Is Sustainability Sexy?

Posts Categorized: Sustainability Metrics

Is Sustainability Sexy?

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A few weeks ago, I was having lunch with a colleague whom I respect deeply. We were talking about the nature of the work I do at Scope 5. At one point he looked across the table at me and, looking at his face, I could tell that he was debating whether to say what he was about to say. At last, he spoke, and he said “Yoram – I’m not sure how to say this without offending you, but let’s face it… the work you do isn’t exactly sexy”.

I thought about what he said… 

I thought back on my career, first at Bell Labs, designing computer graphics hardware during the dawn of the PC, then at Microsoft, working on transmitting video and audio over the Internet during the dawn of the Internet. I was young, feeling at the top of the world.

I was working at Microsoft Research during the kind of years that Microsoft hired Mick Jagger and the Rolling Stones to promote Windows ‘95. I was jetting around the world negotiating computer networking protocols at big conferences with other technology leaders. I managed a development group in Redmond and our lab was full of monitors streaming rock and roll music videos over a simulated high-bandwidth network from the distributed video server that our group had designed. I was turning down head-hunters as frequently as I was turning down invitations to speak at tech keynotes. 

Now that was sexy! 

I thought about what I do today. Yes, I’m the CEO now. But when I deliver the elevator pitch describing our work, it goes something like: 

We help medium to large enterprises, utilities and municipalities, get a grip on their sustainability data. That’s primarily, but not only, carbon-emissions. We do so by providing both a cloud-based software service and consulting to go with it.

Invariably, the pitch is met with a muted response. It’s not quite as sexy as:

We create leading edge technology that makes it possible for you to watch any movie or hear any music you’d like to hear from anywhere in the world, at the press of a button.

I responded after a minute, to my colleague.

No, you’re right. There was a time when I worked at, arguably, the leading technology research institution of its time, with the coolest leading-edge technology. That was sexy. Today, I work on technology that, at its core, crunches numbers to find patterns in sustainability data. But here’s the thing…

I went on to elaborate…

At Scope 5, we’re deeply engaged in the defining battle of our lifetimes – we are engaged in a battle to save the world from climate change. I have no delusions that we’re doing this ourselves – there are many people engaged in this battle and we are but a part of that effort. At this point, it’s not so much about sexy technology. We have the technological pieces we need to save ourselves from climate change. At this point, it’s about helping the corporations and governments and consumers that drive our unsustainable lifestyles to identify opportunities to make changes and to see that doing so ultimately makes them more profitable, more effective. It’s about helping our clients see that renewables are their key to a prosperous future. It’s about making changes and telling the stories of those changes. It’s about communicating and ultimately, it’s about changing hearts and minds and moving the world to a new paradigm.

This is not the sexiest work in the world. It would be sexy to be working on virtual reality and on the video games that my boys play, like Fortnite and Red Dead Redemption. 

But this is the right work to be working on. It’s a slog to change hearts and minds. But our employees are young and smart and motivated to make the word a better place. Our clients are finding that they can make a difference and be more profitable at the same time. I go to sleep each night feeling that I’ve moved the needle in the right direction. This is the right time and the right work and there’s nothing I could be doing that would be more meaningful.

Sustainability Reporting: Tracking Your Critical Metrics

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Determining which ESG metrics an organization should track is one of the most important issues facing practitioners today.

The breadth of metrics is large. Basic activities that generate emissions are obvious places to start. Typical examples are electricity, stationary combustion, mobile combustion, and fugitive emissions.

But the real question is which one of these metrics, or perhaps others, is “right” for your organization? Does a metric represent a significant portion of environmental impact, and, if so, is there anything you can do to reduce usage or change activity?

For example, a hospital may use desflurane as an anesthetic for surgeries and procedures. Replacing desflurane with an eco-friendly substitute will lower greenhouse gas. But if your operation uses water as a major product ingredient, then it may be hard to materially reduce water use. And you likely can’t change the source or corresponding emissions if it’s supplied by a local authority.

Reporting is Evolving

Despite record reporting submissions to organizations like Carbon Disclosure Project (CDP) and Global Resource Institute (GRI), and more companies publishing sustainability reports, the practice of sustainability reporting remains relatively nascent.

Readers of corporate sustainability reports want to see companies provide direct and useful information about their sustainability impacts and what actions are being taken. A common miss is how key sustainability impacts are addressed in operations.

For example, although many may report onsite fuel, corporate fleets, business travel, energy purchased from utilities, and even employee commutes, they often don’t include metrics on water, waste, procurement, toxins, or supply chain impacts because those categories are not required under many reporting schemes.

But these may contribute significantly to an organization’s environmental footprint.

“Metrics” Should Drive The “Report”

Metrics-driven transparency can help businesses both internally and externally. Externally, reporting sustainability metrics will help to increase transparency for stakeholders. Internally, tracking and reporting sustainability metrics ensures results.

Whether for public consumption or not, tracking the “right” metrics is a way to achieve cost savings and reduce environmental impact. They reveal information on poorly functioning products and systems so steps can be taken to calibrate or redesign. Otherwise, companies will lack the sustainability data they need to evaluate and improve their practices.

