Leveraging Sustainability Data to Create Value Beyond Reporting

Companies are investing significant efforts to report on their corporate or product environmental footprints. However, many do not spend much effort reflecting on this information and considering how the metrics they’ve put in place to support disclosure can inform other areas of their work. By looking beyond reporting to risks and opportunities, sustainability leaders can bring a quantitative focus to their company’s sustainability planning.

In this free, hour-long webcast, Quantis International’s CEO Emmanuelle Aoustin and U.S. Managing Director Jon Dettling will be joined by executives from global apparel and food companies to discuss getting the most out of your sustainability data. You’ll hear examples of how leadership companies are leveraging the data they use for reporting to address core business issues.

During this webcast, you’ll learn:

  • New ways to leverage the footprint data you may already be producing
  • How to use quantitative goals to focus sustainability work across the company and into the value chain
  • Examples from companies that have fine-tuned their sustainability efforts based on metrics 
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Tuesday, May 12, 2015 - 11:30am
Sponsored by: 
Quantis International

Sustaining America’s Cities: The Role Businesses Can Play

The global rise of cities has been unprecedented. In 1800, 2% of the world’s population lived in cities. Now it’s 50%. Every week, some 1.5 million people join the urban population, through a combination of migration and childbirth.  At the same time, cities are faced with challenges to prepare for droughts, extreme heat days, and other effects of climate change. How will these cities sustain themselves and what role can businesses play? 

Several US cities have taken a proactive stance in planning for this challenge. To succeed — economically, culturally and environmentally — cities must accommodate new individuals, maintain standards of livability, prepare for threats like water scarcity, more intense storms and compete for talent and brand leadership with other cities.  Their ability to do this successfully has major implications for the private sector as well.  Corporations are attracted by a reliable, talented workforce.

In this free, hour-long webcast, current and former sustainability directors from three major US cities - Matt Petersen from Los Angeles, Katherine Gajewski from Philadelphia, Brian Swett from Boston -  will share their experiences in setting strategy, developing public-private partnerships, and making a citywide sustainability strategy work for residents, businesses and other stakeholders.  Clinton Moloney, Managing Director at PwC and Shana Rappaport from GreenBiz will moderate.

During this webcast, you’ll understand:

  • The case for sustainable cities
  • Lessons from the front lines on the challenges cities face as they become more sustainable – and strategies that are making a difference
  • How cities and businesses can partner to play an active role in one another’s success

Speakers:

Clinton Moloney, Managing Director, Sustainable Business Solutions, PwC
 

Clinton Moloney is Managing Director and leader in PwC's Sustainable Business Solutions advisory team with over 16 years of strategy consulting experience focused on helping clients frame and mobilize sustainability-driven business transformation in the US, UK, Australia and South East Asia.

Clinton currently serves as a Vice Chair of the Board of the Coro Center for Civic Leadership in San Francisco, CA, and a National Board member of Friends of the Children based in Portland, OR. He has worked with executive leadership at multiple Fortune 500 companies and has extensive experience mobilizing entire organizational systems, including internal (e.g., C-suite & middle management) and external stakeholders (e.g., customers & suppliers), around sustainability goals to help foster innovation.

In his role as a Managing Director in the Sustainable Business Solutions group, Clinton has two focus areas: The first is to help our most significant clients transform their businesses for a more sustainable future; the second is to find ways to leverage PwC’s platform to transform the financial system through new approaches to measurement, valuation and materiality.

Matt Petersen, Chief Sustainability Officer, City of Los Angeles 
 

Before joining the Mayor’s office, Matt served as President and CEO of Global Green USA for 19 years. Passionate about improving the lives of those in need, combatting climate change and greening communities, Petersen focused the organization on greening affordable housing, schools and cities (including LA).  Petersen led the organization in the green rebuilding of New Orleans after Hurricane Katrina, and later to communities devastated by Hurricane Sandy. Matt is a board member of Global Green USA and Habitat for Humanity of Greater Los Angeles, as well as is a member of the Council on Foreign Relations and an advisor to the Clinton Global Initiative.

