September 19, 2012. An increasing number of companies collecting and reporting sustainability information according to one or multiple environmental performance standards. The challenge for sustainability and corporate social responsibility managers is that these standards continue to proliferate and evolve, and it is not clear when they will stabilize. This article explores the evolution of sustainability reporting standards and metrics, and what this means for those who are or will be participating. The first article in this series explored the targets and types of sustainability indicators that businesses are incorporating in sustainability programs. The take-home messages, from our perspective at EcoShift, were: (1) Think hard about your goals before embarking on a particular reporting standard (2) Choose the most appropriate indicators based on the best available standards and science in your sector We’ll apply those lessons in this second installment. From Disclosure to Performance An important thrust in the evolution of reporting standards is a gradual shift in focus from disclosure to performance. In a department too often at the periphery of corporate decision-making, it is often easier for sustainability professionals to focus on data collection instead of structural improvements in performance. When reporting standards only ask for disclosure information and do not rate companies based on performance, there is less pressure on companies to become more sustainable. Some say that the act of data collection and disclosure leads companies to begin improving, but with no benchmark to measure the extent or quality of performance improvements, focusing solely on disclosure is insufficient. The Global Reporting Initiative (GRI) and the Carbon Disclosure Project (CDP), two of the most recognized reporting frameworks that initially focused solely on disclosure, are now working to include performance metrics in their protocols, and this is a trend that is certain to continue. This will make the information in sustainability reporting frameworks much more useful to stakeholders interested in corporate social responsibility, and encourage a race to the top for sustainability initiatives and practices at firms. Convergence & Divergence of Standards Sustainability standards continue to proliferate. For example, there are several different standards by which a firm can measure its impacts on water, from the Water Footprint Network to CDP’s Water Disclosure Project. Since many sustainability issues are specific to a particular industry, sector-specific standards are necessary, and this approach continues to proliferate. Meanwhile, general standards are becoming more refined and accepted, even though they may overlook critical issues in a given sector. How should a business navigate this simultaneous divergence and convergence? Continue reading this article
Read part 2 in our series on sustainability metrics, indicators, and reporting: Where to Report and Why?
Transportation fuels generate greenhouse gas (GHG) and air pollution emissions across their entire life cycle, not just when they leave the tailpipe. The life cycle emissions are referred to as the “well-to-wheels” emissions (or “seed-to-wheels” by the biofuel industry). Modeling these life cycle GHG emissions is challenging because there are numerous steps, inputs, and resources involved in making transportation fuels. But these modeling efforts are critical because it is important to compare the impacts of various fuels. Scientists at Argonne National Labs developed the GREET (Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation) model to respond to this challenge. The model helps assign GHG or “carbon” intensity values for almost all fuels including ethanol, biodiesel, gasoline, or natural gas made from various feedstock such as corn, sugarcane, algae, and/or fossil fuels. It also allows users to model the GHGs from various vehicle and fuel combinations. EcoShift uses GREET to conduct life cycle assessments for clients who are interested in the “well-to-pump” carbon intensity (usually for fuel producers as required by various regulatory agencies) or the “well-to-wheels” carbon intensity (usually for policy makers, automobile manufacturers, or automobile fleet owners). The US Environmental Protection Agency and California Air Resources Board are just two regulatory agencies that use GREET to assign carbon intensity values to transportation fuels for the purposes of emissions trading schemes and to qualify as renewable or advanced biofuels. As low carbon fuel standards evolve, GREET will be a critical for demonstrating regulatory compliance. For more information, read about Alternative Fuels LCA, see our service offering on transportation fuels, or contact us.
