em feature Corporate Sustainability Using Big Data to Look at the Big Picture by Chet Chaffee Why disclosing environmental impact makes good business sense. Dr. Chet Chaffee is the Director of Sustainability at FirstCarbon Solutions (www.firstcarbonsolutions. com). Previously, Dr. Chaffee was an executive vice president at Scientific Certification Systems, where he directed more than 200 lifecycle and sustainability initiatives for General Motors, Home Depot, Unilever, and more. He also helped found Boustead Consulting & Associates, a subsidiary of Boustead Consulting, one of the world's first life cycle firms. When it comes to judging the quality of companies today, managing corporate impact on the environment and climate change has become increasingly important to investors around the globe. In order to make educated, well-informed decisions, more and more investors prefer to have deeper insights into companies greenhouse gas emissions, energy, and water usage, and various strategies for managing climate change. As a result, many leading global companies are seriously embracing sustainability practices they 14 em march 2014 awma.org
understand that this method is not simply a reporting exercise, but that full and transparent disclosure to all stakeholders is crucial for success. Several of these companies are not only integrating sustainability themes into their overall corporate mission, vision, and values, but they also are incorporating sustainability directly into their brand and customer value propositions. The Challenge of Collecting Big Data Enabling better decisions by providing investors, companies, and governments with high-quality information on how companies are managing their response to climate change and mitigating the risks from natural resource constraints has never been more important. Stakeholders today want more than the philanthropic mission vision statements of a company. They want real statistics, real facts, and most important of all, real results in terms of corporate social responsibility. In other words, they need accurate big data inclusive of a company s environmental sustainability information. Determining what big data, or information, is most important and where to find it is the first step. Whether for reporting or other purposes, success requires identifying your own needs, as well as your critical stakeholders and their priority needs, then addressing areas of overlap. The first step involves getting a sense of what leaders and competitors in your company s specific industry are doing by reviewing their most recent sustainability reports. See what issues they are addressing; what components or processes they tout as being important; and why. One example in the beverage industry is the issue of water availability it s critical for beverage companies as a core natural resource not only for their operations, but for their products as well. So much so, that leading beverage and soda manufacturers issue reports on their efforts around conserving water resources separately from their main sustainability reports. Additionally, be sure to think critically about what practices make the most sense for your business and your mission. Competitive advantage can sometimes come from pushing beyond what others are doing, allowing you to capitalize on your efforts and generate significant benefits for your company and brand(s). PepsiCo, for example, partnered with The Nature Conservancy to identify ways not only to protect and conserve water resources, but create a positive water impact by ensuring the company uses fewer water resources. It s also critical to look at what major reporting standards require and/or suggest. The Global Reporting Initiative (GRI; www.globalreporting.org), for example, has developed a GRI Content Index template and provides a checklist for reporting purposes. It has a growing number of criteria sets for specific industries. Other reporting standards that may be helpful include the CDP (formerly known as the Carbon Disclosure Project; www.cdp.net) and the UN Global Compact (UNGC; www.unglobalcompact.org). Many companies today are reporting to these standards as a strategic tool and/or communications piece for stakeholders. Even for those companies not reporting, the data specified by these standards can help prioritize sustainability efforts. Results from a 2012 CDP survey offer evidence that the Standard & Poor s (S&P) 500 is making significant advances in terms of transparency and progress on carbon goals, and that this progress is rapidly moving forward. As one of the most important organizations in the world to lead the dialogue around measurement, rigor, and transparency and recognized as one of the most credible sustainability rating/ranking indices in the world by Globescan s 2012 Rate the Raters survey CDP has become a leader in providing data that help companies leap beyond guesswork and get straight to the facts. In fact, the data compiled and reported by CDP have had a tremendous impact on current and future business behavior worldwide. The data offer insights for executives who are trying to understand awma.org march 2014 em 15
floods, and wildfires can threaten business continuity with interruptions in power, supply, and transportation networks. From harnessing wind energy in Illinois to financing an expansion of geothermal energy in Kenya, Bank of America has been supporting the global transition to cleaner and more sustainable energy sources for many years. why climate change matters, and allow companies already taking action to track their progress and better inform their critical policy and planning decisions. And while many leading companies have made significant progress in addressing the risks and opportunities presented by environmental and climate change, many of the CDP s leading members including those listed in the organization s Climate Performance Leadership Index (CPLI) are actually way ahead of the curve regarding incorporating climate change into their enterprise risk management and strategic decision-making. This broader view of climate change and environmental impact has enabled these leading CDP companies to not only realize lower energy costs and increased productivity, but to obtain the necessary knowledge needed for development of current and future low-carbon, energy-efficient products and services. These companies also are taking the physical risks that stem from climate change seriously, especially since there is increasing realization that an escalation in the frequency and severity of extreme weather events such as heat waves, cold snaps, hurricanes, However you and your colleagues collect your data whether more automatically through robust technology platforms, or more manually