paperback 216x170mm 23mm spine

Winner of Choice Magazine’s

the business guide to SUSTAINABILITY

Outstanding Academic Titles Award 2007
Fully Revised and Updated Second Edition
Praise for the first edition:

‘If you want your business to be part of the green-is-sexy movement and aren’t quite sure how to get there,
then this guide should be on the top of your business book stack.’
SUSTAINABLE INDUSTRIES JOURNAL

‘Many organizations have made some progress toward more sustainable practices but don’t know where to go
next. [The book’s] SCORE method is an excellent, systematic process for establishing where you are and where
you need to go to become more sustainable.’
NED TILLMAN, CHAIR, ENVIRONMENTAL SUSTAINABILITY BOARD, HOWARD COUNTY, MARYLAND

‘Provides a clear methodology on how to take the first steps down the path toward being a sustainable
business.’
MARCO MAZZONI, BAINBRIDGE GRADUATE INSTITUTE’S MBA IN SUSTAINABLE BUSINESS.

‘At last a business guide that’s really about Business and a sustainability guide that’s really about
Sustainability.’
CHRISTOPHER SHELDON, CO-AUTHOR OF ENVIRONMENTAL MANAGEMENT SYSTEMS (3RD EDITION)

Sustainability promises both reduced environmental impacts and real cash savings for any organization ? be it a
business, non-profit/NGO or government department. This easy-to-use manual has been written by top
business consultants specifically to help managers, business owners, organizational leaders and aspiring
environmental managers/sustainability coordinators to improve their organization's environmental, social and
economic performance.

The authors demystify ‘sustainability’, untangle the plethora of sustainability frameworks, tools and practices,
and make it easy for the average person in any organization to move towards sustainability. Organized by

& Marsha Willard

Darcy Hitchcock
sector (manufacturing, services and office operations, and government) and common organizational functions
(senior management, facilities, human resources, purchasing, environmental affairs and compliance, marketing
and public relations, and finance and accounting), the authors show how organizations can incorporate
sustainability into their everyday work through the application of useful tools and self-assessments.

This fully updated edition includes a new chapter on information and communication technology (ICT). The
authors have also added many new facts, stories, practices and resources throughout the book to keep up with
the business guide to
SUSTAINABILITY
this rapidly emerging field and have updated their widely used SCORE sustainability assessment.

Darcy Hitchcock and Marsha Willard, principals of the sustainability consulting firm AXIS Performance Advisors
(based in Portland, Oregon, USA) also co-founded and help manage the International Society of Sustainability
Professionals. They both teach in Bainbridge Graduate Institute’s MBA in Sustainable Business and are the
authors of The Step-by-Step Guide to Sustainability Planning.

BUSINESS AND ENVIRONMENTAL MANAGEMENT

PRACTICAL STRATEGIES AND TOOLS
FOR ORGANIZATIONS
www.earthscan.co.uk

Earthscan strives to minimize its impact on the environment Darcy Hitchcock & Marsha Willard
Prelims.qxd 6/10/2009 11:54 AM Page i

The Business Guide to Sustainability

Prelims.qxd 6/10/2009 11:54 AM Page ii

ABOUT THE AUTHORS

Darcy Hitchcock and Marsha Willard founded AXIS Performance Advisors in 1990. In the
early years, they developed a reputation for helping organizations implement cutting-edge
management techniques, including high-performance work teams. They were proud of
their win–win approach. Employees were happier because they had more control;
management was happier because they got better performance; customers were happier
because they got better quality and service. They published a number of popular
management books including Why Teams Can Fail and What to Do About It.
In 1996, however, they noticed the term ‘sustainability’ showing up in management
literature. In the process of investigating what this entailed, they realized that in some
cases, by showing their clients how to be more productive, they’d also showed them how
to deplete the world’s resources better, faster and cheaper. This was not the legacy they had
in mind! This epiphany set them on a journey to discover how they could correct this
oversight.
Initially, they wondered if there was anything they could do. They weren’t trained as
biologists or chemical engineers. However, they discovered that many of the problems
organizations had were not so much technical as relating to organizational development:
how to get an organization to think differently about what it was in business to do; how
to get a new idea integrated into a business; how to get people from different backgrounds
and interests to collaborate. Gosh, they knew how to do that! So, after learning all they
could about the topic, they developed a thriving practice around helping organizations
implement sustainable business practices.
Since then they have developed a reputation for being able to make the abstract
concept of sustainability easy for business people to understand and act upon. They have
developed efficient methods for getting clients quickly to a sustainability plan, conducted
sustainability assessments and facilitated multi-stakeholder processes.
Marsha and Darcy teach in the prestigious Bainbridge Graduate Institute’s MBA in
Sustainable Business. They helped found and manage the International Society of
Sustainability Professionals. Currently, they also host the Sustainable Today TV show. To
learn more, visit their website at www.axisperformance.com.
Prelims.qxd 6/10/2009 11:54 AM Page iii

The Business Guide to Sustainability

Practical Strategies and Tools for Organizations

SECOND EDITION

Darcy Hitchcock and Marsha Willard

p u b l i s h i n g fo r a s u s t a i n a b l e fu t u re
London • Sterling, VA
Prelims.qxd 6/10/2009 11:54 AM Page iv

Second edition first published by Earthscan in the UK and USA in 2009

First edition published in 2006
Copyright © AXIS Performance Advisors, Inc., 2009
All rights reserved
ISBN: 978-1-84407-765-6 hardback
978-1-84407-766-3 paperback
Typeset by Domex e-Data, India
Cover design by Yvonne Booth
For a full list of publications please contact:
Earthscan
Dunstan House, 14a St Cross Street
London, EC1N 8XA, UK
Tel: +44 (0)20 7841 1930
Fax: +44 (0)20 7242 1474
Email: [email protected]
Web: www.earthscan.co.uk
22883 Quicksilver Drive, Sterling, VA 20166-2012, USA
Earthscan publishes in association with the International Institute for Environment and Development
A catalogue record for this book is available from the British Library
Library of Congress Cataloging-in-Publication Data
Hitchcock, Darcy E.
The business guide to sustainability : practical strategies and tools for organizations / Darcy
Hitchcock and Marsha Willard. -- 2nd ed.
p. cm.
Includes bibliographical references and index.
ISBN 978-1-84407-765-6 (hbk.) -- ISBN 978-1-84407-766-3 (pbk.) 1. Management--
Environmental aspects. 2. Sustainable development. 3. Environmentalism. I. Willard, Marsha L.
II. Title.
HD30.255.H58 2009
658.4'083--dc22
2009022391
At Earthscan we strive to minimize our environmental impacts and carbon footprint through
reducing waste, recycling and offsetting our CO2 emissions, including those created through
publication of this book. For more details of our environmental policy, see www.earthscan.co.uk.
This book was printed in the UK by TJ International, an ISO
14001 accredited company. The paper used is FSC certified
and the inks are vegetable based.
Prelims.qxd 6/10/2009 11:54 AM Page v

Contents

List of Figures and Tables xiii

Acknowledgements xv
Abbreviations xvii
Introduction xxi
How this book is structured xxii
How to get the most out of this book xxiii
How to use the self-assessments xxiii
Extend the value of the book xxvii
Disclaimer to the sustainability experts xxvii

PART 1 – FOUNDATION CONCEPTS

1 Sustainability as a Strategic Issue 3
Benefits of pursuing sustainability 3
Threats if you don’t pursue sustainability 6
Risks in pursuing sustainability 8
What is sustainability? 9
Why is sustainability a strategic issue? 12
Factors that define sustainability 18
How do you know whether your organization is sustainable? 20
Conclusion 22
2 Change Agent/Sustainability Director: How to Keep
a Sustainability Effort on Track 25
What you should know about sustainability 25
Strategies you can use 28
Change agents with no formal authority 29
Begin within your span of control 29
Sow seeds 29
Discussion groups 29
Green teams 30
Sustainability coordinators with formal authority 30
Steering committees 30
Prelims.qxd 6/10/2009 11:54 AM Page vi

vi THE BUSINESS GUIDE TO SUSTAINABILITY

Task forces and project teams 31

Individuals 32
Award programmes and certification systems 32
Sustainability management systems 32
Conclusion 33
SCORE the sustainability coordinator 33

PART 2 – SUSTAINABILITY BY INDUSTRY SECTOR

3 Sustainability in Services and General Office Practices 39
What you should know about sustainability 39
Strategies you can use 42
Clean up your own operations 42
Facilities 42
Technology 43
Paper products 44
Break room 45
Take responsibility for your ripples 46
Evaluate strategic threats 48
Explore emerging opportunities 49
Conclusion 51
SCORE services and office practices 51
4 Sustainability in Manufacturing and Product Design 55
What you should know about sustainability 55
Strategies you can use 59
Product design 59
Design for environment 59
Life cycle assessment 61
Life cycle costing 62
Product life cycle management and product life cycle tools 64
Grey lists, black lists and supply chain management 64
Green chemistry 65
Converting products to services 66
Biomimicry 68
Operations 69
Energy and greenhouse gases 69
Collaborate with the supply chain 71
Product certification 73
Zero waste 75
Prelims.qxd 6/10/2009 11:54 AM Page vii

