We’re coming to the end of the year – the time that companies consider future change. Financial performance data is in; you know where you stand. You begin to think about improvements. If your firm does not already have an energy or sustainability program or has a middling one, there may be no better change to make in the new year than to get a quality one off the ground or grow the one you have. There will be doubters in management as energy/sustainability is a foreign concept to many (this will change; sustainability is becoming a staple in business schools – I lecture on the topic at one!). Here are some arguments sustainability doubters may make, and good responses.
Companies that spend effort on being sustainable are losers. Not true. Some doubters think that doing anything different from core product or services is wasted effort. Would those people not have a Legal, Accounting, or HR staff, too? In fact, companies with robust sustainability programs have come out to be winners. Published papers have shown a correlation in Fortune 500 firms: those that address sustainability issues, such as reducing energy and water usage, had higher valuations than those that did not. Is this a coincidence or have these become better performing companies? Finally, it is true that some projects to reduce water, energy and waste production have long paybacks. However, many have additional, hard-to-measure benefits to consider, such as reducing O&M costs, freeing up workers to perform other needed projects and raising worker productivity. While hard to quantify, these benefits are real and should be recognized.
We must wait for government rules about sustainability or else we will need to repeat the effort once they come. While sustainability is not required by any government (except, in California), many agencies are incentivizing sustainability through tax credits, grants, and indirect rules. While these may appear changeable, it is not a good idea to wait and hope that policies and incentives will become uniform. Take advantage of what is right for you. Similarly for procedures, it may be awhile before government sets precise policies on how to become more sustainable, such as an energy audit. However, existing standards (ASHRAE) will likely be part of any future requirements.
Sustainability has no effect on our business. In the US, this may be true in sales. Only a small block of consumers consider sustainability reputation in making purchase decisions. However, more investors take this seriously. A growing number of lenders and shareholder groups have investment or loan policies which favor those with positive energy or sustainability records. Such groups certainly affect company performance.
There are no or there are too many metrics to measure sustainability. Yes, sustainability achievements are difficult to quantify because they often affect parameters that are hard to measure (productivity, company culture). But do note that sustainability metrics exist, such as the Global Reporting Initiative, to measure sustainability. It is important to research the right metrics for your company. But it has been done successfully.
Sustainability is just low-hanging fruit and is of little true importance. This is simply not true. Sustainability is all about conserving resources before they become scarce and expensive. It is a risk hedging program. For example, if your company produces a product dependent on water, and your manufacturing plant is in an area that has either a contaminated water supply or one it must share with residents, farmers, etc., then you know that its price rise and even availability may become an issue. This can become an existential problem for your business. Ways of minimizing water needs would, therefore, have major positive risk outcomes for your business. Also, it is now acknowledged that climate change has and will have major effects on our way of life which, of course, affects business. May the greater frequency of extreme storms, hot weather, and droughts affect your cost of or even the ability to do business, such as access to energy, water, etc.? Might climate change bring on a global depression or at least affect consumer tastes? A sustainability program puts you ahead of the curve in terms of evaluating and addressing such risks.
There is no accepted standard for sustainability. This is true. There is no single standard that says this product is sustainable, and this one is not. This is why it is important that your sustainability program have a strong communication element. Goals, strategies, and practices need to be established and publicized in-house and to the public, easily seen on one’s website or other communications. The public can see the full case you have made about what you are doing to achieve your goals (reduce energy use, greenhouse gas emissions, water use, waste generation, etc.) within the parameters you control. You can quantify such achievements and undeniably say that you are working toward a sustainable future for the world and for yourself.
CCES has the experts and experience to help you develop a robust sustainability program to achieve maximum benefits (and to answer all doubters). We can help you with the technical, policy, and economic phases and develop and achieve goals seamlessly. Contact us today at 914-584-6720 or at karell@CCESworld.com.