Sustainability

Sustainability:

A Competitive Advantage ? In April 2008, members and guests of the Criticaleye community gathered to hear a panel of experts made up of Richard Barrington, Head of Sustainability & Public Policy, Sun Microsystems, Jim Burrell, Senior Vice President of European Operations, Enterprise Rent-A-Car, Doug Johnston, Head - Corporate Responsibility (CR) Practice, Ernst & Young and Dinah McLeod, Head - Sustainability Practice, BT Global Services to discuss the benefits of incorporating sustainability campaigns into large organisations. As a follow-up, Criticaleye members who could not attend put a number of questions to the panel who have provided their responses.

Is sustainability a Western concept? I’m not even sure if the word hasn’t been that sustainability, however handled, will play pinched from the scientists; originally it a vital role in either ensuring, or undermining, Dinah McLeod: No, sustainability is about the meant the capacity of healthy ecosystems successful economic transformation. transfer of benefits from one period of time to to continue functioning indefinitely. My the next. This (admittedly wide) net catches first question is whether ‘sustainability’ has JB: This depends somewhat on the audiences many different cultures and perspectives. been defined adequately. My shorthand the governments or organisations in these A tighter definition of sustainability leans towards ‘doing the right thing’, where countries are targeting. As consumers which centres around the stewardship of opportunities for enhancing relationships in Europe and the Americas become the Earth’s resources, whether economic, to customers, stakeholders, society or more focused, educated and concerned environmental, or social, embraces many the environment are cost-effective. about all things ‘sustainable’ it will be different worldviews. For example, in very prudent for India and China to British Columbia, Canada, where I’m from, Richard Barrington: I would suspect that show how they are tackling this socially, aboriginal peoples are renowned for their it is the complete opposite. The West has economically and environmentally. environmental stewardship. Many modern- been struggling to construct a view of In their own countries, it means understanding day academics believe that their age-old the world that many indigenous peoples the issues they face and developing systems to principles are the ones on which modern would take for granted. Stewardship and prevent erroneous activity. In many ways they environmentalism should be based. And heritage, a sense of time and place, a view have the opportunity to take a leadership role indeed, the sustainability philosophy of the that transcends a financial reporting cycle, in this as their economies continue to grow Shushwap tribe sounds incredibly modern: are perspectives we need to rediscover and rapidly. Governments, independent bodies, they talk of the interrelatedness of all parts should look to other cultures for inspiration. and businesses could effect big change and of the environment; how best to monitor, avoid what the West has done for the last enhance and harvest resources; effective Douglas Johnston: No, the concept of 50 -100 years by choosing to be ignorant of knowledge acquisition and transfer, and sustainable development came out of the opportunity natural capitalism brings! so on. So no, sustainability is not just the the development movement in the late purview of a few Western economies. Lots 80s and the definition which is so often RB: If we aren’t careful sustainability can of other cultures recognise its vital role. cited from the Brundtland Commission be seen as a mechanism for keeping ‘them’ is grounded in development terms. down rather than a set of values we should Jim Burrell: If you looked at sustainability all share. However, is there any appetite as a system of meaning (philosophically) What does sustainability mean in emerging in the West for equity and equality other then quite the reverse may be true. markets such as India or China? than as noble ideals? How can we convince Perhaps the West is beginning to consider ‘them’ that the lessons we have learnt are an Ancient or Eastern concept! DM: It means that foreign and domestic worth embedding in their thinking? Sustainability is a common theme governments and businesses working in these wherever you go in the world. The ideas markets ensure that they haven’t compromised DJ: The question may be more about behind it and the attitudes towards it the economy, society, or environment in 10 whether the approach taken to the delivery may differ as you cross borders, but the – 50 years down the road. It means forward of sustainable development by Western basic concept is already in existence. planning, and having the foresight to realise organisations is also applicable in other www.criticaleye.net 02 The devil seems to have all the good songs right now in this debate.

