CH2M’s EHS information management lead Lucas Wolfenden will be a panelist at the Environmental Leader Conference on June 21-23 in Denver. His panel, The Enterprise Sustainability Journey: Considerations for Long Lasting Success, will be at 12:20 pm on June 22. We were able to catch up with senior members of CH2M’s environmental, health, safety, and sustainability consultants for a brief Q&A on their thoughts on the state of the industry and what they see moving forward. To learn more about the EL Conference, visit the conference site.
Q: We want to know, for EHS&S professionals, what problems are peaking you’re curiosity with your clients. Tell us about the yellow stick-it note on your laptop, the article that peaked your interest, or the meeting you have scheduled next week just to kick an idea, a thought around. In other words, what problems are you trying define in order to find the solutions for tomorrow?
A: We love this question, we are so often on panels at conferences, sitting with our clients in a row, facing an audience and talking about the well tested frameworks, software solutions, and etc. within EHS&S. This is great, of course, but what we really like to do is to sit down, re-arrange our chairs into a circle facing each other to talk with clients, academics, competitors, and other professionals, about gaps between our current and desired future state. Collectivity scratching our heads, rolling up our sleeves and working out solutions. So, what’s on our minds – well to name a few:
Q: What’s going on with the firehose of data in EHS&S land?
A: Data, data, data. CH2M is software agnostic working with many providers for bespoke solutions, and one company we work, Scope5, their CEO likes to talk about the “democratization of data.” As EHS&S information management systems, aka software applications, moves to the cloud and becomes more nimble, flexible, affordable allowing managers to demand the data they need to not only support regulatory compliance, bet better decisions, and breaking down walls to work more collaboratively by sharing single data sets across silos like finance, procurement, and CSR. But, EHS managers are also struggling with greater and greater data sets as the “internet of things”, means a horse pill of data to swallow again and again. To make sense of all this data requires advancements in artificial intelligence to help with the overwhelming amount of unstructured data. We wonder, what could smart, artificial learning, algorithms, for example those run by IBM’s Watson, do for EHS&S with CH2M domain expertise and data content from companies like Enablon, Intelex, EarthSoft, 3E, Regscan and other purveyors of knowledge.
Q: A responsible supply chain, or irresponsible supply chain, that is the question?
A: CH2M clients basically all supply each other directly or indirectly. We have a unique perspective helping with headaches of a supplier answering a survey, and the pains of the customer trying to manage risk in their supply chain. Supply chains are the 800 pound gorilla sitting in the corner of globalization with suppliers-to-suppliers of suppliers, complex logistics, transparency, chain of custody, shell companies, chemical naming games, currency fluctuation, conflict, abuse and a plethora, a virtual cornucopia, of ever changing and chaotically enforced regulatory requirements around the world. This is the ultimate puzzle. Today, all efforts to survey, score, benchmark, and ensure compliance by suppliers and vendors is cumbersome, resource draining, and sadly still pretty ineffective. We need a better mouse trap- or maybe not even a mouse trap at all. We are curious and continue to talk with clients that supply each other about what would work better. We continue to dive into pre-competitive collaboration efforts like ZDHC, those led by BSR or even QuestForum in the ICT industry where there seems to be a direction to incorporate activity into integrated management systems, generally the realm of EHS&S. This is hard, complex, but important as pressure grows from key drivers for change, namely climate change, population growth, resource scarcity, pollution, ocean acidification, and increasing expectations from stakeholders for global corporate citizenship.
Q: Can EHS&S managers demonstrate to a CFO how they noticeably improve net margin and revenue?
A: Let’s start with a general assumption made by many companies during annual budgeting exercises. To set budgets you tend to start with the premise of what past utility, regulatory, compliance, safety, or audit costs were accrued in past years — adjust that amount + or – based on sales or production forecasts for the upcoming year. The budget is approved and this process seems to takes only minutes during annual budgeting meetings we’ve attended. The problem- these are not fixed, but variable costs. The budget is assigned to overhead departments such as operations, quality assurance, EHS, or CSR who then work aggressively site-by-site, line-by-line, asset-by-asset to stay on budget and avoid risks by managing these variable costs. Their livelihood year-to-year depends on being “on budget.” We are working on, how can we give finance departments and CFO’s the comfort of fixed costs for the year, while rewarding and incentivizing day-to-day folks to come in below budget? The ideas and case studies are out there. Pioneered by people like James Angelosante with the University of Washington Facilities Services and championed by Jimmy Jia with Distributed Energy Management. The goal is to capture and account for on-budget savings and create mechanisms, revolving like funds, and approval process to provide the savings back to environmental, operations, safety, and facilities managers to re-invest in more efficient assets, safer processes, or greener chemistry. To put it simply, the revolving fund, containing the on-budget savings, becomes the ultimate performance indicator for just how much EHS&S and other operations have improved the net margin and net revenue of their company. This seems to make CFOs smile.
Q: Did you know EHS&S is the front line of the most pressing and complex externality problem of greenhouse gas (GHG) emissions?
A: The atmosphere is a public good, with benefits accrued by all. The activities of corporations impose costs on society as a whole in the form GHG gas emissions driving climate change. For this reason, corporations will see mechanisms (social, political, and economic) to compel them, the ones who benefit from GHG emitting activity to internalize these costs and risks. And, let’s face it, corporations will pass those costs along to consumers — all of us, who actually benefit in the end for the trip to the store, new pair of shoes, or plastic kayak for that dream vacation in Costa Rica. Stop having CSR teams, or grass root green teams, or the poor soul appended somewhere on an org chart with a spreadsheet and the piles of questionnaires from CDP, GRI, or the whole alphabet soup of voluntary and involuntary reporting expectations requiring annual figures on GHG emissions. You know this person, perhaps it’s you? To put it simply, EHS&S teams have the processes, governance, and data collection capabilities to most effectively- and correctly, measure and monitor GHG emissions. Companies also need to re-tool how this information is disseminated across an organization to drive change. For example, Microsoft’s internal carbon price, Dow’s Net positive impact, or Kering’s environmental profit and loss statements which mitigate or pull carbon from the atmosphere. These are all in the name of empowering and informing new business strategies to change products, manufacturing processes, and employee behavior to mitigate GHG emissions in a company and downstream in supply chains.
If you have ideas or want to talk with CH2M folks about these issues, they would love to hear your ideas and invite you to grab them at the EL conference this week.