Why you should answer the new CDP climate questions

By Cora Lee Mooney and Sarah Corrigan

The 2015 CDP Climate Change questionnaire contains two new unscored questions, and many companies are in the process of determining whether to answer them.

For practitioners who recognize that the value of sustainability reporting lies in the process, this decision should be easy. These practitioners understand that the stages of the reporting process — stakeholder conversations, data collection and response writing — all contribute to refining their company’s sustainability strategy.

CDP highlights the importance of this strategy formulation by launching its two new questions within the Strategy (CC2) section of its questionnaire. This year, responding organizations are asked whether they have an internal price on carbon (CC2.2c) and whether their board of directors would support an international agreement between governments on climate change (CC2.4).

To read the full article please visit GreenBiz.com.

Greening the government’s supply chain: federal procurement poised to drive sustainability reporting

October 14, 2014 | By Darrell Delamaide

As the federal government extends sustainability reporting to its supply chain, it needs to adopt more standardized frameworks for reporting than those now in place

The US federal government is poised to extend its sustainability reporting to its supply chain, giving further impetus to a best practice already encouraged by competition in the marketplace. Large government procurers, including the General Services Administration (GSA) and the Department of Defense, are inserting questions and requirements about sustainability into contracts with their largest vendors as they renew them.

‘We just renewed contracts with our two biggest packaging vendors,’ says Jed Ela, sustainability co-ordinator at GSA’s Federal Acquisition Service, which buys products and services not only for GSA’s own needs but also for those of many other federal agencies. ‘They had the ability to report carbon footprint at the customer level.’

To read the full article, please visit Corporate Secretary Magazine online.

Sustainability reporting evolving as a management tool

By: Darrell Delamaide

An improved reporting process is helping companies identify gaps in their sustainability practices, which, when closed, can lead to big savings

The latest guidelines from the Global Reporting Initiative (GRI), issued less than a year ago, are turning sustainability reporting into more of a management tool and less of a marketing exercise.

The new version, called G4, introduces a whole set of guidelines on governance and places the emphasis on prioritizing which actions of the organization have a truly significant impact on the environment and society.
The focus is more on ‘how’ the report is produced, rather than on ‘what’ it finally says. In other words, it is designed to engage the organization from the C-suite on down in managing the impact rather than putting out a checklist of indicators.

This was the message in a training session with high-level government officials (including several procurement officers) conducted in Washington on April 23 and 24 by BrownFlynn, a sustainability consulting firm and the first US-certified GRI training partner. This training was conducted in partnership with the World Business Council for Sustainable Development at WBCSD’s US offices.

To read the full article in Corporate Secretary magazine please click here.

The long journey to sustainable procurement

By Mike Wallace

Bad news: Survey fatigue — already at significant levels — doesn’t seem to be improving. In fact, it could get much worse before it gets better. Good news: It could make our businesses more sustainable.

Anyone and everyone who examines his own sustainability performance, or footprint, quickly realizes that suppliers make up a big part of that footprint. This, in turn, leads the organization to realize that some sort of action on the supply chain is needed. This generally takes the shape of supplier codes of conduct, questionnaires, scorecards, surveys and/or supplier audit programs. Because everyone is in someone’s supply chain, we create a “circular loop” for ourselves. While complaining about survey fatigue, many companies turn around and subject suppliers to the very thing they complain about.

Tip of the transparent iceberg

It’s one thing for large-multinational corporations to do this, but when large public institutions start to explore sustainable procurement, we get a glimpse of the ripple effect. Federal, state and local governments, state universities and non-profit healthcare providers are assessing their own sustainability performance, which will lead them to assess their suppliers.

Whether you’re large, small, public or private, you are in someone’s supply chain and you inevitably will get that sustainability question. Are you ready to answer it?

Read more in our GreenBiz Shift Happens column here!

Greif Awarded for Sustainable Manufacturing Leadership

BrownFlynn congratulates our client, Greif, for receiving the 2014 Manufacturing Leadership Sustainability Award! As a world leader in industrial packaging products and services, Greif drives sustainable innovation with its DoubleGreen COEX 10-liter plastic jerry can. DoubleGreen is one of the first plastic jerry cans to be made with polyethylene resin derived from a renewable resource, sugarcane.

