How to make top-down and bottom-up sustainability converge
We call this sweet spot "the magnificent middle."
This article is sponsored by CH2M Global.
Fits and starts are all too common in the sustainability world. One year you have budget for initiatives; the next you don’t. Management hails cost savings on individual projects, but they miss the big picture and fail to link progress across departmental boundaries. Bottom-up progress and top-down directives pass each other like proverbial ships in the night. But it doesn’t have to be that way.
With the help of a good coach, like my friend Jameson Morell, it’s possible to transform the pieces into a holistic, gorgeous pop-up sustainability storybook sprung forth at a moment of convergence. And it’s not a magic trick. It’s a patient, evolved strategy that anyone can try. To share how it’s done, I invite you on a jaunt through one of Jameson’s projects with a manufacturing client in the highly competitive electronics industry. This company has already saved over $10 million in operating expenses and is poised to save even more while making its business less susceptible to risk.
A good plan today is better than the perfect plan tomorrow
It started with electricity, a significant, volatile line item in the budget across nearly 12 manufacturing sites. After a CH2M/client team earned an award for significantly reducing electricity costs at one site by working with a local utility, the client’s senior management posed a challenge: could we systematically reduce costs across all manufacturing sites in Asia-Pacific and the United States? We started by developing a strategy and road map to plan, mobilize, implement, and continuously improve a resource/energy management program. Then we raised the ante. Could we further reduce costs and avoid risk by also expanding into energy, water, and waste? Game on! But first we had to convince executive management the investment was worth it.
The value sprint
Our client would have loved to create a comprehensive sustainability program from the get-go with strategy, analysis, and industry-leading goals. Alas, the race to produce more with less is relentless. So we included a value sprint in the planning phase to uncover potential at two sites in Asia-Pacific and one in the United States.
During a value sprint, engineering analysts comb over every aspect of the facility and site with local employees, finding ways to save costs and optimize systems. At the three sites, we identified nearly 70 conservation projects with potential annual savings of $2.7 million, with $3 million in capital and value sprint costs. Client team members found the value sprint to be tremendously helpful and appreciated the assistance evaluating their sites. “This activity came from the operations side of the house,” said Jameson. “This wasn’t part of a structured, overall program, but rather the right thing to do to advance the business.”
As the conservation projects progressed, the company invested in an information management system to streamline data collection and track progress. “It was critical to connect program components and success in a platform as we went, because documenting it later would not have worked,” Jameson explained. “If you allow these efforts to stagnate in case studies, you can’t capitalize on what you’ve done when an opportunity for scale opens up.”
A tsunami of resiliency issues
Towards the end of the 3-year planning process, our efforts took a back burner as our client dealt with integration issues from a merger and acquisition, common in manufacturing. Just as things slowed down, our client suffered a major setback along with an entire nation: Japan was struck by the Tōhoku earthquake and tsunami.
This tragedy, along with memories of the Indian Ocean earthquake and tsunami, called many assumptions into question, including how the company defined sustainability. To be truly sustainable, being the most efficient or saving the most energy and water would not be enough. To be sustainable, the company would also need to be resilient. Facing increasingly severe weather events, global urbanization, and water scarcity and climate change threats on the horizon, the company invested in making a change.
Fortunately, because operations staff had spent time proving the concept and gaining traction, employees were ready to implement management’s plans for improved resiliency and a fresh interpretation of sustainability.
Formalize and implement
Over the next year, the company chartered a central management team, trained local implementation teams, began the conservation projects, and added more robust management systems, like Scope 5, to inventory and track improvement.
“Local teams, made up of EHS coordinators; energy, water, and waste reduction owners; and critical systems engineers were charged with accelerating onsite activity and cross-site collaboration,” said Jameson. “These people provided the juice for the entire operation, because they nominated projects to save energy, water, and waste. With the help of the central program manager, they developed project plans with start dates, investment requirements, and cost and resource savings. Then they decided which projects to invest in, tracked progress, and celebrated and rewarded success.”
It was only at this point — fully five years after initiating the value sprint—that the operations team’s search for conservation projects was aligned with the company’s ISO 1001 Environmental Management System, as well as the corporate-level global citizenship and sustainability team.
Now, the program has become integrated across the organization. The work is expanding to new merger and acquisition sites, aligning to capital investment approval processes, and driving additional water, waste, and supply chain conservation efforts. Beyond the $10 million saved to date, the accrued savings are improving net margins and net revenue through eliminating wasted resource cost, and local employees are proud of providing environmental and social benefits to their communities.
Now we’re exploring how to focus savings into investment to drive even better performance. At some sites the easy conservation projects are exhausted, so how do we pick the higher-hanging fruit?
Beyond the $10 million saved to date, the accrued savings are improving net margins and net revenue through eliminating wasted resource cost.
For example, we’re exploring advanced critical systems modeling with CH2M’s VERO (Virtual Energy and Resource Optimization), an integrated systems design, modeling, and visualization platform. VERO is used to understand the design, control, and operational decisions influencing connected critical systems and the results of resource- and dollar-saving sustainability actions. Further, we’re assessing renewable energy and natural infrastructure options across all manufacturing sites—a hardcore next-generation systems approach to engineering analysis of existing and future manufacturing facilities.
Meeting in the magnificent middle
At the tail end of the process, the disparate management groups came together: operations driving efficiency, EHS delivering environmental targets, sustainability reporting to stakeholders, and finance making better investment decisions by balancing financial criteria with environmental and social impacts.
Would it have been better to start that way, creating alignment among the teams, and then driving the programs? “In an ideal world, a well-planned approach like that would be great,” Jameson said. “However, it rarely happens, and at the end of the day, it probably doesn’t matter.”
“The program strategy and structure drive behavior and as long as everyone shares a commitment, these work streams can proceed in parallel — and get great results — until the time is right to combine them. Allowing everyone the space to test their programs and assumptions means that the work is truly business-driven. When the time is right, everyone is ready to bring their best work forward.”