CONTENTS vii

Extended producer responsibility, product stewardship

and product take-back 76
Conclusion 79
SCORE manufacturing 80
5 Sustainability in Government Agencies 83
What you should know about sustainability 84
Strategies you can use 89
Spend tax revenue wisely, maximizing the benefit to society 89
Conserving energy 89
Take advantage of wasted resources 90
Streamline red tape 90
Employ green building practices 91
Find new funding sources 92
See the municipality as a whole system 92
Provide infrastructure and security 93
Ensure security 94
Design efficient, vibrant urban spaces 94
Design effective public transportation 96
Protect the commons 97
Engineer market-based incentives 100
Reclaim public goods and charge the full cost 101
Create preserves 102
Adopt the precautionary principle 102
Implement regulations 103
Create a level playing field 104
Align regulations with your goals 104
Privatize the resource within the right boundaries 104
Get the numbers right 105
Eliminate perverse subsidies 107
Protect and help people who need it 109
Focus on prevention 110
Perform triage 110
Combat hunger 111
Provide housing 111
Guide us toward a better future 112
Model and encourage new behaviour 112
Use purchasing as a way to drive markets 112
Develop social capital 113
Provide incentives and grants for needed research 115
Prelims.qxd 6/10/2009 11:54 AM Page viii

viii THE BUSINESS GUIDE TO SUSTAINABILITY

Create audacious goals and policies 115

Sponsor award programmes 116
Make information visible 117
Integrate sustainability into education 118
Equalize opportunities 118
Use public pension funds as a signal to business 120
Conclusion 120
SCORE government 121

PART 3 – SUSTAINABILITY BY ORGANIZATIONAL FUNCTION

6 Senior Management: How to Lead the Sustainability Effort 127
What you should know about sustainability 127
Strategies you can use 131
Assess threats, opportunities and constraints 132
Strategic planning 132
Scenario planning 133
Stakeholder management 134
Social entrepreneurship 134
Backcasting 136
Choose terms and frameworks 138
Alternative terms 138
Frameworks 139
Devise an implementation strategy and enlist support 140
Pick the best entry point 141
Set up the best structure 142
Demonstrate support 143
Align business systems 144
Provide for transparency and stakeholder involvement 145
Sustainability reports 147
Partner with NGOs 147
Stakeholder engagement activities 148
Stakeholder audits 149
Conclusion 149
SCORE senior management 150

7 Facilities: How to Save Energy and Water,

Improve Productivity and Reduce Waste 153
What you should know about sustainability 153
Strategies you can use 154
Prelims.qxd 6/10/2009 11:54 AM Page ix

CONTENTS ix

Construct/remodel a high-performance building 155

Deconstruction and recycling 155
Daylighting 156
Site selection 157
Material selection 157
Mechanical systems 158
Construction waste 159
Operate the building efficiently 159
Commissioning 159
Energy management 160
Manage waste 161
Provide green cleaning and landscaping services 162
Manage transportation issues 163
Conclusion 164
SCORE facilities 164

8 Human Resources: How to Support the Change

Process and Bolster Employee Commitment 167
What you should know about sustainability 168
Strategies you can use 170
Introduce the concept to top executives 170
Consult on the implementation 172
Align human resource systems 173
Model appropriate behaviours 178
Measure the benefits 179
SCORE human resources 180

9 Purchasing: How to Determine What to Buy and

How to Work with Suppliers 183
What you should know about sustainability 183
Strategies you can use 185
Purchasing practices 185
Adopt sustainable or environmentally preferable purchasing
(EPP) policies 185
Embed EPP or sustainable choices into online systems 186
Embed sustainability language into RFPs and contracts 186
Use service contracts to align the interests of your vendors
with your own 187
Implement a supply chain environmental management system 188
Buy green power 190
Prelims.qxd 6/10/2009 11:54 AM Page x

x THE BUSINESS GUIDE TO SUSTAINABILITY

Create incentives and checklists for making more sustainable choices 190
Work with disadvantaged businesses and people as an economic
development strategy 192
Life cycle assessment and life cycle costing 192
Purchasing projects 193
Conduct a waste or purchasing audit 193
Create a reliable market for a targeted product 195
Research sustainable alternatives for a specific function or product 196
Partner an NGO 199
Conclusion 199
SCORE purchasing 200
10 Information Technology: How to Save Energy, Reduce Waste
and Facilitate the Transition to a Low-Impact Operation 203
What you should know about sustainability 203
Strategies you can use 205
Manage your equipment purchases 205
Reduce energy consumption 206
Equipment 206
Data centres 207
Cooling 207
Layout 208
Efficient use 208
Data storage 208
Dematerialize organizational operations 209
Facilitate efficient organizational operations 212
Support sustainable product design 213
Conclusion 214
SCORE information technology 214
11 Environmental Affairs: How to Support the Move Beyond
Compliance and Eco-Efficiencies to Sustainability 217
What you should know about sustainability 217
Strategies you can use 219
Environmental management systems 219
Chemical management systems 220
Chemical substitution 221
Green chemistry 222
Conclusion 222
SCORE environmental affairs 223
Prelims.qxd 6/10/2009 11:54 AM Page xi

CONTENTS xi

12 Marketing/Public Relations: Whether and How to Promote

your Sustainability Efforts 227
What you should know about sustainability 230
Strategies you can use 236
Community-based social marketing 236
Cause-related marketing 238
Labelling, certification and standards 239
Stakeholder involvement 239
Sustainability reporting 239
Market transformation 240
Conclusion 241
SCORE marketing and public relations 242
13 Accounting and Finance: How to Account for Environmental
and Social Impacts 245
What you should know about sustainability 245
Strategies you can use 250
Develop a metrics framework and report on results 251
The Natural Step 252
Triple bottom line/Three Es 252
Sustainability or environmental management system 252
Organization’s vision or values 253
Determine what is ‘better’ 256
Activity-based costing (ABC) 256
Life cycle costing (LCC) 257
Life cycle assessment (LCA) 258
Decision tools to balance trade-offs 260
Brainstorm how to add more value 260
Weighted criteria charts 260
Compare a sustainability rating with cost 261
Leverage emerging ecosystem markets and governmental incentives 262
Conclusion 263
SCORE finance and accounting 264

Appendix A – Sustainability frameworks and tools 267

Appendix B – Certification schemes 273
Notes 275
Index 285
Prelims.qxd 6/10/2009 11:54 AM Page xii
Prelims.qxd 6/10/2009 11:54 AM Page xiii

Figures and Tables

FIGURES
1.1 Steps to sustainability 14
1.2 How do you know whether your organization is sustainable? 21
5.1 Value, ownership and product life cycle 108
6.1 Collins team structure 143
12.1 Concern versus influence 240
13.1 SD Solutions results 262
A.1 Hierarchy of sustainability frameworks 267

TABLES
I.1 Which chapters should you read? xxiv
1.1 Examples of organizations pursuing sustainability 11
5.1 Liveability for Portland, Oregon versus Atlanta, Georgia 97
5.2 Perverse subsidies 107
9.1 Options for working with suppliers 188
9.2 Environmental score sheet 191
9.3 Sustainable products checklist 197
13.1 Metrics based on The Natural Step system conditions 253
13.2 Metrics based on the triple bottom line 253
13.3 Metrics based on mission and values 254
13.4 Comparison of ABC, LCC and LCA 256
13.5 Weighted criteria chart 260
Prelims.qxd 6/10/2009 11:54 AM Page xiv
Prelims.qxd 6/10/2009 11:54 AM Page xv

Acknowledgements

This book would not have been possible without the courageous and innovative early
adopters who have shown us all how sustainability can be applied in real life. We would
also like to acknowledge all those who helped us write this book by reading sample
chapters, verifying case examples and refining the SCORE self-assessment.

