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Do sustainable buildings really cost more?

Published August 15, 2014
Do sustainable buildings really cost more?

How much extra does it cost to fit out your office with all the latest green technologies?

Environmentally friendly insulation, low-flush toilets and even onsite renewable energy generation may seem like they have a high financial cost, but a new report from U.K. green building certification body BREEAM aims to show that in fact the opposite is true.

The "Delivering Sustainable Buildings: Savings and Payback" report, co-authored by Sweett Group, aims to challenge the perception that delivering strong sustainability credentials represents an additional cost for a building. Using research-based on real-world costs and savings experienced at an office, secondary school and community healthcare center built to BREEAM standards, it finds that the costs of meeting some standards has increased over the years, but achieving the basic pass rating incurs no extra costs. Meanwhile, achieving the "good" BREEAM standard can lead to a minimal additional cost of just 0.15 percent.

In contrast, achieving a higher sustainability rating, such as "very good" or "excellent," will incur a higher up-front cost, but the cost increase compared to a non-compliant building is still typically less than 2 percent, which can often be paid back through energy bills savings within two to five years, the report found.

Certain technologies also can go on to generate further savings or new revenue streams after they have paid back their initial costs — savings further buoyed by a range of government incentives such as feed-in tariffs for solar panels or enhanced capital allowances for water and energy efficiency products.

The report said the findings highlighted the need for developers to think not just about upfront costs but also the full operational and lifecycle costs of buildings when deciding whether to incorporate green features.

"Opting for a lower capital cost can, in effect, pass the extra cost of a less sustainable solution, along with potentially higher environmental impacts, onto the building occupier and owners," it stated.

However, it also argues that sustainable measures should be factored into the project from an early stage in order to deliver the highest possible savings.

The study highlights the costs of a number of "quick wins" that facilities managers and contractors can use to boost the sustainability levels of their buildings:

With the costs of many of these technologies continuing to fall and the benefits they offer increasingly self-evident, the case for investing in greener buildings never has been clearer.

Top image of BREEAM "Excellent" building Calthorpe House by Elliott Brown via Flickr. This article first appeared at BusinessGreen Plus.

Airbus pollution control entrusted to bees

Published August 15, 2014
Airbus pollution control entrusted to bees

Bees are important to everyone because they pollinate much of our food, but Airbus is relying on them to provide a unique service — to help reduce its environmental footprint.

In this ingenious project, bees inform Airbus on how much pollution it causes at Finkenwerder Airport in Hamburg, Germany.

Airbus maintains two beehives at the airport: near the aircraft paint shop and close to the runway. The tens of thousands of bees in these hives produce more than 160 kilograms of honey a year. About 600 jars of honey are tested for the presence of pollutants and the rest are given as gifts to customers, suppliers and staff. 

To produce the honey, the bees harvest pollen and nectar from hundreds of thousands of plants across about 4.5 square miles — providing key data on the quality of the soil, air and water, and whether there are metal or chemical deposits on flowers.

After analyzing the honey for the past five years at an independent lab, the results show that pollution levels from Airbus facilities are even lower than in the center of Hamburg.  

"We have tested three different parameters this year: wax, pollen and honey, from two different beehive locations," said Eberhard Schädlich, fulltime beekeeper for Airbus. "We are very proud to say that every single result shows pollution levels are well under approved limits."

Airbus is one of the more active aviation companies when it comes to developing airplanes that fly on biofuels or fuel cells.

It's also leading on efficiency. It developed TaxiBot (with partners) to tug airplanes around airports without using engines. Its airplanes — which use 15 percent less energy — are being snapped up by the industry at the fastest rate in the history of aviation.

The company says airlines could derive 30 percent of their fuel from plant-based sources — including farm waste — by 2030. Higher fuel costs would push this along faster. 

The Future MBA, week 6: From competition to collaboration

Published August 15, 2014
The Future MBA, week 6: From competition to collaboration

For 100 days I am posting 100 ways that we could rethink and reimagine the MBA, to transform it into a tool for creating the sustainable leaders that our organizations and the planet need.

I’ll explore all aspects of the MBA, ranging from curriculum and research to partnerships and campus activities. Some ideas could be put into practice tomorrow while others would require a complete rethinking of the way we view the MBA.

This brainstorming of ideas is meant to encourage discussion, so please share your thoughts and comments and elaborate on the ideas you find the most interesting.

Day 36: From competition to collaboration

Today’s business and world challenges are too complex for one organization to tackle alone. Because of this businesses that use to be just competitors are now also partners, collaborating on projects that will enable both parties to move forward with their respective sustainability strategies.

This new course would focus on how to collaborate, how to work with other businesses on a range of different initiatives whether they be research projects, working with competitors, working with businesses from a range of different industries, or working on voluntary initiatives.

Day 37: No classes

Could you train the next generation of business leaders without them ever having to attend a class? What if the MBA had no classes, no book, and no curriculum?

Instead students accepted into this MBA would learn by working in teams to solve a series of local, national, regional and international challenges. These challenges, which would be set by a range of organizations, businesses, NGOs and governments, would be ones that they were currently dealing with around a range of sustainability topics. One challenge could be to develop an alternative to GDP, another could be around creating a new business model or a new product, while another could be how to change an unsustainable behaviour in the community. All of these challenges would be ones that these organizations are currently grappling with, and where solutions would help make an impact.

Students accepted into the program would have access to a building with different work spaces and tools to enable them to work on these challenges, as well as to create and test out prototype solutions. There would be access to a range of interdisciplinary resources and experts based on the assigned task. There would be no tuition, rather it would be funded via the businesses and organizations that sponsor projects as well as alumni.

