Innovation is at the heart of Sustainability

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There are some great media stories out there extolling the steps that a company or brand has taken to minimise single plastic usage.  Some are small scale in their impact, but others will have a significant impact on plastic usage, amounta leaving via the factory gate, and its potential after consumer use to enter the environment as waste.  These are great stories and actions that hopefully will become ‘business as normal’ in the future!

One element that has fascinated me, during all this, is the range of alternative solutions and strategies that have emerged.  The challenge of reducing single use plastics has obviously released a lot of innovative thinking within these organisations. 

So, why had no-one released this innovation earlier? Why had it taken these organisations so long to wake up to the possibility of reducing plastic usage within their systems?

A key business driver for sustainability is challenging and changing established practices or beliefs that this is the only way to conduct a business, drive a process or use a material.  Sustainability leadership has at its core the need to ask questions that nobody at first can answer and to stimulate answers to problems nobody had questioned.   It is closely integrated with innovation, and when practiced as a business tool stimulates innovation internally or across supply chain partnerships.

So why don’t business harness and seek to create opportunities to release this inherent innovation more often within their organisations.  The answer I feel is that sometimes they don’t realise it is there or that it is centred in distinct parts of an organisation that has ‘defined innovation’ areas. 

What is important to me within these single use plastics initiatives is that the innovation probably arose internally through debate within a wider pool of employees than normal, it probably brought different players into contact and required organisational silos to interact and work more closely together.  Sustainability issues are notable for being trans-organisational – that is what makes a sustainability managers life so difficult at times. 

But look at the outcome of this innovation.  The internal workforce has been presented with a challenge or has sought to solve an inherent risk by coming forward with solutions.  This has probably had a positive impact on those involved, a clear sense that they are ‘doing good’ in terms of aligning their values with how they want to behave, a reinforcement of how they expect their employers to behave, and externally how customers and society feel they should behave.  In bringing this forward thier innovative solutions into the marketplace they will have been supported by the businesses’ leadership group, and everyone is feeling good about themselves.  An ideal ‘I Win – You Win – We Win‘ scenario that has then pounced upon by PR and Marketing teams as a positive story to take out into the marketplace.

The next step I hope is that these initiatives reveal potential cost savings and data on how much plastic usage has been offset from environmental escape.  I would also like to know how many Environmental Management Systems had paid previous attention internally to plastic usage and how many had ignored their external impact altogether…. perhaps for another blog!

What I do want to conclude on, is that here is a clear example of how seeking to enact sustainable solutions can galvanise organisational innovation and bring forward new initiative to take out into the marketplace.  They were faced with an uncomfortable truth over their products association with single use plastics, they thought about it and took positive action and the marketplace welcomes their innovation.  Becoming more sustainable hasn’t rocked the boat, hasn’t caused investors to man the life rafts and no one has dies of leadership shock by taking a risk in changing direction.  In contrast the staff are feeling good about themselves, their company and what they have achieved. Internally the initiative has probably brought new internal; teams together to solve a challenge and has given these companies a great story to add to their brand and marketplace communications. 

So, my Big Question is: Why aren’t organisational leaders utilising sustainability more as a business driver to challenging their staff to achieve further sustainability outcomes if the outcomes can only be beneficial?

The issue of plastic waste isn’t new.  The five oceanic gyres hadn’t developed overnight, and environmentalists have been raising concerns about Man’s plastic usage and the environment for years.  So why has it taken so long for action to permeate the strategic tiers of businesses?

Sustainability has the potential to galvanise innovation within and across businesses, it provides a positive culture for business expansion and a repositioning of brands within the marketplace.   

So, business leaders try setting a sustainability challenge to your organisation, a problem that needs to be solved or a resource that needs to be reduced.  Something that can deliver a reputational boost to the brand and that attracts consumer attention, but most of all something that stimulates innovation across the organisations

If you want innovation, give sustainability a try!

Leading Green offer a range of ‘brainstorming’ workshops for leadership teams and wider organisational groups, helping them address and focus on sustainability issues, priorities and future pathways. Contact ross@leading-green.com to see if we can help your organisational needs.