Susan Anderson, Portland Office of Sustainable Development

Dan Atkins, SB Practices
Dorothy Atwood, Zero Waste Alliance
Steve Bell, Steady Improvement
Allen Bernstein
Nik Blosser, Celilo Group
Bill Boland, Pavelcomm
Pamela Brody-Heine, Zero Waste Alliance
Anne Bruce, Upshift
Sheryl Bunn, Community Environmental Services
Duke Castle, The Castle Group
Larry Chalfan, Zero Waste Alliance
Elaine Jane Cole, Pacific University
Michele Crim, Portland Office of Sustainable Development
James Denyer
Rosemary DiCandilo, Zero Waste Alliance
Peter DuBois, Clark County
Damon Fordham, Oregon Department of Transportation
Tom Gloria, eQuilibrium Solutions
Mark Hamilton, Ecos Consulting
CJ Hardy, Oregon Dept of Corrections
Don Harker, Communities by Choice
Scott Harris, JR Simplot
Carsten Henningsen, Progressive Investment Management
Allison Hensey, Oregon Watershed Enhancement Board
Ken Hiatt, Peraska
Prelims.qxd 6/10/2009 11:54 AM Page xvi

xvi THE BUSINESS GUIDE TO SUSTAINABILITY

Mike Hill, WestWyck

Bob Hiltner
Kim Hughes, Zero Waste Alliance
Ed Israel, Virtual Information Executives
Hans Jak, Jaguarundi B.V.
Steve Kokes, Coates Kokes
Anne Landfield, First Environment
Marco Mazzoni
Kate Nash, Kate Nash Workplace Consulting
Kristine Oleske
Tim O’Riordan, University Of East Anglia
Michael Orzen, Steady Improvement
Julie O’Shea, Farmers Irrigation District
Mike Piper, City of Vancouver, WA
Betsy Power, Highwater Research
Wayne Rifer, Zero Waste Alliance
Ari Rubenstein
Rick Schulberg, International Sustainable Development Foundation
Sarah Severn, Nike
Josh Skov, Good Company
Mary Steckel, City of Corvallis, Oregon
Paul Steuke, Fort Lewis Army Base
Lori Stole, Zero Waste Alliance
Mary Cook Swanson, Clackamas County, Oregon
Justin Tilson
Dave Tooze, Portland Office of Sustainable Development
Amanda Tucker, BSI Global
Jessica Vreeswijk
Cheryl Welch, Tualatin Valley Water District
Bob Willard, University of Toronto
Rick Woodward, Coastwide Laboratories
Scott Young, Oregon Dept of Corrections
Dan Zalkow, Portland State University

We would also like to dedicate this edition to Clem Laufenberg who encouraged us early
on to find our voice in sustainability.
Prelims.qxd 6/10/2009 11:54 AM Page xvii

Abbreviations

ABC activity-based costing

AC air conditioning
BEES Building for Environmental and Economic Sustainability
BREEAM BRE Environmental Assessment Method
CAFE Corporate Average Fuel Efficiency; a measure of fuel efficiency of
automobiles
CalPERS California Public Employees’ Pension System
CARS Chemical Assessment and Ranking System
CEO chief executive officer
CERES Coalition for Environmentally Responsible Economies
(www.ceres.org)
CFCs chlorofluorocarbons; a class of chemicals that deplete the ozone layer
CO2 carbon dioxide
CPR cardio-pulmonary resuscitation
CSR corporate social responsibility
DfE design for environment
EH&S environment, health and safety
EMS environmental management system
EPA Environmental Protection Agency (US)
EPEAT Electronic Product Environmental Assessment Tool
EPP environmentally preferable purchasing
EPR extended producer responsibility (or extended product
responsibility)
FEE Fédération des Experts Comptables Européens (European Federation
of Accountants)
FROG First Raise Our Growth; a scenario
FSC Forest Stewardship Council
GDP gross domestic product; a measure of economic activity
GMO genetically modified organism
GNP gross national product; a measure of economic activity (was replaced
by GDP in 1991)
Prelims.qxd 6/10/2009 11:54 AM Page xviii

xviii THE BUSINESS GUIDE TO SUSTAINABILITY

GRI Global Reporting Initiative

HCFC hydrochlorofluorocarbon; less damaging to the ozone layer than
CFCs
HVAC heating, ventilating, air conditioning system
ICLEI International Council for Local Environmental Initiatives; a trade
association for local governments. ICLEI no longer uses the longer
name and instead refers to itself as ICLEI, Local Governments for
Sustainability (www.iclei.org).
ISO International Organization for Standardization
JAG Job Alike Group
LCA life cycle assessment
LCC life cycle costing
LEED leadership in energy and environmental design; a rating system for
buildings
LEED EB LEED for existing buildings
LLC Limited Liability Corporation
LOHAS lifestyles of health and sustainability; a segment of the population
MIT Massachusetts Institute of Technology
MSDS material safety data sheet; a document explaining safe use and
accident response for products containing chemicals with potential
human health impacts
NAFTA North American Free Trade Agreement
NGO non-governmental organization
O&M operations and maintenance budget
OHSAS 18000 Occupational Health and Safety international standards (see
www.ohsas-18001-occupational-health-and-safety.com/)
OMSI Oregon Museum of Science and Industry
OPEC Organization of the Petroleum Exporting Countries
PBTs persistent bioaccumulative toxins
POPs persistent organic pollutants (often used interchangeably with PBTs)
PVC polyvinyl chloride; a form of plastic
REACH Directive Registration, Evaluation and Authorisation of Chemicals Directive
RESOP related enterprise share ownership plan
RFP request for proposal
RoHS Directive Restriction of the Use of Certain Hazardous Substances in Electrical
and Electronic Equipment Regulations 2005
ROI return on investment
SA 8000 Social Accountability 8000; a scoring system for social responsibility
Prelims.qxd 6/10/2009 11:54 AM Page xix

ABBREVIATIONS xix

SCEM system supply chain environmental management system

SCORE Sustainability Competency & Opportunity Rating & Evaluation
assessment (available from AXIS Performance Advisors and
licensed assessors)
SF6 sulphur hexafluoride; a greenhouse gas
SMS sustainability management system; an environmental management
system with sustainability embedded
SWOT strengths, weaknesses, opportunities and threats; a common strategic
planning tool
UGCA Unified Green Cleaning Alliance
UK United Kingdom
UN United Nations
US or USA United States of America
VOC volatile organic compounds; chemicals that tend to evaporate
or off-gas
WEEE Directive Waste Electrical and Electronic Equipment Directive
Prelims.qxd 6/10/2009 11:54 AM Page xx
Prelims.qxd 6/10/2009 11:54 AM Page xxi

Introduction

Sustainability can be a confounding topic and not everyone has the passion to wade into
all the literature to learn about it. Yet virtually everyone is willing to take steps towards
sustainability if someone would just explain, in clear and understandable language, what
can be done. The explosive growth in the US green building industry, for example, was
fuelled largely by the LEED (Leadership in Energy and Environmental Design) system of
checklists that made it easy for architects, developers and facilities managers to make more
sustainable choices. This book does for every organization what LEED did for the building
industry: it translates the abstract concepts of sustainability into tangible actions.
This book explains what organizations (businesses, governmental agencies and non-
profit organizations) can do to move towards sustainability. It can be used by people new
to sustainability to learn about the field. It can also be helpful for those who have been
pursuing sustainability for some time but who have reached a plateau, wondering what else
they can do.
This book is different from the many other excellent sustainability books that have
been written, for the following reasons:

• First, we don’t just talk about the problems; we give tangible examples of what
organizations can do and have done.
• Second, we don’t advocate any one framework; instead we help you determine which
frameworks might be most useful to you and list resources so that you can learn more.
• Third, we embed self-assessments in each chapter so that you can track your progress.
• Last, and perhaps most important, we have organized the book in the way
organizations are structured; this allows each reader to focus on the content that will
be most relevant and provides a way of assigning organizational accountability to
elements of sustainability.

Our emphasis throughout is to make sustainability understandable to the layperson. For

the sustainability movement to continue, we can’t rely on the ‘early adopters’ and the
zealous minority; we must find a way to make sustainable practices easy for everyone to do.
Fortunately, once people understand sustainability, they are often surprised to find how
many untapped sustainable practices make good bottom-line business sense now. If all
Prelims.qxd 6/10/2009 11:54 AM Page xxii

xxii THE BUSINESS GUIDE TO SUSTAINABILITY

organizations take a small first step forward, we can make a huge difference. And once
people begin down the path of sustainability, they usually keep going. The health of our
economy, our communities and our environment all hinge on our ability to make
sustainable practices mainstream. This book can help make that happen.
We offer SCORE as a stand-alone service where we provide a detailed report,
benchmarking your performance against others who have taken the assessment. We have
been contacted by different clients, trade associations and others to create additional
sector-specific assessments. Currently we are in discussion with or developing these for
such industries as construction, eco-tourism, waste management and spas.
If you would like to conduct SCORE in your organization, please see our website for
licensed SCORE assessors in your area (www.axisperformance.com). While any
organization can use the paper-and-pencil version of the assessment in this book for self-
improvement, only licensed assessors have the training and the rights to conduct SCORE
as a service.