Shift from Disclosure to Performance – A Positive Development

Although replete with pitfalls and challenges, sustainability professionals often focus on data collection at the expense of structural improvements in performance.

This brings us to the doorstep of why materiality matters.

A Critical Link for ESG Strategy

The issue of materiality is central to determining which sustainability metrics are prioritized.

As you can imagine, this cuts to the core question of what to report, and how. Determining which metrics are material and which aren’t requires a stakeholder engagement process to gather insight on the relative importance of specific environmental issues.

A common sustainability reporting pitfall is having incorrect ESG data for emissions and resource consumption or approaching sustainability communications as a public relations exercise. The issues identified as material may touch every aspect of a company’s business model or may have gone unnoticed. They are often valuable inputs to strategic planning, operational management, and capital investment decisions.

Let’s Use Carbon to Illustrate Materiality

Many companies already report on carbon management because they believe climate change may be an important issue to their stakeholders. Capturing quantitative stakeholder feedback on carbon can validate or change that reporting strategy, but the value-add is realized when the carbon data is viewed through operational and financial perspectives.

For example, analyzing carbon in the context of production efficiency and EBITDA helps a company understand how its business model would be affected by a price on carbon. If the carbon footprint of a production facility or product is a significant market driver, then the company can assess its risk-to-hold value of its current assets, and inform business and financial planning, such as where to best allocate its OPEX budget towards operational improvements, or its CAPEX towards R&D and innovation.

In this example, a rich data set on stakeholder perspectives further informs investment decisions that are based on the carbon impact of competing products. It’s easy to see how this data can affect the approach to risk management, operational management systems, product development, R&D, marketing and stakeholder communications.

ESG Reporting Software That Tracks Your Metrics

Since the materiality of sustainability metrics varies by company or organization, having a tool that can support your business and process is a must-have.

Flexibility and configuration are critical. With a cloud-based reporting application, new categories of data can be added and can be configured with detailed parameters around each category in a manner that supports specific business processes. This exercise should not require a team of experts to customize the application but should be doable with a few clicks, by any authorized user.

For example, a cloud-based application can give the data provider flexibility in data entry, while simultaneously restricting users to a common format, such as requiring monthly data rather than annual.

When the data is resident in a relational database and accessible through a quality application, users with different needs and interests can chart one variable as a function of another. The result is fine-grain analytics that supports critical business decision-making.

For example, a user might decide to chart their facility’s usage relative to other facilities. If the application stores the area of each facility, that user can chart energy per square foot for each facility. Such a chart reveals facilities that are using much more energy per square foot than the average (or much less). This leads to energy and cost savings.

Conclusion

The importance of using materiality to drive corporate sustainability strategy is growing. Investors demand more disclosure. Global reporting frameworks like GRI include guidance on assessing materiality. There are no “right” or “wrong” sustainability metrics, only those that make the case to senior management on why and how to report sustainability and other non-financial data that have a direct impact on the business. Software tools like Scope 5 can help you track the metrics that matter, whatever they are.

Staying Afloat in Water Management: Practical Tools for Evaluating and Reporting Water Use

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I’m in Boston for two days and I’m already missing home a bit, so I’m excited to see Val Fishman speak on water at New Metrics. Aside from the natural affinity with the topic that you’d expect from someone with Val’s last name, Val has deep environmental experience from her work at the Bonneville Environmental Foundation in Portland, Oregon.

I’ve heard a few people mention the difficulties that water presents to sustainability and I’m interested in Val’s approach. My work in Scope 5 is practical tools for evaluating and reporting all kinds of environmental (and social) metrics including water and its hot cousin, steam.

What are you doing in your organization with regards to water? Measuring? Capturing and reusing? Considering different sourcing options? Shoot me a note and let me know or come say hi if you’re in Boston this week.

Follow me on twitter at @derekeisel and Val Fishman @FishmanVal.

New Metrics Conference in Boston: The Future-Fit Business Benchmark and Pivot Goals featuring Jeff Gowdy and Bob Willard

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Have you heard claims from your local grocery store chain or airline about their greenness and thought, “yeah right”, because you work in sustainability and put “yeah, right” on the end of most of your thoughts? Where do you go to find out which companies have publically committed to what measurable goals? I’ve been looking for a list like that for a while (because I help sustainability professionals quantify their company’s progress towards those goals), but haven’t found anything good. I was a bit surprised to find exactly what I was looking for when I reconnected with Jeff Gowdy in anticipation of New Metrics in Boston. I met Jeff two years ago at the New Metrics in Philly when he was talking about his work with Goodyear. Now he’s back to talk about his work with Pivot Goals. If you’re a sustainability professional interested in measurable, transparent change, then you might consider checking out his presentation. If you do, please say hi. I’m the guy with the long hair and the beard who may look a bit like a civil war re-enactor, but am quite friendly. Also, have you found a good list of companies’ environmental and climate goals? I’d love to know about it. For more details about this Sustainable Brands session see here.

I’ll be posting on twitter from New Metrics @derekeisel.

Bob Willard and Jeff Gowdy are on twitter at @bob_willard and @JGowdyConsult.