Katherine Gajewski, Director of Sustainability, City of Philadelphia
 

Katherine Gajewski is the Director of Sustainability for the City of Philadelphia. She leads the implementation of Greenworks, the city’s comprehensive sustainability plan.  In this role she works with city government partners and external stakeholders to advance progress across 15 targeted goals. Since the plan was launched by Mayor Nutter in 2009, Greenworks has received broad support within Philadelphia, has garnered national and international attention, and has positioned Philadelphia as a leader in urban sustainability.  Katherine is active nationally as co-chair of the Urban Sustainability Directors Network, a peer-to-peer network of local government professional from cities across the U.S. and Canada working to share best practices and accelerate the
application of good ideas across North America.

Brian Swett, Former Chief of Environment, Energy and Open Space, City of Boston
 

In January 2015, Brian Swett stepped down after completing two and a half years as Chief of Environment, Energy and Open Space for the City of Boston. His Cabinet was comprised of the Inspectional Services Department, the Environment Department, and the Parks and Recreation Department. Mr. Swett served as the Mayor’s appointee to the boards of the Massachusetts Water Resource Authority (MWRA), Boston Groundwater Trust, Boston Harbor Islands Alliance, and the Boston Harbor Islands Partnership. Mr. Swett also represented the City on the Boston Green Ribbon Commission, the State’s Global Warming Solutions Act’s Implementation Advisory Committee and the State’s Energy Efficiency Advisory Council. 

Moderator:

Shana Rappaport, Director of Engagement & Correspondent, VERGE®, GreenBiz Group
 

Shana's mission is to advance large-scale, systemic solutions to accelerate climate stabilization. Her role at GreenBiz focuses on scaling and supporting the growing VERGE ecosystem globally, unleashing the game-changing potential at the nexus of energy, transportation, building and information technologies. She previously worked as the director of education for Bioneers.

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Tuesday, April 21, 2015 - 1:00pm
Sponsored by: 
PwC

Savings-as-a-Service: Commercial Real Estate Meets Disruptive Financing via the IoT

With climate and energy concerns putting new pressures on companies, energy efficiency is back in the limelight. While most corporations "get" the value and positive impact of being more energy efficient, financing upgrades remains an obstacle. 

But innovative financing models are changing that, such as Enlighted’s Global Energy Optimization program, a nothing-down option that uses the energy savings from advanced lighting as an asset. Beyond energy savings, innovative companies are using Internet of Things (IoT) applications to maximize workplace comfort and drive new efficiencies.

In this free, one-hour webcast, you’ll hear case studies based on this model. Among the things you’ll learn

  • How companies can bring their buildings into the Internet of Things
  • The benefits of IoT-enabled buildings, from energy savings to workplace comfort
  • How Big Data creates new workplace efficiencies
  • How companies can leverage energy savings to create valuable building intelligence
  • The potential savings when scaled across a building platform.
Tuesday, February 24, 2015 - 1:00pm
Sponsored by: 
Enlighted

How Companies and Procurement Standards Can Protect Forests

Global concern over the health of forest ecosystems has grown in recent years. With good reason: Forests are critical to the health of our environment and our economy. For example, 53 percent of U.S. drinking water originates from forestland, and these same forests offset 12 percent of U.S. CO2 emissions. Yet forests face serious challenges from development, intergenerational land transfer and irresponsible forestry practices at a time when global demand is ever-increasing.

Forest certification standards emerged in the 1990s to provide the market with confidence that forest products come from responsibly managed forests. Today, demand for certified forest products outstrips supply, according to a 2012 report co-authored by the United Nations Environment Programme.

The Sustainable Forestry Initiative launched a new set of standards in January 2015 which represents the interests of land managers, government agencies, industry, tribes, academics and researchers working together for the future of forests.

Many corporations are taking a stand on the future of our forests and are making direct investments in forests as part of their corporate strategies.