At Leading Green, our approach to sustainability in business consulting encourages our clients to look closely at their own internal leadership strengths.  Helping them adopt an inquisitive state of mind and supporting them in how sustainability can support their long-term business strategy.

Getting Green Done ……

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I was amazed as a young environmental colleague lamented the lack of success, she had had recently in presenting her CEO with a new sustainability initiative.

‘He threw out most of my proposal and gave me only 30% of what I wanted!’

The initiative was wrecked, she was down-heartened, she had embarrassed herself, and her enthusiasm was now at a low ebb through disappointment.  It had been a bold initiative, it had matched her vision for what the company could achieve, had aligned with their new sustainability policy and could have delivered real business value.  The whole initiative reflected well on her and the career training she had received to date. 

‘Wow! I was thinking, 30% – that’s just great as a first step I mused, but in her disappointment, I sensed the frustration that many graduates today in the sustainability field feel when entering the workplace.  They leave their institutes with high expectations and run full tilt into the operational realities and encounters that are so common in organisational bearpits.  What was once so clear and rational in the classroom becomes murky and complex when it must be delivered through workplace colleagues.  Organisations just don’t act as rationally as sympathetic classmates with shared worldviews on sustainable development. ‘We must do this’ becomes quickly challenged by ‘Why must we do this?’, ‘But….’, ‘Perhaps when we have the time and money!’ or even a stonewalling ‘No!’. 

It took time to explain to her that I was impressed and pleased for her, that 30% success is not failure but success when you are trail blazing!  For after two decades in corporate environmental risk management and sustainability you learn that any advance or step forward is a good win. 

In sustainability, we are first and foremost business change managers, our role is to ratchet up organisational performance, to deliver value outcomes and to continually progress ‘getting green done’ within organisations.  There are very few ‘Look at Me!’ and ‘Aren’t I Great!’ moments for many environmental professionals within organisations. 

Personally, my greatest inner satisfaction comes from watching others adopt sustainability thinking into their work because it now makes strategic sense to them, aligns with new business direction or reinforces a strong organisational culture with a new worldview.  That is my reward. We all like success and the recognition of high performance by our peers, but when your leadership is enacted via changes in the behaviours of others don’t be surprised if it is overlooked.  Remember that people rarely own up to changing thier past opinions. 

It was clear that her CEO had been supportive and had giving her a chance to progress her initiative but had yet to be totally convinced enough to give her the whole package.  She had first to deliver on this element before any further funding or support was granted – a clear pragmatic leadership decision.

We all need mentors in our professional lives, colleagues who can guide us through the organisational minefield, suggest alternative ways forward and pick us up when we are downhearted or discouraged.  It took time to show my colleague that her disappointment in the meetings outcome was unjustified and had in fact been a win.  She had set her heart on 100% success, her CEO in supporting her had granted 30%.

So now we have started work on ensuring that she does successfully deliver on the 30% she has been entrusted with.  In doing so, we are working out what her strategy will be and how she will bering on other colleagues to gain the next 30%, and the 30% after that, and the 30% after that ……until she wins over the CEO and gets his full backing for her vision. 

So, don’t expect 100% success overnight, building a sustainability foundation within an organisational culture involves a slow but continuous ratcheting up of performance over time.  It is a marathon, not a sprint and that ultimately success is in…just Getting Green Done!

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Note: I have happily borrowed the phrase ‘Getting Green Done’ from the book of the same name by Auden Schendler, Vice President of Sustainability at Aspen Skiing Company. It is a useful read for sustainability professionals enetering any work sector.

‘Consume less’ to save the Planet or ‘Consume more’ to save your Economy

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Photo by Skitterphoto on Pexels.com

A political and economic paradox, but a paradox that is currently operating in the UK.

Over 2/3rds of the UK’s GDP depends on household consumption.  Whilst this helps to explain the resilience in the economy to Brexit chaos and most post-war UK recessions, as exports and investments are relatively minor components of current GDP.  It stands against us as a measure of UK future economic sustainable development.

In contrast, what does cause economic recession in the UK? – when we consume less and when we save more!

Both issues raise questions about how business & sustainability professionals address future ‘growth’ strategies.  There are many UK businesses whose leadership have committed their organisations towards responsible leadership practice and the integration of business sustainability within their core strategies.  These actions are to be praised and applauded as they form the keystones of the UK’s commitment to a greener business economy.

