Conserving Environment – New Corporate Initiatives
EmPower Research
December 28, 2007
By Arun Swamy
A growing trend witnessed in recent times across corporate boardrooms has been the concern for environmental protection and implementation of initiatives for environmental conservation. Half of the US's top 100 companies are now reporting on their environmental, social and governance (ESG) performance, according to a study by Social Investment Research Analysts Network (SIRAN) and Boston-based KLD Research & Analytics. Of the companies in the S&P 100 Index, 49 had issued comprehensive ESG reports - 11 for the first time - in the period from June 2005 to December 2006, clearly underscoring the importance of their commitment to the environment.
Environmental Sustenance: On The Rise
The world is awakening to the grim prospect of environmental degradation and is taking steps to stem the tide. Many corporations have acknowledged the negative consequences of natural events like global warming, greenhouse gases and the depletion of the ozone layer and are re-orienting themselves and their businesses to combat the same, especially given its impact on energy, a critical raw material input. Such provisioning for environmental impact in their day-to-day operations is often termed as "going green" in corporate parlance. Regulatory policies like the Kyoto Protocol are also increasingly helping this shift as corporates pro-actively embrace environment-friendly programs and initiatives.
Incidentally, a survey conducted by Global Environment Management Initiative (GEMI) in May 2006 reveals that the key reasons driving companies to adopting environmental-friendly programs have been energy efficiency and greenhouse gases (GHG) concerns, specifically the need to report the GHG emissions attributed to the company (also stated as a GHG inventory) and to maintain/reduce the emissions through various means.
The GEMI survey reports that companies view investment in communications, conservation and climate change programs as most important in contributing towards the upkeep of the environment. Examples of some such successful "green investments" include:
IBM, known as Big Blue, which launched its Project Big Green to help customers slash their data center energy usage
Home Depot introduced an Eco Options label for thousands of green products
General Motors and oil major ConocoPhillips joined the list of corporate giants that have come out in support of a mandatory ceiling on greenhouse gas emissions (Source: Corporate Research Newsletter)
Nearly 60% of the GEMI survey respondents have partnered with a government agency, NGO or academic institution on an energy or climate topic.
According to EmPower Research, for corporates to manage the environment sustenance role effectively, they must adopt a four step value chain comprising the following, as detailed below:
Benchmark Against Peers And Across Industries:
As a starting point for companies about to embark on an environment friendly and sustainable journey, benchmarking helps in analyzing and implementing best practices from within and across industries. There are numerous examples of companies adopting environmental initiatives across various industries that can be effectively studied and adopted or modeled.
Execute Effectively:
An environmental program on paper is of no use unless accompanied by a well laid out implementation strategy. Understanding and internalizing the key steps to execution is a must for a company that plans to commence on the environmental journey. For example, a key approach could be collaboration with environmental groups, government organizations, NGO's or academic institutions to implement an environmental program.
Such an initiative has been taken by Wal-Mart by working closely with Conservation International on its efforts to cut energy usage and switch to renewable sources of power.
Similarly, McDonald's has teamed up with Greenpeace to discourage deforestation caused by the growth of soybean farming in Brazil.
Again, good execution ensures that companies planning to inculcate environment-friendly initiatives do not falter at the first step or do not have to retract their steps in the future.
Communicate - Media Outreach:
Positive communication by organizations highlighting the benefits, features and results of "green" initiatives portray practicing companies in good light and constantly keep them in the media focus radar. This is more so imperative for energy, utilities, and such other companies, which consume large amounts of the earth's resources.
Measure Outcomes:
Going forward, companies need to select meaningful and effective tools for measuring their environmental performance, especially among their stakeholders, customers and the community at large. In addition, the quality and quantity of media coverage plays a very important role in adding to the company's reputation. For example, positive coverage in the top tier newspapers always alleviates a company's position in the print media. Similarly, coverage of key issues, which have an impact on the company's stock price is picked up by financial institutions which in turn are accessed by key stakeholders. Therefore, capturing the essence of both qualitative and quantitative coverage in the media is crucial for gauging the impact of initiatives.
According to AMR Research, 52% of the top 100 Fortune companies do not have a dedicated budget and have not planned a strategic roadmap for implementing environment-friendly initiatives. This showcases the untapped potential for environmental sustenance adoption and underlies the importance of this need, going forward.