Day 38: Meditation

In an environment where individuals are constantly bombarded with information how can future leaders be trained to focus and be more effective?

Meditation and business school are not two words that are usually heard together. That being said a growing number of studies show that meditation can change the structure of the brain leading to a boost in intelligence, that it helps people stay on tasks longer with few distractions, improves data retention, reduces stress, increases working memory and fosters creativity.

The Future MBA will integrate a range of meditation experiences and opportunities within the program, to assist students in using this or other related techniques to focus and become more effective.

Day 39: Facilitators in the classroom

Faculty are experts in their respective fields, but that doesn’t necessarily make them effective teachers. What is taught in the classroom is important, but how it is taught is crucial.

In the future certain MBA classes will be led by facilitators rather than faculty. These individuals will be responsible for bringing out and sharing learning’s around a specific topic between faculty and the diverse student body who all have their own lessons to share based on their experiences.

Day 40: No energy needed

University campuses are complex environments that require a large amount of energy for lighting, computers, technology, air conditioning and heating. The Future MBA will be energy self-sufficient. It will not only generate enough energy for its uses on campus but will also be able to support other businesses located nearby.

Schools will continue to become more energy efficient by minimizing energy use and through using leading edge technologies. In order to support their energy needs at this point they will tap into a range of renewable energy options depending on their location including but not limited to wind, solar or geothermal. Flooring across campus will collect kinetic energy of students and staff walking, running, dancing and walking up the stairs across campus to be used. Gym equipment such as bike use will help to generate power to run the gym or revolving doors in front of the cafeteria will collect energy for the cafeteria.

Students and staff will be actively engaged in exploring possible options and putting them into practice.

Day 41: Genius bar

Business schools around the world are home to some of great minds, individuals who have spent their life studying a particular topic. They have an incredible amount of knowledge but very few people get the opportunity to learn from these individuals unless you attend one of their classes, or read their book. How could we create a Business School where professors are available to share their expertise to a wider community?

The Future MBA could have a range of “Genius Bar”( inspired by Apple Flagship stores). Professors and subject matter experts, or “Geniuses”, will be available for short periods of time (maybe 20 minutes) to meet with any student, staff, or other individual from the wider community so they can ask questions, discuss their topic, or ask for advice. These short meetings would take place through the MBA Flagship Store (Day 46), or Pop up Shops (Day 3), online platforms or on campus meetings.

For the local community this means the opportunity to interact and learn from specialists they usually don’t have access to and for the professors engaged in the program it will mean opportunities to explore the broader implications and reach of their work and research.

Top illustration by SONCHAI JONGPOR via Shutterstock.


Kara Hurst named Amazon's first sustainability executive

Published August 15, 2014
Kara Hurst named Amazon's first sustainability executive

Retailing giant Amazon has hired Kara Hartnett Hurst, CEO of The Sustainability Consortium, to be its first sustainability executive.

The company, in typical closed-mouth fashion, has not announced Hurst’s hiring and declined to comment on it. Hurst, too, was mum, even declining to reveal her title, where she’ll be reporting, or what her mandate will be at the retailer.

A recent memo sent to members of The Sustainability Consortium — a research group whose members include businesses with combined revenues exceeding $2.4 trillion — said only that she'd "accepted an executive position at Amazon to head up sustainability for the company," stepping out of her role at TSC at the end of August.

Whatever her charge at Amazon, she will have her work cut out for her. Amazon has been largely AWOL from the sustainability scene — a “no show,” as my friend Marc Gunther put it in 2012. While Amazon touts some energy-efficiency, green building and packaging innovations, it has not publicly reported its impacts, performance or commitments, if any. The company shuns industry collaborations such as Green Grid, a membership group of IT companies working to improve energy and resource efficiency of data centers. It doesn’t publish a sustainability report or report greenhouse gas emissions to CDP. Amazon has consistently ranked near the bottom of most relevant activist lists, from Climate Counts to Greenpeace’s Green IT rankings.

Hurst will arrive at Amazon in October with nearly two decades' experience working in tech and sustainability. Prior to arriving at TSC in 2012, she served for 11 years as an executive at BSR, and before that in Silicon Valley, where she ran OpenVoice, one of the Valley's earliest social ventures. She also worked for former San Francisco mayor Willie Brown and former New York Sen. Daniel Patrick Moynihan.

Whether Hurst can turn Amazon around will be a true test of her skills, but there’s precedent in another iconic tech company: Apple. Barely two years ago, it was similarly (though not equally) villainized by activist groups for its recalcitrance to play by activists’ rules. It took the hiring of a strong and high-profile sustainability executive, former EPA head Lisa Jackson, to turn the company around. In relatively short order, Apple moved to the front of the class, winning praise from activists, including Greenpeace.

It’s unclear whether Hurst can be equally influential with her new employer.

Apple’s transformation was aided by another big change at the company — the ascension of CEO Tim Cook. He followed in the wake of Steve Jobs, who never placed corporate responsibility high on his list. But with Amazon CEO Jeff Bezos not likely to hand over the reins anytime soon, Hurst will need to work with the current leadership.

She’s not saying, but I’ve known Hurst for years — she's no shrinking violet — and am guessing that Bezos or others said the right things to lure her to Seattle from New York. It will be interesting to see if it was worth the journey.

Photo of Hurst taken from video of interview at the 2013 GreenBiz Forum.

