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Posts tagged 'CSR'

How to achieve revenue growth from resource efficiency

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This webinar all about resource efficiency was posted last week. Thanks to Tracey, Greg and the teams at 2degrees and Next Manufacturing Revolution.

Resource efficiency is traditionally associated with cost reduction. But leading companies have also used non-labour resource efficiency to drive sales. Watch this webinar recording to hear how Kyocera successfully do this and how your company can too.

The Next Manufacturing Revolution conservatively estimated additional profits worth £325M p.a. from revenue growth from resource efficiency through:

* Improved product performance
* More efficient delivery models such as ‘servicising’
* Collaborative consumption business models
* Quantifying these additional revenues can boost the economics of resource efficiency and should be included in sustainability-related business cases.

In this webinar, Dr Greg Lavery from Lavery Pennell, lead author of the Next Manufacturing Revolution, presents the revenue growth opportunities available from resource efficiency and how to succeed followed by Tracey Rawling-Church, Head of CSR at Kyocera Document Solutions UK, presenting Kyocera’s experience.

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Full product transparency: The future of reporting

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Good corporate reporting is based on the principles of accountability and transparency. When reporting on sustainability, this transparency is greatest when focused at product level. After a decade of corporate responsibility (CR), FPT heralds a new era for reporting. With many – and often most – environmental impacts occurring outside a company’s boundaries, extending reporting from the narrow confines of a company’s own operations to the wider effects of the products it sells demonstrates superior accountability. This is the ultimate in transparency. It is also of greater relevance to most stakeholders, who are more interested in a company’s products than its facilities.

Accountability across the whole value chain

So forget reporting at company level. Classic CR reporting is too narrow in focus, and it misses too much. Environment sections of reports are usually limited to the immediate impacts of a company’s operations, perhaps with a nod to managing impacts in the supply chain. By extending reporting to include the impacts of products throughout their lifecycle, companies can demonstrate transparency and accountability across the value chain.

A supermarket should take accountability for the products that go through it, not just its buildings

Which environmental impacts, for instance, should a retailer be account- able for – and report on? The environmental impact of a supermarket extends well beyond the doors of its stores to include the impacts of all the products it sells. These occur before and after the products enter and leave the stores – in their production, their use and their disposal. Yet conventional corporate reporting would largely ignore anything that happens outside of the store, apart from a few cherry-picked case studies.

By taking accountability for the impacts of products across their lifecycle, retailers can gain a much better idea of their overall impact on society – and of the type of products they might want to sell. Arguably, it was this kind of approach that led the do-it-yourself retailer B&Q to stop selling patio heaters. A traditional CR approach would not have registered the significant environmental impacts of patio heaters in their use phase. Ikea is now assessing its products based on a sustainability product scorecard to assess the lifecycle impacts of its products, including waste, energy and water from their use in customers’ homes.

A traditional corporate report might pick out one or two products as case studies and look at their impacts, but what about the rest? If a company produces EPDs based on lifecycle assessment for all its products, this can reveal its overall impact much better than any CR report. An EPD takes into account the ingredients of a product, the methods of its production, and the full environmental impact of each stage of its lifecycle.

If we apply the supermarket approach to other sectors, we can see a different level of debate about who should be accountable for what. What about a private equity firm owning various companies? Rather than ticking some boxes and sending back a meaningless Stanford Research Institute-type questionnaire, private equity firms could report the overall impact of each of their companies based on the products these companies sell or make. This would be possible if those companies all produced EPDs for their products. The same thinking would apply to project finance.

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“Twenty years on, corporate sustainability still lacking”

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Robert Kropp wrote this article which was published on SocialFunds and then GreenBiz earlier this month. It’s a fascinating read and I’ve included the oekom research report below.

” After 20 years of rating corporate sustainability efforts, German-based oekom research has found that global giants have not been doing nearly enough in their commitments to sustainability. In its most recent annual report, oekom found that only one in six — 16.7 percent — of the companies rated has a “good” level of commitment.

That so few companies are performing at all well — none has been accorded oekom’s highest rating — is especially sobering given that 62 percent of companies now report that they pursue sustainability strategies, and almost two-thirds of those that do state that doing so has been profitable for them.

The industry sector with the highest sustainability performance rating was paper and forest, but that sector’s rating was only 47.7 out of a possible 100.