However do we truly believe that the next phase in sustainable development is sustainability modelled around continued rises in household consumption?

Increasingly consumers now demonstrate greater awareness and response to what they spend their incomes on, and how they view ethical brands, sustainable goods and services. This is great news and is helping to demonstrate the growth and value benefits to businesses of responsible leadership and sustainability in businesses. However, consumers are also not letting up in their desire to spend and acquire more. We are purchasing smarter but we are still purchasing more than we need, and save less than other European nations.

We are still decades away from getting to grips with a circular economy or one that is sustainably balanced in terms of inputs and outputs.  However, there needs to be a bridging phase during which we embed more sustainable business models into the economy, coupled with policy & societal models that:

  • incentivise households to save towards a longer life expectancy
  • incentivise household savings towards the purchase and implementation of sustainable household infrastructure – renewable energy, lower carbon construction outcomes, reduced ecosystem service and impacts) that offsets living costs
  • offset household consumption on materially unsustainable goods or services that have a higher than desirable impact on ecosystem services or climate change.
  • incentivise the UK’s trading balance towards the growth in export of goods and services that promote a greener global economy, and
  • address the deep structural cracks that current economic policy will have on tomorrow’s economy.  It was a great model whilst you couldn’t see the forest for the trees, but now that the forest has been cleared to the size of a coppice we need some new economic ideas and practices.

If economic theory is logical, and political economic science rational – how can a society, such as the UK, develop more sustainable economic indicators, be encouraged to pursue these through more stable economic models and to promote household sustainably over  household materialism.   Where is the economic leadership that allows us to switch tracks from GDP Key Performance Indicators based on unsustainable consumerism to those more suited to the realities of the future?

Individuals and businesses are capable of great innovation but future recession beating policies must accept that you cannot enable sustainable development through mass consumption, and that household savings can ultimately contribute to societal sustainability.

At Leading Green, our approach to sustainability in business consulting encourages our clients to look closely at their own internal leadership strengths. Helping them adopt an inquisitive state of mind and supporting them in how sustainability can support their long-term business strategy.

Contact ross@leading-green.com

Making the Business Case for Sustainability: Obtaining Top Management Support

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Making the Business Case for Sustainability (3) updated

Leading Green is delighted to announce a new Sustainability in Action leadership course for Environmental Management, EHS and Sustainability professionals.

Obtaining Top Management Support (a new 1 day course)

22 – 25 January 2019

Getting across the board buy-in for sustainability in organisations can be difficult.  Progressing strategic actions that create visibility for and awareness of sustainability, both inside and outside the organisation will require top management support.  When seeking to change an organisation’s sustainability culture, their support – which must also require their participation and involvement, may be the most important success factor before you start!

Top management support is the critical success factor when progressing a business sustainability agenda.

This one day course sets out a strategic pathway that aims to supports you

  • self-assess the degree to which a sustainability framework is embedded across  your organization, helping you understand your company’s progress, and
    where to prioritize your efforts (1/2 day).
  • The second half of the day sets out a toolbox of tips and tactics to help win support, participation and involvement from the CEO and senior leadership team,to identify opportunities to support your CEO’s journeys to embed sustainability, and to increase the visibility of for sustainability initiatives within your organisation.

The course focuses on your day-to-day activities and your organisations direction of travel.  It follows an established pathway, used successfully within several Business Schools and international organisations.  The course’s objective is to help you personally:

  • Advance your organisation further along the path from environmental management/EHS to sustainability
  • Self assess progress year on year
  • Introduce your sustainability agenda to senior management
  • Increased your corporate visibility
  • Align Sustainability with the Corporate Plan, and
  • Demonstrate value and win support.

The Courses will be held during the 22nd – 25th January 2019 in Birmingham (2 days); Sheffield (1 day) and Lincoln (1 day).

This 1 day course is designed to align with IEMA’s CPD requirements for environmental professionals, with elements of the course corresponding to requirements within IEMA’s Sustainability Skills Map.

For further information, delegate rates and details contact:  Ross Marshall at info@leading-green.com or view the Training page.