This is the first in a three part series that EcoShift is writing for Sustainable Brands. These days more and more brands are eyeing the growing body of sustainability indicators, reporting frameworks, and certifications and wondering which to participate in and when to start. Cross-sector reporting frameworks like Global Reporting Initiative, Carbon Disclosure Project, B-Corp, and the Dow Jones Sustainability Index can apply to any type of business, and countless sector-specific organizations such as the Sustainable Apparel Coalition, the Sustainable Food Trade Association, the Electronic Industry Code of Conduct, and the Sustainability Consortium are continuously emerging and evolving definitions of corporate sustainability. Clearly, there is value to measuring environmental impact, but is it worth taking the time to fulfill the requirements of one standard only to see it be replaced by a new standard three years down the road? How do you make the decision? The answer is actually to ask a different question. Instead of – which standard should I comply with – the question should be – what am I trying to achieve by measuring my impact? By answering this question, the right metrics emerge, and assessing the suitability of any existing program, standard, or certification to meet those goals becomes easier. This is the first in a series of three articles that addresses these questions and will help you begin to solve the riddle for yourself. In this article, we’ll look at the range of sustainability performance indicators to help get some focus on the goals of measurement. The second article looks a several sector-level efforts to refine these indictors as way of exploring the maturity of existing standards and certifications. The last article will be devoted to supply chain sustainability performance indicators, since this frontier in corporate sustainability is the least clearly defined. The questions of what to measure and under which standards is so fitting because standardization and reporting in corporate sustainability is nearing a tipping point…. but it isn’t there yet. I’ll illustrate this point by taking a look at the targets and types of sustainability performance indictors. What Do You Target? The target of an indictor can be a product, an organization, or a supply chain. Choosing your target depends on what you are trying to accomplish through measurement. For example, if you are marketing your product as a more sustainable alternative to a competing product, product-level indicators are critical. Product-level indicators are more complex to calculate than others, and, especially if you sell a large number of products, may be cost-prohibitive to measure and track. The Sustainability Consortium is working on streamlining this process, at least for some product categories, but their results are still a long ways off. Click here to read the rest of this article.
By Ingrid Lin (Carbon Design Group) & James Barsimantov (EcoShift) If there’s one common thread that binds product designers, researchers, and engineers, it’s the passion to create products that have a positive impact on the world. More and more, sustainability is an important facet of the impact we’re all striving to create. Consumers, retailers, and brands are quickly realizing that the best solutions are ones that are good for businesses, good for people, and good for the planet – forward-thinking product design firms already know this. The benefits of a slight reduction in the environmental impact of a single product that sells in the millions will quickly surpass the benefit of all the recycling and composting we could ever do in our offices. While there are a variety of approaches to creating more sustainable products that have been around for years (e.g. the Eco-Strategy Wheel and Design for X), life cycle analysis (LCA) is now recognized as the most complete approach to depict a product’s impact. As an assessment tool, LCA is excellent, and can provide high quality information for reporting as well as for planning project re-designs. But when you’re neck deep in the development process, the product itself is a moving target. There’s truth in the old adage that “You can’t manage what you can’t measure.” The problem is, you can’t measure it if it doesn’t yet exist. This article is the first of a three part series based on a collaboration between Carbon Design Group, a product design and development firm, and EcoShift, a sustainability and LCA consultancy. It looks at the complex challenges of sustainable product design, the current state of LCA practices and tools, and our vision of integrating sustainability throughout the development process. In this introductory piece, we’ll focus on why and how product development consultancies are stepping up to sustainability, and the significant challenges that arise from this. Staying Ahead of Demand It’s a product development consultancy’s job to anticipate trends, whether they are user desires or client needs. As we’ve sought to develop sustainable design capabilities at Carbon, we’ve seen more and more clients espouse sustainability as an integral part of their brands. It’s also clear that regulatory requirements in this area will only increase in the coming years. For example, strict restrictions on handling electronic waste, already common in Europe, are now starting to hit the U.S. on a state-by-state basis. History has shown that it’s much more costly for a company to comply with these regulations after they’ve passed, than to proactively implement best practices. The costs of compliance can include development expenses, fines, diminished brand value, and less cohesive product designs. Design and development consultancies need anticipate this demand to be able to guide clients through the process. Read the rest of this article