In this free one-hour webcast, you’ll learn:

  • Why forests matter as a solution to clean water, clean air, biodiversity, climate change and sustainable communities and more.
  • How responsible procurement of forest products can make a difference.
  • How forest certifications are a proof point of responsible forestry in a much larger conversation around the future of forests.
  • What a large multinational corporation is doing to invest in that future through philanthropy, paper procurement decisions and policies, forest carbon investments and more.
Tuesday, February 10, 2015 - 1:00pm
Sponsored by: 
Sustainable Forestry Initiative

State of Green Business 2015

Join us for the release of the eighth annual edition of State of Green Business, GreenBiz Group’s award-winning annual report.

Each year, the report looks at 10 key trends and dozens of metrics assessing how, and how much, companies are moving the needle on the world’s most pressing environmental challenges. The report is produced in partnership with Trucost, a world leader in helping companies, investors, governments, academics and thought leaders to understand the economic consequences of natural capital dependency

In this one-hour webcast, coinciding with the report’s release, GreenBiz Group chairman and executive editor Joel Makower, Trucost CEO Richard Mattison and GreenBiz vice president and senior analyst John Davies will unveil the report and provide insights into key trends in sustainable business and the sustainability profession.

Among the topics: 

  • How open innovation is becoming a key corporate sustainability strategy
  • The growing movement toward science-based goals
  • The top-reported key performance indicators of more than 1500 companies
  • Which company impacts are changing, and why
Tuesday, February 3, 2015 - 1:00pm

Three Big Myths about Big Data and Energy Management

Big data and data analytics are terms used increasingly to describe the current state and future opportunities of enterprise energy management. To gain greater insight, GreenBiz Group, in partnership with Siemens Building Technologies, surveyed energy managers from large corporations, hospital systems, governments and educational institutions.

The results highlight the early nature of using big data analytics for enterprise-level energy management and identified three common misconceptions. Join us for a discussion about how organizations are leveraging big data for energy enterprise management. During this webcast, you’ll learn:

  • Three common misconceptions are about using big data analytics for enterprise-level energy management
  • How to manage data quality and quantity to take “big data” and turn it into actionable information
  • Immediate actions energy managers can take today to advance their big-data analytics program

Speakers:

Bob Dixon, Vice President of Industry Affairs, Siemens Infastructure & Cities
 

Bob Dixon serves as the Director of Industry Affairs,  Building Performance & Sustainability for Siemens Industry, Inc – Building Technologies Division.  He is responsible for strategy development, market positioning, and Industry Leadership on efficiency and sustainability in buildings.

Dixon serves on the Board of Directors for the National Association of State Energy Officials, served as the Vice Chair for the Alliance to Save Energy, and is a past president of National Association of Energy Service Companies. Previously, he served as the Senior Vice President, Global Head, Energy and Environmental Solutions for the Building Technologies Division and was the first designated Senior Principle Expert for the 39,000 employee Building Technologies Division.

Dixon earned his Bachelor of Science degree in Mechanical Engineering from California Polytechnic State University in San Luis Obispo, California, and is a graduate of the Minnesota Executive program at the University of Minnesota.

 

Chris Brophy, Vice President, Corporate Responsibility, MGM Resorts International
 

Chris Brophy is the Vice President of Corporate Sustainability for MGM Resorts International.  In this capacity, Chris has a leadership role in developing, executing and communicating the company’s programs for environmental responsibility. Chris also oversees the planning, analysis, and capital budget management for energy conservation projects at all MGM Resorts International properties, and is responsible for the company’s Greenhouse Gas Emissions inventory and reporting. 

Before joining MGM Resorts International in his current role in 2007, Chris was the Director of Technology Projects and Operations for The Breakers Palm Beach, a luxury resort and club in Florida.  In this role, he managed strategic technology and operational initiatives for departments throughout the organization.  In addition, Chris oversaw financial reporting and budgeting for the Technology Services Division, as well as the capital budget for all technology investments at The Breakers.  He previously served MGM as a Senior Associate in Corporate Strategy.

Chris earned his Bachelors and Masters of Business Administration degrees from the University of Arizona and the University of Arizona Eller College of Management.