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Supporting Business Leaders implement Sustainability in Business

Ross Marshall has over 25 years experience of senior level Corporate Environmental Management & operational Sustainability within the Power, Water & Government Sectors.  He is involved in the accreditation of environmental professionals for IEMA.

At Leading Green, our approach to sustainability in business training & consulting encourages our clients to look closely at their own internal leadership strengths. Helping them adopt an inquisitive state of mind and supporting them in how sustainability can support their long-term business strategy.

 

 

 

 

 

 

 

 

 

Brainstorming with a Property Developer CEO over Energy Efficiency

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About 60% of total energy efficiency investment lies within the property and building construction sector, yet on occasion it seems that 75% of the resistance to building in energy efficiency into new development lies within the C-suite of such companies. This is a hard, pragmatic sector to operate in and risk aversion can be a necessary survival trait as the market fluctuates.

Having grown up around family run property development and estate agency owners  I had been a useful addition to site construction crews on projects as a teenager and subsequently regarded as the black sheep of the family for becoming a corporate environmental manager.  My description of myself as a ‘green businessman’ cut very little ice in their commercial eyes.  Only when I had honed my skills on guiding large infrastructure development through planning systems within the UK power, renewables and water sector did they become interested.  I was now a useful source of advice on EIA, legislation, planning laws and explaining to them why floodplains, ancient woodlands and habitats were being actively protected by communities from their next money-making scheme.

So, this mentoring meeting on sustainability in business with the CEO of a sizeable house building company was following a predictable route.  He was interested in what I had to say, but wary of what I was saying.  His organisation with many others were being bombarded with the ‘sustainability’ message, but few commentators had helped him  drawing linkage to what it meant for him personally and for those actively leading organisations now at the forefront of climate change adaptation hopes.  He was intelligent and strategically far-sighted to understand that the way they operated now had to change, but needed help and more rational reasons to actively jump onto the sustainability wagon.

We agreed that as a ground rule sustainability initiatives had to either add +£1 to the operational profits or save £1 expended in risk.  The core strategy had whatever to add a minimum of +£1 to his balance sheet.

So, we sat down and brainstormed!

First, we addressed the direct benefits of energy efficiency regarding climate change so that we could park that issue first and go on to explore other potential benefits of energy efficiency. We agreed that the building & property development sectors has an important role to play via aggressive efficiency improvements within new build (and existing) as a contributor to limiting the pace of global warming.  As evidence to this we referenced a recent International Energy Agency’s (IEA) market outlook on energy efficiency that claimed that a concerted drive in energy efficiency policies could assist the world in achieving ca 40% of the emission reductions needed without requiring new technology.

We discussed the options open to his company to improve energy efficiency design. There was a lot they could do but the blockage in his mind was just how they could boost financial returns, as any benefit advantage to the buyer was dependent on increased borrowing costs, energy-efficient material costs and added construction time costs to his organisation. These added costs would have to be passed on to the buyer at the detriment of a higher purchase price.  He recognised that the buyer could eventually recover those added costs in lower energy bills, but in risk terms the marketplace still revolved around ‘location, location, location, and mortgage cost.  The only clearly marketable attribute was the attractiveness of a ‘green’ home to his target market – relatively successful, dual income, young and mid-life professionals.  An advantage yes, but unquantifiable in the sellers marketplace or when seeking added capital for a scheme.  Little progress here towards his +£1!

I then turned the discussion over to the evaluation of alternative and more sustainably innovative options to identify added value finance and business model benefits based on added energy efficiency.

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Asked if he ever took the alignment of new property’s into account, the answer was ‘No! the priority was housing density and profit return on a site!’.  So we discussed placement for solar efficiency with housing density + return.  Exploring an idea where a development was maximised for the fitting a mass photovoltaic scheme in its design as the site was constructed.  The factory unit or property houses benefitting from the scheme, but ownership of the asset remained with the development company for an initial period before transferring over.  How did he feel about his organisation branching out and becoming an ‘energy company’ exporting into the local grid?  Monetising the potential energy benefit as part of the development return had attraction he agreed:

  • It could reduce the risk profile – for even if the buildings were empty, they still produced capital returns post construction.
  • A house build-carbon reduction-renewables scheme could appeal more to the third-party financier marketplace in the future.
  • Such a scheme could have a predictable return on investment, and the cost in solar installation was still reducing in price.
  • The energy units were reproducible on a scale that potentially made the added installation costs attractive.
  • there was still the option of possible energy efficiency grants.
  • The concept could help in demonstrating lower cost starter homes, and
  • It had a marketable factor for those seeking a mortgage and concerned about rising externalities.