Dr. Dustin Mulvaney is leading EcoShift’s LCA team on a project to measure the carbon intensity of ethanol produced in upstate New York by Sunoco, Inc. Carbon intensity is a measure of the amount of greenhouse gases emitted along the life cycle of transportation fuel production. It is an important metric because it allows for apples-to-apples comparisons of greenhouse gases emissions (GHGs) from burning different kinds of fuels. Canadian tar sands, for example, have a relatively high carbon intensity compared to gasoline, while that of ethanol is typically lower than gasoline – although it can sometimes be higher! By focusing on lowering carbon intensities of transportation fuels, we can move people and goods around while releasing fewer GHGs. Carbon intensity is also becoming an important metric for transportation fuel providers subject to new rules throughout North America. The California Air Resources Board is leading efforts to regulate carbon intensity through its Low Carbon Fuel Standard (LCFS), and similar policies are being pursued by 11 Northeastern and Mid-Atlantic states, as well as Ontario and British Columbia. California’s law says that the life cycle carbon intensity — or the total greenhouse gas emissions per unit of energy — of transportation fuels must be reduced by 10% by 2020. Providers of transportation fuels who do not meet the requirements will have to purchase permits to make up the difference from those who perform better than the requirements. Hence, if you are producing green transportation fuels—ethanol from corn, biodiesel from waste grease, biobutanol from algae—measuring carbon intensity is or will be critical to your operations. Lower carbon fuels will have higher financial value than higher carbon fuels in regulatory systems designed like California’s LCFS. One of the challenges of producing sustainable ethanol is that it requires a significant amount of energy inputs to make ethanol. In fact, the Environmental Protection Agency (EPA) will not permit any new ethanol production unless the life cycle carbon intensity from ethanol is 20% better than gasoline. Energy inputs for processing ethanol can be as much as one third of the overall energy in the final ethanol product. Thus, it is essential that ethanol production maximize all energy efficiency opportunities. For these reasons, EcoShift’s LCA team is collecting data on ethanol production, energy use, farming practices, and corn and fuel transportation to measure the carbon intensity of an innovative new process at Sunoco’s facility and identify opportunities to further reduce carbon intensity. EcoShift’s analysis will show where ethanol facilities can invest in innovative new processes, local feedstock sourcing, and energy efficiency upgrades to reduce the carbon intensity of ethanol, which should translate into a more profitable facility in the long term as new rules for carbon intensity compliance take root. Contact Dr. Dustin Mulvaney (firstname.lastname@example.org) for more information about Life Cycle Analysis, or download our LCA or PathwayShift brochures on how we measure the life cycle carbon intensity of transportation fuels.
It should come as no surprise that the large majority of environmental impact takes place outside a company’s physical boundaries. Greenhouse gas emissions (GHGs) reporting probably gives us the best estimate of this; the Carbon Disclosure Project (CDP) estimates that over 50% of an entity’s greenhouse gas emissions are indirect ‘Scope 3’ emissions, while AT Kearny says the number is closer to 80% (source: CDP 2011 Supply Chain Report). In this article, we look at why so many companies are now addressing sustainability in the supply chain, and what approaches are used to reduce environmental impact in the supply chain. We use AMD, a Chamber BCLC Environmental Innovation Network member, as a case study, which reports that 63% of total GHGs are Scope 3, over 90% of which comes from the supply chain. (The rest comes from business travel and employee commutes; see this page for more information or the AMD 2010 Corporate Responsibility Report.) Even the most far-reaching climate legislation, either passed or proposed, recognizes that supply chain emissions are not the legal responsibility of a firm. So why are so many companies beginning to measure and manage supply chains for sustainability? The reasons are simple. First, many companies are feeling pressure from a wide array of stakeholders, including consumers, shareholders, retailers and nonprofits. Second, a sustainable supply chain is an efficient supply chain, so improving supply chain performance can provide multiple benefits to a firm by saving money while reducing impact. Despite the high impact of supply chains and the potential benefits from addressing them, most companies have still not looked closely at the issue. CDP reports that, of the 57 companies participating in their supply chain initiative, 87% have GHG reduction targets but only 45% of these include supply chains. Which companies are diving in? From our experience, companies that have a high level of accountability to stakeholders and have more public visibility are feeling more pressure to act. In addition, companies that can more easily influence their suppliers find it easier to act and reap the benefits. So when companies are insulated from stakeholders or when supply chains are unruly, large, or often in flux, implementing a deep sustainability program isn’t easy. Read the rest of this article on the US Chamber of Commerce BCLC Website.
