Managing Carbon

Managing Carbon: Taking an Integrated Approach

By Paul Horton, Paul Horton Consulting

© Copyright ISSP 2011 (Image courtesy Carlos Porto)

Regardless of individual beliefs around climate change, businesses and other large organizations will benefit from viewing climate change as an inevitable market transition that will have far reaching economic effects. These effects include:

• energy price volatility
• increased costs for a wide range of services that rely on energy
• a variety of regulatory and internal and external stakeholder pressures

This inevitable transition places the challenge of carbon- emissions reduction squarely into the strategic realm, necessitating a fully-integrated, organization-wide response.

Granted, the process of carbon-emissions reduction can be a complicated and frustrating one for businesses, organizations, and large institutions. Furthermore, policy mandates that many had long anticipated have not yet materialized in the United States, so it can be tempting for business and organizational leaders to approach carbon reduction management from the perspective of "doing what's expected" or as a necessary but less than a strategic add-on. Organizations that start from this perspective will tend to offer insufficient support and resources for the task.

Imagine an entrepreneur standing before a group of potential investors and saying that in addition to inventing an exciting new technological breakthrough, he or she is also considering the idea of earning a profit. Just as a business cannot succeed if it only dabbles in profit making, no business or organization can achieve great results with a half-hearted effort at reducing carbon emissions. This sort of tentative approach is likely to lead to minimal reductions in an organization’s carbon footprint, and will do little to advance or prepare a business or organization for the future.

Just as climate change is a major indicator of a non-sustainable society, excessive or unnecessary carbon emissions are an indicator of a non-sustainable organization. Because of its potential to integrate the triple bottom line concerns of ecology, economy, and social equity while simultaneously creating financial value through enhanced revenues, lower costs, and reduced risk, an increasing number of public and private sector leaders are seeing sustainability as an appropriate framework under which to manage carbon reduction efforts. These leaders are ushering in what some have called a “new era of sustainability.” For instance, according to a new report from the United Nations Global Compact and Accenture, based on a global survey of more than 750 CEOs and in-depth interviews with 50 of the world’s foremost CEOs in a range of industries and geographies, this new era is characterized by the embedding of not only environmental but also social and corporate governance issues throughout the organization as well as its supply chain.

According to the survey, 93 percent of Global Compact CEOs see sustainability as important to their future success.

Path to Sustainability

Organizations appear to progress through relatively easily definable stages on the path to sustainability: Exploration, Investment, Full Integration.

Phase 1: Exploration

An initial exploratory period often begins with efforts to eliminate obvious inefficiencies, in particular those that have short-term paybacks. At this stage, organizations are testing the water and internally validating the notion that sustainability needn’t be bad for the bottom line. Also at this stage, sustainability is clearly only one of many initiatives competing for attention and resources.

This may be an appropriate time for organizations to invest a modest amount of time and money to get an initial read on its carbon emissions by conducting a basic carbon inventory. My first GHG inventory as Director of Sustainability for the engineering firm David Evans and Associates, Inc was an eye opening experience. For me it was a fascinating look across the organization that made visible the incredible interconnectedness of functions. It was also a great tool for finding a bunch of easy, money- and carbon-saving fixes.

Everything from small local businesses to universities to international corporations have yielded tangible benefits from a wide range of relatively simple carbon reduction measures. CP Property Management (now a division of CBRE), for instance, substantially reduced its carbon footprint and saved $51,265 on electricity in 2007 by installing smart-time optimization programming and turning off HVAC systems on Saturdays for three of its properties in Seattle.

However, once you’ve captured most of the “low hanging fruit” getting to the next tier of carbon reductions and other environmental improvements tends to be a much bigger and more complex task.

 

Phase 2: Investment

Once the more straightforward waste reductions and efficiencies have been realized, organizations will often hit a plateau after which forward progress appears to slow significantly. In the absence of a thoughtful, integrated plan of action, efforts can be disjointed, clunky, and often frustrating for those involved. To overcome this, smart organizations know that they must embed sustainability more fully within the structure of the organizations. The graphic above illustrates some of the key elements on the path to sustainability.

With thoughtful, proactive management any organization can skip much of the clunky inefficiency of stage one and move straight into stage two. One way to ensure this happens is to take an integrated approach to planning for sustainability and carbon reductions.

