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One of the key examples is energy efficiency in buildings.
8 cities in the US now have made mandatory reporting of energy efficiency for commercial buildings. New York City, Philadelphia, San Francisco, Seattle, Austin, Washington D.C., Minneapolis and now Boston (Pictured) require owners of commercial properties to report the energy efficiency. See this article from 2Degrees for more.
Ideally what we should have is a set of measures, all coordinated, that would transform the industry, making companies compete fiercely towards energy efficient buildings:
a) Mandatory displaying of the results. Reporting is not enough. Displaying the results in the entrance of the commercial properties should be mandated as well. That would create social pressure from customers. A mild way of naming and shaming.
b) Bonus malus taxation schemes. Being revenue neutral, the top performers should be subsidized by the bottom in the list. That would create a healthy competition.
c) Minimum standards. Moving standards should be set so that some commercial properties under the given standard should not be given license to operate.
How full product transparency will revitalise the bureaucratic approach to managing sustainability in the supply chain
The conventional approach to exercising corporate responsibility in a company’s supply chain is to draft a company supplier standard and then audit for compliance using that document. The process often begins with a questionnaire and is followed by audit visits to suppliers judged to be the highest risk. The better programmes also include an offer of ‘capacity building’ for suppliers – in other words, they provide training and support to help them raise and maintain their standards.
Positive and usually well-intentioned as this course of action is, the impact is inherently limited by the narrow scope of the dialogue and the teacher–student nature of the relationship. It might work well when addressing very problematic issues (such as child labour), but telling suppliers what they shouldn’t be doing misses an opportunity to foster their talent for commercial advantage and innovation.
The flaws of the 700-question supply chain questionnaire
The questions below are from a real example of a supplier questionnaire I was asked to fill in by a corporate customer. Let’s look at how little each question actually drives real environmental performance:
1. Does your organisation have an environmental policy in place?
Any company can write up a policy in a couple of hours, but this doesn’t mean the policy is being implemented or monitored. Policies by themselves don’t drive performance, so the creation of an environmental policy will not necessarily have any impact on the products you are buying from your suppliers. For non-sophisticated audiences, it looks so good to say that 80% of your suppliers have an environmental policy. But in reality it means next to nothing.
2. Does your organisation have an environmental management system (EMS) in place?
ISO 14001 and EMAS are management systems, not performance systems. They just require an organisation to have a policy, comply with legislation, determine its impacts, and have targets. There is no link with performance. The other issue is the scope of these management systems. In general, they have a purely internal focus – they don’t include the raw materials used to make products, nor do they look at the use phase impacts of those products. If your suppliers have an EMS in place, this provides little assurance that the products they are supplying have less impact on the environment than any others.
3. Has your organisation identified the specific environmental impacts associated with the products, services or works it provides and taken steps to minimise them?
The supplier can just answer ‘Yes, we have identified them’. But how do you know that the issues it has identified are the biggest and most important ones? The supplier can also respond with any amount of corporate spin – cherry-picking some initiatives from the fringes and thereby allowing itself to look good.
4. Does your organisation observe legislation with regards to environmental issues?
Shouldn’t this be taken for granted?
5. Does your organisation communicate its environmental policy to its suppliers?
What demonstrable impact can be gained from sending a piece of paper full of generalities to suppliers? It would be far better to ask suppliers for radical innovations on the issues you want to improve.
6. Does your organisation check the environmental policy and performance of its staff?
Even if your supplier does this, how much of a difference will it have on the products you are buying?
How far have we come when thinking about sustainability strategically?
It used to be about finding one or two feel-good activities like recycling the paper in the office. Then reporting a biased account of a few issues with some cherry picked case studies. Then it became the time of the public commitments: carbon neutrality, zero waste factories. Now we are entering into the territory of product sustainability, since most of the impacts of products are outside companies’ boundaries, in many cases 90%.
The key lies in product re-design.
You can redesign a car or a vacuum cleaner so that it uses less energy, and you can redesign cement or carpet so that it uses less embodied energy. Both are design challenges. Now if you come up with a product with super low impact, you still need to convince your customers to switch to that product.
In many cases, a technical product innovation does not solve the problem if it does not get accompanied with a commercial strategy for wide adoption of the new green product. Similarly, companies can identify the products with the highest impact products and try to either come with alternative products that provide the same function or convincing customers to buy products with less footprint. In both scenarios, they will be commercial opportunities for those companies that crack this code.