PNC takes the value of deep retrofits all the way to the bank

By Zach Donnenfeld
Published August 14, 2014
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Tags: Building Design, Employees
PNC takes the value of deep retrofits all the way to the bank

With more than 2,900 branches, 5 million customers and $300 billion in assets, PNC is one of the largest banks in the United States. Energy efficiency and sustainability are important parts of the company's corporate culture and are embodied in its bank branches, including the net-zero branch (PDF) it opened in Florida early last year.

Business owners typically view such investments in sustainability strictly through the prism of tangible, if not immediate, energy cost savings. Working with the U.S. Department Of Energy and other partners, for example, PNC estimated the new branch in Florida would use 49 percent less energy than a comparable prototype and save nearly $10,000 in energy costs per year with a short, six-year payback.

However, what eludes nearly every estimate are the real but seldom quantified benefits to workplaces that incorporate energy efficiency into their building designs and renovations. In other words, PNC's energy-efficient bank branches generate far more value than just energy savings. Rocky Mountain Institute calls those benefits deep retrofit value.

A recent study (PDF) from the University of Notre Dame helps assign measurable value to the more abstract productivity gains generated through the deep retrofit process. The study compares PNC's "regular" and LEED-certified bank branches, examining 494 facilities in the United States. The sample contained 52 LEED-certified and 442 non-LEED-certified branches, all with similar annual revenue streams and market demographics, excluding facilities less than three years old. These controls provide a comparison between facilities located in similar business contexts where discrepancies in performance cannot be easily explained by other factors, such as reputation or customer market base. Along with the appreciable cost savings that accompany a LEED certification — certified branches spent $675 less per employee on utility bills — the study found that "certification makes a significant difference on revenue generating aspects of the business" and that these savings go "above and beyond cost measures."

The effects of these changes on PNC's business were significant. In contrast to non-LEED certified facilities, each LEED certified branches opened more consumer deposit accounts annually (458), had about $3 million more in consumer deposit balances, initiated 25.5 more consumer loans and held nearly $1 million more in loans. These results were statistically significant even after controlling for all the major variables used to track influence on revenue, such as market demographics, size of facility, personnel demographics, age of facility and advertising spent annually per facility, according to the report. Thus, energy efficiency measures normally quantified in terms of kilowatt-hours conserved and savings generated other indirect value that also accrued to PNC's bottom line.

Although the study did not attempt to tease out exactly what factors improved the performance of LEED-certified buildings, it'd be reasonable to infer that bank branch employees became more engaged and productive (including with branch customers) and the branch customers themselves enjoyed banking there more (including with a bank that aligns with their own personal views on environmental sustainability), or both. Other studies (PDF) on corporate social responsibility support this idea.

Either way, the value of an energy-efficient building is a bit like an iceberg where "conventional practice only considers the energy cost savings — or what's above the surface," according to RMI associate Doug Miller. "However, by only considering the easily visible we miss an opportunity to capture the bulk of an energy-efficient building's business value, and as a result, have less investment in efficient buildings than would otherwise occur if this value was formally considered in the decision-making process."

This study presents another proof point of compelling evidence showing that the financial benefits of environmentally sustainable business practices extend well beyond the immediate energy savings. PNC likely invests in energy-efficiency measures at its branches primarily for the energy cost savings, but studies such as the Notre Dame one show that PNC and other corporations also can take deep retrofit value all the way to the bank.

Building facade image by avarand via Shutterstock.

Also in The Institutional Acupuncture Blog:


Rainforest Alliance: Step change won't happen without governments

By Tom Idle
Published August 14, 2014
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Tags: Agriculture, Policy & Regulations
Rainforest Alliance: Step change won't happen without governments

Twenty-five years is a long time to be at the forefront of any movement. But battling the challenges associated with driving sustainability along supply chains, through boardrooms and into consumerism can take its toll. Just ask Tensie Whelan.

As president of the Rainforest Alliance, the global non-profit working hard to conserve biodiversity and promote sustainable best practice in agriculture, she bemoans the constant “fighting for pennies” her organization needs to catalyse business, governments, consumers and producers doing the right thing is “wearing.” It’s a “typical non-profit response,” she admitted, “but there’s so much money being spent on doing the wrong things.”

But the work of the Rainforest Alliance is crucial. It understands the health of landscapes like few others, and works with farmers, foresters and tourism businesses to help conserve natural resources, ensuring the long-term economic health of communities.

You might have seen the organization’s logo on products in your supermarket. Well, in order for a farm or forestry organization to achieve Rainforest Alliance certification, or for a tourism business to be verified, it has to meet rigorous standards.

It then helps to link these certified farms and forests to the emerging market of conscientious consumers using its famous green frog seal of approval.

I caught up with Tensie on Skype from her base in the U.S. to better understand the organization’s successes, frustrations and ongoing challenges as it strives to improve the livelihoods of those that most need help the world over.

Tom Idle: You’ve been involved in the environmental movement in one way, shape or form for many years now. How do you feel about where we stand today with so many pressures, economically, socially, environmentally? What sort of progress is being made?

Tensie Whelan: The progress over the last 10 years has been exponential, when you consider what went before.

But it’s also not fast enough. We have seen a paradigm shift in a significant number of businesses, but we’re not seeing that shift in the government sector. And, according to our data, we’re also seeing a shift of values of citizens and consumers in many countries. But that is not necessarily translating into action.

Today, up to 14 percent of the world’s cocoa and tea supply is now under sustainable management. That’s a tipping point, right? That is significant. But, there’s still 86 percent to go. So, we are no longer niche but we are nowhere near there yet.