HOW THIS BOOK IS STRUCTURED

Following an overview chapter on sustainability, Chapters 2 to 12 are organized by major

sectors (services, manufacturing and government) and common organizational functions
or departments (top management, human resources, purchasing, etc.). Each of these
chapters contains three sections:

1 What you should know about sustainability – This section explains, from the point of
view of the sector or function, why sustainability is important and how it affects you.
You’ll understand how sustainability relates to your role in the organization.
2 Strategies you can use – As with any new field, terms, frameworks and buzzwords are
proliferating. Here you are provided with a honed list of ones that will be most useful
to you. Think of this section as a customized encyclopaedia of methods and tools used
by people pursuing sustainability, complete with case examples. We also give relevant
resources, listed roughly in order of usefulness, to help you learn more. This section
will help you identify concrete actions you can take.
3 Self-assessment – Each chapter ends with a SCORE (Sustainability Competency &
Opportunity Rating & Evaluation) self-assessment that can help you identify your
strengths and areas for improvement. These self-assessments were developed in
collaboration with the International Sustainable Development Foundation and the
Zero Waste Alliance. They can be combined to provide you with an overall picture of
your organization’s sustainability performance. Each practice listed in the assessment
benchmarks three levels of performance so that you can identify the low-hanging fruit
Prelims.qxd 6/10/2009 11:54 AM Page xxiii

INTRODUCTION xxiii

to do early but also see what will be necessary in the long term to become fully
sustainable. Instructions on how to use the assessments and how to interpret your score
are given with the first SCORE assessment (pages 33–36).

HOW TO GET THE MOST OUT OF THIS BOOK

Certainly, this book can be read cover to cover to get an overview of the issues and
strategies associated with sustainability, but for some that might feel like a drink from a fire
hose. People new to sustainability might find it most useful to read the ‘What you should
know about sustainability’ sections, then pick one issue and explore the handful of tools
we provide in the ‘Strategies you can use’ section. People well versed in sustainability may
want to go directly to the SCORE self-assessments to identify areas for improvement and
then seek out the appropriate strategies.
Based on your current understanding of sustainability, the position you hold and the
sector in which you work, certain chapters will be more relevant than others. Chapter 1,
on sustainability as a strategic issue, will be helpful for anyone not already familiar with
sustainability concepts. Since every organization has a service and office component, we
recommend that all readers, regardless of their industrial sector, read Chapter 3 (on
services). People in government or manufacturing will also want to read their respective
sector chapters. Then read the chapter or chapters related to functions you perform.
Obviously there are many more position titles than the ones represented in this book, so
choose chapters most relevant to the work you do. For example, an office manager may
maintain the office, purchase supplies and manage the safety programme.
Table I.1 represents our advice for what to read. A
indicates the primary chapter
related to the position. A  indicates other chapters that would be helpful.
Think of this as a sustainability idea book. Read a chapter, find something worth
pursuing, implement that idea, and then return to the book to uncover another opportunity.

HOW TO USE THE SELF-ASSESSMENTS

The SCORE (Sustainability Competency & Opportunity Rating & Evaluation) self-
assessments at the end of the chapters can be used in a variety of ways. If you are a lone voice
for sustainability in your organization, the assessment related to your function and sector
should give you actions you can take within your existing span of control. If your
organization is already well versed in sustainability and has been actively working towards
it, these assessments can help you identify missing elements in your sustainability strategy.
For people new to sustainability, these assessments can help clarify what sustainability means
in their context.
 Table I.1 Which chapters should you read?
Prelims.qxd

Position CHAPTER

1 2 3–5 6 7 8 9 10 11 12 13
Sustainability Change Chapters Senior Facilities Human Purchasing Information Environmental Marketing/ Finance/
as Strategic Agent by sector Management Resources Technology Affairs PR Accounting
6/10/2009

Issue

Executive/

Services (and
     

Board member other sector
if appropriate)
11:54 AM

Office manager 
Services  If you own 

your building,
can influence
lease, or are
Page xxiv

remodelling

Plant manager 
Manufacturing   

xxiv THE BUSINESS GUIDE TO SUSTAINABILITY

Product/ 
Manufacturing   
industrial
designer,
engineer

Facilities 
Appropriate
 
manager, sector
architect,
developer

Human

Services (and 
 

resources other sector
manager if appropriate)
 Prelims.qxd

Purchasing 
Appropriate

manager or sector
people
responsible for
6/10/2009

purchasing
supplies

Environmental,

Appropriate    
 
health/safety, sector
or pollution
11:54 AM

prevention
professionals

Marketing, sales

Appropriate 


or public sector
Page xxv

relations

Finance/

Appropriate      

stockholder sector
relations/
accountants

Sustainability 

Services (and
     

coordinator other sector
if appropriate)

Business school  
Services (and
    

student other sector
if appropriate)

Economist

All sectors, 

esp. government

Organizational


Appropriate
     
or sustainability sector(s)
consultant

Of primary importance to position  Useful but not essential to position

INTRODUCTION
xxv
Prelims.qxd 6/10/2009 11:54 AM Page xxvi

xxvi THE BUSINESS GUIDE TO SUSTAINABILITY

• Service organizations (for example, banks, restaurants, hotels, architects and most non-
profits) will want to take the service sector assessment and then all the relevant
functional ones (senior management, human resources, etc.).
• Manufacturing businesses will want to take both service and manufacturing sector
assessments as well as all the functional ones.
• Governmental organizations (meaning policy-setting and enforcing agencies or
departments at all levels of government, as opposed to public services such as utilities
or public transport authorities) will want to take the service and government sector
assessments and then all relevant functional ones.

Note that we now have more detailed sector assessments for some industries which do not
fit logically into the structure of this book.
You can compile the results from all the paper-and-pencil assessments in the book to
get a large-scale view of how far you have come and how much further you need to go.
While anyone may take this paper-and-pencil version of SCORE in the book, SCORE
is also a stand-alone service. More sophisticated analyses are available, including the ability
to benchmark your organization against others who have taken SCORE. AXIS
Performance Advisors has licensed people to administer SCORE as a sustainability
assessment and periodically offer training to help internal practitioners and external
consultants get the most out of the assessment. These individuals will have access to more
sector-specific assessments as they are developed. Please go to www.axisperformance.com
to find people who are trained and licensed to use this assessment.
We ask any external consultants who want to use SCORE in their practice to please
become licensed; they’ll learn the subtleties of the tool, get listed as a certified SCORE
assessor, get all the needed support files, have access to the benchmarking database, and get
access to sector assessments that aren’t in this book. They will also be able to participate in
improving SCORE and receive updates as the tool evolves. Contact us to be added to a
notification list for upcoming training ([email protected]).
These assessments are not intended to replace various scoring systems that are being
developed around the world to evaluate organizational sustainability performance (for
example, the Global Reporting Initiative, British Standard 8900, S-BAR, and
AccountAbility 1000). Nor do they collectively define ultimate sustainability, as that is a
global phenomenon, not one that can be achieved by any single organization. We prefer
not to use this tool to compare organizations; rather, they are intended as an internal
improvement tool to help organizations make decisions and move towards sustainability.
To keep our assessments simple and short, they often focus on process (have you done
an energy audit in the last five years?) more than results (how much energy you saved). The
scoring is tied to the degree to which you have institutionalized practices internally but also
the degree to which you are influencing others. We want to thank the smart people at the
Prelims.qxd 6/10/2009 11:54 AM Page xxvii

INTRODUCTION xxvii

International Sustainable Development Foundation, the Zero Waste Alliance and our
licensed SCORE assessors for their invaluable input into the design of this tool.

Extend the value of the book

Some people read this book to discover what sustainability involves, others use it to get
ideas for projects they could undertake, but a third type of reader wants to take this even
further. For example, Sustainable Dallas formed a Book Study Group and went through it
chapter by chapter. You can pull people from your own organization together or from
different organizations. You could organize a lunch speakers series around the chapter
titles. Sustainable North Carolina and Sustainable Florida have adopted SCORE as their
assessment method to help businesses all over the state. Please feel free to invite us to be
part of your process if we can add value. We’ve done briefings on SCORE via webinar and
offer licensing training via distance learning. Let us know how we can help you get the
most out of our knowledge and connections.