Typically companies which are laying out initial plans tend to give more importance on the first two steps of the value chain - benchmarking and execution.
On the other hand, companies which have already executed environmental programs tend to concentrate their efforts on the last two steps - media communication planning and measurement of the impact of their initiatives, while continuously benchmarking themselves against their peers and the industry at large. However, varying strategies are also likely, given the importance the corporate accords to the environment.
EmPower Research caters to organizations in all stages of their environment sustenance programs by providing research and analytics supporting all the four steps of the value chain. Two sample cases that outline examples of benchmarking and media communication planning executed by EmPower are discussed in the next section.
Case Study 1:
EmPower Research assisted a global consumer electronics goods manufacturer in their green strategy by providing a benchmarking analyses across a pre-defined peer set on a global basis. The analyses provided the following insights:
A) Identification of initiatives across the globe for the peer set under study;
B) Categorization of initiatives under various buckets such as the illustrative list below:
1. Wildlife conservation and restoration;
2. Product recycling;
3. Decreased or removal of hazard substance usage in the product life cycle;
4. Afforestation;
5. Emission reduction;
6. Packaging;
7. Product design;
8. Procurement;
9. Vision Statements;
10. Adoption of Endangered Flora And/Or Fauna;
11. Groundwater cultivation;
12. Contests promoting the friendly use of the environment;
13. Consumer focused thought provoking communication programs; and
14. Vendor education campaigns
C) Traction of the above programs in terms of awards, recognition accorded to them by local, state or federal authorities in their respective geographies.
In addition, EmPower also provided anecdotal evidence in the form of case studies from organizations in other industries outside the peer set, so that the client could take cues from them to devise their approach in this regard.
Case Study 2:
For a global energy giant, EmPower provided insights into the efforts of green initiatives among industry players in one of the most environment conscious states with very stringent environment and energy legislations in the US. Through a regular daily media monitoring service, we tracked issues such as energy legislation at the state and national level, energy shortages, natural gas, alternative energy sources and developments in this area, blackouts, and greenhouse gas emission issues.
This real-time intelligence provided the groundwork for the client to mould their approach and green initiative plans in close alignment to the prevailing legal requirements, while also effectively countering the initiatives of their competitors and peer set at large.
A growing trend witnessed in recent times across corporate boardrooms has been the concern for environmental protection and implementation of initiatives for environmental conservation. Half of the US's top 100 companies are now reporting on their environmental, social and governance (ESG) performance, according to a study by Social Investment Research Analysts Network (SIRAN) and Boston-based KLD Research & Analytics. Of the companies in the S&P 100 Index, 49 had issued comprehensive ESG reports - 11 for the first time - in the period from June 2005 to December 2006, clearly underscoring the importance of their commitment to the environment.
Environmental Sustenance: On The Rise
The world is awakening to the grim prospect of environmental degradation and is taking steps to stem the tide. Many corporations have acknowledged the negative consequences of natural events like global warming, greenhouse gases and the depletion of the ozone layer and are re-orienting themselves and their businesses to combat the same, especially given its impact on energy, a critical raw material input. Such provisioning for environmental impact in their day-to-day operations is often termed as "going green" in corporate parlance. Regulatory policies like the Kyoto Protocol are also increasingly helping this shift as corporates pro-actively embrace environment-friendly programs and initiatives.
Incidentally, a survey conducted by Global Environment Management Initiative (GEMI) in May 2006 reveals that the key reasons driving companies to adopting environmental-friendly programs have been energy efficiency and greenhouse gases (GHG) concerns, specifically the need to report the GHG emissions attributed to the company (also stated as a GHG inventory) and to maintain/reduce the emissions through various means.
The GEMI survey reports that companies view investment in communications, conservation and climate change programs as most important in contributing towards the upkeep of the environment. Examples of some such successful "green investments" include:
IBM, known as Big Blue, which launched its Project Big Green to help customers slash their data center energy usage
Home Depot introduced an Eco Options label for thousands of green products
General Motors and oil major ConocoPhillips joined the list of corporate giants that have come out in support of a mandatory ceiling on greenhouse gas emissions (Source: Corporate Research Newsletter)
Nearly 60% of the GEMI survey respondents have partnered with a government agency, NGO or academic institution on an energy or climate topic.
