This past week several Newport principals, colleagues and friends gathered in Portland for a weekend of connecting over toasty glasses of pinot noir and chardonnay. Harvest is fast approaching and the Willamette Valley was abuzz with new releases and hopeful flavors a pre-harvest dry and sunny spell would cast over the 2010 vintage.
During the week I found myself in the “Mecca of Sustainability” – Portland, Oregon for a view on the University of Oregon Sustainability Leadership Program. Having lived in Oregon years ago, I knew then that recycling could be taken to new art form levels (for example, do you put those color newspaper adds in the colored paper or the newsprint recycling container?) With my new colleagues from the SLP, several themes emerged to bring some cohesion to this business about sustainability.
Don’t get me wrong, sustainability (particularly the area of social accountability and responsibility) is nothing new to many of us. Our firm and several principals have been engaged with such organizations as SAI as well as monitoring product environmental compliance for customers of software maker SAP for over 10 years. However when a concept begins to be institutionalized in the business mainstream, I have found it important to have a consistent point of view (perhaps not one’s own but one that is broadly shared). This allows for a platform of conversation and dialogue, much like the old Total Quality Management days in the mid-1980s. (For example: what does “X” mean? How do I plan and implement this in my organization? and the infamous WIIFMs – what’s in it for me? – questions that come up with any business initiative having such market pull.)
The first take-away is that sustainability is more than recycling. While this may be a no-brainer to those familiar with TBL reporting, this is a logical starting place and an area where quick-hits and low hanging fruit may be found. Removing waste as outputs, and then creating a system where that waste can be re-introduced as raw material inputs, makes a lot of sense. As the market for recycled material inputs increases, so does the demand create a price incentive. These days recycling programs, done correctly, can actually be revenue generators.
The second key concept is that sustainability is by definition a cultural change program. Several of my SLP colleagues had received word from the mountain top that they “had to do something with sustainability” and they were tasked with making something happen. This suggests two things. First reporting and the benefits of reporting on sustainability can have a net positive impact on the relationship and investor management functions of the company (but buyer beware! see the next point). Second, because of this and because of the mainstream buzz, sustainability is moving into the forefront with critical mass. So more and more of these conversations are likely to occur in the future. As such to really “do sustainability,” you need to define what it is, determine your value drivers, and motivate the organization. Which is not easy to do, and these are just the basic opening questions
The third take-away is that you shouldn’t do sustainability just to do sustainability. In fact some harm can be done by claiming to have a sustainability program or initiative underway and either not be in acceptable range of what is “good” by key frameworks (such as GRI), or worse to make a claim in a sustainability report which is misleading or simply untrue. While there are no fraudulent penalties in the financial world (yet) for malicious sustainability reporting, there can certainly be consumer backlash and investor damage . One SLP example we discussed: BP’s promoted efforts in the areas of overall safety and “green” ecosystems which consisted of less than 2% of total operations despite the “beyond petroleum” ad campaign which ran before the Gulf of Mexico spill earlier this year (estimates presented by University of Oregon SLP and independent studies).
We continue to advocate the need for program related governance, consistent value orientation, and focused strategic goals and messaging from sustainability programs we engage with our direct and indirect partner clients. We believe that through a comprehensive and strategic deployment of sustainability, over time the concepts become institutionalized into our day-to-day activities.
For more information on sustainability and to read our point of view on sustainability program governance and outreach visit our sustainability page.