 

Phase 3: Integration

Climate action planning doesn’t have to be a dry exercise in counting carbon. Nor does it have to be a frustrating distraction from the core business or organizational mandate. If done right, carbon reduction effort can not only save money, improve operational efficiency, and enhance your reputation, it can also be an opportunity to gain priceless new insights about your organization, engage your people, identify emerging leaders, and, yes, even have some fun in the process.

Following are a few important considerations when developing and successfully executing an integrated climate action plan.

Start from goal of achieving 100% sustainability—At the root of the problem is that our enterprises are individually and collectively unsustainable. Again, rather than starting from the goal of simply creating a lower carbon footprint, a more compelling and I would argue, a more strategic approach is to view carbon reduction as one important aspect of ultimately creating a fully sustainable enterprise.

According to the United Nations Environment Programme, Global Environment Outlook (GEO-4), our ability to meet for the needs of future generations due to a host of interrelated planetary challenges such as climate change, loss of biodiversity, accelerated rates of species extinction, and growing food insecurity are at risk.

A major difference between this approach and many other efforts to reduce environmental impact is the defining of a beneficial goal or endpoint. This approach provides a clear idea of how good things need to be. From there, groups of individuals know what’s expected of them over the long haul and can work together more creatively and effectively to identify near-term opportunities to achieve the goals.

The vision of full sustainability ultimately may include such long-term targets as zero waste, zero net water, climate neutrality (not just carbon reduction), and effective stewardship of all resources, human and physical. For instance, major retailer Marks & Spencer established the aggressive goal of making all its UK and Republic of Ireland operations (stores, offices, warehouses, business travel and logistics) carbon neutral by 2012. This provided the institutional platform that allowed the company to reduce its 2009-10 emissions per square foot by 20%.

Some executives and managers, when considering for the first time aggressive sustainability and carbon reduction goals, might be understandably reluctant. Sustainability, after all, isn’t the primary competency of most organizations and the goal itself may seem simply unattainable. Many managers are also rightly hesitant to make claims that might be greeted with skepticism by employees or important stakeholders.

The keys to success here are intention and transparency. As stakeholder sophistication around sustainability increases, so too does internal and external scrutiny of efforts to “green wash”. This is certainly the case for business but public institutions such as institutions of higher education are anything but immune. Many sustainability leaders have publicly stated their long-term intent to become fully sustainable while acknowledging the complex challenge ahead. They keep themselves honest by annually reporting their achievements while clearly indicating not only where they are making progress, but also where they are having difficulty meeting their goals.

Ensure support and involvement from leadership—To achieve optimal results, carbon reduction needs to move from the technical problem taken on by a subset of the organization (just another initiative) to a boardroom strategic level issue. Seen from this vantage point, carbon management is not just about reducing emissions or limiting the negative impacts of our activities (being “less bad”), but as a tool to help achieve a number of other important organizational goals. Who best to drive a strategic level issue forward than organizational leadership?

Business or agency leaders are in a unique position to champion, validate, and endorse new initiatives, especially those that require the adoption of new practices, the development of new competencies, or, as is sometimes the case, additions to someone’s job description.

When DuPont established in 1994 a company-wide goal of reducing GHG emissions 40 percent below 1990 levels by 2000, business unit push back was overcome when CEO Chad Holliday personally stepped in to assert that failure wasn’t acceptable. DuPont not only met its goal in 1999 but also subsequently revised it to the more aggressive goal of 65 percent reductions from 1990 levels by 2010.

Senior leaders are also in the best position to ensure that climate change and sustainability are firmly embedded into the business or organizational mission, vision, and goals.

Involve key staff from all major organizational units or functions—Just as climate change pays no heed to international boundaries, greenhouse gases, though invisible, permeate nearly every aspect of a business or agency, from its internal operations through its entire value chain. A whole systems approach will provide more leverage than any single-issue response. Therefore, a fully robust climate action plan must have tentacles into every facet of an organization, the broad goal being to design an emissions reduction strategy that will create synergies across the various organization units and functions.  

As indicated above, it might be tempting to treat carbon emissions as an isolated problem to be handled by a newly appointed green team made up of low level employees or a small team of technocrats buried inside of the organization.  In so doing, organizations are likely to miss a whole range of potential synergies and opportunities that would emerge through an integrated approach.

