final summit de sustainability management presentation combined
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Sustainability Management:Walking the Walk and Talking the TalkTRANSCRIPT
Sustainability Management:Walking the Walk and Talking the Talk
November 10, 2009
Presented by Dix & Eaton and Summit Energy
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Agenda
Overview Walking the Walk Talking the Talk Sustainability Indexes and Ratings Q&A
Brainstorming
Overview
John Hoekstra, Summit Energy
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Summit Energy Overview
Manage $20 Billion energy spend; over 50 million mtons CO2-e
Founded 1991 10 Offices 350+ employees 25,000+ client sites
Independent & unbiased
Core business
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Corporate Sustainability
Triple Bottom Line
Sustainability: Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.
– “Triple bottom line”
– “3 P’s” of People, Planet, Profit
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Environmental Impact Areas
Operational
(gate to gate)
Product (cradle to cradle)
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Corporate Sustainability Pressures
Investor / ShareholderRegulatory
Customer / Competitive MarketSocietal / Citizenship
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Why Sustainability Matters
Business continuity and long term financial wealth affected by environmental risks and social positioning
– Multi-tier market drivers: operational, product, supply chain performance
– Examples: reliance on foreign oil, watershed availability for facility ops
Market-makers (GE, HP, Wal-Mart, 3M, Starbucks) are riding the wave and setting the tone for others
Global public awareness and commitment (MTV generation, Gen Z)
– Compliance is not nearly enough for them
Strategic, top-level attention
– Senior management positions
– Board committees
– Socially responsible investors
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The Green Consumer
Source: Grocery Manufacturers Association & Deloitte
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Green Shopper Demographics
Source: Grocery Manufacturers Association & Deloitte
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Walmart
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Source: Walmart
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Life Cycle Analysis – Scopes 1, 2 & 3
Business to business (B2B)
Business to consumer (B2C)
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Life Cycle Analysis
Supplier Performance Metrics and Targets
– Drive cost improvements in supply chain
– Determine regulatory and financial risk of carbon on vendor channels
“Green” brand messaging to customers and shareholders
– Environmental / carbon product labels on the rise
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U.S. Regulatory Programs
Renewable Energy Standards
Energy Efficiency Resource Standards
GHG Reporting
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Organizations are Changing
Procurement
Environmental,
Health & Safety
Operations
Sustainability
“Chief Sustainability Officer (CSO)”
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Strategic Sustainability Roadmap
Develop Sustainability Strategy
• Determine corporate profile• Set goals & objectives
• Develop management plans (CarbonMap™)• Establish measurement & reporting structure• Set baseline with third-party verification
Determine Baseline Inventories
Evaluate Footprint & Prioritize Actions
• Identify top emitters• Commit to targets• Create performance metrics (KPIs)
• Reduce (raw material, energy, water, waste)• Renew (renewable energy, recycle, treat & reuse)• Restore (offset impact, manage credits)
Implement Optimization Activities
Communicate Results & Performance
• Voluntary / mandatory reporting• Internal communications• External communications
Walking the Walk
John Hoekstra, Summit Energy
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Areas of Focus
Electricity, natural gas, alternate fuel consumption reduction
Water consumption and waste generation reporting
Carbon / greenhouse gas (GHG) emissions benchmarking
Employee conservation initiatives
Sustainable purchasing practices and policy initiatives (supply chain)
Energy efficiency – lighting, HVAC, demand optimization
Portfolio optimization – source reduction, recycling, renewables
Innovative approaches – green building, outreach programs
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#1 – Develop a Strategy
Gather Stakeholders Understand Issues at Hand Determine Current Programs Review Competitive Landscape Set GreenProfile Finalize Strategy / Roadmap
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#2 – Measure Baselines and Progress
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Cost of Carbon Abatement
Reduce/Restore
Renew/Restore
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#3 – Reduce Operational Waste Energy Efficiency
– Lighting– Compressed Air– Chiller Controls– Cooling Towers – Usage Correlation– Demand Management– Heating and Ventilation– Pumps and Fans
Waste Efficiency– Raw Material Optimization– Lightweighting, Recyclability– Management Processes
Every facility is unique one size fits one!
Water Efficiency
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#4 – Clean Alternatives
Ohio passed its “Alternative Energy Portfolio Standard” (AEPS) bill S.B. 221
Utilities must provide 25% from renewable sources by 2025
Provides “carve out” for solar in the RPS Solar solutions generate renewable energy
credits (RECs) that utilities must buy Amplifies incentives for projects:
– Trading range of $300 – 500 per MWh
– 30% capital grants available from Treasury
– Changes payback scenarios from over 10 years to 5 and under….
