greening your company and its supply / distribution chains · greening your company and its supply...

Greening Your Company and Its Supply / Distribution Chains

From everyday collection to environmental protection, Think Green.® Think Waste Management.

A Practical Guide to Developing a Successful Corporate Sustainability Program

“Going Green” is a hot topic in today’s business world, but how do you go about Greening your company and its supply/distribution chain?

What is the definition of “Green” and what are the specific steps that your organization must take in order to get there? How do you quantify a Return-on-Investment for your sustainability program?

Why Should Your Organization Go Green? • A February 2008 survey of international business executives said that 57% of

executives surveyed agree that the benefits of a corporate sustainability program outweigh the costs. It went on to say that companies who had effective programs were on average 16% more profitable than competitors and had a share price that averaged 45% higher.1

• Energy savings programs can reduce the costs of office operations 35% - 40% per year.2

• Worker productivity improves 2% - 18% in a building that utilizes Green systems.3

• Sustainable commercial buildings yield an average 8% - 9% overall reduction in operating costs, a 7.5% increase in building value, a 6.6% improvement of ROI, a 3.5% increase in occupancy and a 3% increase in rent levels.4

• An office building of 2,000 workers who recycle office paper reduce Greenhouse Gas Emissions to the same extent as taking 119 cars off the road for an entire year.5

• Per unit costs of energy, water and sewage continue to escalate annually, so the value of reduction efforts grows each year.

Results of a 2007 national marketing survey indicate that individual consumers are personally focusing pro-environmental actions in three areas6: • Conserving Energy (93%)

• Conserving Water (86%)

• Recycling (89%)

As for business, consumers expect the following steps toward sustainability: • Reduce pollution throughout offi ce and manufacturing operations (71%)

• Design products/packaging with more environmentally-friendly contents and minimal packaging (69%)

• Distribute and transport goods more effi ciently (69%)

• Communicate environmental efforts to employees and consumers, so they can support those efforts (69%)

• Donate money to environmental causes (59%)

• Lobby for more environmentally friendly policies (57%)



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“... companies that had

effective programs were on

average 16% more profitable

than competitors and had

a share price that averaged

45% higher.”1

“ Energy savings programs can

reduce the costs of office

operations 35% - 40% per

year.”2

“ Worker productivity improves

2% - 18% in a building that

utilizes Green systems.”3

“ Sustainable commercial

buildings yield an average

8% - 9% overall reduction

in operating costs, a 7.5%

increase in building value, a

6.6% improvement of ROI, a

3.5% increase in occupancy

and a 3% increase in

rent levels.”4



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The Defi nition of “Green”Surprisingly, the most basic defi nition of “Green” is relatively simple. Its basic theme is all about minimizing the potential negative environmental impacts of your business and using all of your resources as effi ciently as possible. Continually seek to eliminate all types of waste, protect the environment and increase operational effi ciency to become more sustainable, while reducing total costs.

In order to maneuver through the complexity and confusion that creeps in when you start building in the details, your company needs a clear vision of “Green,” along with specifi c, measurable goals that maximize value. Start with the vision and the goals to provide focus and motivation during the program development process.

It’s obviously easier to have an impact on things that you can directly control, so start with the vision and goals for your own business fi rst and then start looking toward your supply/distribution chain.

Building Your Sustainability TeamAssemble an internal cross-functional team of content experts to examine all of the topics necessary for an effective sustainability program. Recruit representatives from all parts of your organization to gather data and provide input in order to look at issues from all angles and ensure “buy-in” from key constituencies.

It’s vital to have a high-ranking executive sponsor who can communicate the goals and value of your sustainability program to the CEO and other corporate offi cers. Without this high-level support, your sustainability efforts have little chance of becoming reality. Show your executive team a clear plan with associated costs and net benefi ts to maximize your chances of gaining approval.

Identifying Your Value DriversEach business and industry has unique issues to address in building a sustainability program, but there are several common areas that every business can examine in building its approach. These common areas include:

• Procurement – Are there alternative materials that you can use that are more environmentally friendly and provide no worse than a cost-neutral comparison to current materials? Are you using recycled materials in your business?

• Energy Usage – How can you reduce the energy required to produce your product or service? Can you use alternative Green Energy sources to reduce Greenhouse Gas emissions in a cost-effective manner? Do you have a corporate energy policy to formalize and provide incentives for energy conservation? Look at major energy centers such as IT servers, heating and cooling, lighting, compressed air and process equipment.

• Water and Sewer Usage – Are you doing everything possible to minimize the use of water in your business, along with the resulting waste streams associated with water use? This includes items as small as landscaping around buildings.

• Building Construction and Operation – Does your organization build, operate and remodel its buildings in accordance with sustainability standards, such as Leadership in Energy & Environmental Design (LEED), from the U.S. Green Building Council?