 

Marty Sedler, Director of Global Utilities & Infrastructure, Intel Corporation
 

Marty Sedler is the Director of Global Utilities & Infrastructure for Intel Corporation. Marty has been with Intel 20 years, integrating Energy Management and Energy Policy responsibilities within a formal process.  He and his staff are responsible for all utility supply issues, ensuring the capacity, price and reliability of Utility Supplies/Infrastructure to Intel facilities worldwide, as well as, supporting conservation programs. Marty is responsible for evaluating/incorporating alternative energy options w/in Intel and establishing sustainable energy positions/strategies for renewable energy policy within Intel’s energy portfolio. He leads the utility site selection component of a corporate team that identifies and recommends potential new locations for Intel Facility/Manufacturing growth worldwide.  Marty is Intel’s external energy representative in various private/public, State and Federal energy action groups and task forces. He is a member of various DOE Steering Committees and has sat on several state Governors’ energy committees.  Previous to joining Intel, he spent 14 years in the electric utility industry in a variety of functions including: Operations, Rates, Environmental, Energy Supply/Engineering, Power Plant Operation and Key Account Management. 

Moderator:

John Davies, Vice President & Senior Analyst, GreenBiz Group
 

John Davies is vice president and senior analyst at GreenBiz Group, heading up independent research regarding green strategies and business operations and the sustainability profession. Davies also leads the GreenBiz Executive Network, a member-based, peer-to-peer learning forum for sustainability professionals.

 

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Tuesday, January 6, 2015 - 1:00pm
Sponsored by: 
Siemens

GreenBuzz – December 1, 2014

Happy December. For our U.S. readers, I hope you had a wonderful holiday weekend. As December dawns, we're beginning to look both backward and forward — at the year just ending, and and all that's yet to come.

For starters, we're planning our annual package of year-end stories, including the voices of many of your colleagues on the highs and lows of 2014 and a look forward at 2015.

Recycling 2.0 – Changing Consumer Behavior Amid Changing Waste Streams

Consumer recycling, once seen as the most basic of environmental practices, has become decidedly more complex. Some communities have mandated aggressive, long-term, zero-waste goals to divert sometimes up to 90 percent of their waste from the local landfill. That can lead to a  wide array of what’s collected — and what’s not —  engendering confusion among residents (citizens).

The result: After decades of growth, recycling rates have plateaued, or even dropped.

How can cities regain the momentum? There are some tried and true methods, but it takes a village, literally — producers, recyclers, municipalities and consumers, working together to find solutions.

In this hour-long webcast, you’ll hear how waste streams are changing;  the latest data about what consumers think about recycling and what messages resonate with them; how one of the nation’s largest recycling companies is working with cities to increase recovery rates; and the secrets behind one of the most successful municipal recycling programs in the United States.

Among the things you’ll learn:

  • Current recycling trends and the true bottom-line impacts of non-recyclable materials such as “flexible packaging”
  • How recycling programs influence how consumers think and recycle
  • The differences between what consumers say about recycling and how they actually recycle (what they are actually doing)
  • Specific examples from Hennepin County, MN demonstrating how their innovative recycling education initiatives work    

Click here to register to attend the webcast and receive the recording when it concludes.


Speakers:

Susan Robinson, Director of Public Affairs, Waste Management
 

Susan Robinson is the Director of Public Affairs for Waste Management.  She has worked in the environmental industry for 30 years in roles that span the public sector, non-profit, consultancy, and over twenty years in the private sector.  Since joining Waste Management in1999, Susan has been instrumental in the company’s implementation of new recycling programs in the Western U.S.  She currently supports the company’s public policy efforts associated with materials management technologies.  Susan is on the Board of Directors of Ameripen, served on the Washington State Governor’s Beyond Waste Working Group and is past president of the Washington State Recycling Association. She attended Stanford University and the University of Washington, and holds degrees in Applied Earth Sciences and English.  Her Masters work in Environmental Studies is from the Evergreen State College. 

