Why Companies Should Merge Voluntary and Required Sustainability Projects

Why Companies Should Merge Voluntary and Required Sustainability Projects

To merge or not to merge? That is the question facing many companies with both a mandatory reporting requirement for environmental regulations and voluntary activities focused on improving the overall sustainability of the business. Two experts made the case for merging the two efforts to an audience at a Greenbiz.com webinar this week.

Nigel Nugent, vice president for worldwide sales at Enviance made the case for melding them by explaining their similarities in a recent webcast hosted by GreenBiz.com.

Regulations are generally highly prescriptive with four to five specific components, include a statement of obligations or standards to be met, describe human actions that must be taken and then require a final report.

A volunteer sustainability project starts with a definition of the project that includes a good description of its goals, a set of actions that will help achieve those goals, a method of analyzing the results and some forum for reporting them.

"There are significant similarities," he said. "So we would achieve more in environmental reporting if it is done closely with those managing corporate compliance."

The biggest difference between the two comes when making the case to management for investment in the projects. Explaining the ROI for a voluntary sustainability project is not as simple as it is for compliance programs. "If we talk about the regulatory side … the ROI is that you will not be fined," Nugent said. "If you combine them, then you can argue that the ROI of a sustainability program is enhanced through the collaboration with the regulatory team."

Not combining the two types of work can lead to some negative impacts, according to Andrea Garner, senior technologist in sustainability at CH2M Hill. It may seem natural to separate the two because a voluntary program is aspirational by nature while a compliance program looks at the here and now. However, separating them can lead to duplicate data collection and can cause internal confusion across the organization.

Next page: How the merge could affect integrated reporting practices

Voluntary programs, because of their visionary nature, can yield some important benefits for members of a compliance team. Often voluntary standards end up becoming mandatory, Garner pointed out. Reporting them through the same group can keep an organization ahead of the game.

"The more aligned with core business functions a voluntary program is, the more successful it's going to be," Garner said.

An audience question relayed by Joel Makower, the panel's moderator and executive editor of GreenBiz.com, addressed the potential relationship to integrated reporting of environmental risks and financials, a growing trend in corporate financial and sustainability reporting.

Compiling accurate environmental impact data and reporting them correctly is going to be key in the future, according to Nugent.

"Just like no organization would entertain the idea of submitting its SEC reports on a spreadsheet, soon no organization will use anything other than a robust, well-integrated reporting solution to collect and provide environmental data that will be analyzed by people whose job is to tell you if you are doing a good job or not," he said.

Makower asked if the trend of increased environmental regulations means that an end is in sight for voluntary sustainability efforts in companies. Both panelists eschewed that idea.

"It's important to have those teams," Nugent said. "It balances the negativity [associated with regulations] and it reinforces what everybody should understand: the impact of their organization on the environment."

"There's often … an idea that there's an end point for sustainability, that once we get there we're all going to be fine," Garner said. "But there's never an end point. There is always a need to adapt our systems, to continue to change goals. A voluntary program will help you continue to adapt and be competitive."

An archive of the free webcast will be available for one year; you can register and watch the program here.

Photo CC-licensed by Nic McPhee.