Idle: You mention that we haven’t seen governments keep pace with the shift made by business. Does that matter? Do we need governments to lead the shift?

Whelan: We have managed to go around governments because we have found it so impossible — and there’s a lot you can do without them.

But if we want a step change, you need governments to create a level-playing field, with good regulation that is enforced and positive incentives for sustainable production and consumption. But governments are not only neutral but are actually providing incentives and support for non-sustainable production. And they are not enforcing regulation — regulation that does not exist for the most part.

We can continue to have incremental change. But we are not going to have the step change we want without government support.

Idle: And how has the Rainforest Alliance’s approach to protecting biodiversity and creating sustainable livelihoods changed over the years? What have you been doing differently these last few years?

Whelan: Largely, our work is about redesigning outmoded land-use practices. People have ways of growing bananas, for example, that were first designed 200 years ago for a world that no longer exists.

But as we are learning to redesign — looking at the economic, environment and social aspects — we're also asking, what’s missing? What’s holding people back?

For example, in the agricultural sector, the huge barrier — and something having a big impact on people and the environment — is the fact that many small farmers in the developing world have no financial literacy. They are operating at a loss — and even if you help them to generate better yields, give them better market access and improve environmental conservation, they struggle to access the financial support that will allow them to invest well. So we are currently looking at how we can help them — particularly women who are the active investors in the family — to get those financial literacy tools to access credit.

Similarly, you can improve water quality and reduce water use by changing farming practices. But at some point you need some technologies which are not readily available to these farmers.

We also want to support the pre-competitive engagement across sectors and within landscapes to achieve more of that step change without government involvement.

Idle: And how is that cross-sector collaboration going? It’s a tough nut to crack.

Whelan: It is getting increasingly easier these last five years because companies recognize that they can’t do it on your own. Plus, there is a real disadvantage for a company making loads of sustainability investments versus those that are not. So, it’s in their interest to get people engaged.

Within sectors, it is beginning to happen. When you get people working together in an industry-based coalition, you often go towards lowest common denominator because you are negotiating among people at different levels. Although we do support that approach, it can lead to the creation of a less robust program and companies stay there.

But across sectors, we are interested in developing a net positive impact. I have just created a CEO forum from across sectors to think about what a 10-year plan might look like within a particular community, thinking about deforestation impacts, water quality and society; how can we engage local governments to get the right funding and how does the supply chain support that.

Idle: One of the toughest challenges in driving change along the value chain is that growing gap between the leading businesses and the laggards. For every Kingfisher, there are 100,000s of businesses that just don’t get it.

Whelan: Yes, that’s right. The biggest opportunity and challenge is to get the emerging country leaders engaged. We are beginning to see that happen in China, Brazil and India. But it is something that needs to be addressed.

Idle: And a lot of your work requires an emerging enlightened consumer base to grow quickly. Are we starting to see that happen? Do consumers really care about environmental issues?

Whelan: Yes and no. If you look at the data, it says people are thinking about it — and that data is consistent across countries, not just in the developed world. So, there is a value shift in consumers — from mindless to mindful consumerism. People are interested less in luxury and exclusiveness, and more in authenticity, values and purpose-driven brands.

But they don’t call it environmentalism or sustainability. Climate change is not at the top of their priorities. But they are really caring more and more about wellbeing, community and the planet.

They want to do the right thing when it’s made easy for them. We call them the "Vocal Globalists" — the 35 percent of the people out there, beyond the 10 percent true greens, that we need to reach out to, but not in the traditional activist way.

Idle: What about the role of the media in trying to initiate this consumer shift? You were once a journalist. Does the media have a role to merely reflect the reality of what’s going on out there, or does it need to do more to make a difference?

Whelan: As a recovering journalist, I have always felt annoyed by the media’s focus on being ostensibly neutral when in fact there’s no such thing.

There is a focus on constantly trying to find controversy to elevate a story. When I talk to the traditional media, they say, "Don’t talk about the great positive stuff; tell me about the bad stuff. " But people are sick of bad stuff. They turn off and it’s overwhelming. It’s an abdication of responsibility by the media — they need to find ways of making the positive stuff interesting.

There needs to be clarity between advocacy and reporting, but media can do a much better job in creating more accessible and useful information for people about what is happening out there.

Wow, you just pushed my button!

Idle: You’ve been with the Rainforest Alliance since 1990. What are you most proud of in that time?

Whelan: The real transformation that I see in industry. From the illiterate cocoa farmer in West Africa with one hectare of land who is now showing me how he is protecting water and wildlife and increasing his yields; he’s incredibly proud of that. Then there’s the trader in the middle, the commodity broker, who previously saw this as purely a transaction but is now engaged and supporting those farmers and feeling proud about it. Then there’s the CEO of a company who has instigated this work and who has been out to the field. Previously, when the cocoa arrived in the factory, all they cared about was the quality and the price. Now he or she thinks about the farmers, is proud of what they are doing and talks about it to their family.

That kind of shift in peoples’ thinking is incredibly inspiring, and I feel humbled and proud to be part of that transformation.

This story first appeared at 2DegreesCommunity.

Top image: women pluck tea in a Tanzania plantation by Koen van Seijen via Flickr.




How She Leads: Letitia Webster, VF

By Heather Clancy
Published August 14, 2014
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Tags: Recycled Products, Retail
How She Leads: Letitia Webster, VF

How She Leads is a regular GreenBiz feature spotlighting the careers of women who have moved into influential roles in sustainable business.

