Biodiversity may not seem be an issue for any business outside the natural resources sector. However, such an appearance is wrong. Biodiversity is needed for the health of the ecosystems that provide life-supporting services to all of us. Like growing food, regulating fresh air and water, and controlling the climate. Biodiversity loss happens whenever any business expands into a previously "greenfield" area, or uses any energy that emits greenhouse gases, or pollutes in some other way, or consumes any resource that is being overexploited. Is anyone not on such a list?
A new study by the UNPRI (United Nations Principles for Responsible Investing) of 3,000 of the world's largest companies has found that they are responsible for environmental externalities of US$2 trillion a year - or 1/3 of their combined profits. The key externalities are greenhouse gas emissions (69% of the total), overuse and pollution of water, particulate air emissions, waste, and unsustainable harvesting of fish and timber. These all contribute to the loss of biodiversity.
Businesses now have a source of reports that can speak to biodiversity issues that may affect their sector of business. Read more
Sometimes it is fun to step back from the specific problems facing a business and look at the big picture.
The Centre for Alternative Technology (CAT) is an eco-centre based in Wales. It was started in 1973. Today it has a permanent staff of 90 people. It conducts research into renewable energy, environmental building, energy efficiency, organic growing and alternative sewage systems.
It is essential to keep global warming under 2°C if the world is to avoid future problems like widespread famine and drought, environmental migration, destructive natural disasters and mass extinction of species. Agreeing on this target was one of the concrete results of the recent international conference on climate change at Copenhagen. The target requires global greenhouse gas (GHG) emissions to be cut quickly. Poverty alleviation efforts in developing countries such as China and India will be gutted if those countries are not given some short-term leeway to increase their GHG emissions, so in fairness the short-term cuts should come mainly from the developed countries that have already gone through their own poverty alleviation stages. (Soon afterwards, however, cuts will have to come from everywhere.) CAT therefore researched to see if it was feasible for Britain to reduce its net GHG emissions to zero by 2030. CAT concluded... Read more
An environmentalist will prefer electronic documents to paper documents since they save trees. This is a great reason and sometimes the environmentalist is a business manager who will lead his or her office staff to a "paperless" office for this reason alone. But there are also other compelling business reasons for going paperless. Here are another 5 of them... Read more
Many energy distributors sell electricity that comes from a number of sources. Some of the sources may generate renewable electricity (e.g., based on hydro or wind) but others are likely based on burning fossil fuels, particularly coal and natural gas, that emit greenhouse gases during the generation process. A business that purchases electricity from such a distributor is therefore buying an element of "dirty" power. Sustainability management encourages a business to avoid dirty power. But it has to buy electricity, so what should it do if it doesn't have a choice of distributors? Read more
Sustainability involves the three spheres of economic, environment and social issues. Most business people probably have a reasonable idea of what the first two spheres involve. But the "sphere of social issues" sounds both vague and unending. Is there some way to be more precise? Read more
Sustainability management aims to increase the efficiency with which business makes use of materials. The Three-Rs - reduce, reuse, recycle - light the way forward. They have obvious guidance to manufacturers (Make your products with fewer inputs! Reuse what you can! Recycle everything!) but they apply to commercial offices, too. Commercial managers should not overlook the great opportunities here.
Take recycling. Offices should have recycling programs that divert paper, pop cans and other recyclable waste from being send to landfill. Fortunately, such programs have become typical of many offices. But much more can be done. For example, a policy could be put into place to buy office furnishings (desks, chairs, cabinets, screens) that are made with recycled content, and that are designed not to end up in landfill when the office is through with them.
Following such a policy has been made easier by the "cradle-to-cradle" certification awarded by a company named MBDC (McDonough Braungart Design Chemistry, LLC.). It was founded by William McDonough and Michael Braungart, the authors of the book Cradle to Cradle: Remaking the Way We Make Things. Read more
Everyone has to get to work somehow, most commonly by walking, cycling, driving or taking public transportation. An employer cannot dictate to employees where to live or which method to use...so does it make sense to hold the employer responsible for any problems that the methods may hold? The people who devised the LEED green building system think so: LEED gives extra points for locating a business near public transportation or for installing showers so that cyclists can clean themselves after a sweaty ride into work. The people who devised the GHG Protocol for measuring greenhouse gas emissions think so, too: under the Protocol, an employer must measure the GHG emissions associated with employees' travel and report them as part of the carbon footprint of the business. Does this make sense?
