Carbon Footprinting – Corporate Impact on the Carbon Cycle

Welcome back everyone. Today we will be making the case for addressing the carbon footprint of your organization. The video below covers an introductory look at the carbon cycle and our effect on it. As we progress into more in-depth series, we will cover the process of carbon footprinting in more detail, but it is important to set the stage with the introductory concepts.

Essentially, in many of our operations, we burn a fuel source to create energy to power a process. These fuel sources are carbon based (oil, coal, biomass, natural gas, etc.) and give off carbon dioxide, other gases, and solid waste byproducts. This system has released a significant amount of carbon into the atmosphere since the Industrial Revolution, which is a contributing factor in climate change.

Climate change is imposing various risks on corporations and our society. Extreme weather patterns, rising sea levels, droughts, and floods are all becoming more prevalent worldwide. These natural occurrences impact raw material production, manufacturing operations, transportation, inventory, and even sales. The operational and financial losses from natural disasters can shock local and national economies, as well as the corporations that are active in those areas.

It is important for organizations to calculate their carbon footprint and to reduce carbon emissions to help mitigate these risks. Calculating and reducing your carbon footprint can be used to identify ways to reduce utility expenses and drive continued performance improvement. Stay tuned for further discussion on carbon footprinting, as well as additional topics relevant to Corporate Responsibility.

 – Tad Radzinski, PE, LEED AP, SFP

Links:

Check out the Natural Catastrophe World Map for 2012 which demonstrates the global impacts of climate change and illustrates the economic implications of such events.

If you would like to learn more about carbon footprinting, you will find some helpful information on my company’s website, or email me at tad@tadradzinski.com and I will be happy to provide additional resources.  

Materiality – Asset Valuation for Long-Term Viability

Thanks for coming back. On Tuesday, I promised you more information on materiality; so today’s post is all about materiality, risk, and sustainability. The concept of materiality, originating from accounting, is becoming increasingly important in Corporate Responsibility. According to the Global Reporting Initiative, “Material topics for a reporting organization should include those topics that have a direct or indirect impact on an organization’s ability to create, preserve or erode economic, environmental and social value for itself, its stakeholders and society at large."

Until recently, environmental and social factors were rarely thought of as “material”; only economic information was considered. However, as the effects of climate change, increased consumption, and population growth put strain on current systems and resources, these aspects are becoming key factors in accurately assessing the true value of an organization. By addressing sustainability in materiality, future risks can be identified and action can be taken to provide long-term viability.

This ties in with the video and post from Tuesday on Understanding Material Flows in Your Operation because, in order to assess the materiality of your operations, you must fully understand the inputs and outputs of your organization. After listing these variables, it is important to place ranking on the necessity of the input to your operations, as well as the risks/opportunities involved with securing these inputs in future markets. By classifying your inputs in this manner, you can begin to strategically shift areas of focus to the most critical facets of your operations.

Performing a materiality analysis of your organization benefits you, your stakeholders, and ultimately society, as you will use this information to alter business strategies and advance your practices to ensure sustained performance.

 – Tad Radzinski, PE, LEED AP, SFP

Links:

The Sustainability Accounting Standards Board’s Materiality Map

Understanding Material Flows in Your Operations

Establishing an effective Corporate Responsibility program requires a detailed understanding of the inputs and outputs of your organization and operations. In this video, I discuss a simple form of accounting for these inputs and outputs that will provide the baseline for further management of material resources.

Organization-wide Material Flow Analysis, or MFA, is the precursor to benchmarking your operation in that broad MFAs identify all of your inputs and outputs; and benchmarking quantifies these variables, allowing you to make informed decisions. The purpose of performing an organization-wide MFA is to quickly classify targets to be benchmarked based on the overall objectives of your Corporate Responsibility strategy. MFA can also identify material risks of often overlooked inputs. Identifying these risks early provides strategic business benefits, and they can be readily addressed to ensure continued success. MFA can also be useful in identifying exact impacts when benchmarking systems and specific operations; but for now, I suggest using the broad MFA to first gain an overarching perspective of your organization.

Tune in Friday for a more detailed look at Materiality, as this topic becomes increasingly important as we move through our discussion on developing successful, comprehensive Corporate Responsibility strategies. Be sure to subscribe by providing your email address in the sidebar to receive each update via email.

 – Tad Radzinski, PE, LEED AP, SFP

2013 Dow Jones Sustainability Indices Released

Yesterday, the 2013 Dow Jones Sustainability Indices (DJSI) was released by RobecoSAM and S&P Dow Jones Indices. Originally launched in 1999, the DJSI tracks the financial and sustainability performance of the 2,500 largest companies of the S&P Global Broad Market Index. Using a combined valuation of economic, social and environmental criteria, the DJSI focuses on assessing long-term shareholder value.

The DJSI company selection criteria uses a “best-in-class approach” that targets sustainability leaders in 59 designated industries. This best-in-class approach creates competition among companies to be included in the DJSI and ultimately drives sustainability improvements among top organizations. According to this year’s report, top performers in their industries for 2013 include Volkswagen, Nestlé, Citigroup, Siemens, Air France, and Panasonic.

With the emergence of the DJSI and other sustainable investing guidelines and indices, there has been increased focus from investors on Corporate Responsibility in the firms in which they invest. The amount of capital that sustainable investors control continues to grow; and as a result, so does their influence. For more information on sustainable investing, read one of our most recent white papers, Financing Our Future – How Sustainable Investing is Shaping the Face of Business.