cultures. There has been much debate could transform the world. The sustainability in the new realism phase and each one of on this and it is widely recognised that movement has done itself a disservice by us doing something in one of the spheres effective sustainable development needs not presenting those images, along with of influence we inhabit. And as for the to be culturally sensitive and take into the (essential, but scary) message that we impact of the individual, look to Gandhi consideration the views of stakeholders need to act urgently to avoid catastrophe. or Mao before you question the role of the in the relevant countries of operation. individual. The answer starts with ‘me’ and JB: If sustainability remains an environment- I have 3 opportunities to make a difference: Is there a degree of ‘sustainability fatigue’ only debate, then possibly. There’s always a at home, at work and at the ballot box. setting in with stakeholders, because danger of fatigue when one topic remains the the thought of global warming & climate centre of attention for any given period of time. DJ: There is little evidence of this. If change is too big at an individual level, ie, Inherent in the question is an acceptance that anything the climate change agenda has ‘what difference can one person make?’ the two ideas are the same, when actually, brought home the urgency of collaborative sustainability is about much more than action between government, industry, DM: It may not be sustainability fatigue cutting plastic bag use and driving cars less. the consumer and key influencers. per se, but maybe fatigue with the way the Sustainability is about understanding the message has been transmitted to date. I do economic implications of behaviour, social How do you secure cross-sector comparability think that there has been an unfortunate implications and then the environmental of environmental performance? trend towards ‘environmental doomsday- implication - that way my guess is inspiration ism’, ie, sustainability is this ‘hair shirt’ that will be our measurement, not fatigue. DM: I’m not sure that you can other than we all have to live with, which most people There’s perhaps more danger of fatigue if at a very high level. How can you compare rightly consider to be a bit of a drag. we only look at the rhetoric of sustainability the extractives industry’s best practice to IT I saw this wonderful New Yorker cartoon a few rather than trying to get to grips with the performance? That being said, there are some months back showing two women in a bar, concept itself. People do seem increasingly similarities that you can draw: environmental one of them saying, “I know it’s bad, but I sceptical over the environmental promises performance in both of those industries involves just LOVE a guy with a big carbon footprint!” and the commitments emanating direct and indirect emissions; they require This demonstrates the problem: the devil from company boardrooms where considerable attention not just to equipment seems to have all the good songs right now behavioural change is uncertain. but also to people and processes, and so on. in this debate. On one side are the incredibly The key message however, is that there may The first step towards making them more wasteful SUVs that are nevertheless seen be fatigue, but that suggests a belief, albeit comparable is, of course, achieving greater by some as the sexiest things on wheels; on one that is tired. More alarming would be clarity and agreement on environmental the other side we have the world heating up if we were cynical, as to suggest people benchmarks for each industry – such as beyond repair. Which side would you choose didn’t believe it in the first instance. whether to include Greenhouse Gas Protocol to have dinner with on a Friday night? Scopes 1, 2, and 3 when measuring carbon We need new messages that will excite and RB: Each ‘revolution’ comes in three emissions. Incidentally, BT’s Carbon Impact motivate people, showing how there are trends phases. The initial ‘euphoria’ gives way to Assessment takes into account all three in the right direction and showing that there is ‘despondency’ which migrates into a ‘new – and we think everyone else should, too. hope. This stuff is great, it’s our future, and we realism’. I actually think we are generally We are less certain about what to do with the locked-in carbon issue. We hope there will use and carbon emissions. If this is to be used audit – which we took as fact alongside be industry-wide debate about that soon. to draw conclusions on the environmental an action plan and reporting cycle. impact of one sector relative to another it JB: I don’t think we can today. Clearly, is important to ensure that the scope and DJ: Assurance of sustainability information there are some measures that can be seen scale of measurement are comparable. is more than just testing whether something as facing everyone like direct and indirect is accurate or not. Sustainability disclosures emissions, but beyond them there is How do you give satisfactory assurance need to be balanced and complete. Therefore more work to be done. Every business is around reported sustainability measures? credible assurance should test not just whether responsible for starting its own process of the information is accurate but that the scope understanding environmental performance DM: Transparency, transparency, transparency. of information presented is complete and that and setting targets to improve effectiveness Have it audited and published. If there’s it deals with the right issues – both those that and efficiencies. However, can Citigroup be a debate, get it out in the open. Try not to are managed well and those that are not. assessed with the same criteria as Anglo- appear as though you have all the answers and American? My sense is not today, at least. you’ve become perfect – because no one will Should sustainability be more regulated? believe it. BT has done a lot – we have reduced RB: Perhaps we shouldn’t try to compare our UK carbon emissions by 60% since 1996 DM: It depends on what you mean by different sectors. What we