The compelling answer is "yes". Read more
Excess paper use is one of the enduring problems of the "electronic age". Easy and fast printing has made it all too common for us to print documents, correct them, print again, correct, and do it again. We may want to see changes on a single page of a document, but somehow we end up printing the whole document again, too. Needless to say, this is a waste of time, paper, ink and energy. And it causes our greenhouse gas emissions to grow. In 1995 The Environmental Defense Fund partnered with Duke University and some large corporations (Johnson&Johnson, McDonald's, Prudential Insurance, Time Inc.) in a major study of the environmental impacts of making paper. An offshoot of the task force is the "Paper Calculator" that allows you to see the impacts associated with making different types of paper. For example, making 1 ton of copy paper from virgin fibre uses 4 tons of wood, 22,219 gallons of water, creates 1,909 lbs of solid waste and causes 5,882 lbs of carbon dioxide equivalent to be emitted. (You can use the Paper Calculator to see the impacts of your own choice of papers at www.edf.org/papercalculator.) In addition to these impacts are those associated with generating the energy for the printer, making the ink cartridge, transporting all the stuff, and dealing with the wasted paper and ink cartridges that result from our activity.
One way to help wean us off our bad habits is to install GreenPrint. Read more
From time to time, we all need to consider afresh why we hold certain things to be important. If we can't come up with good reasons, maybe it's time to change our minds! This blog is devoted to sustainability management. Why? What's so good about sustainability management? Here are four reasons that, to my mind, make it important. Thinking about these things afresh reminds me of what a compelling process it is. Read more
Many employees know that the world's businesses should reduce their greenhouse gas (GHG) emissions. The issue has been widely reported. But there can be a gap between the abstract awareness of a global issue and the practical understanding of why it matters on a local level. One way to reduce this gap is to give employees concrete information about the emissions from their own business. Then employees can be inspired to work for concrete reductions.
A good way to become more concrete is to tell employees "how many cars" are responsible for the same amount of GHG emissions as their business. For example, the activities of a business may generate each year the equivalent of 2,000 tonnes (metric tons) of carbon dioxide, the most common GHG. That figure may not mean much to an employee. But if that business were in Toronto, Canada, it corresponds to the emissions of 714 cars in that city. If the employees worked to reduce emissions by 15%, that would have the same benefit as taking 107 cars permanently off the road. Pretty good! Conversely, if the business were in the United States, the business emissions correspond to those from 363 American cars, and a 15% reduction would have the same effect as taking 54 cars permanently off the road. Still pretty good! (Cars in the United States, taken as a whole, are worse GHG emitters than cars in Toronto. So taking a fewer number of those cars off the road still has benefit for reducing GHG emissions. The differences between the car statistics in Toronto and the U.S. are affected by factors such as the age of the fleet of cars, their relative size, the amount driven, the fuel quality being used and the efficiency with which the fuel is used.)
So how do you generate this concrete information? Read more
The two previous blogs have looked at the reasons to use life cycle costing (LCC) and some of the ratios that make it a useful tool for deciding if an investment is financially attractive, taking its whole life into account. This final blog on the subject looks at how a manager can best make use of LCC. The short answer is that he or she should make it part of an integrated design approach whenever considering the purchase of a major asset. Read more
All managers should use life cycle costing (LCC), for the reasons given in the last blog. When they are investing in an asset, it allows them to compare competing choices that may have differing costs of acquisition, operation, repair and salvage. LCC shows the managers the choice that provides the best value (lowest cost) over its expected life. The asset with the smallest initial cost may actually be more expensive over its useful life than a comparable asset with a larger initial cost. This article now describes LCC in a bit more detail in the hope that managers will become more comfortable in using it. The managers will need to know about:
· Financial rates: discount and escalation rates
· Present value factors: SPV, SPV*, UPV, UPV*
· Useful ratios: NS, SIR, AIRR, DPB. Read more
Life cycle costing (LCC) measures the total cost of an asset to an owner, taking into account the entire period of time that the asset will likely be owned. Typically, this will mean adding together the initial cost of the asset, the costs of operating and repairing it over time, and the final cost to dispose of it at the end of its useful life to the owner. If it is likely to have resale or salvage value at that time, that benefit will be taken into account too. Because it measures costs over an entire life of ownership, sometimes LCC is called "cradle to grave" accounting. Read more.