DISCLAIMER TO OTHER SUSTAINABILITY EXPERTS

The field of sustainability is exploding and exciting practices are bubbling up all over the
world. It was not possible to include every example, every country, every framework or
every method. We’ve tried instead to choose examples that illustrate our points and give
preference to ones that could easily be researched further (ie those that have been described
in print or have web resources). So we apologize in advance to all the sustainability experts
who may read this book and find their pet projects omitted. We welcome your feedback
and suggestions in case we print an updated edition. And we thank you all for your
commitment, creativity and willingness to collaborate. Together we are crafting a better
future for us all.
Prelims.qxd 6/10/2009 11:54 AM Page xxviii
Chapter_01.qxd 6/10/2009 4:36 PM Page 1

Part 1

Foundation Concepts
Chapter_01.qxd 6/10/2009 4:36 PM Page 2
Chapter_01.qxd 6/10/2009 4:36 PM Page 3

1
Sustainability as a Strategic Issue

It is hard to manage an organization in today’s turbulent world. Practically every day, we

learn of a new technology, social dilemma or environmental problem. Businesses worry
about the proliferation of new regulations and the effects of globalization. Governments
struggle to maintain services while addressing the needs of an increasingly diverse and
growing population amid an anti-tax culture. Unless you want to be buffeted by each
change, you need a framework for making sense of what is happening in the world so that
you can foresee changes and take action before they happen.
Sustainability is such a framework. It doesn’t encompass everything you’ll need to track
to be successful and it’s not a crystal ball. However, sustainability does help you see
relationships between issues and more accurately forecast what may occur in the future. It
examines our world as a whole system, revealing threats and opportunities. It forces you to
see relationships between social, economic and environmental trends. This improved
foresight can prevent unfortunate surprises and uncover previously unrecognized
opportunities. If you understand sustainability, you can be a step ahead of the companies
or communities with which you compete.
Sustainability challenges us to make decisions that simultaneously improve the economy,
the community and the environment. That challenge may seem far outside the scope of your
responsibility. Why would business take time to examine its impacts on these large and
‘squishy’ issues? Think of sustainability as a wide-angle lens. It helps you to see beyond your
normal field of vision to take in potential threats and opportunities that you might have
missed before. In a global and connected world, what happens elsewhere can affect you.

Benefits of pursuing sustainability

Here are some of the benefits you should expect, based on the experience of other
businesses and communities that have embraced sustainability.
Reduce energy, waste and costs. Some organizations have already achieved the goal of zero
waste to landfill. Nothing is wasted. Toyota, for example, has reportedly achieved zero waste
to landfill targets across all European manufacturing plants in 2006.1 These organizations are
Chapter_01.qxd 6/10/2009 4:36 PM Page 4

4 THE BUSINESS GUIDE TO SUSTAINABILITY

able to eliminate haulage costs and also get paid for the ‘residual products’ (formerly known as
waste). It’s hard to believe, but we still have a long way to go on energy efficiency. A prison in
Oregon has reduced its natural gas bills by about 65 per cent by preheating water with solar
(thermal) energy before putting it in the boilers. Banking giant HSBC has tracked the climate
change index back to 2004 and says it would have outperformed the MSCI World Index by
about 70 per cent, lending credence to financial benefits of attending to climate change.2
Differentiate yourself. Companies and communities are always looking for ways to
differentiate themselves from their competitors. Sustainability, at least until it becomes
standard practice, can provide a way of making your organization stand out. For example,
OZOCar in New York City was the first all-hybrid hired-car service. But they didn’t stop
with just being green. They offer Sirius satellite radio, Wi-Fi access, and a spare Mac laptop
in seat pocket. Its hip image has it growing at a rate of 13 per cent per week and it was
profitable 18 months after starting up.3
Sidestep future regulations. Regulations are constantly changing. For those who want to
get ahead of the curve, sustainability provides a useful framework for understanding the
‘endgame’. In some cases, you may be able to avoid them all together. For example,
progressive dry cleaners that invested in more eco-friendly processes were unaffected by the
new phasing out of perchloroethylene, the common cancer-causing solvent used in
traditional dry cleaning. In other situations, you can at least have advanced warning. For
example, according to a McKinsey study released in 2008, 80 per cent of executives expect
climate change-related regulations within five years and one-third expect it to come in just
the next two years. Those who saw the trend early had more time to phase in
improvements.4
Create innovative new products or processes. By helping you to see the world’s present
and future challenges, sustainability can help you develop new products or processes that
can be part of the solution. By focusing its funding on sustainability projects, ShoreBank
Pacific, a small financial institution in Ilwaco, Washington, has attracted deposits from
across the nation. Toyota developed its hybrid technology and is now selling it to other
manufacturers. The Aravind Eye Clinic in Madurai, India invented a new intraocular lens
to help cataract patients at a fraction of the cost of those they could import; now they
export them.
Open new markets. Most companies focus on serving those in industrialized nations, less
than one-sixth of the world’s population. Believe it or not, you can make a handy profit
serving even the most destitute 3 billion people, if you have a product they want at a price
they can afford. Amul, a dairy cooperative in India, discovered they could sell ice cream to
the poor in India if they could get the cost down to around a rupee a scoop. Since most of the
cost is in refrigeration, they developed a much cheaper way to keep the product cold. This
Chapter_01.qxd 6/10/2009 4:36 PM Page 5

SUSTAINABILITY AS A STRATEGIC ISSUE 5

new process opens up a gigantic marketplace and has uncovered a radically cheaper
refrigeration process that could be used in other venues, providing them with a competitive
advantage.5
Attract and retain the best employees. Many of today’s employees want to work for
companies that share their values. A recent poll on green employment by
MonsterTRAK.com found that 80 per cent of young professionals were interested in
getting a job where they could have a positive impact on the environment and 92 per cent
would be more inclined to work for a company that was known as environmentally
friendly.6 Sustainability can help infuse even mundane jobs with meaning. Hot Lips Pizza,
a small restaurant chain in Portland, Oregon, found that pursuing sustainability helped
them attract a much higher quality employee because the mission made the work seem
more meaningful. Sustainability can unleash a sense of passion not possible with most
other organizational change efforts. Even burger-flippers at Swedish McDonald’s can feel
as if they are changing the world by serving organic dairy products and beef. Sustainability,
because it includes both environmental and socio-economic issues, is broad enough to
encompass most people’s concerns, whether they are the future of the rainforest or the
future of schools. When employees feel as if their work is a means to solving major societal
issues of concern to them, you tap into a powerful source of commitment and loyalty.
Improve your image with shareholders and the public. Sustainability can put
organizations on the leading edge of an exciting and socially responsible trend. This can
help the largest corporations, who are often targeted by non-governmental organizations
(NGOs), build goodwill with the public. But it can also help tiny organizations get
recognition. Gerding/Edlen, a developer in the northwest US, has received national
recognition in trade journals and on a Public Broadcasting TV show. ‘We couldn’t have
bought this type of PR,’ the owners say.
Reduce legal risk and insurance costs. In order to manage risk, organizations must keep
an eye on social and environmental practices. Sustainability can help organizations
radically reduce those risks and the overhead costs that go with them. The former OKI
Semiconductor plant in Oregon discovered that, by eliminating certain toxic chemicals,
their insurance company could offer them a lower rate. Swiss Re, one of the world’s largest
reinsurers, has told clients who are significant emitters of greenhouse gases that they may
deny coverage if they do not have a plan in place to manage their climate risks, so for
some it may not be a matter of saving on insurance costs but instead of maintaining
coverage.
Provide a higher quality of life. Sustainability helps communities make decisions that
maximize the quality of life through ‘smart growth’ design principles. Curitiba, Brazil, for
example, combined insights in urban planning, transportation and social programmes to
Chapter_01.qxd 6/10/2009 4:36 PM Page 6

6 THE BUSINESS GUIDE TO SUSTAINABILITY

provide a much better quality of life for all their citizens, rich and poor. Their public
transportation system is so convenient and well used that it requires no government
subsidy. The whole city is designed for people, not cars, reducing air pollution while
enhancing the quality of life.

Threats if you don’t pursue sustainability

In addition to the benefits of pursuing sustainability, there are also threats you can avoid.
Organizations that choose to ignore this worldwide trend may put themselves at
unnecessary risk. In 2007 alone, if you understood sustainability, you might have foreseen:

• the rise in oil prices;

• the increase in grain prices;
• the backlash against plastic bags and water bottles;
• the rise of investment in the clean-tech sector; and
• the embarrassing series of Mattel recalls.

