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Archive for the ‘CSR’ Category

Affordable Investments: Owned Media and Partnerships

Posted in CSR, Recycling, tagged , , , , , , , on January 22, 2012 | 1 Comment »


by Megan Yarnall

Social media is popular for various reasons including the fact that it’s easy to reach people and that it’s free. Media such as advertising and marketing often is not free, so for many companies it is hard, if not impossible, to find room in the budget. For companies who don’t mind taking a leap of faith, there’s another option, one that TerraCycle relies heavily upon: owned media.

I say “leap of faith” because sometimes you have to shell out some cash to create the owned media, and then be patient and wait for the fruit of your efforts to materialize. Here at TerraCycle, we just started a bi-weekly podcast that documents eco-tips, eco-news, and features interviews with key players from our partners such as Elmer’s, Dropps, and Garnier  as well as leading voices from the sustainable industry.

Of course there was some limited start-up capital required to outfit one of our tiny meeting rooms: making the space soundproof, purchasing a podcast mic and sound equipment, and making sure our social media manager had the most appropriate sound editing programs on his computer. So, how do we justify spending the money on something that won’t bring us outright income?

Well, the podcast is an affordable investment. The start up cost wouldn’t have paid for a few days of Google Ads and this piece of owned media (the podcast itself) becomes a multi-use platform. When people hear the podcast, they learn about the company, its mission, and then (hopefully) are encouraged to sign up for the TerraCycle Brigade program and help us collect and recycle waste! Moreover, we can offer interviews to our valued partners and create or solidify relationships with industry leaders.

Other pieces of owned media include books, TV shows, company magazines, and blogs. Some of these require a larger output of money, but in return the outcome can be greater. The product can end up paying for itself. Additionally, with things like magazines, you can partner with advertisers to help foot some of the costs involved.

Some pieces of owned media will be more of a challenge than others. You can always write your own blog, you can’t just sign up to have a TV show. As with all things, it’s easier to start small, at TerraCycle we began blogging for smaller sites years ago, today we write for the New York Times, Treehugger and other major news sites. TerraCycle was in the media long before the founder and CEO, Tom Szaky, wrote his book and appeared on the National Geographic Channel with TerraCycle’s show “Garbage Moguls.” But any company can find a unique engaging angle worth pitching for a show or a book; just turn on your TV to find a 100 examples of small business turned reality TV hit show.

Additionally, you have to remind yourself that owned media is an investment. There’s cost involved, and while it may pay for itself in the long run, you’ll have to be patient. For the less patient, or for those who can’t (or don’t want to!) put up the cash, blogs are a great option. Social media partnerships allow for collaborating with like-minded businesses and charities and you can support each other’s causes with guest posts and mentions.

The vital element is this: you must remember what you can offer to other people, not always what they can do for you, and you should keep in mind popular media and how people are consuming content these days.

For TerraCycle’s podcast, visit iTunes and search “Talking Trash with TerraCycle” or visit www.terracycle.podbean.com.

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What Luxury Brands Teach Us about Sustainability

Posted in CSR, Fashion & Apparel, tagged , , , , , , , on January 5, 2012 | Leave a Comment »


By Elisa Niemtzow, Sequoia Lab Principal.

 

2011 marks an exciting year in luxury goods. After years of being singled out for lackluster social and environmental performance, luxury brands are recognizing the benefits of going green, and are starting to talk about it. Backtrack four years ago to the release of WWF-UK’s analysis of the luxury goods industry, and things looked bleak. For example, Tiffany scored a D+, PPR a D, and L’Oréal a C+.

This year, Tiffany launched its well-received sustainability website, detailing the responsible business practices that have made it a sector leader. PPR unveiled the first complete annual environmental profit and loss account for its brand Puma, committing to extend the practice to all of its brands, including iconic luxury houses Gucci, Balenciaga, Yves Saint Laurent and Bottega Veneta by 2015. Finally, L’Oréal pleasantly surprised more than just one sustainability expert at its inaugural global stakeholder forums this year.