Managing portfolios will become a huge issue on the sustainability agenda.
Many companies will deny this at first and a few leaders will look for opportunities but Government interventions will push for greener (genuinely greener) products. So if you are a retailer this will be your biggest issue. And yes, it will be difficult to face but it is likely to be your biggest issue by far. So understanding the footprint of your products and moving consumers towards the more environmentally friendly ones will be seen as vital.
This expectation of retail will happen faster than we think.
I would like to present a HUGE project that I think is just as challenging as our Mission Zero : the renovation of the emblematic headquarters of Bouygues Construction. It was first opened in January 1988 and was designed on the instructions of Francis Bouygues in conjunction with the architect Kevin Roche.
Twenty years later Bouygues Construction decided to undertake a complete renovation programme with an ambitious objective: enhancing the complex’s performance with respect to energy and the environment and at the same time upgrading the working environment of the 3,200 employees on site. In 2014, when the works are complete, Challenger’s energy consumption and carbon emissions will have been reduced by an impressive 90% and its water consumption by 60%.
Challenger will be a concrete demonstration of Bouygues Construction’s ambition to be a leader in sustainable construction, not just for new-build projects but for renovation too.
THE KEY ASPECTS OF CHALLENGER’S RENOVATION:
- The insulation of the buildings will be upgraded: 88% of the cladding glass (more than 24,000 m²) will be replaced by a double-skin façade achieving very high thermal performance.
- The heating and air conditioning of the buildings will use the energies naturally present in the ground (ground-source) and air (air-source) as their primary energy sources.
- Part of the electricity necessary for operation of the site will be producedlocally by installing more than 21,000 m² of photovoltaic panels.
- Wastewater and rainwater will be treated by filter gardens, artificial wetlands which purify water naturally for re-use on site, for watering the grounds for instance.
THE CHERRY ON THE CAKE : TRIPLE HQE®, LEED®, AND BREEAM® CERTIFICATION !
Designed as a means of assisting sales, as an ambassador-building promoting the Group’s know-how, Challenger is aiming for triple HQE®, LEED® Platinum, and BREEAM® Outstanding certification. Though quite a challenge for an operation of this size, this project has already been awarded a trophy presented by the BRE at Ecobuild in March 2013 for reaching the highest score of the year in 2012 on the BREEAM® International Design Stage rating system.
To renovate 45,000 sqm thinking of their employee’s comfort, makes this project quite unique. Particular emphasis has been paid to the visual design as well as to the acoustic and thermal comfort of the work areas which has meant the areas have been completely redesigned. I can tell you that developing a special Transformation carpet tile, with an especially high reflectance value, whilst remaining aesthetically beautiful and technically high performing has been hard work!Interface’s ‘Transformation’ has been chosen to cover the 45,000 sqm because of its random design which limits the installation waste significantly, its average recycled content of 44% (even with special colours), and because of its low VOC emissions to favour a better indoor air quality. Generally speaking, Interface has been chosen as flooring partner on this project because of its expertise in the sustainability area and its ability to take back the old carpets and recycle them.
THE EXPERIMENT LAB : THE COCKPIT
To better control, follow and show all the technological sustainability devices on site, Bouygues has created a kind of lab where you can feel and experience the scale of this huge sustainable renovation project. The Cockpit, aka the Challenger ‘control room’, allows you to measure energy consumption, production, and recovery in real time, as well as optimise staff comfort. It includes a showroom where interactive and eductional visits of the site can be conducted.
Have a look at these crazy figures and you’ll understand why I admire so much this project :
Next week, I’ll post our Cut the Fluff interview that Philippe Metgès, Central General Business Manager for Bouygues SA, in charge of the Challenger renovation operation, has accepted to answer ! Be ready !
AFTER MANY YEARS OF WORKING HARD to encourage consumers to change their buying habits in favour of sustainable products, we have seen only small pockets of success.
Let’s face it: Not many consumers are really prepared to bother
Unfortunately, although there is growing public awareness of the urgent environmental matters we now face, only a small section of the consumer market is changing its buying behaviour. According to research performed by Marks and Spencer (M&S), the UK consumer market contains a ‘deep green’ group of consumers representing 8% of the market, as well as a ‘lighter green’ group representing 28%.
Aside from these two factions, there is a segment of consumers (38%) who could be persuaded to buy green if the price, quality and convenience of a product is good enough. And then there is a recalcitrant hard core (26%) who do not really care about sustainability issues and are unlikely to change their buying behaviours in any circumstances.
