The benefits of going green
What's prompting SAS and other companies to move ahead with strategies for sustainability?
The eco-aware economy is making a big impact on big business with environmental issues topping the agenda in executive suites worldwide. Companies like Cisco, Wal-Mart, Dell and GE are leading the charge and attracting new customers, retaining employees and driving innovation as a result. But many organizations don’t know how to begin accurately measuring and managing their environmental impact.
Here, Alyssa Farrell, Marketing Manager for Sustainability Solutions at SAS, answers questions about using technology to overcome these challenges and measuring the bottom-line benefits of going green.
How did SAS become interested in sustainability?
Alyssa Farrell: Our involvement in sustainability derives from the activities of our senior executives. Our CEO, for example, participates in the World Economic Forum (WEF), where there are currently many CEO-level conversations happening about sustainability. Executives are increasingly focused on the impact of their businesses on education and economic development, on constrained global energy supplies, on constrained water supplies, and on operational efficiency and sustainable business strategies.
On the campuses we own, we go above required environmental regulations for replanting of trees, stream abatements and habitat protection. At our North Carolina headquarters, we have roughly 355 acres comprised of mostly old-growth woodland, lakes and streams, farmland and natural areas. A portion of our property in Austin, Texas, is home to several types of endangered birds and spiders that are protected under the federal Endangered Species Act. We work closely with county and federal officials to maintain the natural integrity of these important habitats through appropriate landscaping and conservation. Dr. John Sall, our co-founder, is also personally involved with conservation issues via the World Wildlife Fund and the Environmental Defense Fund.
Why is sustainability on the CEO agenda?
Farrell: One reason is that sustainability can drive operational efficiency and innovative business outcomes. For example, we own a building in Toronto, Canada, which is LEED (Leadership in Energy and Environmental Design) registered by the US Green Building Council. This building has realized more operational efficiencies than we expected. Water cisterns in the basement collect and store rainwater from the roof. Also, it is designed to admit a lot of natural light and facilitate better air circulation, which not only reduces energy bills but promotes employee health. In total, it adds up to a significant cost saving, both in terms of the energy we save and the employee absenteeism we manage to reduce.
Sustainability is also on the CEO agenda because they feel the pressure from both business-to-business customers and end consumers. People are increasingly making buying decisions based on companies’ sustainability practices. People are also increasingly willing to highlight corporate practices in the media if they do not think they are appropriate. In addition, employees today care about the corporate values of the company they work for. For all these reasons, CEOs increasingly see a direct relationship between sustainability and shareholder value.
What positive effects have you observed from embracing sustainability at SAS?
Farrell: We have found that putting more attention on sustainability helps drive innovation in the workplace. We recently ran a project at SAS called The EcoFamily Challenge. Our employees and their families were challenged to come up with five sustainable activities every week for a month. The result was a lot of innovation at home and new ideas that employees brought to the office environment. Our marketing group now has a special task force that looks at ways to reduce waste at the conferences we manage. Our technology group is expanding reuse, recycling and donation of outdated equipment and employing techniques to maximize cooling efficiency in our data centers. We’ve also implemented a wide variety of initiatives to reduce water and energy use in our facilities, from energy management systems in buildings to recycling cooking oil for conversion to biodiesel fuel to exploring solar power generation on our Cary campus.
How are corporate attitudes and practices changing?
Farrell: The sustainability movement has been around for about a decade. One difference is that it used to be treated in a softer way. Now there is much more focus on trying to quantify benefits, both in terms of measuring the impact of current practices on the bottom line and in quantifying the future under different scenarios. Companies are embracing the idea that operating in a sustainable manner makes good business sense and trying to quantify the return on a sustainable investment.
This is happening in different ways for each organization partly because, in many areas, there are few standards for evaluating sustainability initiatives. In the absence of documented best practices in supply-chain innovations, for example, or accounting for carbon offsets, companies are seeking more support from business intelligence and executive decision-support systems when quantifying the effect of sustainability programs.
What is the proper role of government in catalyzing sustainable business practices?
Farrell: Governments are already playing a large role in driving sustainability. For example, the US government provides tax incentives for renewable energy investments. The US Environmental Protection Agency runs a program called Climate Leaders, which is an industry-government partnership that provides guidance and recognition to companies developing long-term climate change strategies.
The establishment of a carbon market could have significant impact on greenhouse gas emissions but could also be extremely complex for companies to manage. For this reason, governments must act prudently with legislation and take time to get it right.
SAS embraces predictive analytics as part of its sustainability program. What is predictive analytics and how does SAS use it?
Farrell: Predictive analytics is a way to add tremendous value to the data collected for reporting on corporate social responsibility. We integrate forecasting to analyze and predict future outcomes based on historical patterns. We look across economic, social and environmental performance indicators to identify correlations that indicate driving forces for change in our business. We also allow our customers to use SAS to perform “what-if” analyses – for example, what might be the impact on our energy consumption if you make changes to a manufacturing process? We also rely on predictive analytics to understand what might happen if you keep business as usual. This sort of analysis helps organizations to make more informed decisions.
Is corporate sustainability about gaining competitive advantage?
Farrell: There is certainly a part of the market that will always address sustainability from a purely compliance perspective. We do not take that position. For us, sustainability helps us attract new customers, retain employees and innovate in our operations and products. Companies that make public commitments to sustainability, like Wal-Mart, Dell and GE are being seen as leaders, with all the risks and benefits that come with that. Sustainability will drive competitiveness in almost every industry.
How can companies best gain credibility for their sustainability programs?
Farrell: Firstly, companies should look to participate in local, national and international organizations that are active in sustainability. In this way, they can learn from their peers, which is very important, and receive recognition in a public forum. Secondly, companies should report to external stakeholders on their sustainability programs. There is now an international standard for corporate social responsibility (CSR) reporting under the Global Reporting Initiative (GRI). Both of these things will help to build credibility with a company’s constituencies.