Like other business sectors, luxury brands still face a lion’s share of challenges. In September, the Ethical Consumer Research Association (ECRA) in the U.K. lambasted leading designer clothing companies in its special report Style Over Substance, at the height of the “killer” sandblasted jeans problem involving brands such as Armani and Dolce & Gabanna.

For sure, there’s a lot of work to be done.

However, in reading the ECRA report, many companies received criticism for lack of available information, and ECRA assumed the worst. Dig a little deeper and I’m convinced that better things are brewing beneath the surface. Secrecy, after all, is a hallmark of the industry, which protects its craftsmanship and its margins like a mother bird her eggs.

I used to manage wholesale at Chanel, one of the most coveted brands out there (and one of the most searched for names on the internet). Online videos will take you backstage at December’s Paris-Bombay runway show, but you’d be hard-pressed to find much corporate information on this very private company.

Because of their glamorous role front and center, we expect the best from luxury brands (and that creates a special risk for them if customer perception of good business doesn’t match reality). But, as luxury brands begin conversations around sustainability, they face the same challenges as their non-luxury counterparts.
Since I don’t have the space here to discuss all these questions, I’ll focus on that last one, i.e., how do you talk to customers about your social initiatives without detracting from key brand messages?How do you communicate on your sustainability journey, essentially a work in progress, without becoming a target for criticism or losing control of the dialogue? How does a corporate executive support sustainable consumption while meeting ever-increasing sales targets? How do you talk to customers about your green or social initiatives without detracting from key brand messages?

The question of how to communicate on CSR themes to customers comes up frequently with my consulting clients these days. Fortunately, luxury brands have the potential to excel in this arena. They know how to create universes – whether that’s stores, fashion shows, websites or ads – which are on brand, make you dream, aspire, and ignite all your senses.

First, let’s start with a CSR-focused ad campaign gone a little wrong.

Italian leather and fashion house Ferragamo pioneered eco-luxe in 2007, with the launch of a small collection of bags made of natural, metal-free leather. This year, it launched the Ferragamo World collection, with 5 percent of proceeds going to the vanguard Acumen Fund. What a great partnership, but what a bad ad.

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The Paradox of Being National and Staying Local

Posted in CSR, Recycling, tagged , , , , , , , on December 15, 2011 | 1 Comment »


by Megan Yarnall

TerraCycle is a national and international company that stays local. Sound like a paradox? It doesn’t have to be one.

Since there’s usually a big push around “buying local” at the holidays, when everyone is doing more shopping than usual and trying to get the best prices, I started wondering how staying local fits into the plans for a national and/or international company, and how those companies can help encourage consumers to stay local. I’m not talking companies like retail stores, but instead companies like TerraCycle or even those that aren’t often consumer-facing (think, a national film company or a social services company).

The temptation to go to the large, national retail stores that are offering substantial holiday discounts and incentives is hard to resist, understandably. So what will help consumers veer toward local stores regardless? And why should a company not personally involved with, say, shoes, when people are looking for shoes, be concerned?

My answer here is community and personality. Even for a national company, engaging consumers at every level – including local – is key. Not only that, but by showing that your company cares about local causes in the areas it has offices, or the area it serves individually, you show part of your company’s personality, and that your company has depth. When you care about what your community cares about, they will care about you as well. Participate in a walkathon or help coordinate a gift drive. TerraCycle does this in August with its Graffiti Jam, works with local community improvement non-profits such as Isles, and enables its Brigades to donate to local charities in their respective towns.

One factor that can also help consumers buy local is knowledge. Consumers need to know why buying local is beneficial and why not all of the focus should be on cheaper prices at large stores. In order to engage people in your community, team up with a local shop to offer a “Buy Local Challenge” like the one run by the Southern Maryland Agricultural Development Commission.  Help them discover how to find discounts at local stores and local coupons (maybe suggest looking on community boards or in community handouts).

TerraCycle, a socially responsible company at our core, found a way to grow to 16 countries and still maintain our focus on being a local business. In each new market we expand, we find a local office, local shippers, local processing partners and hire citizens of that country to run our operations. The waste collected in a country stay in that country or region (in Argentina and Brazil for example uses the same facilities as needed) and nevers comes back to the US. So why we are turning into a global company each of our markets are kept very locally focused.