Integrated climate action planning suggests joint planning, allowing wherever possible meaningful participation of all departments. If the goal of planning is to identify the best options possible and determine an appropriate course of action then ensuring collaboration among multiple departments and levels of hierarchy within the organization is critical. For instance, the IT (Information Technology) department is uniquely positioned to identify and lead implementation of opportunities to reduce office paper use as well as business air and auto travel through options like video teleconferencing. Human Resources can help to reinforce a culture of accountability by ensuring that carbon reduction goals are integrated into internal staff review, recognition, and rewards systems.

Pay Careful Attention to Stakeholder Engagement—When Wal-Mart announced in 2009 the release of its new Sustainability Index, a ground breaking effort to begin to try and gather sustainability-related information from its 60,000 suppliers and ultimately to improve the performance of the products sold in its stores, it opened the door to a potential firestorm of criticism from environmental advocates and the more progressive shareholders that would claim that this just another cynical corporate attempt at greenwashing.

Wal-Mart circumvented much of this criticism by not only acknowledging up front that the product was not yet perfect and was intended to be iterative but also took care to engage a broad spectrum of external stakeholders in the development process. These included a number of environmental groups, approximately 20 universities, and many of its major suppliers.

Conclusion

Managing carbon is indeed multifaceted and often complex. However, it certainly isn’t magic.

While I haven’t covered every aspect of developing and managing a comprehensive climate action plan, I have highlighted a few of the more critical best practices that will help to ensure that you achieve success with the least amount of wasted effort and frustration. The key, again, is to take an integrated, whole systems approach.

Don’t forget that you’re not alone here. There are a number of places that you can look for support. Following are just a few.

The Greenhouse Gas Protocol — The Greenhouse Gas Protocol is a joint effort of the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD). The Protocol is the most widely accepted GHG inventory accounting and reporting standard used throughout the world. It provides principles and guidance for determining organizational and operational boundaries, calculating, tracking, and reporting emissions over time, and managing the quality of a GHG inventory. 

The Climate Registry — The Climate Registryoffers a widely accepted General Reporting Protocol and various industry-specific protocols for GHGaccounting and guidance on process management.

US EPA Climate Leaders— The US EPA’s Climate Leaders programis an EPA industry-government partnership that works with companies to develop comprehensive climate change strategies.

The Seattle Climate Partnership— The Seattle Climate Partnership is a voluntary pact among Seattle-area employers to take action to reduce their own emissions, and to work together to help meet the community-wide goal. SCP partnersreceive a host of benefits, including high-quality technical assistance, access to utility incentive programs, opportunities for cost-saving collaborations such as joint purchasing arrangements, and recognition for a job well done.

You can also attend classes offered by organizations such as the International Society of Sustainability Professionals. The Natural Step Networkis a non-profit organization that offers an internationally accepted, scientifically-based framework for strategic sustainability planning.  Finally, some businesses and organizations may benefit from the accumulated experience of an outside consultant.

Note that while a comprehensive, fully-integrated climate action planning process will likely achieve the greatest results and the lowest amount of frustration, even in the absence of a substantial organizational investment, it’s probably better to get started now to try and gain at least an initial understanding of an organization’s carbon emissions are coming from. Many early improvements can be made with minimal changes in the existing organizational structure or internal operating procedures, and with the relatively inexpensive changes in hardware. The economic savings and environmental improvements achieved are a good increase internal support for additional future financial support and other resources.

 

About the Author

Paul Horton’s leadership experience includes co-founding and managing the non-profit Climate Solutions, serving as corporate sustainability director for the engineering firm David Evans & Associates, Inc, teaching sustainable business and carbon management at the Evergreen State College, and providing strategic sustainability solutions to tribes, universities, and other public and private sector clients.  Paul has extensive experience in the areas of climate change, energy efficiency, renewable energy, green building, and sustainable transportation and land-use.  He has conducted over 100 trainings and briefings on sustainable resource management and climate change.   Paul is one of nine Associates of the Natural Step Network USA and is a LEED Accredited Professional.  He also holds a Certificate in Sustainable Business from the Bainbridge Graduate Institute. 

 

Paul Horton, Principal,

Paul Horton Consulting Group, LLC – Integrated Sustainability Solutions

1714 Langridge Ave NW, Olympia, WA 98502

(360) 918-1079

paul@paulhortongroup.net

www.paulhortongroup.net