The DoubleGreen COEX 10-liter plastic jerry can has the following sustainable attributes:

• Less production material due to Greif’s efficient manufacturing process, which reduces the shipping weight
• A stackable design, which reduces the amount of packaging material during transport, decreases inventory management cost, requires fewer packaging labels and enhances the recycling process
• UN Certification, meaning that Greif’s customers will not have to manage the UN Certification Process

Through sustainable investments, Greif reduces its environmental footprint throughout its supply chain, particularly with customers. IT Business Net highlights the following environmental benefits:

• “The use of sugarcane ethanol is estimated to eliminate CO2 emissions by 1,390 tons annually.”
• “The elimination of [DoubleGreen] carton packaging is estimated to save 3,643 trees and avoid 23 tons of excess CO2 emissions.”

Greif’s award represents how companies can incorporate sustainability into their business processes and product development to positively impact their triple bottom line. We applaud Greif’s efforts and look forward to seeing their positive influence on global manufacturing, the industrial packaging industry and other industries across the board.

By Margie Flynn and Cora Lee Mooney

U.S. shareholders break a record in environmental and social resolutions in 2014!

This week’s 2014 Proxy Review Webinar reinforced the leadership role shareholders are playing in influencing companies to address their environmental, social and governance (ESG) impacts.

According to Heidi Welsh, Executive Director of the Sustainable Investment Institute, U.S. shareholders are breaking records in the number of social and environmental proposals filed in 2014 (417 as of February 14!).  The most active proposal filers in 2014 have been SRI groups (31%), pension funds (24%) and religious groups (17%).  The issues addressed include political activity, environment (climate change and energy), sustainability and diversity.  The increase in discussion of political activity relates to a changing context, as shareholders are interested in companies’ political spending and lobbying and whether or not these activities align with their stated corporate responsibility objectives.  Where companies devote their time and money in political activity can leave a lasting mark; as Timothy Smith, Director of ESG Management at Walden Asset Management, said, “the power of the purse in influencing elections and public policy is real.”

One interesting trend is that shareholders now have a systemic view of corporate responsibility topics. Andrew Behar, the CEO of As You Sow, discussed the interconnectedness of environmental and social issues and how shareholders no longer view these issues in isolation.  For example, Behar described how corporate political spending relates to energy policy, which relates to climate change, which relates to water and agriculture, which relate to human rights.  In addition, shareholder requests for sustainability reporting disclosures are expanding in focus, from purely environmental efforts to more social topics and supply chain issues.  These findings mirror those highlighted in the State of Green Business 2014, as companies are “integrating social issues into their sustainability programs” and seeing “how improving lives makes good business sense.”

What are the key takeaways for companies?

• Environmental and social issues are of growing interest to shareholders, increasing pressure on companies to demonstrate management of these issues.
• Shareholder engagement is an invaluable tool for risk management; often, shareholders raise environmental and social topics early, which helps companies consider what topics they should address now and in the future.
• Shareholders are looking for transparency and accountability, particularly related to political activity.  Companies will need to evaluate how their current reporting practices meet the needs of shareholders.  Many will turn to the Global Reporting Initiative G4 Sustainability Reporting Guidelines for help in determining what topics to prioritize. This is accomplished through materiality assessments which provide an outline for companies to organize and prioritize their corporate responsibility objectives, performance, governance and management approach.

I look forward to seeing how shareholder environmental and social resolutions evolve, how companies respond, and what corporate responsibility best practices emerge throughout the rest of the year.  How will your company address shareholder concerns and engage with shareholders in 2014?

By Brittany VanderBeek, Analyst

5 Key Sustainable Business Trends in 2013

Reflecting on 2013, BrownFlynn is thrilled with the momentum of sustainability and corporate responsibility across businesses.  Here are 5 key sustainability trends we have found in 2013 and what they mean for your company:

1. The newest generation of prospective employees, Millennials, are passionate about sustainability and dedicated to creating a sustainable future.  BrownFlynn’s Co-Owner and Principal, Margie Flynn, describes how “top-notch Millennials bring to BrownFlynn [and companies overall] the critical thinking skills, passion for sustainability, strong work ethic, and commitment to make a difference needed to continue our Firm’s growth trajectory.”

• Implication for your company: Your current sustainability initiatives will only be driven forward with the support of Millennial employees.  In order to attract and retain Millennial employees, your company should have sustainability initiatives (both internal, such as product innovation and employee wellness projects, and external, such as volunteer opportunities to engage in the community).