While national and international companies are concerned with more than local activities, it’s important to remember local connections and community so


companies can remember who they’re serving and can express their company’s personality and drives. What better time to do this than the holidays? So give your employees an extra day off if they volunteer at a local soup kitchen or food bank, donate to local charities on their behalf or find other ways to spread the holiday cheer to your workers and your community.

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What can Web 2.0 teach us about CSR?

Posted in CSR, Economy, tagged , , , , , on November 30, 2011 | Leave a Comment »


By Wayne Visser

As part of the Quest for CSR 2.0 series

By May 2008, it was clear to me the evolutionary concept of Web 2.0 held many lessons for corporate social responsibility. At the time, I declared: “The field of what is variously known as CSR, sustainability, corporate citizenship and business ethics is ushering in a new era in the relationship between business and society. Simply put, we are shifting from the old concept of CSR – the classic notion of ‘Corporate Social Responsibility,’ which I call CSR 1.0 – to a new, integrated conception – CSR 2.0, which can be more accurately labelled ‘Corporate Sustainability and Responsibility.’”

From http://stonerocket.net/

The allusion to Web 1.0 and Web 2.0 is no coincidence. The transformation of the Internet through the emergence of social media networks, user-generated content and open source approaches is a fitting metaphor for the changes business is experiencing as it begins to redefine its role in society. Let’s look at some of the similarities.

Web 1.0

  • A flat world just beginning to connect itself and finding a new medium to push out information and plug advertising.
  • Saw the rise to prominence of innovators like Netscape, but these were quickly out-muscled by giants like Microsoft with its Internet Explorer.
  • Focused largely on the standardised hardware and software of the PC as its delivery platform, rather than multi-level applications.

CSR 1.0

  • A vehicle for companies to establish relationships with communities, channel philanthropic contributions and manage their image.
  • Included many start-up pioneers like Traidcraft, but has ultimately turned into a product for large multinationals like Wal-Mart.
  • Travelled down the road of “one size fits all” standardization, through codes, standards and guidelines to shape its offering.

Web 2.0

  • Being defined by watchwords like “collective intelligence,” “collaborative networks” and “user participation.”
  • Tools include social media, knowledge syndication and beta testing.
  • Is as much a state of being as a technical advance – it is a new philosophy or way of seeing the world differently.

CSR 2.0

  • Being defined by “global commons,” “innovative partnerships” and “stakeholder involvement.”

    From netasbitsandpieces.blogspot.com

  • Mechanisms include diverse stakeholder panels, real-time transparent reporting and new-wave social entrepreneurship.
  • Is recognising a shift in power from centralised to decentralised; a change in scale from few and big to many and small; and a change in application from single and exclusive to multiple and shared.

So what will some of these shifts look like? In my view, the shifts will happen at two levels. At a macro-level, there will be a change in CSR’s ontological assumptions or ways of seeing the world. At a micro-level, there will be a change in CSR’s methodological practices or ways of being in the world.

Macro Shifts

The macro-level changes can be described as follows: Paternalistic relationships between companies and the community based on philanthropy will give way to more equal partnerships. Defensive, minimalist responses to social and environmental issues are replaced with proactive strategies and investment in growing responsibility markets, such as clean technology. Reputation-conscious public-relations approaches to CSR are no longer credible and so companies are judged on actual social, environmental and ethical performance (are things getting better on the ground in absolute, cumulative terms?).

Although CSR specialists still have a role to play, each dimension of CSR 2.0 performance is embedded and integrated into the core operations of companies. Standardized approaches remain useful as guides to consensus, but CSR finds diversified expression and implementation at very local levels. CSR solutions, including responsible products and services, go from niche ‘nice-to-haves’ to mass-market ‘must-haves.’ And the whole concept of CSR loses its Western conceptual and operational dominance, giving way to a more culturally diverse and internationally applied concept.