Outdoor enthusiast Letitia Webster's five years of experience launching and leading the well-regarded North Face sustainability program made her a logical choice to spearhead the corporate-wide initiative at parent company VF, established in 2011.

Since then, Webster has focused on defining processes to help VF's highly visible brands — including North Face, Timberland and Nautica — deliver on their sustainable business aspirations. Two of her biggest tactical projects: readying VF's 2014 sustainability report (in accordance with the Global Reporting Initiative guidelines) and creating an internal scorecard for tracking and reporting energy and carbon emissions reductions.

What's up next? VF's senior director of corporate responsibility shares her ideas for phase two of the program, which will include adopting aggressive water conservation measures and building an in-house wiki for helping brands and business units share best practices, and why she regards sustainability as an "ultra-marathon."

Heather Clancy: You've got quite a few things going on. What's your top priority?

Letitia Webster: When I got here it was pretty much a clean slate, which is great, but at the same time it wasn't much to work with. So my first strategy was building a foundation; it was building governance structure, management systems, implementing data management, hiring a staff and team, understanding our footprint, doing measurements. That’s culminating in our first sustainability report that’s going to be coming out in just a couple of months.

My priority is getting that report out, and starting to think about how we transition from sustainability strategy 1.0, which is building a program and building infrastructure, to what I’m calling 2.0, which is unlocking the value of sustainability for the corporation and really thinking about how sustainability can actually drive revenue growth, build brand equity and help the corporation meet our 17 by 17 growth plan — $17 billion [in revenue] by 2017.

Clancy: Who is helping you with that?

Webster: I report into finance. So I report into the head, the CFO and the chief accounting officer and controller. VF is a very financially disciplined company — that’s something that we’re very well known for. I am challenged to really help provide perspective in terms of what is the value for the company. The leadership team is eager, and I think it will only help accelerate our program. So our leaders are thinking about how we integrate sustainability throughout the organization. I think really being able to cement [that concept] in dollars and cents and its value is really going to help. The short answer is finance is really helping me think that through.

Clancy: Where will that lead you first? Is there a particular area that’s got your attention as a result or are you kind of finetuning your priorities underneath that?

Webster: To be honest, it’s a little too early to determine where we’re headed. I think what we’re doing is overlaying our traditional sustainability materiality assessments that we’ve done with stakeholders with our key business strategies and key business drivers, like direct-to-consumer, international, strategy and innovation. Then we're layering in what is the risk assessment, cost reductions and revenue upside sustainability can bring? Ideally, this will help us identify the big things we need to be focusing in on. Does that make sense?

Credit: VFClancy: OK, let me ask you about something specific: water conservation. What’s new for you on that front? Is there anything in particular?

Webster: Water is one of the biggest impacts we have: water use, not only in the growing of raw materials and the processing of fiber — especially around synthetics and dyeing and finishing — but also in consumer use. So it’s a major issue. Let me back up for just a second here. VF is unique in that we produce 30 percent of our product in our owned and operated factories throughout mostly Central America. That's very unique [among] apparel companies. What that allows us to do — and we’ve been doing it for 100 years — is really control those costs, right? So we manage those resources, energy and water and materials down to the nano; we’re very careful about how we manage those. 

We’ve done a really good job in our own manufacturing [processes] of reducing our water. I’ll give you an example. In our factory in Torreon, Mexico, where it’s a finishing factory, a washhouse, too, we have recycled and are reusing 45 percent of our water right now. We have new technology coming in by the end of the year that will actually recycle water by 85 percent. …

We have a lot of those kinds of examples, especially around wastewater. That’s another big issue for apparel, wastewater, because we use a lot of chemicals. That said, we are embarking on developing an overall water strategy for VF starting next year. That’s the next big thing I’m focused on. We really focused on carbon and energy for the first two years, developing a climate change strategy. We are now moving into water and really thinking about a water strategy: where do we use our water, how do we use our water, where do we have risk in our supply chain around water scarcity, what materials are at risk due to climate change and the impacts it has on water in different regions. Whether it’s flooding or droughts or the need to reallocate water to communities versus agriculture, those are real issues that we have to be paying attention to.

Clancy: What are your thoughts on improving the rate of apparel reuse or repurposing? 

Webster: Obviously a good portion of our products are [made from] cotton, but [in addition] a good portion of our products are synthetics. So if you think about a synthetic, a synthetic is — and this is true for cotton, too — a synthetic is trapped energy. Synthetics are mostly petroleum-based. Many of our products that we’re doing with synthetics are just recycled PET plastic water bottles. Basically what we can do with a North Face jacket that’s a synthetic is re-melt it down and make it into something new. So you need to think about how we reuse that jacket, not just in terms of consumer reuse, but how we take it back and actually make it into something new.

Credit: VFTo me that’s one concept around reuse and recycling. But then there’s that other concept of the sharing economy and how that is just growing and growing and we’re seeing it even in outdoor equipment. A lot of people don’t want to buy one tent for one camping trip every couple of years, so how do we think about our business models and start thinking about how we promote that sharing economy, how do we ensure that we’re having those conversations with the consumers and the customers as well. 

Clancy: You’re obviously working on the corporate strategy, but that sits over some very distinct brands known for their environmental policies — NorthFace, Timberland and Nautica among them. How do you give them the freedom to innovate? The fact that you’re working on this big corporate strategy and approach, how does that permeate back to them now? 