According to EmPower Research, for corporates to manage the environment sustenance role effectively, they must adopt a four step value chain comprising the following, as detailed below:
Benchmark Against Peers And Across Industries:
As a starting point for companies about to embark on an environment friendly and sustainable journey, benchmarking helps in analyzing and implementing best practices from within and across industries. There are numerous examples of companies adopting environmental initiatives across various industries that can be effectively studied and adopted or modeled.
Execute Effectively:
An environmental program on paper is of no use unless accompanied by a well laid out implementation strategy. Understanding and internalizing the key steps to execution is a must for a company that plans to commence on the environmental journey. For example, a key approach could be collaboration with environmental groups, government organizations, NGO's or academic institutions to implement an environmental program.
Such an initiative has been taken by Wal-Mart by working closely with Conservation International on its efforts to cut energy usage and switch to renewable sources of power.
Similarly, McDonald's has teamed up with Greenpeace to discourage deforestation caused by the growth of soybean farming in Brazil.
Again, good execution ensures that companies planning to inculcate environment-friendly initiatives do not falter at the first step or do not have to retract their steps in the future.
Communicate - Media Outreach:
Positive communication by organizations highlighting the benefits, features and results of "green" initiatives portray practicing companies in good light and constantly keep them in the media focus radar. This is more so imperative for energy, utilities, and such other companies, which consume large amounts of the earth's resources.
Measure Outcomes:
Going forward, companies need to select meaningful and effective tools for measuring their environmental performance, especially among their stakeholders, customers and the community at large. In addition, the quality and quantity of media coverage plays a very important role in adding to the company's reputation. For example, positive coverage in the top tier newspapers always alleviates a company's position in the print media. Similarly, coverage of key issues, which have an impact on the company's stock price is picked up by financial institutions which in turn are accessed by key stakeholders. Therefore, capturing the essence of both qualitative and quantitative coverage in the media is crucial for gauging the impact of initiatives.
According to AMR Research, 52% of the top 100 Fortune companies do not have a dedicated budget and have not planned a strategic roadmap for implementing environment-friendly initiatives. This showcases the untapped potential for environmental sustenance adoption and underlies the importance of this need, going forward.
Typically companies which are laying out initial plans tend to give more importance on the first two steps of the value chain - benchmarking and execution.
On the other hand, companies which have already executed environmental programs tend to concentrate their efforts on the last two steps - media communication planning and measurement of the impact of their initiatives, while continuously benchmarking themselves against their peers and the industry at large. However, varying strategies are also likely, given the importance the corporate accords to the environment.
EmPower Research caters to organizations in all stages of their environment sustenance programs by providing research and analytics supporting all the four steps of the value chain. Two sample cases that outline examples of benchmarking and media communication planning executed by EmPower are discussed in the next section.
Case Study 1:
EmPower Research assisted a global consumer electronics goods manufacturer in their green strategy by providing a benchmarking analyses across a pre-defined peer set on a global basis. The analyses provided the following insights:
A) Identification of initiatives across the globe for the peer set under study;
B) Categorization of initiatives under various buckets such as the illustrative list below:
1. Wildlife conservation and restoration;
2. Product recycling;
3. Decreased or removal of hazard substance usage in the product life cycle;
4. Afforestation;
5. Emission reduction;
6. Packaging;
7. Product design;
8. Procurement;
9. Vision Statements;
10. Adoption of Endangered Flora And/Or Fauna;
11. Groundwater cultivation;
12. Contests promoting the friendly use of the environment;
13. Consumer focused thought provoking communication programs; and
14. Vendor education campaigns
C) Traction of the above programs in terms of awards, recognition accorded to them by local, state or federal authorities in their respective geographies.
In addition, EmPower also provided anecdotal evidence in the form of case studies from organizations in other industries outside the peer set, so that the client could take cues from them to devise their approach in this regard.
Case Study 2:
For a global energy giant, EmPower provided insights into the efforts of green initiatives among industry players in one of the most environment conscious states with very stringent environment and energy legislations in the US. Through a regular daily media monitoring service, we tracked issues such as energy legislation at the state and national level, energy shortages, natural gas, alternative energy sources and developments in this area, blackouts, and greenhouse gas emission issues.
This real-time intelligence provided the groundwork for the client to mould their approach and green initiative plans in close alignment to the prevailing legal requirements, while also effectively countering the initiatives of their competitors and peer set at large.