Micro Shifts

How might these shifting principles manifest as CSR practices? Supporting these meta-level changes, the anticipated micro-level changes can be described as follows: CSR will no longer manifest as luxury products and services (as with current green and fair-trade options), but as affordable solutions for those who most need quality of life improvements. Investment in self-sustaining social enterprises will be favored over cheque-book charity. CSR indexes, which rank the same large companies over and over (often revealing contradictions between indexes) will make way for CSR rating systems, which turn social, environmental, ethical and economic performance into corporate scores (A+, B-, etc., not dissimilar to credit ratings), which analysts and others can usefully employ to compare and integrate into their decision making.

Reliance on CSR departments will disappear or disperse, as performance across responsibility and sustainability dimensions are increasingly built into corporate performance appraisal and market incentive systems. Self-selecting ethical consumers will become irrelevant, as CSR 2.0 companies begin to choice-edit; i.e., cease offering implicitly ‘less ethical’ product ranges, thus allowing guilt-free shopping.

Post-use liability for products will become obsolete, as the service-lease and take-back economy goes mainstream. Annual CSR reporting will be replaced by online, real-time CSR performance data flows. Feeding into these live communications will be Web 2.0 connected social networks, instead of periodic meetings of rather cumbersome stakeholder panels. And typical CSR 1.0 management systems standards like ISO 14001 will be less credible than new performance standards, such as those emerging in climate change that set absolute limits and thresholds.

As our world becomes more connected and global challenges like climate change and poverty loom ever larger, businesses that still practice CSR 1.0 will (like their Web 1.0 counterparts) be rapidly left behind. Highly conscientised and networked stakeholders will expose them and gradually withdraw their social licence to operate. By contrast, companies that embrace the CSR 2.0 era will be those that collaboratively find innovative ways tackle our global challenges and be rewarded in the marketplace as a result.

Note: This article has appeared on CSRwire

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EDFbiz — Sustainable Shopping: On the right track with GoodGuide

Posted in CSR, Energy Efficiency, tagged , , , , , , on September 14, 2011 | 1 Comment »


By Lillias MacIntyre, Program Associate, Corporate Partnerships

OK – so you’re part of the ever increasing group of environmentally conscious global citizens trying to make a difference.  I’m sure you’ve found yourself browsing a retailer’s shelves or clicking through Amazon.com in search of a product more sustainable than the one sitting on your shelf at home…But you couldn’t remember if you should avoid PBDE, PFOA or NPEs!  Now, undeterred and armed with your smart phone, you launch the GoodGuide mobile app, and learn you should try and avoid all three chemicals.

GoodGuide helps consumers make better purchasing decisions by ranking product performance on a relative scale using an array of environmental, health and social impact metrics.  And with the recent launch of its “Transparency Toolbar” you can now browse products on Amazon.com and see how they stack up to the competition in areas of interest to you.  Naturally, the moment I learned about these tools I decided to give them a try.

The mobile app allows you to scan or manually input barcodes for product information and is a fun and convenient tool when it works.  With a database of about 120,000 products, you can opt to browse GoodGuide or simply use the scanner when shopping.  Conveniently, when browsing product categories, you’re given a list of “ingredients to watch for.”

The Toolbar is supported on Chrome and Firefox, currently works with Amazon, and will soon be supported by Walmart,SOAP, Target and Google Products.  While helpful when it finds a product from the database, this too has its inconsistencies.  For example, a search for “Avalon Organics Biotin B-Complex Thickening Shampoo” on GoodGuide.com, Amazon.com, and the mobile application produced an overall product rating of 6.2 on the first; a non product-specific 5.2 on the toolbar; and a 6.2 overall rating on the app.  Additionally, when clicking through for the “Full Rating” from the Toolbar, I was taken to a page with partial data and no overall rating.  It seems that in this case, the first Toolbar rating of 5.2 draws on overall company data (Avalon Natural Products).

Information on GoodGuide’s ratings and methodologies can be found on the website, but in general, data is acquired from many sources including scientific institutions, government agencies, NGOs, media outlets and corporations themselves.

That said, the next time you’re wandering the isles of your favorite retailer or searching for a great deal on Amazon.com, keep these tools in mind, because despite their kinks – you’re on a more enlightened path with GoodGuide.