The non-energy benefits (NEBs) of energy-efficient buildings.

It was becoming clear from our session that householder or tenant energy cost savings were not always enough to drive sustainability strategies into the property market.  A robust business case and ROI argument needs to consider additional factors in assigning that +£1 to the developer.

I raised the concept of ‘stranded assets’ as the organisation had a property letting arm within its business portfolio.  What was the risk of these properties decreasing in value or becoming stranded if energy efficiency standards dramatically rose in the future?  The scenario we discussed was a significant shift in Government policy in response to the +1.5oC temperature target.  What would be the impact if this became a hard and fast target in government or global energy policy reaction?

  • Could such changes render ‘bought cheap and done up’ properties a future financial liability?
  • Would investors continue to lend real estate capital for properties they deemed at future risk of becoming stranded liabilities?
  • What strategic criteria should now define a ‘cheap’ property in terms of its energy efficiency or retrofit profile?

These were new questions he hadn’t considered before and needed to be considered as future risk scenario.

Moving on from the risk of stranded assets we agreed that the top non-energy benefit for his organisation would lie in increased asset value within their holding portfolio and within individual buildings within that portfolio.  One obvious advantage was the desirability to rent of individual properties as a reflection of energy efficiency.  Anything that increased the longevity of tenants or reduced the lapse time between losing one tenant and gaining another could have a significant NEB return we agreed.  A financial return that was much greater than the energy cost savings implemented into the fabric of that building originally, if a building remained empty for too long.

If a building provided tenants with a greener, more pleasant place to work/live and which also contributed to operational costs, its desirability and occupation periods enhanced during its life. Within the portfolio, we also agreed that such buildings would have a lower risk exposure to future regulatory energy efficiency challenge and the expense of retrofitting. Thus:

  • increased rentability,
  • lower gap periods and
  • reduced regulatory risks

attached to high performing energy-efficient commercial/residential properties were all NEBs that need to be considered within future business strategies he agreed.

The session had I hoped started to alter the perception of this CEO, over his strategic options and how sustainability could assist in safeguarding the business’s longevity.  It had also raised scenario that could go forward into the boardroom for further debate and consideration.  That was a satisfactory start, because sustainability in business is dependant on industry leaders feeling comfortable in taking the lead on sustainability initiatives in a pro-active manner rather than reacting negatively when the opportunity has passed or when new regulation demand change.

However, the wider strategic impression I was left with after our session was that energy efficiency and investment practices remain unaligned in the UK property marketplace. The buildings sector clearly has a significant role to play in offsetting future carbon releases and in mitigating future carbon use, yet the regulatory energy policy and investment routes remain confusing as to whether they can ultimately drive a +1.5oC climate change future or just contribute locally to energy efficiency.

The regulatory preference over the last decade has clearly been aimed at direct grants and subsidies for home owners.  Whilst successful in general, how much greater would have been its success if it had been aimed at achieving greater standardisation in energy efficiency within the new build developments over the last 10 years?  This may reflect political caution when dealing with the sector or that policymaking is still more comfortable with the small subsidy model as they are easier to administer and communicate out to society.  Yet there is clear evidence that when scaled up, energy efficiency schemes are easily replicable and just as easily scalable.  They also have a verifiable ROI, help offset the switch to a low-carbon economy, low carbon cities & their air quality, and can build employment capacity within the construction service marketplace.

Let us be braver in future as the potential monetary value and benefits of energy efficiency can be just as great to developers, financiers and government as the societal value of a households energy reduction savings!

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At Leading Green, our approach to sustainability in business consulting encourages our clients to look closely at their own internal leadership strengths.  Helping them adopt an inquisitive state of mind and supporting them in how sustainability can support their long-term business strategy.