A New Sustainability Standard for Business

Two Steps Forward

A New Sustainability Standard for Business

Today, the veil of secrecy is being lifted on a project in which my colleagues and I have been engaged for several years: The creation of a global sustainability standard for business.

The standard is being developed in partnership with UL Environment, a business unit of the venerable Underwriters Laboratories, the 115-year-old standards and certification organization best known for its ubiquitous "UL" logo associated with safety assurance on millions of products. UL Environment was established 18 months ago to do for the environment what UL has done for safety: create credible standards where they are needed. The initial focus of UL Environment has been on product standards.

For the past year or so, my team at GreenBiz.com has been engaged with UL Environment to develop and commercialize a company-level standard for sustainability — that is, environmental, social, and corporate governance issues — to be used as a procurement tool for companies, government agencies, and others.

Today, at the Global Reporting Initiative annual conference in Amsterdam, Marcello Manca, vice president and general manager at UL Environment, participated on a panel during which he talked about this project publicly for the first time. The final standard won't be launched until later this year.

A little history is in order. The idea for a business-level sustainability standard dates back to 2003, when a group of individuals representing nonprofits, government agencies and companies in the San Francisco Bay Area came together to create a business council to share best practices in engaging with companies on sustainability issues. One project that emerged was the need for a standard -- what did it mean to be a "sustainable business?" We weren't the first or only ones asking that question, of course, but we began an effort to figure it out.

We received seed funding from StopWaste.Org, an Alameda County, Calif., public agency, to begin developing a standard. A core group of five of us (including two sustainability veterans: Gil Friend, president of Natural Logic, and David Johnston, president of What's Working, along with Rory Bakke and Justin Lehrer of StopWaste.Org) labored for several years, ultimately building a framework and a partial standard before lack of funding forced us to set the project aside. (I wrote about that earlier attempt to write a standard in a 2005 blog post.)

In 2008, Greener World Media, the company I co-founded that produces GreenBiz.com, among many other things, decided to develop a new standard. Along the way, we met Manca and his colleagues at UL at our 2008 Greener By Design conference, and learned they were planning an environmental spin-off, UL Environment. The pieces fell into place. Bakke, who headed business programs at StopWaste.Org and served as our team leader from 2003 through 2007, joined Greener World Media as director of sustainability and heads the standard-development process. Inspired by the seminal work done by the original team, we developed a new standard.

The 2003 vision remains largely intact, including our original notion of looking beyond mere "green" to the broader arena of sustainability. The new standard covers environment, workforce, social and community engagement, customers and suppliers, and "governance for sustainability."

We've long described this in shorthand as "LEED for Companies" -- that is, a point-based rating system along with good-better-best levels of certification. We have been inspired by the success of the U.S. Green Building Council's LEED green building rating systems, which created definitions of "green building" where there were none. Those ratings systems were critical catalysts in spurring the green building market. Similarly, we believe this new standard and rating system will help define sustainability at the enterprise level, growing markets for certified companies.

Of course, the LEED analogy only goes so far. LEED isn't perfect, and companies aren't buildings -- they vary infinitely in terms of size, sector, geography, activities, culture, inputs, outputs and the people who engage with them every day. What companies do can have far-reaching ripples both upstream and downstream. So, designing a standard for companies has been a complex challenge, to say the least.

The first draft of the standard has now been completed and is beginning a robust process of stakeholder feedback. The plan is to have a final version ready for the marketplace later this year.

As I said, this will be a procurement and supply-chain standard -- a tool for companies and others to use in assessing companies with which they do business. Companies, government agencies, universities and other entities will each decide how to use it -- as a requirement for suppliers, for example, or as a way to compare companies vying for their business, or perhaps as a tie-breaker in requests for proposals. It is being designed as a global standard, though it will initially be introduced in North America.

We intend this standard to be a learning tool as much as a certification process -- a means for companies to benchmark themselves on sustainability measures and to identify what specific measures they can take that would be most impactful for their operations and stakeholders. We plan to develop tools companies can use to assess how they would fare under this standard, regardless of whether or not they seek certification.

You may be asking, “How is this different from the dozens of other standards out there?” The short answer is that this one is different. First, as I said, this is a company-level standard, of which there are relatively few. It is the first global standard on sustainability that is comprehensive in scope, global in application, and verifiable by trained, accredited third parties. It includes management quality and reporting, but emphasizes performance and is intended for mainstream companies -- the kind typically found in company supply chains -- not just for smaller, values-led companies already committed to being leaders. Finally, it integrates with dozens of other standards from around the world -- a rich alphabet soup that includes ASHRAE, BOMA, CDP, GRI, ISO, IUCN, SPC, UNESCO and many others.

There will be much more to say later in the year, as we formally launch the system and announce our key partners, initial pilot companies, and more. For now, we wanted to lift the veil in order to engage more effectively and collaboratively in the hard work that lies ahead.

Joel Makower is executive editor of GreenBiz.com.