• Printing and Packaging – Can you reformulate your printed materials and packaging to eliminate all but the absolutely necessary elements and utilize recycled materials?

• Waste Minimization and Commodity Management – Do you have effective programs in place to recover and recycle or reuse valuable commodities and reduce the solid waste streams fl owing from your offi ces and facilities?



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• Janitorial and Maintenance Services – Are you using non-toxic materials/products and practicing preventative maintenance on key systems to maximize their effi ciency?

• Shipping – How can you minimize the need to ship materials? Do you use pdf electronic documents, web conferences and/or e-mail? When you do ship materials are you using the most effi cient containers and carriers? Are you recovering and recycling current shipping containers?

• Transportation – Is it feasible to convert at least a portion of your corporate fl eet to alternative fuels, such as bio-diesel, natural gas or electric?

• Employee Commuting – Do you offer telecommuting options for appropriate job classifi cations? Has the company offered programs and/or incentives for employees to use public transportation, carpools, bicycles or walking routes to get to and from work?

• Unique Factors – What factors and value drivers are unique to your business or industry? How do these factors affect your ability to build an effective sustainability program? If your organization manufactures products, does it include a Lifecycle Analysis in its design program to ensure the product has minimal environmental impact and is easier to recycle?

• Carbon Footprint – Is it important for your company to quantify its existing carbon footprint and develop greenhouse gas emission reduction plans and goals?

Developing Your Sustainability PlanAt this point, you’ve gathered a lot of data and received a mountain of input from various internal constituencies. Your team is at the critical stage, where most programs either cut through the clutter and succeed, or fl ounder in data and fail.

The key deliverable at this stage is a written document that states your sustainability vision and specifi c, measurable goals. Specifi cally, what steps can you take to have the biggest positive benefi ts for your organization? Of all of those possibilities, which major value drivers are the most feasible to implement? The answers serve as the roadmap to guide the development of your corporate sustainability plan.

Waste Management, Inc., for example, has pledged to achieve the following sustainability goals by 2020:

• Increase the green power generated from waste-to-energy and landfi ll gas plants that it operates to supply enough electricity to power the equivalent of more than 2 million homes nationwide —up from 1 million today.

• Manage more than 20 million tons of recyclables each year—up from 8 million tons currently.

• Provide at least 25,000 acres of wildlife habitat on its property, a 35% increase over today’s level.

• Reduce emissions from its truck fl eet by 15% and improve fuel effi ciency by 15%.

Once you have a vision statement and specifi c goals, there are two paths that you can take to analyze your data and identify the key steps you can take to create value:

Option One is to do it all in-house. This method may seem less expensive and faster, but that isn’t always the case. Do you have people with the appropriate skill sets and time to create a compelling and feasible plan?

Specifi cally, are there one or more people on your team who are good at data analysis, systems analysis, strategic planning, environmental regulations, fi nancial analysis and writing? These skills are necessary to do an extensive feasibility study and cost-benefi t analysis on the major strategies identifi ed by your team.



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Can these folks devote 10 or more hours a week for several months working on your sustainability plan? If the answer is “Yes,” the internal route may be appropriate for your organization. But if everyone on your team has a full plate, or the team lacks the key skills outlined, you may want to consider a second option.

Option Two is to hire a sustainability consultant. These consulting fi rms provide a staff of content experts that can examine your systems and data to identify strategies and tactics that will help you to defi ne, measure and achieve your goals much faster than you could on your own.

Consulting fi rms obviously add additional costs to your program development budget, but the potential benefi ts can far outweigh the cost if your organization is facing public questions regarding its sustainability efforts and can reap signifi cant marketing and/or economic benefi ts by implementing an effective program.

Don’t Forget to Report Your Progress and AchievementsYour organization won’t get full value for its sustainability program unless it communicates its efforts and results to all stakeholders. Important stakeholder groups often include:

• Employees

• Shareholders

• Customers

• Potential customers

• Communities where you operate

• Regulatory agencies

• Consumer and/or advocacy groups

Communications regarding your sustainability program should be directed to all of these groups and include details on the steps you’ve taken, along with both the tangible and intangible benefi ts of those steps. The more logical and specifi c the benefi ts, the better.

Effective corporate sustainability initiatives that are accurately communicated to these stakeholder groups can have many valuable, reputation-building benefi ts, including:

• Brand enhancement and protection

• Marketing advantage—price premium

• Appreciation in shareholder value

• Employee recruiting, retention and satisfaction improvements

• Customer loyalty

• “Most Favorable” regulatory reporting requirements

However, you should beware of using your corporate sustainability report strictly as a public relations tool. There are many advocacy groups that monitor these reports and check the validity of claims made in them.

If your report includes claims that aren’t true, or can’t be supported by data or references, your organization may be accused of “Greenwashing,” the new pejorative buzzword for being heavy on public relations and light on substance.

