Oklahoma City Research Roundtable
End-users Consider How to Link Sustainability Programs to Company Goals
"Don't throw anything away. There is no 'away.' " - from a Royal Dutch Shell advertisement in 2007
ISO 14001's Role in Business Sustainability
Here's how the International Organization for Standardization (ISO) describes ISO 14001:
"An EMS [environmental management system] meeting the requirements of ISO 14001:2004 is a management tool enabling an organization of any size or type to:
identify and control the environmental impact of its activities, products or services, and to
improve its environmental performance continually, and to
implement a systematic approach to setting environmental objectives and targets, to achieving these and to demonstrating that they have been achieved."
ISO's Web sites clarifies this further, saying "The intention of ISO 14001:2004 is to provide a framework for a holistic, strategic approach to the organization's environmental policy, plans and actions." Note the word strategic here. Some Research Roundtable participants were concerned that their companies' green programs had no strategy component. If their operations had been ISO 14001 certified, this would likely not be the case.
Not all companies seek the certification, however. A study looking into why this so says, "high certification cost and lack of other available resources are the greatest obstacles for implementing the ISO 14001 standard."
In spite of the cost, there is evidence ISO 14001 complements and can accelerate progress toward "greening the company." In "Targeting Sustainability: The positive application of ISO 14001," Philip Sutton writes, "this paper develops the framework for a sustainability-promoting interpretation of ISO 14401. If this framework for applying ISO 14401 is adopted widely it will dramatically improve the chances of achieving sustainability." Robert L. Westly and Ralph Vasquez lay out a similar message in "LEED and ISO 14001 Can Help Improve Environmental Performance." They say, "One systematic process that is used globally to work toward environmental sustainability is ISO 14001, an international standard for environmental management systems that provides a path to continual improvement. The standard outlines five concepts that can help facility executives develop a process to improve performance on environmental issues."
About 30 corporate real estate (CREM) executives from industrial companies met on Sunday, Sept. 14, at IAMC's Oklahoma City Professional Forum to consider how the real estate department can link sustainability programs to corporate goals and objectives. Some of the attendees had indicated during the program's planning sessions that sustainability was a show piece at their firms that had little connection to corporate strategy. The Roundtable's objective was to share the methods of companies with strong sustainability-strategy links with representatives of companies lacking them. The first presenter was Jeff Adelson of Boeing, who gave a briefing on ISO 14001. Then, Chuck Manula of Wyeth and Russell Burton of PepsiCo described their companies' sustainability programs.
The group could be divided into several categories with respect to the stage of their companies' sustainability programs. Most had such programs; a few were just getting started on them. Of those with green initiatives in place, the majority felt that these were weakly connected to corporate goals and objectives. A minority indicated that their green programs actively contributed to corporate strategy.
At least 20 percent of all Active member companies have sustainability programs that are mature, extensive and effective enough to have earned them public recognitions for their business sustainability efforts. Because corporate greening programs are so popular among investors, shareholders and readers of business publications, recognition programs seem to be cropping up all over. For example, just a quick Google search on the word sustainability will produce Web sites and information on the Dow Jones Sustainability Indexes, the U.S. Green Buildings Council's LEED Certification Program, the U.S. Environmental Protection Agency's Energy Star Awards, the Global 100 Most Sustainable Corporations Awards, and more. All draw media attention to sustainability efforts and encourage companies to work greener. But some recognition programs have been criticized as being ineffective at achieving more sustainable corporate business operations.
If you scan the press releases provided on most IAMC Active member companies' Web sites, you will see copious mentions of sustainability programs the firms are hard at work on, and in some cases, awards recognizing the programs' effectiveness.
For this article, we selected four well-regarded corporate sustainability awards and identified the IAMC Active member companies that have received them (see the chart below). The awards are the Dow Jones Sustainability World Index, the Dow Jones Sustainability North American Index, the Energy Star Award for Sustained Excellence and the Global 100 Most Sustainable Corporations list.
Selected IAMC Active Member Companies with Sustainability Recognitions
2008 Dow Jones Sustainability World Index (1)
2008 Dow Jones Sustainability North America Index (1)
2008 Energy Star Award for Sustained Excellence (2)
After the three Research Roundtable presentations, the program turned to table discussions. Each table group was asked to summarize its conversations using the following report-out format:
Characteristics of the sustainability programs of companies represented at the table,
Similarities between the programs,
Differences in the programs, and
Other important observations.
Sustainability program characteristics were led by the almost ubiquitous drive toward workplace standardization, including use of unassigned cubicles and, at many companies, Web-resident virtual workplaces. ISO 14001 was cited by many as an indispensable foundation for sustainability program implementation. Managers involved in the corporate supply chain said their companies are evaluating and comparing the environmental benefits of a just-in-time resource and product delivery model against the costs of carrying larger inventories across the company. One manager, obviously well placed in his company, said almost every proposal for corporate investment had to include a section detailing sustainability opportunities for the project.
The participants saw some striking similarities and trends. First, they observed that most large companies, and many smaller ones, are engaged in some type of sustainability program. Few if any companies were doing nothing. The corporate real estate executives noted that managers working on pretty much any sustainability program could request and obtain support from top management. This is a remarkable benefit because managers say the most common cause of any corporate program's failure is lack of support from the senior managers. The participants said that a well organized and publicized sustainability program increases employee retention. Similarly, these programs tend to enhance the corporate image and add a very positive element to the company's brand. However, several participants observed that there was much more talk about conducting business in a sustainable manner than there was action to accomplish this.
Regarding similarities across corporations' sustainability programs, the CREM managers noted that their companies usually were willing to invest in sustainability programs. The implication here is that there may be a lower hurdle for approval and funding of these programs than other potential investments. The participants saw that at many of their companies there is an ongoing interest in getting ahead of impending sustainability legislation. Lastly, it was noted that in some cases companies pick a pet environmental project or project type to become part of the corporate brand. One participant said his company's board favored programs that supported biodiversity.
One table group looked at the motivations behind the interest in having sustainable programs at their companies. First, they believed that having and publicizing these programs created an important connection with the company's customers. They noted that when justifying these programs from an investment perspective, the financial analysis really should look at the life-cycle cost as well as the initial-investment cost. Talent recruitment and retention were said to be easier at companies with broad-based and effective sustainability initiatives. Several said that these programs may be a key to their companies' long-term survival.
Sustainability is one of those buzzwords that comes along every so often in the business world. Almost every company is into it. It's hard to define, but the purpose behind it is clearly very important. There's a hardcore management process to under-gird it called ISO 14001, but many companies take a less rigorous approach. The media is full of awards for companies judged effective at their sustainability efforts. The recognized companies are working hard to reduce waste, cut energy use and become as environmentally responsible as possible. But some of the awards are accused of lacking the substance needed to increase corporate sustainability. The use and evolution of the term sustainability reminds this writer of the term e-business that was in vogue a few years ago. Now, most companies apply e-business principles, so that the words business and e-business for practical purposes mean the same thing. In not too many years, the same is likely to become true of the term sustainable business. Every business will be sustainable, and the adjective will not be needed.