Diversey's Portfolio Approach Toward Sustainability ROI

Diversey's sustainability program has delivered an impressive ROI by providing a new perspective on old issues.

Over the years there has been a steady, trickling stream of criticism regarding the business case for sustainability, whether it's Milton Friedman writing in the New York Times in 1970 or Professor Aneel Karnani's recent Wall Street Journal editorial. What often gets lost in these critiques is the perspective of corporations who view sustainability as an innovation lens where they can leverage their capabilities to foster growth and increase shareholder value.

There are an increasing number of companies who view their sustainability programs as a competitive advantage and many of those participate in the GreenBiz Executive Network. The Network is a member-based, peer-to-peer learning forum for corporate sustainability professionals, established to bring together like-minded executives to discuss strategies for implementing sustainability initiatives at their companies.

During a recent Network meeting, Dr. Daniel Daggett, Corporate Sustainability Manager for Diversey, Inc., presented a unique portfolio management approach used by the company to drive its sustainability programs, a strategy specifically focused on achieving significant greenhouse gas reductions coupled with an attractive return on investment (ROI).

Making a Commitment to Sustainability

Diversey is a world leader in cleaning and hygiene solutions for business. With a number-one or number-two market position in more than 175 countries, it provides a wide range of cleaning products and dispensing technologies, equipment, tools, training, and consulting services to their business-to-business customers.

In 2008, the company committed to Climate Savers, the rigorous greenhouse gas reduction program managed by the World Wildlife Fund (WWF). More than 30 corporations have partnered with WWF to establish ambitious targets to voluntarily reduce their greenhouse gas emissions. According to the WWF web site, Climate Savers partners will reduce CO2 emissions by over 50 million tons by the end of 2010.

To be accepted into the program, Diversey had to make four commitments in addressing climate change:

To make a challenging, measurable reduction in its emissions within a specified time frame;
To be accountable through a third-party validation process;
To partner with their customers and suppliers to help them reduce greenhouse gas emissions; and,
To share learnings and encourage others in the industry to achieve similar emission reductions.

But the commitment to the Climate Savers goals is only one aspect of the overall sustainability approach of the company. Diversey focuses on measuring the returns on its sustainability investments with a focus on an Integrated Bottom Line. The integrated bottom line is a concept derived from triple-bottom-line accounting that suggests environmental, societal, and economic factors should be considered together in measuring the impact of business operations. Diversey was introduced to the concept through their work with Natural Capitalism Solutions, where the integrated bottom line is being used to combine social and environmental measures into a financial balance sheet and income statement instead of being treated separately. In that way, the environment and society are seen as critical elements of a financial bottom line. Figure 1 presents an illustration of how an integrated bottom line can be calculated.


 

Not all sustainability-related efforts have an easily identifiable financial return. But programs such as Diversey's Global Children's Initiative (which seeks to improve the lives of one million children) and programs that encourage employee volunteerism have real value. As Daggett notes, "A corporate commitment to sustainability motivates employees, drives innovation, and creates a sense of purpose within the company."