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Staying green when there’s a lack of green (How to go green AND stay on a budget)

Posted in CSR, Recycling, tagged , , , , , , , on September 1, 2011 | 1 Comment »


by Megan Yarnall

Going green, or being green, has often been associated with expensive organic or eco-friendly products, lifestyle and habit changes, and limited luxury. But going green at home and in the workplace doesn’t have to break the bank.

Many tips that families use to stay green around the house and save money – such as turning off the lights when a room is empty – can be applied to the office as well.  This can lead to happier employees, reduced costs and of course a smaller carbon footprint.

Example of how we re-use objects in our office every day

First, a few things that can be done every day, with contribution from everyone in the office:

Tip #1 Limited printing. Most things don’t really need to be printed out in hard copy. And if they do need to be printed, you can re-use paper and print double-sided. When you’re done with it, stick in the recycling bin.

How we do this? Just the way it sounds! We print double-sided, or reuse paper when we can. We also only print when we need to, and do most things by email. Afterwards, we’re TerraCycle. So you better believe we recycle.

Example of how we re-use objects in our office every day

Tip #2 Turn electronics off. If a room is empty, turn the lights off. If a bathroom is empty, turn the lights off. If a computer is not being used, especially overnight or over the weekend, turn it off.

How we do this? Just the way it sounds! We turn our computers off at night, and turn the lights off when we don’t need them.  Power strips at each desk make it really easy to make sure monitors etc are not “leeching” overnight.

Tip #3 Reusable flatware. Most offices have small kitchens. Install an energy efficient dishwasher, and provide reusable flatware for employees. This will cut down on paper plates and plastic silverware being thrown away constantly.

How we do it? Here at TerraCycle, we also have an employee lunch program, in which lunch is served every day. This cuts down on takeout trash.

Tip #4 Mugs and reusable cups for guests. As opposed to offering a guest a bottle of water, offer a glass of water. Instead of offering coffee in a Styrofoam cup, have a clean mug handy.

How we do it? When we have someone in for an interview, or a business meeting, we use real glasses when we offer them water. The water comes from our cooler, which is hooked up to the city water, not shipped in.

Tip #5 Limit travel. Instead of traveling to a meeting, employ an application like Skype or GoToMeeting. Share screens, talk face-to-face, include as many people as you need – and don’t spend as much or leave so much of a carbon footprint.

How we do it? TerraCycle has offices in 15 different countries, with which there are meetings and calls a few times a week – via Skype.

Tip #6 Create a ride board to encourage employees to carpool, and help facilitate it to make it easy for them. Display who is coming and going, and locations and times.

How we do it? Some TerraCycle employees take the train down from New York, rather than driving separately, and when they arrive in the morning, one person picks all of them up. This cuts down on people driving from a far, and on people being picked up separately or taking separate cabs to the office.

Tip #7Make things from waste. Instead of buying new pen holders, make them out of recycled bottles or old mugs. Don’t buy new

Example of how we re-use objects in our office every day

furniture; buy used.

How we do it? TerraCycle’s office is made from waste from floor to ceiling – literally. The carpet is made of remnants, the desk are old doors and the walls are bottle, vinyl record etc.

There are other lengthier, more expensive projects (that will pay off in the long run!) that offices can investigate and institute in order to go green. While some of the upfront costs may be pricey, the money saved on energy bills in the end can make the investments just that – investments, rather than just costs.

Installing solar panels on the rooftop cuts down on electricity bills (eventually, you may have none!) as well as offering a source of clean energy for your office.

A green roof – which is essentially a yard and/or garden on top of your roof – helps insulate the building during the winter and keep temperatures down in the summer as it shields the building from the sun. (It also gives employees a neat place to take a break and eat lunch during the beautiful days!)

Many truly green moves that are more costly will pay off in the end anyway, but if you’re not ready to invest quite yet, the smaller green moves can make a difference in the meantime!

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Nissan (Finally) Gets the Pitch Right on the Leaf

Posted in Climate Change, CSR, Energy Efficiency, Green Marketing, tagged , , , , on June 27, 2011 | 1 Comment »


by Andrew Winston

As a car, the all-electric Nissan Leaf has received mostly great reviews. But as a positioning statement, Nissan has, in many marketers’ eyes, missed the boat. After some missteps, Nissan may now be on the right path. An ad I pulled from Fast Company recently hits all the right marks.

