Transparent Disclosure to Stakeholders Critical for Corporations Today
Many leading global companies today are embracing sustainability practices as they understand that this method is not simply a reporting exercise; they realize that full and transparent disclosure to all stakeholders is crucial for success.
These companies are not only integrating sustainability themes into their overall corporate mission, vision and values, but they also are incorporating sustainability directly into their brand and customer value propositions.
Stay Ahead of the Curve with CDP
Recent enhancements in corporate transparency and performance are proof that leading companies are making decisions in response to the growing interest from their investors and customers regarding their environmental sustainability performance.
Results from the CDP (formerly known as the Carbon Disclosure Project) survey in 2012 offer evidence that the S&P 500 is making significant advances in terms of transparency and progress on carbon goals, and that this progress is rapidly moving forward.
And while many leading companies have made notable progress in addressing the risks and opportunities regarding climate change, many of the CDP’s leading members — including those listed in the organization’s Climate Performance Leadership Index (CPLI) — are way ahead of the curve regarding incorporating climate change into their enterprise risk management and strategic decision making.
This broader view of climate change and environmental impact has enabled these leading CDP companies to realize lower energy costs and increased productivity, and to obtain the necessary knowledge needed for development of current and future low-carbon, energy efficient products and services.
These top companies also are taking the physical risks that stem from climate change seriously, especially since there is increasing realization that an escalation in the frequency and severity of extreme weather events — like heat waves, cold snaps, hurricanes, flooding and wildfires — can threaten business continuity with interruptions in power, supply and transportation networks.
As one of the most important organizations in the world to lead the dialogue around measurement, rigor and transparency – and recognized as one of the most credible sustainability rating/ranking indices in the world by Globescan’s 2012 Rate the Raters survey – CDP provides data that can help companies leap beyond guesswork and get straight to the facts.
In fact, the data compiled and reported by CDP has had tremendous impact on current and future business behavior. It offers insights for executives who are trying to understand why climate change matters, and it allows companies already taking action to track their progress and better inform their critical policy and planning decisions.
CDP Leader: Bank of America
CDP’s CPLI member, Bank of America is one of the companies that have taken this issue seriously. The company has created numerous policies and relationships to manage the environmental footprint of its supply base as an integral part of its sourcing and vendor management activities. For example, in 2012, Bank of America requested disclosure from 163 of its significant vendors and achieved an impressive 88 percent response rate.
Bank of America also has integrated environmental sustainability criteria into its vendor sourcing processes. In 2012, they initiated a Carbon Reduction grant program encouraging qualifying vendors to establish a public carbon-reduction target, for example. As part of this collaborative effort, they offered executive coaching and financial support to encourage vendors to overcome hurdles and work toward the publication of specific goals to reduce greenhouse gas emissions.
Groundbreaking Technology in Foodservice Operations
Compass Group, the world’s largest food and support services company, offers a unique example of applying an innovative business solution to manage corporate impact on the environment. Just last year, the company enhanced its web-based tool designed to help food operations staff measure the effect of their environmental impact reduction strategies. This technology helps Compass Group redefine sustainability within foodservice operations by helping teams create operational and structural changes that will have long-term impacts.
An easy-to-use application, the Carbon FOODPrint toolkit is focused on the supply chain and what happens in foodservice kitchens. More specifically, the technology allows chefs and managers create customized strategies to reduce their operations’ carbon footprints by decreasing waste disposal, and energy and water use. Foodservice managers can make up to 185 strategic choices across five key areas, including menu engineering, kitchen operations, kitchen services, site equipment and facilities.
Compass Group uses the data to help make improvements throughout its cafes, as well as share the information with clients for purposes such as annual reports, sustainability indexes, and disclosure to public programs such as EPA, CDP, and more.
Utilizing Big Data For Corporate Sustainability
Enabling better decisions by providing investors, companies and governments with high quality information on how they are managing their response to climate change and mitigating the risks from natural resource constraints has never been more important.
Stakeholders today want more than the mission-vision statements of a company. They want real statistics, and most important, real results in terms of corporate social responsibility. In other words, they need accurate “Big Data” inclusive of a company’s environmental sustainability information.
Because a company’s environmental impact data is not easily collected nor is it usually given out to the public on a regular basis, numerous organizations are available to assist with carbon collection and reporting, and helping executives stay aware of the ever-changing rules and regulations governing compliance on a local, federal, national, and even international levels.
By utilizing the latest in these lifecycle assessment services, network design, optimization and planning systems, executives can integrate environmental practices within their company and supply chain, while at the same time provide investors with a transparent view of their organization.
More companies are starting to recognize that failure to anticipate and properly prepare for the impacts of climate change may leave them without adequate plans to mitigate damages to their business, develop new products, and implement business strategies necessary to respond to changing customer needs.
Moreover, failure to successfully execute a proper climate change strategy could risk damaging the support of stakeholders against those who fail to plan. The consequences could ultimately affect reputation, as well as damage a company’s customer loyalty and investor confidence.
Dr. Chet Chaffee is the Director of Sustainability at FirstCarbon Solutions. Previously, Dr. Chaffee was an executive vice president at Scientific Certification Systems where he directed over 200 lifecycle and sustainability initiatives for General Motors, Home Depot, Unilever, and more. He also helped found Boustead Consulting & Associates, a subsidiary of Boustead Consulting, one of Europe’s best-known lifecycle firms. With over 50 technical papers to his credit, Chet has provided expert testimony before the U.S. House of Representatives, the U.S. Environmental Protection Agency, and the Federal Trade Commission.
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