To achieve a high level of sustainability, financial services companies need to focus on two areas: operations and portfolios. Focusing operations can offer quick returns, while paying closer attention to portfolios addresses a broader set of sustainability concerns. Our webinar this Friday (2/3) covers our full approach to green banking, and in this short blog, we focus on operations, since doing business while being cost-effective is fundamental to any business successful. Even simple operational changes can help banks and credit unions do just that, and companies save on operational costs and reduce environmental impacts by using energy, water, paper and other services or materials more efficiently. Performance metrics are the underlying fabric of any effective sustainability program. That’s why efforts to achieve operational efficiency should be built from the group up. Focusing on comprehensive building energy efficiency is the most obvious first step, but quick wins can also be found in other areas of sustainability. Having a clear roadmap to guide the strategy is essential to maximize return on investment and direct future goals for the company, and metrics are the anchor of this approach. Operational efficiency works best when it becomes integrated into regular business practice, and is made easier through strategic communication of goals and efforts to employees and customers. This is because so many decisions about resource use lie in the hand of your employees. Efforts that focus on technical solutions alone will often find that the full benefits efficiency upgrades are not realized. To get started making these changes at your company:
Today we turn the spotlight to EcoShift’s own Dr. Dustin Mulvaney. Dustin is one of the principals and co-founders of EcoShift, and he recently co-authored a research paper for the United Nations Development Programme. For Dustin, a surface level understanding is never enough – he looks at the breadth and depth of every problem, and is motivated to find solutions with the greatest positive and least negative impacts. This is why he took a look at the impacts of energy generation and use from an environmental justice standpoint. He, along with Dr. Peter Newell and Jon Phillips, authored a research paper for the UN’s Human Development Report titled, “Pursuing Clean Energy Equitably.” His goal with this paper was to draw the attention of the UN, policy makers, and academics to the notion that even clean energy programs could contribute to inequality. The concept of energy justice is the theme of the paper. There are three aspects of energy justice addressed: (1) energy poverty, and the 1.4 billion people without regular access to electricity; (2) the impacts of fossil fuel extraction and fossil fuel based power generation; and (3) the potential for new issues arising out of the wave of clean technologies and climate change adaptation strategies. The UN research paper is an expansion of another paper that Dustin and Peter Newell worked on that will appear in the Journal Development in Change in 2012. Dustin and Peter first got the idea for the paper after meeting at an Environmental Justice conference at East Anglia University in the UK. Dustin had presented on work addressing the environmental and health impacts of photovoltaic manufacturing and deployment. Peter saw an opportunity to expand Dustin’s thought process and write a report for the UN’s Development Programme. Dustin describes his work on this UN paper as an extension of what motivated his work with EcoShift: “We’re not just out there to sell things – we have a broader engagement on the impacts in areas where we are making change.” Dustin’s primary goal in environmental consulting is to identify and strive for just and sustainable solutions. Dustin Mulvaney is a co-founder of and principal consultant for EcoShift. He hails from New Jersey, where he completed his B.S. in Chemical Engineering and M.A. in Environmental Policy at the New Jersey Institute of Technology. His interest in sustainable agriculture brought him to Santa Cruz, CA where he obtained a Ph.D. in Environmental Studies from UC Santa Cruz. He then went on to form EcoShift with Dr. Alex Gernshenson and Dr. James Barsimantov, peers from UCSC. Dustin holds and an assistant professor position in the Environmental Studies Department at San Jose State University while continuing his work with EcoShift. by Erica Reuter
It seems like every product and service imaginable has an eco-friendly option available, and the market for these types of products is rapidly growing. But would all of these products really match our sustainability goals? Unfortunately, most eco-labeling doesn’t explicitly tell the consumer how much greener a product is than a conventional alternative, or how far it is from a truly sustainable version. As such, whether intentional are not, most eco-lableing includes at least some degree of greenwashing, which is the practice of over marketing a supposedly ‘green’ element of a product or service. It is easy to take one-off actions, like reducing the amount of packaging around a product, including plant-based ingredients, or installing a rooftop solar PV system. But none of those actions on its own makes a product sustainable. And while easily marketed, the impact of those actions on the environment (and on the firm’s bottom line) typically go unreported. This can be detrimental as consumers become more and more sustainability savvy. EcoShift’s own Dr. James Barsimantov addresses the importance of product labeling at Sustainable Life Media:
Focusing on transparent, operational metrics can address these problems . A metrics approach allows a company to be transparent. Performance metrics can be readily communicated to the public, like an eco-label, and they also carry real information to the customer. Sustainability metrics also work as reliable benchmarks from which all potential actions can be compared, strategy can be assessed, and a course can be set – both environmentally and financially. With a clear vision, strategy, and concise metrics, decision makers can easily identify the right actions to pursue.Labeling based on industry-specific metrics would give consumers comparison points for making informed decisions. In many cases where a sustainable product has an increased consumer cost, proper labeling would provide a more appreciable value to the consumer. James points out that industry specific tools “once perfected, can help serve as a roadmap towards sustainability”, as companies within each industry will have peer-to-peer comparisons of environmental and social impact. There are already several rating systems that have been, or are being, developed to guide various industries toward sustainable goals. Some are based on metrics (or real impacts), while others are based on checklists (or completed actions). The US Green Building Council’s LEED program is one of the more well known tools. See our upcoming posts for a synopsis of various industry-specific sustainability tools and programs. by Erica Reuter & James Barsimantov