"Visioning sessions" have become a popular way for organisations to bring together a variety of stakeholders (such as owners, managers, staff, consultants, and even customers) in order to brainstorm about some future project. The project could be a new building, a new product line, a new brand - anything that is important to the organisation's future. Everyone is asked to imagine the desirable things that could go into the project. The idea is to get creative juices flowing and fire up enthusiasm about what the stakeholders can achieve together. The hope is that people can come up with better, more innovative ideas when they act collaboratively than when they act alone. In due course the nitty-gritty of feasibility studies will need to be done, too, but at the visioning stage the challenge is to think outside the box and make a wish list of the best and brightest ideas for the organisation's future project. It can be a powerful management tool for coming up with good ideas at the same time as fostering the enthusiasm and commitment of the stakeholders. Read more
One way or another, in the next few years governments are going to put a price on emissions of greenhouse gases (GHGs). Whether it comes in the form of a carbon tax or a "cap and trade" system, a price will be coming. And the price will inevitably be passed on directly or indirectly to energy users, since the major source of GHG emissions is the burning of fossil fuels. Good managers will strive to minimise this cost by reducing a business's use of fossil-fuel energy. Of course, even without this additional cost it makes sense to reduce energy bills, and thus reduce the GHG emissions associated with that energy. The smaller your costs, the higher your profit.
There are software systems on the market that measure the GHG emissions associated with making and delivering a service or product. The measurement is sometimes called its "carbon footprint". Carbon footprints can be measured for businesses, too. A good management strategy is to measure your carbon footprint today, for individual services or products or divisions, and for the firm as a whole, and then make plans to reduce your carbon footprint over time. To do this you will need one of the software systems. Although some software can be purchased on a stand-alone basis, the trend is now for companies to offer web-based services. Read more
The big picture is well-known: computers were supposed to cut down on the use of paper but they have actually increased its use. About 70% of all waste from offices is paper. The electronic revolution of the 20th century has given new life to the printed page that emerged from the printing press revolution of the 15th century. This is simply foolish. A business that seeks to be sustainable needs to wean itself off paper. It needs to install an electronic document management system and then police its use: no printing of multiple drafts when preparing a new document; no printing of multiple copies to distribute; no printing, period! An electronic system is intended to be just that - electronic.
Fortunately, such systems are now widely available for all sizes of business and they are easy to use. Information from a variety of sources becomes accessible and readily searchable. And the systems generate "meta-data" which can be monitored to ensure that files are only being used by authorised people. Meta-data is the information generated inside the system that shows who accessed an electronic file, when, and for how long. Businesses who want to invest in an electronic system should keep 12 criteria in mind. Read More
A seminar at the recent Green Building Festival in Toronto demonstrated how a tenant can make sustainable improvements to a small commercial office (under 3,000 square feet). It featured the work of The Innovolve Group, a communications consultancy that moved into an office that it wanted to renovate along sustainable lines, using earthfriendly products and local suppliers. Some of the key components of a true green building were beyond the scope of what it could achieve. For example, Innovolve had no control over the existing building envelope or the efficiency or design of the heating, ventilation and air conditioning systems. However, it did build everything from floor to ceiling inside the space and it stands as an example of what can be done. Read more
A business person who wants to invest some money outside his or her business is faced with the question, where should my personal investments go? One choice is now "sustainable investment funds".
A recent trend in the world's capital markets has been the emergence of funds that invest in businesses trying to meet sustainability challenges like climate change, water shortage or global poverty. Typical underlying investments may include renewable energy technolgy, environmental building controls, sustainable transportation (hybrid technology, batteries, etc), water and waste management, or air purification. There are even funds investing in micro-financing projects - lending small amounts of money to the very poor so that they can start a tiny business to make a living for themselves. In light of the recent U.S. financial meltdown, it turns out that investing in the poor can be far less risky than investing in large financial institutions, since microfinance projects have shown default rates of under 2%. American mortgage institutions can only dream of such a low rate! Read more
James Lovelock is one of the world’s most famous scientists. He is best known for his Gaia Theory – the idea that the earth as a whole is self-regulating. Ecosytems, taken all together, actively shape the environment into a balance that is comfortable for life. But he claims that global warming has altered the current balance and the earth is responding dramatically. It is moving to a new balance where the average global temperature is going to be about 5°C hotter than today. Within a short time (maybe as little as 20 years) he expects agriculture to have been rendered impossible in lower latitudes – to use his phrase, the Sahara Desert may reach as far north as Berlin. Business should be taking these risks into account, now, for all long-term planning. Read more
RETScreen is an amazing, free software program developed by the government of Canada. A person can test the feasibility of any green energy or energy efficiency project, by comparing the costs and benefits of the proposed project to the current "business-as-usual" situation. Anyone in the world can download the program for free at www.retscreen.net. Read more
Biodiversity and business: the economics of nature