should do is be – but we have an awful lot of work to do to sustainability, and by regulation. There able to benchmark within sectors and where achieve our 80% worldwide reduction target. is a critical need to address the issue of possible, establish knowledge-sharing carbon emissions in very short order. networks cross-sector to ensure that ‘best JB: The key has to be engaging an impartial Tight, effective climate change legislation practice’ and innovation is captured and third party. There is no better way in which will force companies to respond in the shared. We need to identify (right back to the an organisation can give strong enough short timeframe that we’ve got before initial MIT Wedges and now the McKinsey cost assurances on its sustainability efforts. irreversible climate change is a reality. curve analysis) where the worst impacts exist Transparency is crucial, but there currently In other areas, it is less clear that legislation and where most benefit can be achieved. remains some difficulty in accrediting and is the answer. None of us are even sure about verifying those organisations and a healthy/ a binding definition of sustainability, and DJ: Environmental performance covers a broad comprehensive approach is advised. many people are not yet convinced that it range of issues from waste management actually matters. How can you legislate on through to climate change. Each sector will RB: This is difficult, but that’s where something you don’t even know how to define? have a different range of issues which are transparency comes in. An organisation material to them and will apply resources must look at what it is reporting and how JB: In an ideal world, sustainable practices are in their management in different ways. This it arrived at the figures. Sun Microsystems a matter of course for business. Unfortunately, will be dependent on the importance of was recently awarded Most Ethical Business that isn’t the case across the board. There the issue to their ability to operate, meet in our sector by ‘Ethisphere Magazine.’ This is a lot of variation in sustainability efforts stakeholder expectations and reduce costs. accolade came about because we declared and what the customer understands it is There are obviously cross-sector issues which our ‘known unknowns,’ ie, areas in the purchasing from a particular business – this can be measured and monitored such as water business we were unsure of or couldn’t is an opportunity for all industry to tackle, www.criticaleye.net 04 How do you deal with consumer cynicism relating to sustainability issues?

DM: Be a company that puts its money where its mouth is. BT saves over £500m a year through environmental and sustainability practices (such as home-working, telecommuting, and videoconferencing). We have an excellent CSR reputation. Our long track record on Can Citigroup be assessed with sustainability issues comes with a certain the same criteria as Anglo- facility to deal with consumer cynicism. JB: This is really about uncertainty and not cynicism. Broadly speaking there isn’t American for its environmental very much clarification as to precisely what constitutes ‘sustainability issues’, and performance? My sense is not that in itself creates uncertainty which can manifest cynicism. My sense is that it’s the environmental element of sustainability today, at least. that has attracted uncertainty, and as business becomes better at unpacking its environmental impact – whether through legislation or self-governance – consumers will it doesn’t need to be regulated per se. stuff. A large part of our Carbon Impact have a clearer understanding. The economics Having said that, regulation is already Assessment, for example, is about ensuring and societal benefits are perhaps more self an important tool in creating a business that customers’ IT equipment is deployed as evident, but there still remains lots to do to community committed to the environment, efficiently as possible, and introducing new fully grasp the meaning of sustainability. but it needs to be used in conjunction ways of working that allow staff to reduce their with more subtle approaches as well. carbon emissions profile without the need RB: Consumers are more frustrated with a The Climate Change Bill is the key piece of to buy new kit. For us, boosting consumer lack of clarity and evidence to base decisions legislation on the horizon which promises sales doesn’t necessarily involve purchase on. They are asking questions like: ‘Should I further regulation to compel environmental of new things; it involves purchase of our buy beans grown in Kenya or not?’ ‘What are business practices. Many of the proposals expertise to help consume more responsibly. the value judgements I should make so I can in the Bill are incredibly impressive and arrive at a decision I’m comfortable with?’ will likely have a very positive impact, but JB: Are we consuming too much? Or, are we need to ensure the scope of the Bill and we not addressing how we are consuming? DJ: It is important that consumers challenge associated legislation doesn’t obscure the Sustainability is not at the expense of profit or the sustainability claims of the companies efforts many businesses are already making. consumption, but about understanding how they deal with and the products they buy. In we make our profits, andhow we consume. response, organisations should feel completely RB: This depends on what behaviour you are Admittedly, there is a lot of work to do in all confident in the sustainability claims they trying to ‘drive’. I am a fan of an approach of this and in broadly educating ourselves make and be prepared to respond to external based on the establishment of principles that about understanding the unintended scrutiny with robust supporting data. people aspire to, rather than a regulatory consequences of our behaviour if we don’t. Building trust is an important part of approach that tends to drive compliance reducing cynicism, a key part of this is but not continuous improvement. RB: This is where the shift from product being open, not just about the things that to service or ‘de-materialisation’ kicks in have gone well, but also about the things DJ: As a broad concept, no. But there are areas and where that may not be possible, the that haven’t gone as well as expected. of sustainability where greater consistency opportunity to build stronger relationships is required and if voluntary schemes are based on a ‘whole life’ or ‘cradle-to- How can companies engage with not deemed sufficiently effective; more cradle’ approach may be the way ahead. local communities in order to regulation may be the solution. Examples Showing how buying from you both reduce their carbon footprint? might include common standards for satisfies the consumer urge as well as disclosing green house gas data and their altruistic intent can go a long way. DM: Companies can engage with communities labour standards in product sourcing. in a variety of ways, such as through direct DJ: These concepts are not necessarily introduction of sustainable businesses into the How do you reconcile the aim of boosting opposed. If a company produces a more community through to retailers’ education and consumer sales to generate more sustainable product than its competitor communication campaigns. We’re all finding, profit with the simple fact that we are and selling more of this product triggers I think, that measures that are mutually all consuming too much as it is? a reduction in the consumption of a less profitable – that take advantage of both sustainable product, then there should consumers’ and businesses’ incentives – are DM: The BT sustainability practice be a net environmental benefit. the ones most likely to have a high impact. concentrates on selling services that help customers make more of what they’ve got, rather than getting them to buy new JB: Companies of all sizes have an opportunity to engage the communities in which they do Richard Barrington business. Companies with a large workforce Head of Sustainability & Public have a great opportunity to link themselves with Policy, Sun Microsystems local independent organisations/authorities. Richard represents Sun on the UK’s Corporate RB: In reality a business should focus on its Leaders Group on Climate Change; the DTI’s core stakeholder communities, employees, Information Age Partnership; is a board member customers and investors. The Confederation of of PITCOM, the UK Parliamentary IT Committee British Industry’s Climate Change Task Force and has been asked to join the UK Government’s identified employees as catalysts for change ‘Business Task force on Sustainable Consumption beyond the ‘factory gate’. Jonathon Porritt, the and Production’. British environmentalist and writer, told me that To contact Richard, please email: “Sun’s value is not in becoming more sustainable [email protected] in its operations however laudable that may be, it’s value is in the products and services it brings Jim Burrell to market as they are transformative” so that’s Senior Vice President of European where I encourage Sun to spend 80% of its time. Operations, Enterprise Rent-A-Car

DJ: Make it easy for the community to get Jim oversees all operations for Enterprise Rent-A- Car in the United Kingdom, Ireland and Germany. involved, make it visible, offer incentives, In more than 20 years with the company, he has get input and feedback from community been instrumental in Enterprise’s growth both in representatives and refine as appropriate. the U.S. and internationally and now serves as one of the company’s top officers. What is the best way to engage with NGOs on the sustainability agenda? To contact Jim, please email: [email protected] DM: Out in the open, and, if dealing with contentious issues, preferably in form with Doug Johnston government inputs. Or, you can just collaborate. Head - Corporate Responsibility For example, we work closely with Forum for the (CR) Practice, Ernst & Young Future. Jonathon Porritt has written papers with Doug leads Ernst & Young’s work in corporate our own sustainability guru Dr Chris Tuppen, and responsibility. He has 15 years experience in the that thought leadership has helped influence our area of corporate responsibility and sustainable company’s direction in terms of sustainability. development, advising on managing key risks (including health, safety, environmental and JB: Being open and willing to learn; ignorance in social), establishing corporate responsibility and today’s corporate climate simply isn’t an excuse sustainable development programmes, measuring performance and independent assurance over that warrants very much sympathy. Ignoring public disclosures. NGOs is one of the worst things a company can do. They have increasing levels of influence, To contact Doug, please email: so it’s essential to identify the most relevant [email protected] organisations and open a dialogue early on. Dinah McLeod RB: Transparency. As I mentioned, by exposing Head - Sustainability Practice, Sun’s known unknowns, we have been BT Global Services able to defuse any potential risk and reach out to NGOs to help provide solutions. It is In her previous role as independent consultant interesting how many find helping solve the Dinah worked with various international clients including the OECD, the UK Department for problem more difficult than complaining. International Development, and the African Development Bank. Until 2004, Dinah was a DJ: There is guidance out there on stakeholder policy adviser in the Prime Minister’s Strategy engagement. The Institute of Social and Unit in London. Before this, she spent six years at Ethical Accountability has developed the World Bank as a social protection specialist stakeholder engagement standards which specialising in community-based sustainable set out principles of effective engagement. development. For NGOs (as with other stakeholders), it is To contact Dinah, please email: important that they feel that by engaging [email protected] with them, there is a genuine desire to listen and respond to what has been discussed. Engagement, which is only about informing, may not get the right audiences to participate or provide the benefits of gaining new insights on risks and opportunities.