Now more than ever, leadership in sustainability provides tangible value to corporations. Between process and product innovations, reduced costs and material certainty, and public support and market positioning, companies that pioneer sustainability perform better than their competitors. Adopting Corporate Responsibility as a business strategy is the key to becoming an industry leader and ensuring future viability of your organization. Learn more about Empowering Business through Corporate Responsibility here.

 – Tad Radzinski, PE, LEED AP, SFP

Our Addiction to Fossil Fuels

Last week we talked about population growth and the amount of materials we collectively consume. We are all aware of the impending oil crisis, because we see it each week when we fill up at the pump and pay gas prices of almost $4.00/gallon; but what many don’t know is that a lot of the products we use every day are derived from fossil fuels. In my most recentwhite paper, I referenced this list of everyday household products that are petroleum based: http://www.ranken-energy.com/Products%20from%20Petroleum.htm.

If you look at that list closely, hopefully, you notice that many of these products are not recyclable and usually end up in landfills. With this consumption pattern, we are wasting a significant amount of resources and are forced to go to great lengths to locate more sources of petroleum and other fossil fuels. The challenge posed here for sustainability professionals is reframing our economic system to properly utilize life cycle thinking and closed loop design that allows us to reuse these resources in innovative ways.

Another way to look at this is not as a challenge, but as an opportunity. Corporate pioneers in this area have proven that closed loop systems are valuable to an organization, especially when facing fluctuating costs in turbulent raw material markets. A good example is one of our clients, CertainTeed Corporation. The siding division at CertainTeed has set up a system where they take back vinyl siding from consumers at the end of its usable life, grind it up, and blend it into new siding products. In fact, CertainTeed produces the CedarBoards D6 product with up to 73% recycled content. Companies that have created similar systems in the consumer marketplace (i.e. Timberland’s Earthkeepers® 2.0 boots) have also realized decreased materials costs and increased market share. To learn more about Sustainable Product Development (SPD) practices and closed loop products, click here.

 – Tad Radzinski, PE, LEED AP, SFP

My Take on “3 Hidden Killers of Sustainability Programs”

I recently found an article titled 3 Hidden Killers of Sustainability Programs, and thought it was a great topic to elaborate on as we continue our introduction to Corporate Responsibility. Although we will cover the steps and strategies of creating, implementing and strengthening a corporate sustainability program in detail in upcoming video series, this article really illustrates the importance of a few of my Core Principles for Implementing Successful Sustainability Programs.

The first “hidden killer” addresses sustainability programs that are not linked to overall corporate strategy. In many instances, I have seen companies that implement sustainability initiatives that are separated by business segments or by end objectives. This results in disconnected corporate responsibility projects, not overarching programs. In order to successfully engrain sustainability into an overall corporate strategy, it must be an integral function that supports business plans, rather than an independent agenda.

The article identifies the second hidden killer as “Death by Middle Management”. This section explains that, in both top-down and bottom-up approaches to sustainability, middle managers play a significant role in advancing sustainability through the ranks; however, middle management incentives are typically operations and revenue based. I have always believed that a top-down approach mitigates this challenge, because upper management has the power to shift assessment criteria to include sustainability performance metrics as a complement to operational performance. My consulting firm always recommends training at all levels within an organization. Similar to implementing new programs focused on safety, IT or even diversity, training is the key to effectively integrating sustainability into the corporate culture. We will talk more about the importance and benefits of training in future videos and blog posts.

Finally, the third roadblock is “Premature Declaration of Victory”. With a wide range of reasons for corporate citizenship – regulatory, stakeholder pressure, competitive pressure, etc. – the definition of sustainability is different for every firm. A sure-fire way to undermine a sustainability program is by setting weak, short-term goals. Once these goals are accomplished, the motivation to continually improve is lost. It is important to report on and celebrate accomplishments, but sustainability is always a moving target. Setting challenging, multi-year goals and effectively incorporating sustainability into strategic planning ensures continued support and greater results. In later video series we will examine effective goal setting as well as green marketing to promote your sustainability achievements.

Stay tuned for next week’s video release and for the next few series, where we will dive deep into developing sustainability programs that successfully support business strategy.

 – Tad Radzinski, PE, LEED AP, SFP

Population Growth Putting Strain on Resources

Welcome back, I hope you had an enjoyable holiday. If you were like many people I know, you may have gone to the beach this Labor Day weekend. Hopefully, if you’ve been following along with our Introduction series, you started to notice some things while you were on vacation. You may have noticed just how many people were there, and most importantly, how much stuff everyone had with them. One thing to think about is where does all this stuff come from, and where does it ultimately end up?

Today’s video looks at the effect of our increasing global population, the overall increase of wealth and the effect this has on resource consumption. In the BRIC countries (Brazil, Russia, India and China), there are approximately 3 billion people who are emerging as a new middle class. I often wonder: How do we give Nikes, Levis and iPhones to 3 billion more people? Presently, our system is not set to efficiently reuse our resources, and many projections estimate significant resource shortages and even complete depletion in the next few decades.

Slowly, but surely, I believe major influencers are recognizing the impending risks that population growth is putting on our present system and they are taking steps toward implementing change.  As we continue through our video series, we will further examine the concept I briefly introduce about a circular economy where goods are taken back and usable resources are reclaimed and reused. The closed-loop economy is possible, and we will talk in-depth on the steps many companies are taking to lead us there. 

 – Tad Radzinski, PE, LEED AP, SFP

Links:

World Population Clock

White paper focusing on a major change agent in our economic system, Investors:

Financingour Future – How Sustainable Investing is Shaping the Face of Business