It’s tricky to predict the timing but the trajectory is clear. This helps you prepare for future
challenges and you can be more confident that capital expenditures will make sense over
the long term. For example, a 2001 Toyota Prius is worth almost its original cost (especially
after tax incentives) seven years later, maintaining its value much better than the typical
vehicle. The longer the intended lifetime of the capital investment, the more important it
is to know where the world is headed.
Climatologists predict that climate change will bring bigger, more violent storms and
paradoxically severe droughts, something the people in the southern states in the US can
appreciate after counting their water supply in weeks this year. The jump in oil prices has
been predicted by Hubbert’s Curve for decades, although the precise date for peaking oil
supplies is still in dispute. Looking forward, effects of climate change (environmental and
social), persistent toxins and emerging pollutants, invasive species, peaking fossil fuel
supplies and water availability are at the top of our list of concerns. Prudent leaders factor
these risks into their plans.
The threats to you may not be as dramatic as the ones described above. Here are some
of the more everyday problems that sustainability can help you avoid.
Liability for pollutants. Even though smokestack emissions and waste-pipe discharges
have long been the targets of environmental regulations, organizations are still often caught
off guard every time a new substance is added to the list of regulated substances. Smart
companies anticipate these hits by taking a proactive look at the raw materials they use in
their processes. If it goes into your product, likely as not at least some of it will end up in
Chapter_01.qxd 6/10/2009 4:36 PM Page 7

SUSTAINABILITY AS A STRATEGIC ISSUE 7

your waste stream. Increasing attention to waste lead, for example, caught most of the
members of the metal casting industry unprepared. One small metal caster in Oregon, Barr
Casting, anticipated the problem and developed a casting process that didn’t use lead.
When the owner of a now-defunct competitor discovered what Barr had done, he moaned,
‘Why didn’t my engineer tell me about this?’
Liability is also beginning to extend beyond the factory gates. More and more
industries are surprised at how far their liability for toxins and other damaging substances
extends. The current trend toward product stewardship or producer responsibility
increasingly holds manufacturers responsible for the impacts of their products for their
entire life cycle. Electronics companies, for example, are scrambling to design end-of-life
options for their products in anticipation of state and national regulations that are likely
to prohibit the disposal of computers, televisions and cell phones.
Supply problems with raw materials and energy. Sustainability helps you to foresee potential
future supply and demand problems. Wouldn’t you like to know in advance if a material or
resource is likely to become much more expensive or unavailable? When the energy crisis of
the 1990s hit the US Pacific northwest, it resulted in closing down the area’s entire
aluminium industry, which had become dependent upon cheap hydropower. In the half-
century they had been around, many other industries had undergone major transformations
in process efficiencies, but the aluminium industry was still melting rocks with electricity.
Had they been better able to foresee the future of energy, they might still be operating.
Attacks on your image. Sustainability helps you to understand the expectations of all your
stakeholders. It can take years to recover from one well-publicized mistake or omission. In
2007, Mattel had to recall millions of toys due to lax standards in China, affecting both
the company and the country. It takes a long time to build up a positive image and an
instant to destroy it. And the public’s memory, while fickle, can be enduring. I recall
hearing an eight-year-old boy respond to the mention of an oil company with the question,
‘Exxon, you mean like Valdez?’ He wasn’t even alive at the time of the Valdez oil spill but
it was the first word he associated with the company. On the other hand, taking a
leadership role can build goodwill that can help you when accidents happen. BP, for
example, got off easy when the media reported they’d neglected to maintain their Alaskan
pipes, causing a spill. They also, the prior year, had a refinery explosion. The public
response would have been an uproar had it been Exxon and not BP! Instead, the goodwill
BP had developed for being the first oil company to acknowledge climate change, helped
them manage these public relations problems.
Legal risks. Many companies have been held responsible for actions that were legal at the
time but later determined to be harmful. General Electric is fighting litigation intended to
make them pay to clean up toxic chemicals they dumped into the Hudson River. So staying
within the bounds of current legal practice is no protection. Sustainability can help you
Chapter_01.qxd 6/10/2009 4:36 PM Page 8

8 THE BUSINESS GUIDE TO SUSTAINABILITY

assess your environmental legal risk, taking into account issues beyond compliance with
current environmental regulations.
Bad-mouthing of your product. As others become more aware of sustainability, certain
materials tend to get labelled as ‘good’ or ‘bad’. Polyvinyl chloride (PVC) manufacturers
have been on the defensive since Greenpeace labelled it as the worst plastic. A number of
manufacturers, Nike included, have committed to phasing out PVC from their products.
Retailers like Target are also phasing out products made from it. Sustainability can help you
uncover your product’s weaknesses so that you can overcome them before Greenpeace
shows up on your doorstep or the media runs a story.
Being closed out of certain markets. Sustainability is driving the marketplace in many
countries. The European Union, which is banning certain toxic chemicals, turned away an
entire shipment of Sony Playstations because of too much cadmium in one of the parts.
Agricultural sustainability certification schemes are popping up, closing the market to
farmers who aren’t yet certified.

Risks in pursuing sustainability

To be fair, there are risks in pursuing sustainability as well, but they are more easily
managed than the risks in not pursuing it.
Greenwashing. Organizations that publicly tout their sustainability efforts without much
action to back them up can be accused of ‘greenwashing’. The larger and more visible the
organization, the bigger target they make. You can manage to prevent greenwashing by
starting quietly and humbly and by engaging stakeholders in your transformation.
Cannibalizing your own business. Whenever you engage in research and development,
there is a risk that you will make obsolete the core product or service you offer. Certain
transportation companies, for example, are now consulting with their clients on how not
to transport materials as much. However, if you don’t do it, it is likely that someone else
will. Better to be part of the future than completely left behind.
Raising unrealistic expectations. Sustainability unleashes a sense of purpose, passion and
urgency. So no matter how much you do, you will always be able to find someone – an
employee, customer, NGO or shareholder – who thinks you should do more. Some
organizations that have pursued sustainability have found that they lost a few good
employees who felt the company wasn’t moving fast enough. You may be able to handle or
minimize this risk by managing expectations and involving stakeholders in the effort. Any
attrition you experience may be offset by the ability to attract and retain others. You can
view these unrealistic expectations as a nuisance to be managed or you can view them as a
vaccination against complacency.
Chapter_01.qxd 6/10/2009 4:36 PM Page 9

SUSTAINABILITY AS A STRATEGIC ISSUE 9

What is sustainability?
Let us now examine sustainability in more detail so that you can understand how to
translate this abstract concept into meaningful action. Sustainability or sustainable
development has been described in many ways: ‘Meeting our needs while not
compromising the ability of future generations to meet theirs’ (Bruntland Commission),
‘Living well within the limits of nature’ (Mathis Wackernagel, author of Sharing Nature’s
Interest) or simply ‘Not cheating on our children’ (former UK Environment Minister John
Gummer).
Regardless of the definition, those working in the field of sustainability generally all
envision sustainability as having three realms: economic, social and environmental.
Businesses have long referred to this as the ‘triple bottom line’. Instead of trading these
realms off against one another (jobs or the environment; economic growth or
environmental health; development or habitat), sustainability aims to optimize all three.
In the long term, you can’t have one without the others. China, for example, has been
reporting 9 per cent economic growth or more over the past decade but is beginning to
recognize that the environmental costs of that growth (eg flooding, pollution, health
problems and resource depletion) wipe out most of those gains. Pan Yue, deputy director
of China’s State Environmental Protection Administration, figures that environmental
injury costs China 8 to 15 per cent of its annual gross domestic product.
These three realms are intimately intertwined. Without a healthy economy,
unemployment is high, leading to a host of social problems; and without a healthy
economy, governments don’t have the revenues to handle these increased social ills.
Without a healthy environment, we deplete the resources upon which our economy
depends and contribute to human illness. Without a vibrant community, we don’t have the
employees to work in businesses, and people in crisis don’t have the luxury of being
concerned about environmental degradation.
When we don’t understand these interdependencies, we often make poor decisions.
We tend to focus on one realm over the others. As the Clinton/Gore presidential campaign
put it, ‘It’s the economy, stupid.’ This may be true for voters and in the minds of many.
However, the economy is not independent of the health of the environment and
community.
Holding the other realms hostage to one ultimately backfires. For example, for
decades, the US Congress has resisted raising the Corporate Average Fuel Efficiency
(CAFE) standards for automobiles. They didn’t want to hurt the economy, and the
automobile industry represents a significant portion of US gross domestic product.
However, by not improving these standards, the US is more dependent on foreign oil, and
now, during the Iraq War, economic health is being syphoned off to OPEC countries at
the pump. Furthermore, US cities have higher air pollution levels, which is putting more
Chapter_01.qxd 6/10/2009 4:36 PM Page 10