 

Julie Colehour, Principal, Colehour & Cohen
 

Julie Colehour is a Partner at Colehour+Cohen, a 36 person social marketing and public relations firm with offices in Seattle and Portland, Oregon. She has 24 years of experience creating and implementing social marketing campaigns that encourage consumers to adopt environmentally-friendly behaviors. Her experience includes 17 years working with EPA on ENERGY STAR including creating the plan that launched the brand in 1997. She works on behavior change campaigns that span a number of important social issues including recycling, waste reduction, water efficiency and healthcare. She is frequently called upon to speak on social marketing at venues across the country. Julie has been recognized for her work through many awards including eight Silver Anvils from the Public Relations Society of America. In 2001, she was named one of The Puget Sound Business Journal’s 40 under 40 young outstanding executives. She is also co-author of The Environmental Marketing Imperative (Probus Publishing).

 

Angie Timmons, Environmental Education Coordinator, Hennepin County, MN
 

Angie is the Communications Coordinator for Hennepin County Environmental Services. She has fifteen years of environmental education experience. Recent projects include launching a multimedia campaign called “Recycle Everywhere” to encourage away from home recycling and promoting an environmental recognition program for businesses.

Angie has a Bachelor of Science degree in Natural Resources and Environmental Studies from the University of Minnesota and a Master of Business Administration degree from the University of St. Thomas


Moderator:

Joel Makower

Joel Makower, Chairman & Executive Editor, GreenBiz Group 

For 25 years, Joel has been a well-respected voice on business, the environment, and the bottom line. Joel is co-founded GreenBiz Group Inc., including its website, research reports and events on the corporate sustainability strategy and trends. He hosts the annual GreenBiz Forums and VERGE conferences around the world, and is author of the annual, award-winning State of Green Business report.

In 2012, he was awarded the Hutchens Medal by the American Society for Quality, which cited “his ability to tell compelling stories that both inform and inspire business leaders toward profitable action.” In 2014 he wasinducted into the Hall of Fame of the International Society of Sustainability Professionals.

Tuesday, December 9, 2014 - 1:00pm
Sponsored by: 
Waste Management

How to engage millennials? Appeal to 3 core values, 3 core traits

Bridget Croke

Popular opinion says that millennials are different animal from the rest of the populace. And with millennials quickly moving through their 20s and 30s, the yet-to-be-definitively-labeled Gen Z'er is coming of age and becoming a more critical decision maker.

With all the conflicting information on millennials' relationship with social change, how do we successfully engage these generations in positive behavior change? Do they care about your brand's social impact? Do they actually align their spending with their values? Or are they so cash-strapped and overwhelmed with information that clicktivism is the most we can expect?

In reality, all generations share a set of core motivations that drive our decision-making (hint: it's not our rational thought). But millennials and Generation Z have grown up in a different context and with a new set of digital tools that also influence behavior.

To best mobilize this audience around your brand and mission, we need to understand what core values and trends that drive behavior change.

Core value 1: Belonging

This basic human instinct isn't something we comfortably discuss, but ultimately most people want to fit in. We want to be seen as socially conscious only so much as it sits within the expectations of our peer group.

Millennial embrace of the Toms Shoes brand is an example of a peer-driven business growth where social impact becomes synonymous with cool. Toms made it easy to take an impactful action, attracting a socially conscious millennial audience who take easy social actions such as online petitions, likes and shares.

Toms leveraged these influencers to mobilize their friends who wanted to be part of the club. The shoes became a proof of belonging.

Suddenly, the one-for-one model wasn't just another stodgy cause marketing program. One-for-one became a new category of social action, where the product becomes a badge of honor. With this in mind, we can treat behavior change like an innovative product launch, where we target early adopters first and use their influence to make that behavior feel like the default behavior in their community of peers.

Core value 2: Recognition

Within the confines of belonging, we like to also feel special and unique. If a particular behavior is perceived in our social circle as cool, we want to be recognized for that. Peruse your social media feeds and you'll likely notice your online community filled with "humblebrags" — casual shares of images and recent achievements that their peer group is likely to value and recognize through likes and comments.

