Businesses struggle to win sustainability street cred
Businesses struggle to win sustainability street cred
Despite the fact that many corporate heavy weights are now embracing some form of sustainability, many companies continue to struggle with proving their efforts to consumers.
The overall corporate embrace of green goals isn’t all that surprising these days. Consumers and shareholders are putting significant pressure on corporations to step up to the green plate. Companies across the globe increasingly are faced with the necessity of producing corporate sustainability reports to “prove” the environmental friendliness of their business.
According to the 2011 United National Global Compact – Accenture Industry Study, 93 percent of industry CEOs believe that sustainability issues will be critical to the future success of their business.
But while corporate sustainability reports account for consumption within specific environmental categories, such as electricity, water and carbon, these singular measurements don’t really paint the full picture of sustainability efforts.
In many cases, there are several subtle, complex policies or operations that have to be considered. Add to that most sustainability efforts take a while to truly ramp up.
Given these multiple discrepancies, it’s no wonder that consumer surveys typically reveal skepticism around corporate greening. But, with so many things to measure, and no one metric to span all categories, how are businesses supposed to accurately measure sustainability, let alone convince consumers of the value and validity of their efforts?
Each year, well-respected, high-profile firms release reports ranking the “top” or “most sustainable” companies in a variety of spectrums--sustainable energy, sustainable water consumption, most sustainable in the state, most sustainable in the nation, most sustainable company on earth. But, if you do a side-by-side comparison of these lists, it quickly becomes apparent that not only are they measuring largely different things, they frequently are measuring the same things, differently.
In that context, how are companies to know how sustainable they are really being overall and how do they go about proving their sustainable standings?
One good example is Intel’s corporate responsibility report. Known across multiple indices as one of the world’s top green companies, Intel’s most recent report continues to demonstrate the company’s improvements. However, Intel’s true sustainability impact may be getting a little lost in the data that’s not making it in.
According to a recent report from the Environmental Protection Agency, Intel is the largest purchaser of green power in the U.S. But, its annual corporate responsibility report only takes into account that the power was used, not where it was sourced or how it was generated. Why? Again, we go back to metrics. Strictly inferring from experience, I’d say the likely answer is simply that they have no easy way to accurately measure and communicate this particular resource use in comparison to the other sustainability domains measured. As environmentally friendly as Forbes’ “World’s Greenest Company” is, it’s likely that Intel is even more environmentally sustainable than what it is reporting.
It’s not as if major companies don’t have the support for figuring out how their sustainability efforts fit into the larger corporate puzzle. There are dozens, even hundreds of vendor companies out there working to help businesses measure their water use, electricity use, their GHG emissions and more. There are also companies that do cradle-to-grave product impact analysis and companies that put environmental impact labels on everything from food to clothing to cars.
But, at the end of the day, there continues to be a dichotomy between what companies want to measure, what many even say they are measuring and the accuracy of the measurements they actually can generate in an apples-to-apples (or in this case, water-to-waste) comparison across resources.
Here’s another way to look at it: Companies, both public and private, have reported on their financial earnings and losses since the turn of the last century. Some began reporting their finances at the behest of stockholders, others to meet political and societal demands. Today, all companies operating in the United States, foreign and domestic, are required by law to file periodic and annual financial reports with the Securities and Exchange Commission. For companies with assets in more than one country, this means reporting on finances in multiple currencies.
Rather than producing separate reports for each currency type to comply, businesses now convert everything into one common unit. In the United States, it is of course the dollar.
It seems simple enough and it makes complete sense to do things this way. So why aren’t we?
From a sustainability perspective, the General Services Administration is pushing suppliers to provide scope I, II and III greenhouse gas reporting. In addition, the Federal Trade Commission is aggressively regulating how manufacturers and retailers make sustainability claims. Even the SEC has reminded CEOs that sustainability now plays an important role in the products and services they sell. Unfortunately, even with these increasing influences, in the much younger world of environmental sustainability reporting, we are still decades behind.
While a majority of the world’s largest companies and a growing number of the smaller ones now produce corporate sustainability reports of one sort or another, the lack of consistency in communicating and measuring their environmental savings and sustainability project impacts continues to stifle any chance for a global sustainability standard.
Environmental sustainability simply is not intuitive.
Parallel to the earlier currency example: If you don’t live in India, you likely have no handle on the value of a rupee, and if you don’t work for an energy company, you likely have at best a vanishing grasp on the value of a kilowatt hour or therm.
Until there is a universally recognized and understood unit of measurement that is consistent, accurate, intuitive and applicable across all environmental domains, taking into account external influences such as regionality, companies around the globe will continue to be stuck alongside the financial reporting of the 1900s—consumers and CEOs alike basing their decisions on a “best guess” and left to wonder, “how sustainable are we really?”