2. There is a global increase in public transportation.  In developed countries such as the United States and Canada, mass transit has grown significantly as a result of economic and consumer choice – in the United States, public transport ridership has increased by 34% since 1995.  In emerging economies like Colombia, India, South Africa, Brazil, and Mexico, there are a growing number of investments in mass transit.

• Implication for your company: Stakeholders (employees, customers, etc.) are realizing the benefits of mass transit, such as reduced transportation costs and environmental harm, and decreased traffic.  Companies will need to choose central locations close to mass transit to reduce these costs as well and meet stakeholder demands.

3. Companies are integrating financial information and sustainability performance in their business strategies, as a result of growing investor interest in sustainability.  We have seen this with the progress of the Sustainability Accounting Standards Board, integrated reporting and Carbon Disclosure Project scores listed on Google Finance.

• Implication for your company: Investors will likely ask for more disclosure of sustainability information.  Integrating sustainability efforts into financial presentations will benefit how investors view the integrity of your sustainability efforts.  Communication of sustainability performance and management going forward will likely be integrated with financial reporting.

4. Companies are developing more focused sustainability strategies with materiality assessments by spending time reviewing the topics that are most significant to their business and to stakeholders, and prioritizing them in a matrix.  This is driven by the May 2013 release of the Global Reporting Initiative G4 standards, which include materiality processes as a disclosure.  Read our whitepaper, “Getting Materiality Right,” to learn more about materiality.

• Implication for your company: Companies will be able to allocate dollars and time wisely to sustainability efforts that will have the greatest positive impact on their business and stakeholders.

5. Companies have developed an increased understanding of their circle of influence (internal and external stakeholders) through value chain mapping.  Learn more about value chain mapping at our GreenBiz Forum Phoenix 2014 workshop, “Materiality & the Value Chain – Why Should Your Materiality Assessment Include a Sustainability Value Chain Map?”.

• Implication for your company: Companies will need to spend more time engaging with suppliers and understanding their operations.  Collaboration and communication throughout the value chain may improve operational efficiency and stakeholder trust.

With all of these trends, it is an exciting time to be in sustainability.  The current momentum of sustainability and corporate responsibility will help your company think more strategically as you plan sustainability efforts in 2014.  Sustainability leaders should be proud of our progress in 2013 and continue our passion in 2014.  Happy last day of 2013!

By Brittany VanderBeek, Analyst

Apple Welcomes Lisa Jackson to Address Environmental Policy

In an ongoing effort to reduce the company’s environmental impact, Apple recently hired former Administrator of the Environmental Protection Agency (EPA) Lisa Jackson as vice president of environmental initiatives. During her 25 years with the EPA, Jackson fought for more air quality regulations and campaigned for greater jurisdiction of the agency. Jackson’s expertise in the field will be welcome at Apple, which has been striving for more environmentally sustainable business practices under the leadership of Tim Cook.

In recent years, Apple has been criticized by several “green” advocacy groups for the company’s lack of supply chain transparency. Apple responded by publishing its incriminating Supplier Responsibility Progress Report for 2013. The release of the report earned Apple much acclaim for its transparency, but did raise many questions regarding the numerous violations. Over 100 of Apple’s 400 suppliers failed to recycle or properly dispose of potentially hazardous waste, and over 120 of the facilities failed to properly monitor air emissions. The list of environmental misconducts continues, and the report also acknowledges 11 factories employing 106 underage workers. Releasing the report was a step in the right direction for the company, but the violations still need to be addressed.

Apple CEO Tim Cook plans to confront the company’s environmental impacts. Since taking over for Steve Jobs in 2011, Cook has propelled Apple to address the company’s environmental effects. Environmental issues have received greater importance within the company in recent years, and Cook has made new commitments to work with suppliers to reduce their environmental impacts. Apple’s new supply chain transparency is only part of the commitment the company has made. Apple facilities, some of which were previously run on coal power, now run on about 75% renewable energy, and the company has set a goal of procuring 100% of its energy from clean energy sources.

Jackson’s experience combating dirty energy and toxic waste will add to the environmental movement happening at Apple. A chemical engineer by trade, she is well versed in these causes of global warming. But, her job description includes only environmental impacts, and includes nothing about the social impacts in the supply chain. The addition of Jackson should reduce Apple’s use of fossil fuels and hazardous chemicals, but it still remains unseen if (and how much) the former EPA Administrator will affect Apple’s social policy.