The debate — or more accurately criticism — began last year with a now infamous ad showing a polar bear lugging himself from the Arctic to some guy’s suburban driveway to hug him for buying a Leaf. The ad was gorgeous, no doubt, and the YouTube version has been viewed 1.3 million times, which isn’t bad. But some green marketing leaders, such as Jacquie Ottman, found it a bit heavy-handed and way too focused on the hyper-green benefits vs. driving experience.

But even before getting to ads, some have pointed out that the name itself is a problem. A “Leaf” doesn’t exactly speak to the same part of the male brain that car ads usally target — the caveman lobe that asks, “How will this car make me sexy and powerful?”.

As one ad agency exec with a specialty in green marketing told me, “What guy is going to the pub and saying, ‘Hey, I test drove a Leaf’?” As she pointed out, the print ads have focused on images like seals and kelp — it’s basically the worst of green marketing, “like it’s packaged in burlap.”

Instead, experts suggest that the Leaf should be positioned in a much more exciting way, as the first electric car for the masses and a true innovation. This, Nissan could trumpet, is a new era of mobility!

So skip to the latest print ad, in which Nissan does something new. A fascinating, colorful graphic shows different cars on a spectrum of fuel efficiency. The axis is not, however, miles per gallon, but “miles traveled for one dollar.” As the ad says in small print: “comparing miles per gallon is suddenly irrelevant.”

Nissan%20Leaf%20Ad%2C%20Green%20Marketing%20%28May%202011%29.jpg

The traditional mpg metric has always been really odd: who thinks that way? And the government has had a devil of a time plugging (forgive me) electric cars into their normal rating system. What the heck does miles per gallon mean if you use no gallons?

But showing how far I can go for each dollar I spend? Now that’s dead on. This is brilliant marketing, in tight economic times or at any time. Nissan has declared a new metric for a completely new model of transportation. Bravo.

(This post first appeared at Harvard Business Online.)

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It Takes a Country: Why Everyone Has a Part in Business “Going Green”

Posted in CSR, Regulation on June 15, 2011 | Leave a Comment »


by Megan Yarnall

In my last post, I mentioned how critical education is in influencing consumer behavior, and how the onus for change falls largely on the consumer. Educating consumers about the effect of toxins from products is crucial in consumers’ understanding of how something affects their overall health and the environment, and how the product can be used in a way that minimizes impact. However, education isn’t the only role a brand must play in promoting a green lifestyle.

While consumers have various options for what they do with the packaging after they’ve used the product, it’s only been recently that they have more green choices when it comes to what’s inside that product they purchase. The only party that can be held responsible for what’s inside the packaging is the manufacturer itself.

While I feel strongly that consumers must demand change in order to achieve change, in the end, it’s the responsibility of brands to be accountable for what goes inside the packaging. Consumers can help affect the choices that brands make by voting with their dollars, but if consumers only have green options to choose from they will go green. They’ll have no other choice.

Let’s take CFCs, for example. CFC stands for chlorofluorocarbon, which was a popular chemical compound used for dry cleaning, aerosol cans, and refrigeration/air conditioning, until it was realized that CFCs have an incredibly negative effect on the ozone, eating away at it quite quickly. When this was discovered, regulations on CFC use were put into place and countries around the world began making efforts and timelines to cut down on (and eventually try to cut out) CFC use.

Governments enacted standards and regulations, and brands made efforts to move away from CFC use in their products and maintain tighter control. Brands had to change their habits in order to adhere to regulations. Consumers had no choice but to buy products with limited CFCs – and other ways to fulfill the same needs were found.  A more recent, example is the use of low VOC (volatile organic compounds) paints. But with limited government regulation, as was the case with CFC, the move to low VOC has been much more tempered.