Webster: We tell them keep the pedal on the metal and just keep going. We continually encourage them to be innovative, think about sustainability and how it resonates with our consumers, how to make more commercial sustainable products. Our responsibility is when to enable that and how we do enable it. There's a couple of different ways we can do that. Then, our responsibility is how we share those learnings and best practices with the rest of the organization, right? So we don’t want to inhibit them, but we do want to take those learnings, best practices and share them with the other brands.

One thing we are doing is we’ve got innovation centers, outside of sustainability, that we're working with to embed sustainability into the innovation process. We're building very strategic innovation centers. We’ve got one here in Greensboro, N.C., around jeanswear. We have one in Alameda, Calif., that’s part of the North Face building around technical apparel, and we’ve got one around technical footwear based in Stratham, N.H., next to the Timberland office. Those innovation centers are there to absolutely propel those businesses and keep them cutting-edge, and our job is to embed a sustainability lens into them.

Clancy: What lessons from North Face are you encouraging other brands to adopt?

Webster: North Face is one of the biggest brands in the outdoor industry and around some of these technical fabrics. We really started looking at our volume and our scale and the impact we have at some mills. One of the things we asked is, “Okay, what can we do around materials?” Because that’s really where the impact is. So, we went after the materials that have the biggest impacts and then layered in which the biggest volume materials. Then worked at the mills to solve some of that through a group called Bluesign [which has created a platform for sustainable textile production], among other things. So we had the volume and the scale on our side so we could get price parity, and that was a crucial, crucial piece to this and we could only do it because of the scale we had at that mill. So I think that’s key because the materials we chose go across a bunch of different products and a bunch of different categories and suddenly we have a story, right? The designers got excited because suddenly that material was in many different categories and they could all kind of embrace some sustainability; it wasn’t just exclusive to one product or one category, but suddenly we were raising the bar across VF.

Clancy: What’s been your most effective strategy for employee engagement?

Webster: I think it’s actually coming. We are doing a couple things; one is we just finished, as part of this strategy 1.0, a huge scorecard collection. So we literally created this online survey, that’s basically called a scorecard, and it went to every single facility, every single brand, every single retail store, and we asked very detailed questions about all of their activities around sustainability. So everything from community service to steps around products and materials to obviously energy, waste, water — all these kinds of practices.

Credit: VFWe just are getting that data back, crunching it, cleaning it up and getting it organized. At the same time — now that we’ve got this data — we're launching this tool on SharePoint as part of our intranet called our sustainability wiki. It is an in-house toolkit basically and resource center around sustainability for all of our associates to go in and find out what they can do, what best practices are out there, what they can learn from other people. The scorecards with all of their data crunched up and all kinds of basic business intelligence tools will be in that wiki. 

The combination of those two together, I think, is going to be the most powerful engagement tool we have, because information is power. We’re going to be able to basically say, “Here’s one facility,” and compare it to another. Here’s a coalition, there’s a coalition; a brand versus brand, country versus country. You can basically slice and dice the information in a thousand different ways, and we can start creating some friendly competition. But we can also say, “Hey, if your facility or your products are not where you want them to be, here are tools, expertise, resources that you can go and can help you solve and unlock the potential you have.” Or “Here’s my e-mail; just call me,” or “Here’s some of the brands that are doing cool things; call them.”

Clancy: What's your most pressing concern or challenge and how you’re tackling it?

Webster: The complexity and the decentralization of VF. We sit here at world headquarters in Greensboro, but frankly we have probably [just] 500, 600 people at world headquarters — we have 60,000 employees. So how do we get them all excited and enthused and understand what they can do and how important it is for them to do it? 

Credit: Manny Valdes via FlickrI always say sustainability is a team sport. My team, we’re not that big. I’ve got a few people and it’s great and they’re powerful and smart and bright. [But] we can’t turn VF into a sustainable operation; we need everyone. I think about how do we align everyone? How do we get everyone moving on the same track so it’s not this shotgun-fragmented approach, but it’s laser-focused; we’re all moving in the same direction, we’re all aligned in what we need to accomplish. It's hard when you literally have brand offices all over the world. 

Clancy: Who has been your most inspirational mentor?

Webster: Frankly I’ve been very fortunate; I’ve had a couple. … One of the most important things that I learned from one of my mentors was, especially around sustainability, because sometimes the thinking isn't out-of-the-box, a lot of people just aren’t ready for it, and you’ve got to meet people where they are. You can’t go into a meeting and start talking about shared value if they don’t even understand what in the world sustainability is. You’ve got to understand where that organization is, what drives that organization, and meet it where it is and be able to integrate sustainability into the culture. Do not underestimate culture.

Clancy: What advice would you give to someone aspiring to a career similar to yours?

Webster: I think two things besides what I just said. Persistence: you just have to keep at it. It’s not a sprint and it’s not a marathon; it’s an ultra-marathon. You just have to stay at it. Also, go where the momentum is. You’re always going to have naysayers or people dragging their feet or saying it can’t be done, but you will find pods of people who have enthusiasm, they’re passionate, they want to do something. Go there. Go there and prove it. Go there and find a bright spot. Go there and find a result. When you start illustrating some success and people get onboard, they begin increasing confidence in you and can trust you as a team and as a function. They'll be more willing to open up once they see that there’s some success out there.

Also in The How She Leads Blog:


Does transparency matter?

By Dunstan Allison Hope
Published August 14, 2014
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Tags: Big Data, Corporate Reporting, More... Big Data, Corporate Reporting, Reporting & Transparency
Does transparency matter?

This article was originally published in BSR Insight.

