The New Metrics of Sustainable Business Conference convened some of sustainability’s top minds to examine leading-edge work that is expanding the way business creates, quantifies and manages the value it delivers through the metrics it adopts. This is the second of two posts summing up some of this year’s highlights (see the first one here). Overall, day two was characterized by fast-paced, truly cutting-edge content that took even the most advanced corporate sustainability leaders ‘back to school,’ elevating the New Metrics conversation to new theoretical and practical heights at the same time. We share a few highlights below and encourage you to access a comprehensive set of slides, audio and video from all sessions in our Learning Library starting October 1st, 2013.
Impact a Billion, Employ a Million, Make a Trillion
Paul Herman of HIP Investor, our MC for the plenary program of Day Two, kicked the morning off with a more-than-healthy dose of enthusiasm and a notable challenge to business leaders in attendance: What would it take for any business to positively impact a billion people, while creating a million jobs and building up a sustainable trillion-dollar market in the process? Could that be the most direct and effective way of solving global social and environmental problems? Certain iconic organizations — the Catholic Church, the Red Cross and Coca-Cola among them — have already proven that kind of scale is attainable. With the right metrics and tools, Herman pointed out, business can drive social impact, employment and profitability to that scale while staying aligned with sustainability imperatives.
The Real Goal Line, Dealing with Thousands of KPIs and Rating the Raters
The deepest next-frontier sustainability lessons of the day came from long-standing sustainability gurus Allen White, Founder of the Global Initiative for Sustainability Ratings (GISR), and Bob Willard, Author of The New Sustainability Advantage, both of whom outlined compelling arguments in support of the claim that, despite a lot of action and some promising progress, corporate sustainability is nowhere near where it needs to be if we as a species are to avoid crossing actual critical natural thresholds. Led by a brilliant 1780 Benjamin Franklin quote — “The great part of the miseries of mankind are brought upon them by false estimates they have made of the value of things.“ — White spoke of the mind-boggling multitude of sustainability indicators floating about these days, and then went on to explain GISR is helping ‘rate the raters’ and bring focus and clarity through a set of fundamental principles that the various rating/ranking bodies and companies alike can follow.
Bob Willard then took over to ask, “How would we recognize a truly sustainable business if we saw one?” He then described breakthrough elements of a project developing a 'gold standard' ESG performance benchmark rooted in real natural thresholds, beyond the three dominant, yet insufficient, current types of goal setting: baseline year, arbitrary company goal and comparison to other companies’ arbitrary goals. Willard’s main point: If a business were to operate forever, it would not only do no harm; it would do well by doing some net good.
Microsoft, Disney and BT Prove New Heights in Reducing Carbon
The most readily applicable and pragmatically attainable, yet impressively visionary updates of the day were all related to innovative programs aimed at reducing company-wide carbon footprints at Microsoft, Disney and BT. Rob Bernard, Head of Sustainability at Microsoft, commented on a successful completion of the first year of his company’s internal carbon fee program, intended to help internalize the external impacts of the company's operations. Conducted under the motto “Be lean, be green, be accountable,” the program assigns a dollar price on carbon and then incentivizes all business units to make more environmentally responsible choices by charging them for emissions from data centers, offices, labs and air travel. Bernard shared his enthusiasm at the state of the initiative a year after it launched — the concept has been proven, the results are all going in the right direction and the company will continue to strengthen the infrastructure needed to analyze the huge volumes of data associated with the project.
A similar scenario is unfolding at Disney, where Bruce Rauhe and the rest of the Walt Disney Imagineering team are working to make up for emissions associated with large-scale operations featuring four theme parks, four cruise ships and more than 300 buses. Not only is Disney investing in technological upgrades to “burn less, burn different, scrub exhaust” but the company is also committed — much like Microsoft — to pooling money collected from charging for carbon company-wide into a Climate Solutions Fund, which then invests in offsets.
Kevin Moss, Head of Net Good Program, BT, described the novelty involved in BT’s Net Good program. The main idea of that effort is to leverage LCA analysis, both on a product and company level, to enable BT customers to reduce carbon emissions by multiple times the end-to-end carbon impact of the company's entire business. The magic happens through strategic data analyses and subsequent investments in product upgrades that result in significantly lower associated emissions in the use phase. A fascinating proposition and one of the first of its kind!
New Horizons in Leveraging Big Data
Ory Zik, Founder & CEO of Energy Points, addressed what he believes is the next frontier in holistic understanding and management of environmental impact data. Back by popular demand after his New Metrics ’12 presentation, Zik revealed his insights on what steps can be taken toward creating a richer, more accurate and unified picture of environmental performance than is currently the norm. With a classic air of the rigor and sophistication he is known for, he dissected the frustration that often results from attempts to compare and contrast multiple environmental impacts (GHGs, energy use, water use, etc.), in effect arguing that more data on them does not necessarily lead to better intelligence due to an ‘apples-and-oranges’ issue in aggregating them in reporting and analysis. What is missing for a truly unified picture, he argued, is a commonly-accepted single measurement unit – such as his breakthrough Energy Points (EP) – that can put all key types of environmental impacts together for purposes of effective interpretation and disclosure.
Hicham Oudghiri, Co-Founder of exciting start-up Enigma, spoke on reigning in and analyzing silo-ed public data for the benefit of corporate sustainability. Enigma recently won the 2013 TechCrunch Disrupt NY competition, bringing a technology play that enables users to reign in silo-ed public data – from a number of government agencies and a huge range of other sources – and engage it in analyses not easily performed before. Some observers are already referring to Enigma as ‘the Google for public data.’
Analyze, Prioritize, Humanize
Bill Shireman, President & CEO of Future 500, a seasoned veteran in working with brands to resolve or avoid conflict NGOs and other stakeholders, took the stage to highlight the value of smart stakeholder engagement that is both analytical and purpose-driven. When you consider that the cost of a meager 1% decline in brand value — which can easily be in the range of $200 million to over a billion for companies of the caliber of Target, Nike or Walmart — you quickly realize the importance of investing in protecting the soul of your brand, Shireman observed. He went on to outline how five high-risk issues (healthy food, climate, IT transparency, material toxicity, deforestation) intersect with five high-opportunity groups of people that have a particularly strong voice these days (women, millennials, minorities, green creatives, politically uncommitteds). For example, research shows that women represent 73% of buying power and tend to care a lot about healthy food and presence of toxic materials in consumer products. Ranking both issues and influential stakeholders, and focusing clearly and authentically on the few intersections that matter the most to your company is a great way to protect or restore the soul of any brand.
Find a comprehensive set of slides, audio and video from all sessions in our Learning Library starting October 1st, 2013.