While most negative environmental factors don’t have such a timely impact on the atmosphere or the Earth, they have an impact nonetheless. Government, brands, and consumers all need to play their part in cutting back on use of products that have a negative impact, whether it be environmental or health. Consumers must realize that what lies inside a package can affect environmental health and personal health. Brands must take responsibility for the scale of those effects and take control over what they expose both consumers and the environment to. When consumers don’t have the choice to expose toxins to the environment, they won’t do it – simply because they can’t.

And finally, in order to get all brands on board, corporate responsibility regulations and standards must be enacted so that these brands are held responsible by someone other than themselves – this will make them take action. Consumers can influence this as well by choosing wisely from the options on the shelf. Brands will have to take into account both the consumer and the government, and with everybody on board to make a change, the positive green differences will begin to surface. The CFC and VOC example shows clearly that it takes all three of these stakeholders in order to enact any massive social change. So instead of finger pointing and hand wringing it is time for a little more teamwork and shared responsibility between consumers, corporations and governments.

The only question left should be – to what degree can we start holding brands responsible for what they’re providing to the environment? How about consumers? Or Governments? For TerraCycle, the answer is easy. Because we’re an environmental company, we hold ourselves to the highest standard. Otherwise, our mission would be pointless and null. For other environmental companies, the same truth holds. How can other businesses and companies be brought on board?

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Spreading sustainability: From the Fortune 500 to the next 5,000

Posted in CSR, tagged , , , , , , , , , , , , , on April 27, 2011 | Leave a Comment »


Today on Sequoia Lab Blog, Gwen Ruta discusses how we can spread the principles of sustainability beyond the Fortune 500.

Recently in Harvard Business Review, Michael Porter and Mark Kramer wrote about “The Big Idea” – that companies must take the lead by “creating economic value in a way that also creates value for society by addressing its needs and challenges.”   Driven by win-win success stories, by a vacuum in policy leadership, and by the embrace of thought leaders like Porter, this idea has surged into the mainstream.  Even in the grip of the recession, companies across the Fortune 500 – from Walmart (#1) and GE (#6) to Owens Corning (#431) and SunGard (#472) – are actively pursuing a sustainability agenda.

But for the companies that make up mainstream corporate America, environmental issues may still largely be seen as a cost center rather than a competitive edge.  What will it take to show these companies that environmental innovation can be an opportunity rather than a burden?  How can we spread the principles of sustainability from the Fortune 500 to the next 5,000?
  • Start with energy efficiency
Every company uses energy, and can do so more efficiently.  The consulting gurus at McKinsey & Company calculate that by deploying an array of NPV-positive efficiency measures, commercial and industrial users could generate $732 billion in energy savings by 2020 while avoiding some 660 million tons of annual greenhouse gas emissions.  In other words, we can make a lot of money and cut a lot of emissions simultaneously by using proven technologies.
But, it’s not quite as easy as it sounds.  Companies fail to reap the benefits of energy efficiency for reasons that have nothing to do with what we learned in Econ 101.  In the real world, managers are overburdened, useful information is hard to find, lease arrangements stand in the way of smart investments, and competition for corporate dollars is sharp.
Sometimes it takes “fresh eyes” to overcome the barriers to change.  Our EDF Climate Corps program uses business students to find energy savings opportunities at participating companies.  In just 10 weeks at 50 companies last summer, we found $350 million in potential operating savings.  And that’s just the tip of the iceberg.
  • Stimulate innovation
Environmental goals, combined with open networking, can be a great way to stimulate innovation that can lead to new products and greater market share.  The impetus can come from the top, because when executives set rigorous goals and metrics for measuring them, they unleash innovation throughout the company.  GE’s Ecomagination program, which generated $18 billion in revenue on $1.5 billion in investments, is a good example of this approach.
Innovation can also come from the bottom up, as illustrated by Toyota’s “Treasure Hunt” process, which uses operators, engineers and maintenance staff to find process innovations and energy savings.
And innovation can come from the outside.  Breakthrough ideas can – and often do – emerge from bringing a new and diverse perspective to a familiar problem.  Environmental Defense Fund recently teamed up with InnoCentive, a global leader in crowdsourced innovation, to work with companies to create business breakthroughs that deliver environmental results.  InnoCentive’s web-based platform gives over 250,000 entrepreneurs, inventors and scientists around the world the chance to solve them.  With the likes of Eli Lilly, NASA, and Procter & Gamble using the platform, it’s redefining the innovation process. 
  • Capture operational excellence
For most companies, including those that provide business capital, environmental issues are still thought of as a liability rather than an opportunity.  To build value, firms must think beyond compliance.  Smart companies are positioning themselves to compete in a resource-constrained world, where efficiency and innovation trump risk management.
Working with private equity giants The Carlyle Group and Kohlberg, Kravis, Roberts & Co., EDF has developed tools that are available to any company for systematically identifying opportunity and measuring improvements in environmental and business performance.  In just two years, those tools generated $160 million in operating savings for companies including Dollar General and US Foodservice.
  • Drive supply chain improvement
Companies will want to focus first on their own operations, but for many small and medium-sized businesses, their biggest impacts lie not within their own fencelines, but in the lifecycle of the products they buy and sell.  And while smaller companies may not feel that they have the clout to create supply chain mandates, they do have ability to ask pointed questions and shop around for the best prices.  Why should your company be paying for the extra energy or water or wasted raw materials embedded in products made by another company that has not yet embraced sustainability?
There are several good examples to work from. Walmart’s Supplier Sustainability Assessment questions are simple, straight-forward and a good place to start.  Procter & Gamble has a similar supplier scorecard designed to track and encourage improvement on key environmental sustainability measures in P&G’s supply chain.  The company reports that about 40% of the completed scorecards it receives have offered at least one innovation idea.
Today, we are all feeling the stress of a pinched economy, resource constraints, volatile fuel prices and global competition.  At the same time, we’re seeing examples every day of companies that have successfully turned environmental sustainability into competitive advantage.  By building capturing energy and operational efficiencies, stimulating innovation through aggressive goals and creative networking, and driving lifecycle change through the supply chain, we can bring Porter’s big idea to life.
 

