by Peter A. Soyka, author of “Creating a Sustainable Organization: Approaches for Enhancing Corporate Value Through Sustainability“
For many companies, environmentally sound operations are an important organizational value to embrace, both from a customer perspective and to attract and retain employees. Of the various types of corporate culture initiatives a company can undertake, “green” solutions are among the most popular with employees. A “sustainable” company is one that uses resources wisely and conserves nonrenewable resources in a manner that ensures its long-term ability to endure. Sustainability initiatives can reduce costs, improve efficiency, and create other net business benefits.
Regardless of whether a company, even a small company, has major and obvious environmental issues, there are a number of concrete steps a firm can take to put it on a more sustainable path:
Creating a company-wide policy that is communicated to employees, investors, customers, etc.
Regardless of how the environment is viewed in the context of your firm’s ongoing work, its leaders should establish or direct the development of a company-wide environmental, sustainability, or social responsibility policy. A policy is the cornerstone of effective programs and establishes the position, aspirations, and commitments of the organization and its members. The absence of a comprehensive, coherent policy has hindered the development of many well-intentioned initiatives. To avoid disappointment and optimize resource use, leadership should establish a simple, clear statement of principles and commitments regarding the environment and, if they choose, broader issues of social equity and economic development under the rubric of sustainability. Also, it is appropriate to review their provisions every few years and make refinements to reflect operating experience and lessons learned, accommodate new goals and priorities, and address emerging issues and concerns. Policies should be concise, unambiguous, and written in understandable language. Policy statements may include long-range aspirations and strategic objectives, but it is generally best to leave specific goals and milestones to implementing strategies and tactical plans.
Offering sustainable investing choices through the company 401(k) or other retirement plan.
Most employee retirement plans do not offer options to direct invested funds to investment vehicles employing security selection based on environmental, social, and/or governance (ESG) characteristics, and relatively few such choices have been available from the largest investment managers. That, however, is changing, as more mutual fund companies and other institutional investors recognize that companies providing evidence of improved ESG practices and performance may offer superior investment returns and lower risks. ESG investing has grown rapidly during the past five years and now accounts for about one in eight dollars invested in U.S. stock markets.
Reviewing business travel practices and considering changes that might reduce travel costs and environmental impacts.
Business travel, including transportation and lodging, can be a small company’s most significant environmental aspect, mainly because of the energy and pollutant emissions intensity of airplanes and, to a lesser degree, cars and trucks. Clearly, the issue’s importance hinges on the frequency and distance of travel by management and employees, as well as the relative need for travel to fulfill customer requirements, etc. If long-distance travel can be reduced through such techniques as video- and web-conferencing, the firm can reduce its environmental footprint and save money as well. When out-of-town travel is necessary, train or automobile travel might be an alternative to flying. Company leaders should establish policies or guidelines on business travel use and transport modes. They should consider their own travel as well.
Another major issue is lodging, at least for companies that host or participate in conferences, seminars, training sessions, and large meetings. Hotels and conference facilities may have substantial environmental aspects, including energy use (space heating, cooling, and hot water), solid waste generation, and water use (landscape maintenance, laundries, swimming pools, and guest use). The large environmental footprint of many hotel and resort facilities has not gone unnoticed, and over the past decade the hospitality industry has made significant strides in making its operations more environmentally sound. There are now a number of associations and programs dedicated specifically to helping hotel properties “green” their operations and provide assistance to meeting hosts and planners that wish to reduce the environmental footprint of their conferences. Company leaders should evaluate the significance of their firms’ meeting and conference activities, and determine whether they should establish or modify a meetings policy to incorporate green meeting criteria.
Developing or strengthening employee safety and disaster preparedness procedures.
Sustainability starts with ensuring that the company’s members are adequately protected from harm while on the job. Regulations and established health and safety programs address this need in most larger businesses in which occupational hazards are prominent. There is another important aspect of this issue, however, and it speaks to how the company behaves under unusual circumstances, from personal and family emergencies to large-scale natural or manmade disasters. Company leadership should review personnel policies and procedures addressing excused absences, expectations of staff on business travel, and employee responses to emergency conditions. Ensuring that there is clarity around what to do when confronted with challenging circumstances will promote clear thinking and appropriate decision making on the part of employees. Policies and procedures should also make it clear that employees are free to avoid travel to work or work-related activities or to leave if they believe that their safety or that of others in their care is in jeopardy. As a matter of policy, one or two senior staff members should receive basic training in emergency preparedness and first aid, and in the event of an emergency all staff and visitors on company premises should be required to follow instructions from these individuals.
Measuring the organization’s carbon footprint (total greenhouse gases emitted).
Given the prominence of the global climate change issue, company leaders may want to ensure that an analysis is performed specifically to quantify the firm’s carbon footprint. More than any other issue, climate change and the contribution individuals and organizations make to this phenomenon are under increasing public scrutiny. Rightly or wrongly, any environmental or sustainability initiative may not be viewed as credible if it does not directly address greenhouse gas (GHG) emissions and their control. Using readily available data sources, it should be possible to identify activities that use fossil fuels—the principal source of greenhouse gases—and at least a rough idea of the extent of use or consumption (for example, business travel miles per year by travel mode, or building space occupied in square feet). Using emission factors and methods obtained from sources such as the US Department of Energy, the US Environmental Protection Agency (EPA), and the nonprofit Climate Registry, your company can construct a simple yet reasonably accurate model (in spreadsheet form) that calculates its carbon footprint. Another tool is the GHG emissions calculators developed by EPA and several other entities (for example, see www.co2science.org/about/ghgreport/calculators.php).
Moving toward a more sustainable business posture does require some thought and work. But by focusing on the steps outlined above, companies of all sizes can get started and create the conditions needed to support meaningful performance improvement over time, without investing significant human or financial capital.
Peter A. Soyka provides environmental and sustainability strategy and management consulting services to private and public sector clients focusing on improved environmental, organizational, and financial performance. His book, “Creating a Sustainable Organization: Approaches for Enhancing Corporate Value Through Sustainability“, is available from the publisher, FT Press, and major booksellers nationwide.