determine how your green initiatives can have the largest overall impact.

Green is here to stay
Is corporate sustainability just a passing fad? We don’t think so. It is fundamental to business performance today because of the constrained energy and labor markets, and it is a standard that consumers will continue to hold companies to more and more as time passes.

The five strategies we’ve mentioned here can be combined to form a comprehensive management plan for sustainability, but you don’t have to treat them equally. If you’re just starting out in your green efforts, pick one of the five as your focus and work toward adopting the others in the future. The strategies you choose to emphasize through greater investment of time and resources will offer unique value to your customers and shareholders – and for generations to come.

Bio: Alyssa Farrell is the Marketing Manager for Sustainability Solutions at SAS.