10 THE BUSINESS GUIDE TO SUSTAINABILITY

people in hospital with lung disorders. Pollution can trigger asthma, which, according to
the Agency for Healthcare Research and Quality, cost the US economy $13 billion in
1998, driving up businesses’ healthcare expenses. The additional emissions also contribute
to climate change, a debt the world is already beginning to pay through increased property
damage, crop failures and coastal erosion. Is the US economy really better off as a result of
Congress’s decision? Probably not. At least, is the US automotive industry better off from
this protection? You’d have to say no, since Toyota is now neck-and-neck with General
Motors as the largest automaker and Michigan is experiencing a ‘one-state recession’.
Notice that sustainability is different from the environmental movement in that it
recognizes the need for a healthy economy. Nature does have certain limits that we must
learn to live within or suffer the consequences. But Alan AtKisson, author of Believing
Cassandra, makes a distinction between ‘growth’ (being bigger, having increased material
throughput, having an increasingly negative impact on nature) with ‘development’
(moving forward, getting better, without having bigger impacts). As AtKisson puts it,
‘Growth must cease. If human beings do not stop their growth willingly, Nature will stop
it forcefully. Paradoxically, however, for Growth to cease, Development must accelerate.’7
We need to speed up the rate at which new, cleaner technologies are implemented. We
need a healthy economy to have the money to invest in these innovations. Once people
reach a reasonable quality of life, they begin to demand a healthier environment. We just
need to devise ways where their increasing affluence no longer exacerbates the pressure on
the environment. We need to get better, not bigger.
Sustainability is also no longer a fringe issue. Consider the fact that the fastest growing
segment of the energy sector is wind power with solar in hot pursuit; in the travel industry,
it’s eco-tourism; in the investment community, it’s socially responsible investments; in
agriculture, it’s organic farming. In venture capital, clean-tech is in the top three. These
trends all point in the same direction, towards sustainability. True, these segments may still
make up a small fraction of their respective sectors, but assuming their exponential growth
continues, they’ll soon become major contenders.
Table 1.1 gives an idea of how many major organizations and communities are actively
pursuing sustainability in one form or another.
Hopefully you can see that it’s not just the usual idealistic suspects like Ben & Jerry’s,
Seventh Generation and Patagonia that are interested in sustainability. And while none of
these organizations is fully sustainable as yet (no organization to the best of our
knowledge is), what is important is that sustainability is on their radar: they are developing
strategies to respond to its threats and opportunities. Some are doing a better job than
others, of course. But they all recognize sustainability as a significant strategic issue.
The organizations listed above are just the tip of the iceberg. According to a study
released by KLD Research and Analytics in 2006, almost 80 per cent of the Standard and
Poors 100 companies now have special website sections disclosing social and
Chapter_01.qxd 6/10/2009 4:36 PM Page 11

SUSTAINABILITY AS A STRATEGIC ISSUE 11

Table 1.1 Examples of organizations pursuing sustainability

Energy Manufacturing Food Services Government Colleges and

USA Rest of the Universities
World
BP Coca-Cola Bon Aspen Skiing Chicago, Australia Cornell
Conoco Dell Appétit Company Illinois Bogota, Darden,
Philips DuPont Chiquita Bank of Madison, Colombia University of
Florida IBM Fetzer America Wisconsin China Virginia
Power Electrolux Winery Calvert National Curitiba, George
and (largest white Frito Lay (mutual Aeronautics Brazil Washington
Light goods Heinz funds) and Space European Harvard
Royal manufacturer Goldman Administration Union Imperial College
Unilever
Dutch in the world) Sachs (NASA) London
UK
Shell Epson Kaiser San Francisco, Iowa State
Japan
Ford Permanente California
Kerala, Lowell Center
General Munich Re Santa Monica, for Sustainable
India
Electric (the largest California Production,
New
General reinsurance State of University of
Zealand
Motors company in Arizona Massachusetts
Sweden
the world) State of Massachusetts
Herman Miller Whistler,
Price- Massachusetts Institute of
Hewlett- British
waterhouse- State of Technology
Packard Columbia,
Coopers Minnesota Michigan
IKEA Canada
Starbucks State of New Oregon State
Intel
Swiss Re (the Jersey University
Interface
second State of North Portland State
(largest
largest Carolina University
manufacturer
reinsurance State of
of commercial Stanford
company in Oregon
carpet tiles) University of
the world)
Johnson State of British Columbia
Wal-Mart Washington
Controls University of
Mattel US Department California
of Defense (Berkeley, San
Nike
US Diego, Santa
Philips
Environmental Barbara)
RR Donnelley
Protection University of
& Sons
Agency East Anglia (UK)
(largest printer
in North University of
America) Victoria
Toyota Yale
Volkswagen York University,
Canada
Chapter_01.qxd 6/10/2009 4:36 PM Page 12

12 THE BUSINESS GUIDE TO SUSTAINABILITY

environmental performance, up from less than 60 per cent the year before.8 And many of
them are pressuring their suppliers for related information, who must then pressure their
suppliers down the supply chain.

Why is sustainability a strategic issue?

If you hadn’t heard much about sustainability until now, you may be wondering why it is
drawing so much attention among such heavy-hitters. Why is sustainability suddenly on
the radar screen? There are a host of reasons.
Transformative worldwide trends. There are major trends in the world that are forcing
radical changes in business models. Some trends relate to energy sources. Climate change
is finally on the front pages of every publication. Lesser known is peak oil, which up until
recently has tended to be discounted. But General Motors has recently started using the
term in public. Production of oil is peaking just as worldwide demand is exploding.
Eventually we will shift to a different energy supply, but the transition is likely to be
wrenching. Early in 2008, Rick Wagoner, the head of General Motors, conceded that the
internal combustion engine’s days were numbered, transforming the auto industry. ‘We
need to develop alternative sources of propulsion based on diverse sources of energy’, he
said.9 It might be simpler if we only used oil for transportation, but it is also the feedstock
for plastics, pharmaceuticals and a host of other products. Natural gas production is tied
to oil production and it too is waning.
Other trends are tied to natural resources. Many renewable resources are under severe
pressure. Fisheries are collapsing, forests are over-logged, topsoil is being depleted and
desertification is expanding. Many regions have constrained water supplies. In addition,
certain non-renewable materials are becoming more difficult or expensive to get, causing
price rises and a burgeoning black market in metals recycling. Interwoven with this is the
increasing knowledge about toxic chemicals, even in minute quantities, and their effect on
ecosystems and human health.
Still other trends relate directly to human society: population growth exacerbates the
problems above and is greatest in the developing and least-developed nations. As a backlash
to colonialism and other forms of oppression as well as Westernization, certain ethnic and
religious groups are reasserting cultural differences leading to conflicts around the globe.
The rapid development of gigantic nations, principally China and India, is driving markets
for everything from concrete to wheat.
All these trends have momentum. They can’t stop on a dime, so you can use them to
forecast the future. Executives need to examine the trends, even those that at first may not
appear to have relevance, and use this knowledge to direct a long-term strategy. This
foresight enables you to position your organization or community to avoid the worst of the
impacts and benefit most from the new industries and technologies that will emerge.
Chapter_01.qxd 6/10/2009 4:36 PM Page 13

SUSTAINABILITY AS A STRATEGIC ISSUE 13

The Wal-Mart Effect. There is a fascinating gap right now in industry. The large
companies understand the need to address this issue. As we mentioned earlier, almost
80 per cent of the Standard and Poors 100 produced some type of sustainability report in
2006. Some of the little guys have been doing sustainability out of a passion. But a number
of the medium-sized enterprises have been oblivious. Now the big companies are putting
pressure on their first-tier suppliers. Wal-Mart is a notable example. Everyone knows how
they love to lean on their vendors. They were just going public with their efforts when our
first edition came out. Now they have goals to reduce packaging, eliminate
dumpsters/waste, reduce greenhouse gases, and improve the fuel efficiency of their fleet by
50 per cent. They are asking their suppliers for life cycle assessment data on their
packaging. This has been, needless to say, a big wake-up call for mid-sized businesses.
About a year ago, the CFO of a food processing company was interested in
sustainability but the owner had a short-timer attitude, planned to sell the company, and
wasn’t much interested. When we discovered that Wal-Mart was a customer, we told them
in effect that they could get their act together or wait for Wal-Mart to come knocking. Two
weeks later they got their first letter from Wal-Mart. Now the company is eager to move
forward. People at the top of the supply chain are rattling the links and the rest of the
companies along the chain are trying not to get thrown off.
Wal-Mart is also cleaning up its own operations. As the largest employer in Canada,
operating the largest trucking operation in North America, it has an enormous footprint.
But when it decides to change, the world just might get swept up in its wake. Wal-Mart
has ambitious long-term goals to eliminate waste to landfills, increase the fuel efficiency of
its fleet, and power its stores with all renewable energy.10
Sustainability is a natural extension of other organizational changes. Over the last
century, society has increasingly raised its expectations of business. In the early 1900s,
codes of ethics and government policies began to discourage monopolies, misleading
product claims and underhand business dealings. Then through to the 1970s employee
rights showed up on the radar with the rise of organized labour and quality of work life
programmes, all intended to combat unfair and inhumane labour practices. With the
quality movement in the late 1970s and early 1980s, organizations adopted a focus on the
needs of customers to stay competitive. In 1984, an accidental chemical release at a Union
Carbide plant in Bhopal killed thousands in the community; then the Exxon Valdez ran
aground in Alaska in 1989. Suddenly environmental practices were added to the list of
expectations. More recently, the internet has increased corporate transparency with such
sites as WalMartWatch.com and the WhirledBank.org often raising corporate social
responsibility issues like international labour practices. And just in the last two to three
years, shareholders have started using their proxies in an unprecedented way to oust
corporate leaders and redirect policies when they feel corporations are not living up to their
expectations on ethical, social and environmental issues.
Chapter_01.qxd 6/10/2009 4:36 PM Page 14