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#5 – Engage Your Arms & Legs
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Engage Your Arms & Legs
Walking the walk starts from the facility up
Get your employees involved
– Simple: Turn lights off
– Complex: Participate in “green” teams to drive community involvement projects
Keep internal communications consistent and honest to drive loyalty
Touch your executives to gain momentum and support – show results!
Talking the Talk
Gregg LaBar, Dix & Eaton
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About Dix & Eaton
Founded in 1952; Cleveland-based integrated communications firm Two-thirds of professionals over 10 years of experience Practice areas: Investor relations, media relations, customer
communications, crisis communications, employee engagement Relevant specialties
– Energy Practice – Sustainability Communications
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#1 – Start small and build
Target an audience (internal, customers) Take on an issue Figure out your story (and identify shortcomings) Find internal champions Use existing communications tools, where possible Under-promise and be satisfied with what you deliver – no reason
to stretch the facts Commitment to continuous improvement (market drivers help you
determine the pace)
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PolyOne Corporation
No Surprises PledgeSM builds customer loyalty Leads to: marketing opportunities, media coverage, sustainability
awards, Sustainability Chairman’s Council, Sustainability Promise, Sustainable Solutions bio-product family, etc.
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#2 – Dare to Be a Leader
Challenge to show leadership (bravery) without being risky Tackle a tough issue by taking the high road “Sleeping with the enemy”? Must believe in what you’re doing or it won’t last – have a business
case for leadership Based on the belief that there are more than two sides to every
story and all points of view have at least some credibility Accept that not everyone will agree with you, but the vast majority
will respect you Become part of the solution
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Limited Brands (Victoria’s Secret)
Partnering with critics to protect brand reputation
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Paper Companies
Believe in what you’re doing and don’t back down – be part of the solution for dealing with limited resources
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#3 – Manage Reputation and Perceptions
Reputation and perceptions matter and must be managed – they’re not just an outcome of good performance
Industry leadership depends on reputation and perceptions, not just performance
Most people will give you the benefit of the doubt, and the tough critics will focus their energies on others
Communication, especially internally and with supply chain, builds opportunities, enabling sustainability commitment to be a self-fulfilling prophecy
Use communication to help build the business case
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Newsweek’s ‘Greenest Big Companies’
Top 500 rankings Environmental Impact
+ Green Policies + Reputation= Green Score
Partnered with KLD, TruCost, CorporateRegister.com
http://greenrankings.newsweek.com/
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#4 – Greenwashing vs. Greenblushing
Greenwashing: Perception of consumers that they are being misled by a company regarding a company’s environmental practices or the environmental benefits of a product or service
– CorpWatch says “disinformation disseminated by an organization so as to present an environmentally responsible public image”
“One step we’ve taken is to make some of our SunChips® snacks with the help of solar energy at one of our plants in California.”
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#4 – Greenwashing vs. Greenblushing
Seven sins of greenwashing– The hidden trade-off. Suggesting a product is “green” based on an
unreasonably narrow set of attributes without attention to other important issues. – No proof. Committed by an environmental claim that cannot be substantiated
by supporting information or reliable third-party certification. – Vagueness. Committed by every claim that is so poorly defined or broad that its
real meaning is likely to be misunderstood by the consumer. e.g. “all-natural.” – Irrelevance. Committed by making an environmental claim that may be truthful
but is unimportant or unhelpful, e.g. “CFC-free” because it is banned by law.– Lesser of two evils. Committed by claims that may be true within the product
category, but that risk distracting the consumer from the greater environmental impacts of the category as a whole, e.g. organic cigarettes.
– Fibbing. Making environmental claims that are simply false, e.g. lying about Energy Star certification
– False labels. Committed when either words or images give the impression of third-party endorsement where no such endorsement actually exists.