 MaridavWant your audience to recycle? Recognize that action in contexts and sharable formats that make them look cool.Global Citizen and EKOCYCLE did this skillfully with their #ADayWIthoutWaste mug shot campaign, showing fun pictures of friends at trendy events like SXSW and the Global Citizen Festival in Central Park confessing their crimes of waste and pledging to go waste-free for a day. The content is sharable with a fun backdrop and the context of events that builds social currency.

Core value 3: Need for ease

Outside of our deep-seated values, we will take the path of less resistance — the default action given to us.

You want people to recycle? Make your package easily and clearly recyclable and work with communities to make recycling the default action. To get people to recycle, communities should make their recycling container bigger than the waste receptacle, make sure recycling is picked up as or more frequently than trash and properly incentivize the behavior.

None of this means that generational differences don't exist. There are also some characteristics and trends unique to millennials and younger audiences. A few examples follow.

Millenial/Gen Z trait 1: Natural hackers

This is a generation of makers with their own Etsy stores. They've seen a shift from Hollywood celebrity to young celebrity entrepreneurs like Mark Zuckerberg. Teenagers are finding their own solutions global problems from the great Pacific ocean patch to clean water and energy .

 mangostock via Shutterstock

Unilever wisely leverages these great minds with their young entrepreneurs program, thereby driving greater youth engagement. Let them help create the solution and build far more brand relevance and likely impact. Otherwise they might leave your company behind and start their own businesses that solve social issues and change the behavior of their generation.

Millenial/Gen Z trait 2: Diminished influence of geographic borders

The sphere of influence of young people includes good friends, neighbors and their vast digital community. According to a ShareThis report , Millennials are 3.6 times more likely than their elders to share online, so peer pressure extends far beyond local communities. This generation has seen the advent of the self-made social media and reality TV celebs.

Influencer status is well within reach of the average social-savvy teenager and 20-something and therefore the line between leader and follower has blurred. Instead of focusing on a single celebrity to motivate consumer action, distribute the message amongst a larger number of everyday influencers with strong social followings. It's like the Avon model for the twenty-first century.

Millenial/Gen Z trait 3: New lifestyles demand less ownership

These generations are driving the sharing economy. Our population continues to urbanize and live a less traditional lifestyle. Older millennials are getting married less and are making major purchases like houses and cars at lower rates than older generations.

New lifestyles and limited budgets have paved the way for new business models that leverage a service-based economy, requiring less individual ownership. Growing businesses such as Rent the Runway, car sharing serviceGetaround, and emerging player Yerdle all succeed at driving new behaviors based on these trends. Brands need to appeal to these new lifestyles. Brands getting wise to this shift are the ones skillfully claiming this new audience and staying on trend.

Home Depot, Walgreens and BMW are some of the companies dabbling in this movement. But the trend of big brands participating in the sharing economy is still nascent. To engage millennials and Gen Z in behaviors you want to drive, ride the waves of new behaviors that are already beginning to take hold. To drive the greatest impact, be sure to understand and consider the core human values driving behavior and the new contexts shaping these generations.

Top image of young designers by Dragon Images via Shutterstock.

Why understanding the true value of water is smart business

Steve Bolton

Concerns about water availability are increasing around the world. Water scarcity threatens the ability of companies and communities to operate as they have in the past. Business value may be at risk if they do not have insight into these natural capital considerations and adjust their operations accordingly.

Understanding the true value of water and pinpointing limits to growth is a growing global trend. Companies that quantify their natural capital dependencies will benefit from a more complete picture of the most effective ways to allocate water and other resources.

Current market pricing disconnected from risks

In many regions, the market price of water is inversely proportional to how much is available. For example, water-scarce regions of China can have a low price for water which does not reflect its relative availability. Forbes India magazine has an informative world map showing local water prices based on data from Global Water Intelligence.

The market also does not consider the risk to business value of water availability, nor the benefits that water provides communities and ecosystems. As water demand rises around the world resulting in shortages and increased operating costs, it will be difficult to conduct business in the same way as before. Without measuring the hidden risks to business value of insufficient water, a company cannot perceive the potential losses or respond to them.