In the early 1990s, I was a teenage activist campaigning on environmental, labor and human rights issues. Concerned about the abusive power of big business but not wanting to feel powerless, I purchased "Shopping for a Better World" by Alice Tepper Marlin.

I posted lists of companies to avoid on the family fridge, and over the summer holidays used my Brother word processor (the one that showed you only five lines at a time) to fire off letters to companies about their approach to climate change or abuse of human rights. Most replies were poor attempts at public relations, but one morning, with a thud, arrived home improvement store B&Q's 1993 environmental report, "How Green Is My Hammer."

Over 120 pages, the report diligently set out the company's approach to the issues I cared about. It even described a new partnership between B&Q and WWF to establish a new organization called the Forest Stewardship Council — history in the making!

I realized that big business needn't be the enemy, but in fact had the promise to generate the change I wanted to see. I was awestruck. That life-changing experience left me with a strong affection for transparency, and 20 years later, here I am at BSR.

BSR's 2014 Conference theme, Transparency and Transformation, has forced me to revisit the question of why transparency matters for sustainability. Its value has to go beyond teenagers misspending their youth reading sustainability reports.

For me, transparency matters for sustainability under the following five conditions.

1. Transparency with a purpose. The trend toward organizations opening up huge data sets for use by others has great potential but doesn't create value on its own. The real significance of transparency arises when data is harnessed for a sustainability purpose and has a clear end goal in mind, such as enabling investors or consumers to make informed decisions based on robust and comparable data. Our product transparency session will explore this theme.

Credit: Bartkowski via Shutterstock

2. Transparency that informs the public dialogue. Transparency has the power to demystify the cryptic and shed light on the unsolved. One fascinating feature of the recent Snowden revelations on government surveillance has been the extent to which companies have used so-called "transparency reports" to increase awareness of the human rights issues at stake and create momentum for change. Our session on addressing tough issues through proactive transparency will explore this theme.

3. Transparency and responsibility. Think of a global problem these days and a Big Data solution is available: smart cities, buildings, agriculture, energy and the like. But is Big Data always a good thing? We must think carefully about the consequences of using data to predict outcomes and make behavioral assumptions about individuals without their knowledge. Big Data: Friend or Foe? will explore the up- and down-side of transparency.

4. Knowing when not to be transparent. Companies are under increasing pressure to disclose findings from their human rights due diligence assessments. Investors, users and other stakeholders need evidence that human rights risks have been systematically reviewed. But too much disclosure can create risk for the stakeholders whom assessments are meant to protect, or reduce companies' ability to create change behind the scenes. Our Transparency in Human Rights Due Diligence session will explore this dilemma.

5. Listening to somebody else's transparency. In today's world, it can seem as if we are exposed to a diversity of perspectives. Too often, however, it's the reverse: We use the Internet to surround ourselves with views that reinforce our own and disconnect from alternative points of view. This tendency to "flock together" is a key concern of I3 speaker Ethan Zuckerman.

In many ways, B&Q's "How Green Is My Hammer" could not be more different from what you'd see today. The graphics are grainy, the charts are basic and the photography reminds me of just how bad fashion was in the 1990s. However, re-reading the report, I'm struck by how relevant the content remains. For all our digital-age concern about the form that transparency takes, it is only by focusing on the purpose, responsibility and substance of the information conveyed that transparency will achieve its potential.

Top image of transparent green chairs by Henning Mühlinghaus via Flickr.



Owyang: Greening corporations via the collaborative economy

By Amy Cortese
Published August 14, 2014
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Tags: Business Operations, The Business Case
Owyang: Greening corporations via the collaborative economy

[Editors note: Jeremiah Owyang will be conducting a workshop at VERGE SF, October 27-30. Click here for more information]

Jeremiah Owyang is the chief catalyst at Crowd Companies, a brand council that aims to help big companies navigate the collaborative economy. Amy Cortese talked with him about the collaborative economy and how large companies are responding.

Amy Cortese: Describe the Collaborative Economy and what’s driving it.

Jeremiah Owyang: The collaborative economy is an economic movement that empowers people to get what they want in the physical world from each other. They can crowdfund new products, create them in the maker movement and share what they already have in the sharing economy. Essentially, the crowd has enabled peer-to-peer commerce, allowing people to bypass inefficient corporations. This is both a disruption and an opportunity. The opportunity is that large corporations can use these same strategies, adjust their business models and benefit from this global change.

This movement is being driven by three major factors: societal shifts, like urban density and a focus on sustainability; economic drivers, such as economic disparities and an influx of venture capital funding; and technology enablers, such as social, mobile and payment technologies.

In particular, the Internet of Everything has been a major driver, as it enables people to find idle resources to activate in their local areas.

Cortese: How big is this? Compare the collaborative economy with other major economic and social shifts ...

Owyang: This is bigger than social media. Social media was the first phase, where people could create media and then share it. This next phase, the collaborative economy, impacts the physical world. It’s organized into six discrete families of goods, services, space, food, transportation and money. There are over 9,000 companies doing some form of sharing.

For some specific numbers, Uber is valued at $18 billion, Airbnb at $10 billion — and these companies have been around for less than five years. We also know from our survey of over 90,000 folks that the adoption is doubling this year in 2014

So this is a long term movement, not a passing fad.

Cortese: This collaborative movement is, by nature, about empowering individuals. Your work explores an interesting question: what role do companies play when people can get what they need from each other? What’s your initial answer to that question?

Owyang: Companies must adapt their business models. Now that people want access to goods rather than owning them, companies must provide products for rent. For example, BMW's Drive Now program enables members to have access to new 1-series electric cars, rather than having to own them.  