Furthermore, many research projects have suggested that even among those consumers who might be inclined to think about sustainability issues, only a small percentage will make purchasing decisions based on the environmental information displayed on a product label or on the web. It’s hardly surprising that most consumers don’t have the time or the inclination to search out detailed environmental information when they are making minor purchases of, say, a toothbrush or a cauliflower.
Would you really bother to look at environmental information for the 200 items of the weekly shopping cart?
The problem with this kind of ‘voluntary sustainability’ is that it actually penalises the people who bother to make the right purchasing decisions – mainly because it asks them, in most cases, to pay more, let alone endure the hassle of going through all the information. After a while, even deep green consumers begin to question why they should be taking the hit by buying more expensive stuff when, elsewhere down the supermarket aisle, someone who doesn’t care about the environment is being rewarded with a cheaper shopping basket.
What, they ask themselves, is the point of making such sacrifices, and why should they act more or less on their own?
These are fair questions, and there is no easy answer to them. Those who make the right choices should not be penalised. So what we actually need is a new system that moves away from voluntary sustainability and makes good behaviour a viable and rewarding option for everyone.
We must look at other ways of instigating the wholesale change that we need.
The European Commission has released the following facts and figures from the Single Market for Green Products initiative:
* The global market for low carbon environmental goods and services is estimated at €4.2 trillion. EU companies’ market share is 21% (UK Department for Business, Innovations and Skills, 2012).
* Xerox reported savings of $400 million and Zara €500 million in 2009 by designing their products to minimise their life-cycle environmental impact.
* There are currently more than 400 environmental labels worldwide (www.ecolabelindex.com).
For analysis at company level, 80 leading methodologies and initiatives were identified according to which GHG reporting could be carried out (EC study, 2010).
* For product carbon footprinting, 62 leading initiatives and methods were identified (EC study, 2010).
* PUMA has stated that 94% of the environmental impacts of its products occur along the supply chain.
* 90% of consumers buy green products at least sometimes (Eurobarometer).
* 39% of consumers say business claims about the environment are not accurate (GFK, 2011).
* Only 6% of EU citizens trust producers’ claims about their products’ environmental performance completely (Eurobarometer, 2009).
* 94 companies examined used 585 different indicators in environmental reports. Of the indicators disclosed, 22% were used by more than 3 corporations; 55% were used only once (Journal of Cleaner production, 2012).
* Investors are interested: the investors’ base behind the Carbon Disclosure Project grew from 35 investors with assets of 4.5 trillion USD in 2003 to 655 investors with assets of 78 trillion USD in 2012.
* More than 1/3 of 250 business executives said that they could not keep up with consumer demand for sustainable products and services and 62% declared that sustainable investments were motivated by consumer expectations for green products (Accenture, 2012).
Many CEOs claim that sustainability is part of their company’s DNA.
What a cliché, what an easy thing to say, impossible to prove or dispute. But how can sustainability be in a company’s DNA until the core product or service of the company has significantly less impact?
The real DNA of companies are their products or services, what they offer to customers, what they sell. The first thing is to understand the true impact of your products.
Product sustainability questions get you to that elephant in the room.
We discovered that around 70% of the overall environmental impacts of their carpet tiles were related to the raw materials used to make them.
Of these, the oil-based nylon yarn, just one single raw material, had the single biggest environmental impact. In fact, nylon production accounts for almost half of the impacts across the full lifecycle of a carpet tile, a hard pill to swallow for a carpet manufacturer (the fibre is what makes carpet a carpet).
Rather than neglecting the elephant in the room, Interface re-focused its efforts where it could make the biggest difference: reducing the amount of yarn used, finding ways to recycle old yarn into new, and looking for bio-based alternatives to nylon. Today the company has products made out of 100% recycled nylon using half the amount of yarn, cutting the overall environmental impact by half.
As a side note, some other carpet manufacturers were marketing wool carpet as a natural and sustainable option but wool has between four and six times more embodied carbon than virgin nylon.
For more on this subject, read ‘Full Product Transparency‘. This book outlines a path towards a more practical era for ‘corporate responsibility’, where companies make real environmental gains based on hard facts, using lifecycle assessment (LCA) and environmental product declarations (EPDs).
Here is a video produced by our colleagues in China. It was used to inspire and provoke conversation at their annual sales meeting. Let us know what you think.
Click on the image and the video will play from their site.