the information needs to be standardized and managed so that it s accessible and useful. This is necessary, in part, to properly set or revise the specifications for technology solutions you use or need; and to include with any specifications or toolkits you share with the gatekeepers of that data to make both your lives easier in providing them to you. Example Leaders CPLI member, Bank of America is one of the companies that has taken this issue seriously. Its leaders have shown they understand the impacts their operations have on the environment, especially in the areas of energy, water and paper usage, greenhouse gas emissions, waste generation, and supply chain. Because of this awareness, Bank of America s scale and influence allow the financial organization to take measurable action to reduce the environmental effects of its operations through their own efficiency, and by influencing their supply chain. As a result, the company has established numerous policies and relationships to manage the environmental footprint of its supply base as an integral part of its sourcing and vendor management activities. For example, in 2012, Bank of America requested disclosure from 163 of its significant vendors and achieved an impressive 88% response rate. Bank of America also has integrated environmental sustainability criteria into its vendor sourcing processes. In 2012, for example, the company initiated a carbon reduction grant program encouraging qualifying vendors to establish a public carbonreduction target. As part of this collaborative effort, Bank of America offered executive coaching and financial support to encourage vendors to overcome hurdles and work toward the publication of specific goals to reduce greenhouse gas emissions. 16 em march 2014 awma.org
Oil & Gas Environmental Compliance Conference This two-day conference will address multi-media topics such as air quality, water use and treatment, waste disposal, spill protection, local issues, and data management challenges throughout the shale plays in Pennsylvania, Ohio, West Virginia, and New York. Speakers will include regulatory authorities, industry environmental managers, environmental interest groups, and industry experts. Conference Location: Double Tree Pittsburgh Meadow Lands Hotel This workshop will help professionals: permit application determinations. disposal. environmental response plans. regulators. http://oilandgas.awma.org. From harnessing wind energy in Illinois to financing an expansion of geothermal energy in Kenya, Bank of America has been supporting the global transition to cleaner and more sustainable energy sources for many years. Looking ahead, as investors continue to increasingly rely on sustainability metrics to make informed investment decisions, Bank of America says it plans to continue addressing a broad range of sustainability issues in the years to come. For example, since the business community has been increasingly impacted by extreme weather events, such as Hurricane Sandy in the United States, significant flooding in India, and unprecedented cold temperatures in Eurpoe, the company understands that weather events of this magnitude will continue to impact homeowners and other bank stakeholders around the world. Another example can be seen with the Compass Group, the world s largest food and support services company, which offers a unique example of applying an innovative business solution to manage corporate impact on the environment. Just last year, the company enhanced its webbased tool designed to help food operations staff across the United States measure the effect of their environmental impact reduction strategies. This groundbreaking technology helps Compass Group redefine sustainability within foodservice operations by helping teams create operational and structural changes that will have long-term impacts and improvements. An easy-to-use application, the Carbon FOODPrint toolkit is focused on the supply chain and what happens in foodservice kitchens across the United States. More specifically, the technology allows chefs and managers to create customized strategies to reduce their operations carbon footprints awma.org march 2014 em 17
by decreasing waste disposal, and energy and water use. Foodservice managers can make up to 185 strategic choices across five key areas, including menu engineering, kitchen operations, kitchen services, site equipment, and facilities. Compass Group uses the data to help make improvements throughout its cafes, as well as publicly share the information with clients in annual reports, sustainability indexes, and disclosure programs such as the CDP. Accuracy and Timely Data Collection Is Key As the concept of corporate sustainability becomes increasingly complex, the need for greater and improved technology solutions has become critical in recent years. These solutions can help companies and suppliers together innovate, drive cost reductions, improve service, and meet stakeholder expectations better than ever before. Accurate and timely data collection is key to making correct decisions and drive efficiencies in your business. Numerous organizations and experts are available to assist companies with their carbon collection and reporting, and help executives stay aware of the ever-changing rules and regulations governing compliance on a local, federal, national, and even international level. By utilizing the latest in these lifecycle assessment services, network design, optimization, and planning systems which incorporate environmental footprint considerations corporate executives can both integrate environmental practices within their company and supply chain, while at the same time provide investors with a transparent view of their organization. The big data challenges that leaders striving for corporate sustainability face don t have to be overwhelming. The keys are determining the critical issues and relevant data for you and your stakeholders; prioritizing that data to narrow your universe; collecting that data into standard formats; and finally finding and using the best tools to help manage and apply that data. More companies are starting to recognize that failure to anticipate and properly prepare for the impacts of climate change may leave them without adequate plans to mitigate damages to their business, develop new products and services, and implement business strategies necessary to respond to changing customer needs. Moreover, failure to successfully execute a proper climate change strategy could risk damaging the attitudes of stakeholders against those who fail to plan. The consequences could ultimately affect reputation, as well as damage a company s customer loyalty and investor confidence. em 18 em march 2014 awma.org