Do you think Apple made a good move in hiring Jackson? Do you think she will add value to the company’s holistic sustainability efforts, and not just the environmental impacts? Let us know!

–Patrick Dowling

Original news credited to Business Green and Triple Pundit

Annoucements by the SEC this week regarding conflict minerals and the disclosure of payments by resource extraction issuers

This week the SEC announced two rules mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act regarding conflict minerals (tin, tantalum, tungsten and gold) and the mandatory disclosure of payments by resource extraction issuers (companies that extract natural resources from the earth as their business). The first rule requires companies to publicly disclose their use of conflict minerals that originated in the Democratic Republic of Congo or an adjoining country. The second rule requires extraction issuers to disclose certain payments made to U.S. or foreign governments.

The Forum for Sustainable and Responsible Investment (US SIF) issued a statement in response to the announcements that congratulates the SEC for making decisions on these important issues. They pointed out that investment managers, advisory firms, mutual fund companies, financial planners and other asset owners will be better informed about the risks in investing in these companies as a result of these rulings.

“For the first time, investors will be able to evaluate these risks across industries and portfolios in ways that have not before been possible,” said sustainable funds firm Calvert. The SEC has estimated that some 6,000 public companies will be affected at an initial compliance cost of up to $4billion and annual costs of up to $609million.

US SIF is glad to see the first rule applies to all companies domestic and international, but wishes it would have been mandatory for the disclosure to be part of the annual report. Therefore, US SIF calls on companies to make this mandatory going forward so investors can better assess how the companies are managing their supply chains responsibly and avoiding human rights violations at all costs.

US SIF is also pleased to see the second ruling as it will hopefully provide for greater transparency and accountability in the extractives industry. However, like the first rule, this disclosure is not required in a company’s annual report. Overall US SIF is pleased with the rulings and believes this is a step in the right direction.

To read the final ruling on conflict minerals please click here.

To read the final ruling on disclosure of payments by resource extraction issuers please click here.

To read the US SIF letter to the SEC please click here.

Do you think the SEC should have required these disclosures in companies’ annual reports? Do you think these rulings will help provide more transparency and accountability in the affected industries? We want to hear your thoughts!

10 Reasons to Become Fluent in Sustainability

Whether your company has cared about sustainability for decades or still wonders about its significance, BrownFlynn hopes that this post makes sustainability go from a foreign word to one that is part of your company’s daily vocabulary.

Sustainability Defined

sus·tain·a·bil·i·ty (noun): the capacity to endure; the successful meeting of present social, economic, and environmental needs without compromising the ability of future generation to meet their own needs (derived from the 1987 World Commission on Environment and Development); a universal language that successful businesses speak; the way of the future for commerce.

10 Reasons to Become Fluent in Sustainability

 

1. Cut costs: Fuel and energy represent costs. Reduce emissions→Reduce costs

2. Earn tax incentives: Environmentally-responsible activities give companies income tax credits for investment, production, or consumption, accelerated depreciation for some capital expenses, exemptions from state or local sales taxes, and cash grants (Learn more from Business Insider).

3. Increase efficiency: An efficient supply chain is a more sustainable supply chain. Lean→Green

4. Mitigate risks: By understanding your current impacts on the environment, you can foresee consequences and make changes. Early and accurate responses to risks→Long-term growth

5. Drive innovation: Sustainability applies to all aspects of business, from the top down, including corporate strategy, product design, supply chain management, and disposal methods (Learn more from BrownFlynn’s blog or BrownFlynn’s “Shift Happens” GreenBiz column).

6. Gain consumer trust: “A growing number of consumers are putting their money where their values are” (Learn more from UPS).

7. Be hip: Socially responsible investing is in style (both from a consumer and a business standpoint), and it is as timeless as a little black dress. The “cool kids,” or in business lingo, the “competitive kids” are sustainable; you should be too.

8. Improve employee recruitment: “The current generation of employees is looking for stability and an employer that is going to be around for the long run” (Learn more from UPS).

9. Build teamwork: Volunteering enables employees to enhance their leadership skills, work in teams, and feel good about what they are doing without a competitive mindset.

10. Move past the MBA mindset; think like a phD: Corporate responsibility is like the higher power of business. It makes businesses stand out from the typical profit-loss focus. phDs are called doctors for a reason; they want to help the world through research and education, leading by example. In the endless strive for improvement and competition to be the best, being a phD in your industry is the secret to success.

 

By Brittany VanderBeek, Intern