This summer, it’ll be nine years that I’ve been working for Interface and I have to admit that I’ve never got bored, not even for a single day! I’ve always worked in the marketing and communication department with a “sustainability hat” on or looking through sustainability glasses.
Interface is truly walking the talk. It puts sustainability at the core of its strategy and knocks down the status quo every day, which means that there are changes and developments in the company all the time. Every commercial, marketing, design or innovation decision made is based on sustainability, and with one goal: to have no negative impact on the environment by the year 2020. At Interface, we’re not working, we’re on a mission! Mission Zero.
Throughout the previous nine years things have accelerated… and fast! The last two years have seen giant steps in terms of lowering our biggest environmental impact : the yarn we use in our products.
In 2011 we were the first carpet manufacturer to launch a product with 100% recycled yarn with Biosfera. In the late ‘90s, nylon manufacturers told us that it was impossible to recycle polyamide. Today, not only do they recycle polyamide 6 but they also buy different kinds of polyamide 6 waste like fishing nets or carpet fibre, as a secondary raw material to supply their factory and reproduce nylon yarn.
With our ReEntry 2.0 machine, we have become the supplier of our supplier. This machine enables us to separate the yarn and the backing from the end-of-life carpet tiles. The polyamide 6 yarn is then recycled into new yarn and the backing into new backing.
With our Net-Works project in the Philippines, we have partnered with an NGO to establish a community based supply chain for discarded nets. This will improve the livelihood of local fishermen, whilst providing Interface with an innovative source of recycled materials for its carpet tiles. Again, we become supplier of our supplier. Have you ever seen a carpet manufacturer acting in this way?
And finally I am going to give you another example to show how we are striving to reach our goal: I said we were the first to launch a carpet tile with 100% recycled yarn in 2011… two years later, I’m quite proud to say that our range of 100% recycled yarn products has been expanded and we now have 368 colours available in our portfolio.
One more thing.. did you know that 49% of our global raw materials are either recycled or bio-based with the aim for 2020 to be 100%.
A practical guide for policy-makers. So how do we get beyond the car sector?
Below is a brief guide to creating transformational change within a sector or product category based on the concept of FPT.
1. Do an LCA in order to understand the main environmental impact of that sector or product category (e.g. food, buildings, chemicals, electricity, etc.).
2. Develop a common metric based on the full lifecycle impact or at least on the main impact area.
3. Establish a long-term goal stating what performance is required by when. This can be a fixed value or variable in order to increase competition.
4. Establish minimum performance required and ban underperform- ing products (you might get some World Trade Organization issues but there are always ways around it).
5. Create a system where industries pay penalties for underachieving and/or tax credits for overachieving. That encourages industries to compete and innovate. 6. Mandate visibility of the common metric on all promotional materials.
7. Enable and encourage national taxes, whereby the products with more environmental impact pay more and products with less impact pay less (variable product tax).
8. Enable local regulation that gives ‘incentives’ to products with less impact (e.g. what free parking and free congestion charge is doing for the cars).
9. Support and enable data intermediaries to be creative and do their job to help consumers make sense of the data.
10. Release the power of public procurement and buy only products that achieve certain performance levels.
11. Encourage equally the power of corporate procurement.
12. Award with the EU Ecolabel those products that demonstrate more than 50% impact reductions over the average product.
13. Sit and relax – the market usually delivers (but you need to tell the market what you want).
Let’s look at the building sector and try to apply this thinking (in a very simplistic way):
a) Magic metrics could be kWh/m2 and kg of embodied CO2/m2 (I will focus on the first one).
b) Set up a minimum European standard of, let’s say, 100 kWh/m2 for new buildings in 2020.
c) Give the EU Ecolabel to new buildings under, let’s say, 50 kWh/m2.
d) Give tax discounts to new buildings under, let’s say, 50 kWh/m2.
e) Facilitate licences/permits to the super-performing buildings (e.g. fast track or no permit required).
f) Existing houses pay variable rate of stamp duty and local council tax according to their energy rating (would encourage retrofit more radically than green deal type of approaches).
g) Government would commit to the strongest standard for new buildings and would retrofit existing government buildings to a minimum standard.
h) Mandatory energy ratings displayed in every public and private building including offices, retail, etc.
This is a back of the envelope approach that does not take into account the fine details such as the differences in building types such as domestic, office or retail, but it gives an idea of what the magic metric approach can deliver.
The move towards transparency is continuing.