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B Corporations: A Better Way to do Business

Posted in CSR, tagged , , , on April 25, 2011 | Leave a Comment »


by Andrew Kassoy

Green business and CSR (#SmartCSR) are fast becoming buzzwords in the business world. Greater awareness of the importance of socially and environmentally responsible businesses is undeniable progress. However, it is becoming increasingly difficult to differentiate between good businesses and just good marketing. This is where certifications that look at the entire company, not just a product, come in.

Certified B Corporations are a new type of corporation which uses the power of business to solve social and environmental problems. B Corps meet rigorous, independent social and environmental performance standards and are certified by B Lab, a nonprofit organization. To be certified, B Corporations take and pass the B Impact Ratings System, which examines a company’s cumulative impact on all its stakeholders. The B Impact Rating System has been taken by over 5,000 companies and is customized, depending on type and size of company.  B Corporations must score at least an 80 and make their results transparent (each B Corporation’s B Impact Report is available online). B Corporations also adopt the B Corporation Legal Framework to integrate the mission of the company into its legal DNA, setting higher standards of accountability.

These standards of performance, accountability and transparency set B Corps apart. Data shows B Corps are effectively creating a greater, positive impact. B Corporations perform 25% better than Other Sustainable Businesses on the B Impact Rating System. When scores are broken down by impact area, B Corporations maintain their lead, scoring 7% higher on employee impact, 19% higher on consumer impact, 5% higher on environmental impact and 10% higher in accountability. Little data is available on how ordinary businesses stack up. However, research suggests that few even measure impact, let alone use a common yardstick.

Consumers are demanding a new way of doing business. Research conducted by branding firm BBMG found 73% of conscious consumers consider both product and company claims when making a purchase. However, almost no one (<1%) trusts company advertisements and statements on packaging. Consumers are much more likely to trust third parties or themselves. People are hungry for independently certified companies having a positive impact. B Corporations fill this need.

To ensure positive momentum forward, we must identify and support those walking the walk. With higher standards of performance, accountability and transparency, B Corporation Certification does just that. The market has never been so ready for triple bottom line businesses. The time for action is now.

To learn more about B Corporations or take the free B Impact Assessment, visit bcorporation.net

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