Secondly, it means companies must host their own marketplaces of used goods. Patagonia, for example, hosts its own Common Threads marketplace for used Patagonia gear.

[Learn more about the collaborative economy at VERGE SF 2014, Oct. 27-30.]

Lastly, it means companies must work with the Maker Movement to co-create their own products. For example, GE collaborates on crowd-based product innovation with Quirky, a site that shares ideas, co-marketing, and even rewards with the makers who submitted ideas.

Cortese: Can you give us some examples of how companies are adapting to the new collaborative world?

Owyang: Many innovative brands have already joined in the movement. In addition to those mentioned above, companies like West Elm, Nordstrom and GE are allowing the crowd to design their products alongside them. Ford is partnering with Uber to give drivers discounts on cars. And Walgreens tapped TaskRabbit to deliver goods to homes, extending the brand promise.

Cortese: How does that change the nature of the relationship between company and customer — or what we used to call "consumer"?

Owyang: The term "consumer" is antiquated for this market. These "empowered people" are crowdfunding, making their own products, and sharing their homes and cars. They're more like micro-entrepreneurs than passive consumers. As such, companies should think of them as partners.

Cortese: This is one of those rare win-win situations that can benefit the planet as well as companies’ bottom lines. Explain.

Owyang: The collaborative economy ultimately results in the empowerment of people that are generating their own wealth and resources — freeing them from traditional 9-5 jobs. It also means more efficient use of the world's resources, as we use and re-use the same resources many times via this new sharing market.

There were 4 billion people on the planet when I was born. Today there are 7 billion. That’s expected to grow to 9 billion by 2050, and more people will be living in megacities. We don’t have a choice.  

Used with the permission of Top image of Jeremiah Owyang by Brian Solis, tweaked by Josh Hallett, via Flickr.



6 challenges hospitals aim to beat for a green bill of health

By Janet Howard
Published August 14, 2014
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Tags: Health Care, Reporting & Transparency
6 challenges hospitals aim to beat for a green bill of health

Going green, improving environmental performance, creating healthier environments — it all sounds good. And with a Hippocratic Oath to do no harm, hospitals are ripe with opportunity. But where to start, how to prioritize, how to measure and how to learn? That's what the Healthier Hospitals Initiative is for.

Just what the doctor ordered

Hospitals are demonstrating the Initiative's value in the second annual Milestone Report (PDF). The report shares findings of the 638 participating hospitals that submitted data in 2013, an increase from 350 hospitals the previous year. Some hospitals enrolled as a stand-alone facility, some as entire systems. Every hospital took on one or all of its challenges.

Enrolled hospitals commit to a minimum of one of the six challenges that make up the initiative. The six challenge areas are Engaged Leadership, Leaner Energy, Healthier Food, Less Waste, Safer Chemicals and Smarter Purchasing. Each challenge is comprised of one to three goals and a specific target.

Although not every hospital responded to every challenge, some interesting trends emerged from the data reported in 2013.

Report highlights

Smarter spending sometimes means buying less. Hospitals reviewed surgical kits and eliminated unnecessary items. Forty-five percent of the 64 hospitals repoting reviewed at least 30 kits, with a total of 2,205 kits reviewed. The 27 hospitals reporting dollar savings and kit numbers reported a total of $2.9 million in savings, with a median of $1,144 savings per kit reviewed.

$2.1 million out of $4.5 million spent on cleaning supplies at the 102 reporting hospitals went to products with Green Seal or EcoLogo (46 percent of cleaning purchases). Seventeen percent of those hospitals purchased more than the goal of 90 percent.

Interiors showed room for chemical improvement, with only 11 hospitals reporting data. Of those, $690,000 out of $3.27 million in purchases were compliant with the Initiative's product definition for avoiding chemicals of concern from fabrics, furniture and finishes.

Two hundred sixty-four hospitals reported recycling at rates greater than the target level of 15 percent, totaling 121,000 tons of waste. Fifteen hospitals recycled construction and demolition waste greater than the 80 percent goal, recycling a total of 29,200 tons of C&D waste. Two hundred twenty-eight hospitals reduced Regulated Medical Waste to 10 percent of total waste stream through improved waste segregation.

Credit: Kei Shooting

Sixty-four (58 percent) of the 110 hospitals reporting claimed more than 15 percent of food budget is local and sustainable food. In aggregate, $23.7 million of $145.3 million food purchases (16.3 percent) were reported as local/sustainable.

Moving towards healthier hospitals

"This report shows that we have made significant progress, but our work is not done," said John Messervy, chair of the Healthier Hospitals Initiative and director of capital and facility planning for Partners Health Care. "As we move into the third year of the initiative, we will continue encouraging hospitals to purchase more environmentally preferable supplies, serve healthier foods, use less energy and reduce waste."

Hospitals are realizing that a commitment to the environment has varied outcomes: cost savings, staff engagement, environmental impact and population health. Hospitals are taking steps to reduce meat procurement (and transition to healthier types of meat), conserve energy, purchase furniture without fire retardants, increase recycling and realize that "sustainability" is more than a blue bin by the photocopier.

With the enrolled hospitals hitting their stride, the followup report will have more to say about teamwork, passionate health care workers, their responsible business partners and healthier communities. As the Healthier Hospital Initiative's leader Gary Cohen said, "We can't have healthy people on a sick planet." Those enrolled in the Healthier Hospitals Initiative are leading communities to a healthier future.

Top image of stethoscope by Africa Studio via Shutterstock.


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