The full value of water should be measured by incorporating its broader social and environmental significance within the market price. By using this value, companies can identify hidden water risks and make more informed decisions, such as locating facilities based on water availability and selecting water-efficient technologies to use in production processes.

Facing water scarcity

Trucost’s research for GreenBiz’s State of Green Business 2014 report found that the average US business uses over 49,000 cubic meters of water per million dollars of revenue. In a world faced by increasing water shortages, we must identify and implement ways of decoupling commercial growth from natural capital dependency, so that economic success does not overwhelm natural resource capacity.

This year’s drought in California reflects the impact of resource scarcity on quality of life, economic activities and public services. As of September 2, 2014, a total of 58 emergency proclamations for water conservation have been issued by municipalities, counties, tribal governments and special districts. The State Water Board is providing technical and funding assistance to communities facing drinking water shortages. The state also has responded to 25 percent more wildfires than during an average year, which have burned 15 percent more acreage, equating to increased costs for firefighting and natural resource damage.

Focusing on the true value of water

Water is not valued properly according to the gaps between supply and demand. For instance, the low market price of water in dry regions is a perverse incentive to grow water-intensive agricultural products despite the high risk of drought or damage to long-term water supplies.

Since market water prices do not capture the full costs of extracting water, these costs are borne by society and the environment — so-called ‘externalities.’ These externalities are becoming more visible as water shortages threaten local communities, ecosystems and economies, droughts shrink crop yields and increase food prices, and desertification takes over farm land.

Applying the true value of water for business growth

How do we monetize water risk so it can be factored into investment decisions and considered alongside other business metrics? Trucost estimates that the true value of one cubic meter of water ranges between $0.10 where it is plentiful and $15 in areas of extreme scarcity. Forward-thinking businesses should apply this true value of water to inform their operating strategies, such as aligning water use with its availability and evaluating new infrastructure investments, procurement strategies and product portfolios. Companies can focus on the true value of water to prepare for having to absorb costs that were once off the books, but are now being internalized due to new regulations, higher water prices or water shortages.

One example of this approach is work by Yorkshire Water in the U.K., which applied natural capital valuations to inform its 25-year corporate strategy so that it could meet the needs of one million new households. The company created an environmental profit and loss account so that it could allocate resources and manage commodity costs for the long term. In the EP&L, negative environmental impacts are shown as losses, such as water extraction, waste disposal and pollution, while environmental benefits are identified as profit, such as the company’s water recharge and energy recovery facilities. Applying monetary values helped the company communicate its water efficiency strategy to stakeholders, including suppliers, customers and regulators, in a way that is easy to understand.

Another example is the use of shadow water pricing by Nestlé, so that the company includes the full value of water in its operational decision making. A recent article in The Financial Times outlines how the food company applies an internal water value to spur more efficient use in its factories. Under this policy, water is priced at approximately $1 per cubic meter for facilities located where water is readily available and $5 in more arid regions. Nestlé applies this value when considering purchasing new equipment, making tangible the impact of water availability within capital expenditure decisions. Shadow pricing has also been applied to greenhouse gas emissions by Microsoft, Disney, and at least 27 other US companies, to factor climate impacts into their business decisions.

Monetary valuation for improved decision making

Monetary valuation enables a business to include the true value of water — not just its current market price—alongside traditionally priced items such as labor in capital budgeting, as well as adjusting the net present value of capital and operational expenditure. Applying monetary values to projected water consumption and deducting the environmental costs from future cash flows can reveal which option has a lower risk. By expressing all of its environmental impacts in the single metric of monetary value, a company can easily identify and manage its most significant environmental risks and opportunities. Water valuations also can be used to map commodity flows and quantify risks across a company’s brand portfolio or business unit.

As a result of understanding the true value of water, a company can make more informed decisions which maintain business value by avoiding or minimizing the risks associated with water scarcity and other natural capital constraints.

Top image by Wollertz via Shutterstock.