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A New Sustainability Standard for Business
Today, the veil of secrecy is being lifted on a project in which my colleagues and I have been engaged for several years: the creation of a global sustainability standard for business.
The standard is being developed in partnership with UL Environment, a business unit of the venerable Underwriters Laboratories, the 115-year-old standards and certification organization best known for its ubiquitous "UL" logo associated with safety assurance on millions of products. UL Environment was established 18 months ago to do for the environment what UL has done for safety: create credible standards where they are needed. The initial focus of UL Environment has been on product standards.
For the past year or so, my team at GreenBiz.com has been engaged with UL Environment to develop and commercialize a company-level standard for sustainability — that is, environmental, social, and corporate governance issues — to be used as a procurement tool for companies, government agencies, and others.
Today, at the Global Reporting Initiative annual conference in Amsterdam, Marcello Manca, vice president and general manager at UL Environment, participated on a panel during which he talked about this project publicly for the first time. The final standard won't be launched until later this year.
A little history is in order. The idea for a business-level sustainability standard dates back to 2003, when a group of individuals representing nonprofits, government agencies, and companies in the San Francisco Bay Area came together to create a business council to share best practices in engaging with companies on sustainability issues. One project that emerged was the need for a standard — what did it mean to be a "sustainable business"? We weren't the first or only ones asking that question, of course, but we began an effort to figure it out.
We received seed funding from StopWaste.Org, an Alameda County, Calif., public agency, to begin developing a standard. A core group of five of us (including two sustainability veterans: Gil Friend, president of Natural Logic, and David Johnston, president of What's Working, along with Rory Bakke and Justin Lehrer of StopWaste.Org) labored for several years, ultimately building a framework and a partial standard before lack of funding forced us to set the project aside. (I wrote about that earlier attempt to write a standard in a 2005 blog post.)
In 2008, Greener World Media, the company I co-founded that produces GreenBiz.com, among many other things, decided to develop a new standard. Along the way, we met Manca and his colleagues at UL at our 2008 Greener By Design conference, and learned they were planning an environmental spin-off, UL Environment. The pieces fell into place. Bakke, who headed business programs at StopWaste.Org and served as our team leader from 2003 through 2007, joined Greener World Media as director of sustainability and heads the standard-development process. Inspired by the seminal work done by the original team, we developed a new standard.
The 2003 vision remains largely intact, including our original notion of looking beyond mere "green" to the broader arena of sustainability. The new standard covers environment, workforce, social and community engagement, customers and suppliers, and "governance for sustainability."
We've long described this in shorthand as "LEED for Companies" — that is, a point-based rating system along with good-better-best levels of certification. We have been inspired by the success of the U.S. Green Building Council's LEED green building rating systems, which created definitions of "green building" where there were none. Those ratings systems were critical catalysts in spurring the green-building market. Similarly, we believe this new standard and rating system will help define sustainability at the enterprise level, growing markets for certified companies.
Of course, the LEED analogy only goes so far. LEED isn't perfect, and companies aren't buildings — they vary infinitely in terms of size, sector, geography, activities, culture, inputs, outputs, and the people who engage with them every day. What companies do can have far-reaching ripples both upstream and downstream. So, designing a standard for companies has been a complex challenge, to say the least.
The first draft of the standard has now been completed and is beginning a robust process of stakeholder feedback. The plan is to have a final version ready for the marketplace later this year.
As I said, this will be a procurement and supply-chain standard — a tool for companies and others to use in assessing companies with which they do business. Companies, government agencies, universities, and other entities will each decide how to use it — as a requirement for suppliers, for example, or as a way to compare companies vying for their business, or perhaps as a tie-breaker in requests for proposals. It is being designed as a global standard, though it will initially be introduced in North America.
We intend this standard to be a learning tool as much as a certification process — a means for companies to benchmark themselves on sustainability measures and to identify what specific measures they can take that would be most impactful for their operations and stakeholders. We plan to develop tools companies can use to assess how they would fare under this standard, regardless of whether or not they seek certification.
You may be asking, “How is this different from the dozens of other standards out there?” The short answer is that this one is different. First, as I said, this is a company-level standard, of which there are relatively few. It is the first global standard on sustainability that is comprehensive in scope, global in application, and verifiable by trained, accredited third parties. It includes management quality and reporting, but emphasizes performance and is intended for mainstream companies — the kind typically found in company supply chains — not just for smaller, values-led companies already committed to being leaders. Finally, it integrates with dozens of other standards from around the world — a rich alphabet soup that includes ASHRAE, BOMA, CDP, GRI, ISO, IUCN, SPC, UNESCO, and many others.
There will be much more to say later in the year, as we formally launch the system and announce our key partners, initial pilot companies, and more. For now, we wanted to lift the veil in order to engage more effectively and collaboratively in the hard work that lies ahead.
May 28, 2010 in Business Practices, Green Marketing, State of the Art | Permalink | Comments (12)
How to Win Green Friends and Influence People
Earth Day is behind us and I'm digging out of my cluttered digital desktop to uncover the nuggets of value that have been hidden amid the countless pitches and come-ons typical of April's environmental hoopla. Among those nuggets: three reports and guidebooks on ... making green pitches and come-ons.
Well, that's a little harsh. The three documents described below all focus on marketing, branding, and communications — and how to ensure that all three are aligned with a company's actual commitments and performance. Each of these comes from a firm with services to sell, but within that context, each provides useful insights and case studies.