“The very industry which, more than any other, stands for sustainable management has thus failed to achieve even half of the maximum possible score,” Matthias Bönning of oekom said in a statement.

The only other sectors achieving even a rating of 40 were household products and automobile. The worst performing sectors were real estate and oil and gas — “sectors which have a key role to play in overcoming the major challenges of sustainability,” the report states. Insurance and commercial banks, both of which will play important financial roles in achieving sustainability, performed poorly as well. Not one of the 20 companies designated as best performers in the industry sectors is headquartered in the U.S. Seven are based in the U.K. and the vast majority of the rest are elsewhere in Europe. “The quality of sustainability management in North America and Asia is significantly lower” than in Europe, the report found.

Paramount importance

Observing that addressing climate change is of “paramount importance,” the report concludes, “The time remaining for taking decisive political, economic and social action in order to prevent the worst from happening is already running out.”

However, “the ideas, concepts and technical capabilities needed to meet the challenges successfully already exist,” oekom continued. “Environmental and social commitment are not the product of economic success, but rather its root cause. Only those who manage energy and raw materials efficiently, treat their own employees and those of their suppliers fairly and offer products that are tailored to changing market requirements will also be economically successful in the long run. In this sense, sustainability is also described as long-term economics.”

oekom research was founded a year after the Earth Summit in Rio de Janeiro in 1992. On behalf of the sustainable investors that comprise its clientele, oekom analyzes and rates both companies and nations on their sustainability performance. For several years, oekom has published an annual Corporate Responsibility Review, which rates the world’s largest companies according to their performance in the seven areas of climate protection, biodiversity, water, forestry, poverty, demographic changes and corruption.

Despite the shortfalls in this year’s report, the report isn’t all doom and gloom. In oekom CEO Robert Haßler’s foreword to this year’s edition, he described the shifting corporate response to the agency’s measurement of sustainability performance in the early years.

“At the time, many companies viewed this as a monstrous imposition,” he wrote. “Managers were not used to having outsiders systematically and comprehensively scrutinizing their social, environmental and ethical behavior.”

Click on the image to open the report

oekom report

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EPDs are inexpensive, contrary to the urban myth

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Some people argue that EPDs are very expensive and especially if you have too many product categories it becomes unmanageable. This is like arguing that for Unilever or Kraft would be impossible and very expensive to provide the nutrition facts for all their products, given their products range. Yet they manage.

EPDs are expensive if you don’t do the internal work and you ask a consultant to do all the work for you. You would end up paying from €10,000 to €15,000. Which is still much less that what many companies pay for some green labels. To put this into perspective, I have seen companies in the building products sector pay more than €50,000 for various types of green labels and certification schemes of dubious independence and robustness.

Once you invest internally and a small part of your CSR or sustainability team have the ability to perform LCAs, it becomes very inexpensive and EPDs can be done for less than €1,000, may times even €500. And the information collected is not only of great use externally but for internal purposes and decision-making, most times substituting redundant internal reporting.

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Magic Metrics In A Can Of Coca-Cola

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It’s true. Only geeks like me read sustainability reports, but what can you do when you’re bored waiting for a flight?

This time I read the report from Coca Cola Entreprises. Their seventh, incorporating Corporate Responsibility and Sustainability (CRS).

Here is my take:

It’s a bit of a surprise that they are reporting so prominently on key product metrics (normally the opposite for corporates), and it’s quite a good performance.

1.43 litres of water are used per litre of Coke. However, I wonder how much room there is to reduce it to 1.1 or lower perhaps? (Please forgive me for not being ‘a man’ while I grab a Diet Coke)

I love the focus on LCA, finally companies are getting it. And guess what?

47% of the carbon is packaging… with:

  • 21% used to keep the cans and bottles cold
  • 17% on ingredients
  • 8% for manufacturing

Another nice surprise is that they have managed to decouple business growth from emissions although I believe there is a further potential saving seeing that refrigeration and packaging takes so much carbon.

One of the elephants in the room is portfolio management. No company is talking about it.

How can you sell more of the more sustainable stuff and less of the less sustainable. For example CCE could consider how to shift from traditional soft drinks to low calorie ones? And given that packaging has such a high relative carbon footprint, how can they entice customers into shifting towards lower carbon packaging products?

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