Source: TerraChoice and PRSA Professional Standards Advisory PS-12 (October 2009)
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#4 – Greenwashing vs. Greenblushing
Guidelines for environmental marketing claims– Substantiation– Specificity– Seals of approval must explain basis for award or rating– Specific claims easier to substantiate than general claims
Definitions for:– Biodegradable– Compostable– Recyclable = Please Recycle– Recycled content– Source reduction– Refillable– Ozone safe, ozone friendly and no CFCs
Source: Federal Trade Commission’s Environmental Marketing Guideshttp://www.ftc.gov/bcp/edu/pubs/business/energy/bus42.shtm
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#4 – Greenwashing vs. Greenblushing
Greenblushing: Limited or no information disseminated by an organization so as to understate or ignore its commitment to and actions on environmental responsibility. – Walking the walk but being too unsure and shy to talk the talk
Newsweek’s Top 100 companies with low reputation scores
Wells Fargo Northern Trust
Adv.Micro Devices Hospira
Staples eBay
McDonald’s Molson Coors
Estée Lauder Nalco
Baxter Tiffany
CB Richard Ellis
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#4 – Greenwashing vs. Greenblushing
Symptoms of greenblushing:– Believing you need “all the answers” before you can communicate
– Being reluctant to talk about your sustainability activities, even when asked to or recognized by outside parties
– Downplaying your achievements internally, which can be very de-motivating
– Afraid to bring it up with customers in case they’re ahead of you or not particularly interested
– Always assuming there’s more risk than reward in communicating
– Feeling that what you’re doing is “not that special,” when, in fact, others could learn a lot from your ideas
Guide to Sustainability Indexes and Ratings
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Dow Jones Sustainability Indexes
Companies are ranked within industry group and leaders are selected for inclusion in the indexes (world, regional, national and industry)– Company questionnaire
– Company documents
– Analyst follow-up
– External assurance report by Deloitte
– Ongoing report by DJSI
http://www.sustainability-index.com/
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Carbon Disclosure Project
Independent nonprofit organization requests climate change data on behalf of – Institutional investors (455 with $55 trillion in assets under
management)
– Purchasing organizations such as Walmart, PepsiCo
– Government bodies
More than 5,000 large companies worldwide have disclosed their GHG emissions through CDP
CDP creates Leadership Index (CDLI) based on data received
https://www.cdproject.net/en-US/Pages/HomePage.aspx
Number of responding companies
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KLD 400 (formerly Domini 400 Social Index)
Independent research and index service for institutional investors
Evaluates environmental, social and governance factors
Consists of 250 U.S.-based global companies, 100 additional large and mid-caps, and 50 smaller companies with ESG exemplary performance
Index maintained at 400 all the time; companies removed or added anytime (not just for performance)
http://www.kld.com/indexes/ds400index/index.html
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Calvert Social Index
Similar to KLD 400 but operated by investment management company
Consists of 663 large U.S. companies Long lists of corporate traits
they like – and don’t like – Labor law violations,
environmental violations, human rights concerns, animal testing, tobacco, weapons, alcohol, gambling
http://www.calvertgroup.com/sri-index.html
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Other Indexes and Ratings
Global 100 Most Sustainable Corporations in the World – Published annually by Innovest Strategic Value Advisors for World Economic Forum
– Started in 2005– http://www.global100.org/index.asp
Scryve– Focused on environment and community performance of 3,500 companies
– Ratings based on KLD, paid and volunteer researchers, and reader opinions
– Want you to make buying decisions based on ratings– http://www.scryve.com
Sustainable Business Achievement Ratings (S-BAR)– 25 companies involved in beta test to define a “sustainable business”
– Rate governance and management, workplace, community, marketplace, and environment
– Plan to track Policy, Practices, Performance, Progress– http://www.sustainabilityratings.com/
Global Initiative for Sustainability Ratings (Corporation 20/20)– Goal to create global sustainability ratings framework– http://www.corporation2020.org
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Other Indexes and Ratings
Walmart Sustainability Index– Energy and Climate: Reducing Energy Costs and Greenhouse Gas Emissions – Material Efficiency: Reducing Waste and Enhancing Quality – Natural Resources: Producing High Quality, Responsibly Sourced Raw
Materials – People and Community: Ensuring Responsible and Ethical Production
http://walmartstores.com/Sustainability/9292.aspx
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Social Indexes Conclusion
Ideas for leveraging social indexes– Use for benchmarking and planning – even if you’re not a formal
participant
– Cross-functional – partnership among EHS, operations, investor relations, corporate communications, customer communications, etc. to determine the impact and relevance for the company – why it matters to the company and why it should be relevant to key stakeholders
– Post list of awards and links on environment/sustainability/CSR section of Web site and intranet
– Highlight in investor presentations and annual report
– Issue press release to announce listings
– Use indexes’ member logos
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Recommended Resources
Web sites/blogs– Environmental Leader– Green Biz– Corporate Responsibility Officer– Best Green Blogs– Sustainablog– CSRwire– Taiga Company– Treehugger.com– Green Wombat (Fortune.com)– GreenInc. (New York Times)– ThreePs (Dix & Eaton)– SummitEnergyGPS (Summit
Energy)
Organizations– GreenCityBlueLake Institute– Entrepreneurs 4 Sustainability– Corporate Sustainability Network– Sustainable Cleveland 2019– Global Reporting Initiative– Global Environmental
Management Initiative Books
– Green to GoldDaniel Esty and Andrew Winston
– Making Sustainability Work Marc J. Epstein
– The Triple Bottom Line Andrew W. Savitz
– No Impact ManColin Beavan
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Contact Information
Gregg LaBarSenior Vice President, Energy PracticeDix & EatonCleveland, Ohio(216) [email protected]
John HoekstraManager of SustainabilitySummit Energy Services, Inc.Louisville, Kentucky(502) [email protected]