In fact, the Federal Trade Commission (FTC) is currently reviewing its guidelines related to environmental marketing claims, while state and local agencies are also scrutinizing these types of claims for accuracy. The wisest advice is, if you can’t prove it—don’t say it.

Reporting Protocols and ResourcesYour organization may want to use an internal reporting protocol or may choose to use one of the many publicly available frameworks to gauge progress toward achieving internal sustainability goals. This will add credibility to your corporate program and allow your organization to report its progress using generally accepted formulas and protocols, especially if you’re a well known, publicly traded company.

Information on program development, reporting protocols and report examples can be obtained by logging on to any of the following web sites:

• Global Reporting Initiative (GRI)http://www.globalreporting.org/Home

• Coalition for Environmental Responsibility & Economic Sustainability (CERES)http://www.ceres.org/NETCOMMUNITY/Page.aspx?pid=556&srcid=415

• Business for Social Responsibility (BSR)http://www.bsr.org/resources/featured-resources.cfm

Expanding Into Your Supply/Distribution ChainExpanding your sustainability program to your supply/distribution chain is a long and diffi cult road. You may not directly control these companies and your organization may not have a lot of infl uence on them.

Before expending a lot of energy trying to get your supply/distribution chains on board with your sustainability initiatives, take some time to analyze whether it’s feasible or necessary. Below are some issues to consider: 1. Is it important to our customers, shareholders, employees or other

stakeholders that we spread our sustainability initiatives to our supply/distribution chain?

2. Do we control, or can we fi nancially infl uence, key companies in our supply/distribution chain?

3. Is the value of our business greater than the costs of compliance for these fi rms?

4. Do we have a cooperative, mutually benefi cial partnership with these companies?

If the answer to the majority of these questions is “NO,” it is an indication that it will take a larger effort to get your supply/distribution chain on board.



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If it is important and feasible to bring your supply/distribution chain into the program, here are some tips to make the process as smooth as possible:

1. Develop a formalized program and requirements for supplier/distributor participation. Appoint an executive sponsor to guide development, monitoring and reporting for the program.

2. Provide copies of your organization’s sustainability vision and goals as a template to be emulated. Explain the need for participation and the anticipated benefi ts for all parties involved.

3. If there are certain goals or results that you expect partners to achieve, state them as clearly and objectively as possible. Explain why they are important.

4. Offer access to your organization’s sustainability team and/or sustainability consultant to assist with supplier/distribution planning. Aggregate common consulting, software and/or equipment purchases into a larger buying group to drive cost savings.

5. Set target dates for supply/distribution chain members to submit their own sustainability vision and goals.

6. Make it clear that partners with active sustainability programs will be given preference in buying decisions made after a pre-determined date at least six months in the future. Offer more favorable payment terms for partners who comply.

7. Schedule conference calls or meetings with supply/distribution chain members on regular intervals to discuss your organization’s sustainability plan and review progress in the development of their plan.

ConclusionA corporate sustainability program offers valuable tangible and intangible benefi ts to your organization. It will likely start out as an effort to incorporate sustainability into your business, but in order to survive and generate maximum value, your sustainability plan and your business plan must merge to make sustainable practices the foundation of your brand.

Upstream is the ISO 14001-certifi ed program management division of Waste Management. Waste Management, Inc. is the largest recycler in North America and generates more Green Power from landfi ll gas and Waste-to-Energy facilities than any other single provider on the continent. Waste Management also offers a wide-range of consulting, assessment, recycling and program management services to help its clients develop and achieve business sustainability goals. Think Green.® Think Waste Management.

Start your business sustainability program with Waste Management today, by logging on at www.wmupstream.com.

References1. February 2008 survey of international business executives, “Doing Good: Business and

the Sustainability Challenge,” The Economist Intelligence Unit Report.

2. http://aceee.org/ogeece/ch1_index.htm http://www.energystar.gov/index.cfm?c=comm_real_estate.bus_comm_realestate

3. U.S. Green Building Council LEED Existing Buildings brochure, 2005

4. U.S. Green Building Council “U.S. Building Impacts” Powerpoint, http://www.usgbc.org/DisplayPage.aspx?CMSPageID=1720

5. EPA WARM tool version 8 estimates 1.56 Metric Tonnes of CO2 reduction for every ton of paper recycled. The tool also estimates that the average car emits 4.6 metric tonnes of CO2 per year. Assuming that the average offi ce worker generates 1.5 lbs. of recycled paper per work day x 230 work days per year = 352.5 lbs. per year/per worker. A building with 2,000 workers x 352.5 lbs. per worker = 705,000 lbs. or 352.5 tons of recycled paper per year. Take the 352.5 tons x 1.56 = 549.9 total metric tonnes of CO2 emission reductions. Divide by the 4.6 tonnes of CO2 emitted by the average car and it’s equivalent to taking 119 cars off the road each year.

6. http://www.coneinc.com/research/



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