From Greenwash to Great: A Practical Guide to Great Green Marketing (without the Greenwash), whose clunky by alliterative title belies a common-sense approach to corporate green storytelling. The report (download - PDF) comes from OgilvyEarth, the sustainability practice of Ogilvy & Mather, the global advertising and marketing firm. It begins with some sensational statements — "Greenwash, it seems, has reached epidemic proportions," is typical — though that's not surprising from a venerable Madison Avenue message machine. I've often taken issue with those who make the case that greenwashing is an insidious threat to our planet (see here and here, for example). Given the significant measures companies are taking for which they're not given credit, they deserve a little slack.
Still, accuracy, honesty, and transparency in marketing, including green marketing, is critical: It helps build trust and reduce cynicism, of which there is more than a little when it comes to viewing companies as environmentally responsible. And so Ogilvy's advice and examples are welcome, especially given their provenance. This easy-to-peruse, 22-page guide offers nine key principles of green marketing, each including a real-world example (presumably created by Ogilvy's shop, though this isn't stated). Most of these examples are well known by those who follow this field — GE's ecomagination, Clorox's Green Works, Frito-Lay's Sun Chips, Nike's Considered — but even veterans will likely find a worthy tip or two here.
An excerpt:
Many marketers go wrong by assuming that a smallish story that already exists or a minor change already in the works will do. Usually it won't. New messages with a couple of green buzzwords won't work either. Sustainability is about driving substantial and authentic change in products and processes up and down the value chain. [Ogilvy advisor] Jeunesse Park confirms, "Those taking the high ground and ensuring that their businesses and processes have a low environmental footprint will have instant market advantage."But driving this kind of significant operational change through the organization takes homework, time and tenacity. It means getting better acquainted with obscure corners of your organization. It means seeking expert third-party advice. It means ensuring your employees understand the tenets of sustainability and in what ways the product is green; give them a part to play in realizing the promise of the product. If you don't invest the resources to build a substantial story, you will almost certainly find yourself greenwashing. If you have taken the time to build a robust and authentic foundation, getting beyond greenwash to great sustainability-oriented marketing becomes much easier.
Communicating Corporate Responsibility comes from another Ogilvy appendage, Ogilvy Public Relations Worldwide, and is based on a workshop led by Professor David Grayson at Business in Society's annual corporate social responsibility (CSR) event in Brussels. Grayson is the Doughty Professor of Corporate Responsibility and Director of the Doughty Centre at the Cranfield School of Management UK.
But don't let the professorial nature of this sway you. It's a very readable document (download - PDF), filled with insight and inspiration. One favorite part focused on a keen interest of mine: corporate storytelling — specifically, the role of storytelling in communicating about company sustainability commitment and performance. It describes the "story spiral," in which you seed stories in the marketplace, turn stakeholders into storytellers on your behalf, and amplify the stories you hear and help others to do so, too. There's also a concise section on aligning corporate responsibility with company values, and another on how all this translates in a digital, social media world. Much of it is Communications 101, though seen through a CSR lens.
An excerpt:
Keeping communications consistent as well as relevant to the business is one of the best ways to ensure credibility. But increasingly, credibility is derived not only from authentic and relevant actions, and the communications around those, but also from the day-to-day actions that make or break a company's image and reputation. Successful brands are built over time as a product or service delivers against its brand promise. Trust is also built over time, and credibility is one of its most valuable by-products. You only have to look at companies that have suffered a breakdown in trust due to failures in product safety, labour rights, ethical sourcing or responsible marketing to understand that credible communications are key to restoring and retaining public confidence.
Mapping the Future of Green Innovation comes from Maddock Douglas, an Illinois-based consultancy focusing on innovation. Its MapChange study tracks both the climate change actions of more than 90 leading U.S. corporations and consumer perception of those actions. (Much of the data came from company research conducted by Climate Counts, a nonprofit group on whose board I sit.) The study (download - PDF) illustrates that a significant disparity exists between the actual sustainable activity of brands and consumers' perception of sustainable activity of those brands.
The report plots companies in various sectors on a classic 2x2 diagram, showing which companies are "Bashfuls" (those not getting the credit they deserve for their sustainability commitment and performance), "Laggards" (those neither getting nor deserving credit), "Lucky" (those getting more credit than they deserve), and "Leaders" (those getting deserved credit). There are 2x2 diagrams for several sectors, including airlines, banks, electronics, food and beverage, hotels, household goods, internet/software/media, restaurants, and shipping companies.
The report ends with the 5 "C's" of sustainability branding, which I'll let you wade through to see how much they differ from the classic 5 "P's" of marketing.
An excerpt:
Can your next drink or snack really change the world? Maybe not, but the company that makes it certainly could. With tremendous distribution networks, packaging needs and consumer demand, these companies have a large climate footprint as a baseline and a lot of room to improve.According to the MapChange Study, General Mills has a perceived sustainability score of 82 — but the brand's actual score is 49. We think that's a pretty big difference. Currently, that gap doesn't seem to be hurting their numbers — or the numbers of other industry-leading brands. For example, General Mills was named a top corporate citizen by Corporate Responsibility Magazine in seven responsibility categories with a lower-weighted emphasis on green. However, the short-lived advantage of a strong, but shallow green perception, alone, will likely only last so long. We believe it is not what large companies stand to gain — but what they stand to lose that's important.
Got all that? As you well know, communicating and marketing effectively in today's wired and cynical world will take more than all the tips and insights these three reports together can muster. But these are a start, some grist for making next year's round of Earth Day promo that much more effective.
May 2, 2010 in Green Marketing, State of the Art | Permalink | Comments (5)