14 THE BUSINESS GUIDE TO SUSTAINABILITY

As you can see, the expectations of business have grown step by step, adding new
stakeholders along the way (see Figure 1.1).
Today society wants it all. According to the Millennium Poll conducted in 1999,
surveying 25,000 people in 23 countries on six continents, the majority of people expect
companies to go far beyond just making a profit, obeying laws, paying taxes and providing
jobs. Instead, they expect corporations to ‘exceed all laws, setting a higher ethical standard, and
helping build a better society for all’.11 Employee health and safety, fair treatment
of employees, elimination of corruption, protecting the environment and ending child labour
practices are high on the priority list. All these issues fall under the economic–social–
environmental framework of sustainability. Bob Willard encourages organizations to think of
sustainability as an enabling strategy, not one more goal in a long list. Sustainability can unify
and organize a wide spectrum of efforts, including such seemingly disparate programmes for
lean manufacturing, corporate social responsibility and zero waste.
In a sense, sustainability is nothing new – it is simply providing some structure to a set
of emerging societal expectations.
Natural resources are now a limiting factor. At the beginning of the industrial revolution we
had a seemingly endless supply of natural resources and a dearth of skilled labour to work in
our factories. Now the situation is reversed. The global population is over 6 billion, with many
people under- or unemployed. According to the best estimates of the UN, we should expect
our population to increase by another 3 billion by 2050. At the same time, many of our
natural resources are dwindling. According to the UN Food and Agriculture Organization,

Stepping up to increasing societal expectations

Comply with ...
Sustain-
ability ... the limits of nature
Social
... community needs
responsibility

Environmental stewardship ... environmental protection

Quality ... customer expectations

Employee health, safety and

... employee needs
quality of work life

Reputable business practices, compliance ... laws, regulations and contracts

1900s Today

Figure 1.1 Steps to sustainability

Chapter_01.qxd 6/10/2009 4:36 PM Page 15

SUSTAINABILITY AS A STRATEGIC ISSUE 15

the world lost 94 million hectares of forestland in the 1990s alone – that’s about 64,000 acres
a day. Eleven of the 15 major fishing grounds in the world are already at or exceeding the
maximum sustainable yield and some are in complete collapse. Soil erosion, desertification,
urban sprawl, salinization and aquifer depletion are compromising our crop yields.
Management involves attending to bottlenecks and limits. These pressures are showing
up in commodity costs. Oil, right now, is close to $100 a barrel; grains and milk have gone
up considerably in just the past year (2007), as have metals and minerals. Population
growth and lifestyle improvements in places like China and India are driving world
markets. If natural resources, not people, are our biggest constraint, then our policies and
management practices should switch from ones that reward getting more from fewer
people (eg lay-offs and depreciation schedules) to ones that reward getting more from less
material (eg resource efficiencies including the use of energy, water, wood products,
agricultural and marine resources, and mined minerals and metals). In the last century, we
used technology and innovation to achieve a tremendous increase in human productivity.
Now we need to apply that same know-how to resource productivity. Unlike previous
corporate social responsibility programmes, sustainability acknowledges the finite limits of
nature and the need to neutralize our wastes and emissions, to produce renewable resources
and to maintain other critical ecosystem services.
Environmental issues are becoming global. Years ago, most environmental problems were
relatively isolated: a tanker runs aground, a train filled with chemicals derails, a plant
explodes, a company mishandles hazardous waste. But now, the biggest environmental
problems are global – global warming, acid rain, the ozone hole, species extinctions, the
destruction of rainforest, the dying of coral reefs – and it’s not clear who to turn to in order
to correct them. The impacts of these problems affect people everywhere. You can’t just
move on to the next frontier, the next fishing ground, the next forest. There is nowhere else
to go. Since the publication of Rachel Carson’s Silent Spring in 1962 and the first Earth
Day in 1970, the public has become far more aware and concerned about these issues. And
thanks in part to the work of the Intergovernmental Panel on Climate Change and Al
Gore’s movie, An Inconvenient Truth, climate change is on everyone’s mind lately.
Health concerns are rising. Studies conducted around the globe have revealed that humans
everywhere are carrying a number of synthetic chemicals in their blood and even breast
milk: wood preservatives, industrial solvents, pesticides, fire retardants and so on. Some of
these are known carcinogens; some, called endocrine disruptors or ‘gender benders’, mimic
hormones and can cause birth defects as well as reproductive abnormalities that don’t
become apparent until our offspring reach childbearing age. Certain natural and synthetic
substances accumulate in body tissue and their concentrations increase as they move up the
food chain. For example, the US Food and Drug Administration recently issued warnings
about mercury levels in certain types of fish. (Coal-fired power plants are a significant
Chapter_01.qxd 6/10/2009 4:36 PM Page 16

16 THE BUSINESS GUIDE TO SUSTAINABILITY

source of mercury and China is bringing more online at a break-neck pace.) This is not just
a matter of fouling your own nest. The west coast of the US regularly gets pulses of air
pollution from China. Many indigenous people in remote arctic regions have in their
bodies high levels of pesticides used near the equator; they are being advised not to
breastfeed their babies. The effects of pollution circulate around the globe.
Social, environmental and economic factors are entangling, creating instability.
Environmental concerns such as the loss of natural resources, coupled with social issues like
the explosive growth of population in developing countries, are combining in a bubbling
cauldron. Coltan, a metal ore mined in the Congo, has contributed to the decline of the
mountain gorilla and has funded conflicts in the country as well as the genocide in
Rwanda. International fishing fleets have depleted African fisheries, causing a flood of
illegal immigrants into Europe. In some areas, we see a backlash against globalization and
Westernization (what some now call ‘Westoxification’). The rise in terrorism can be seen
in this light. Thomas Friedman, a Pulitzer Prize-winning foreign affairs columnist for The
New York Times, who has long studied the Arab world, states:

If we’ve learned one thing since 9/11, it’s that terrorism is not produced by the
poverty of money. It’s produced by the poverty of dignity. It is about young middle-
class Arabs and Muslims feeling trapped in countries with too few good jobs and
too few opportunities to realize their potential or shape their own future – and
blaming America for it. 12

The US Central Intelligence Agency has been warning that environmental degradation will
increasingly become a source of political instability. They cite fresh water and climate
change as particularly critical issues.13 Political instability leads to economic collapse, which
in turn leads to human misery. Once again, the environment, social and economic
elements are intertwined. Sustainability can help you foresee how these global issues might
play out and what you should do now in response.
Energy supplies are a significant threat. One arena where these factors are converging is
that of energy supply. Based on the best estimates, worldwide production of oil is likely to
peak sometime in the next decade, if it hasn’t already. The disruption caused in the US
when domestic production peaked in the 1970s – people lining up around the block to get
petrol, subsequent recession – may serve as a warning here. Natural gas sources are being
depleted much faster than originally thought, so fuel-switching isn’t much of an option.
Renewables tend not to provide the same net energy so experts are saying that the world
will need to learn to live on less energy, just as its population is expected to increase by 50
per cent and China’s demand is growing. The implications for the world economy,
international conflict, the environment and social disruption are deeply disturbing.14
Chapter_01.qxd 6/10/2009 4:36 PM Page 17

SUSTAINABILITY AS A STRATEGIC ISSUE 17

These problems are uncovering new opportunities. Yet all is not gloom and doom. Yes,
there are serious problems, but these also represent interesting opportunities. Many of the
practices we will need to correct these challenges are already in existence. Organic
agriculture can build instead of deplete soil. Smart growth and green building practices
show cities how to plan urban environments that reduce the need for automobiles and also
improve liveability and the health of their inhabitants. Marine sanctuaries have been found
an effective way to rebuild fish stocks. Timber companies have developed a set of
sustainable forest practices. So called clean-tech industries are getting a lot of attention by
venture capitalists and Wall Street. Wind power, organic produce, green building and
socially responsible investing are all on a steep growth trend. According to a study by
Morgan Stanley, sales from clean energy alone could reach $1 trillion by 2030. As a basis
of comparison, the entire US GDP was $13 trillion in 2006, so this is a staggering sum.15
In many cases, we know what we need to do. Through some combination of resource
conservation and new technologies, we might be able to have a soft landing. But the longer
we wait, the more constrained our options. The only question is whether you have a handle
on the issues relevant to your organization, can envision a better future and can muster
the leadership to take the next steps. You can either start experimenting with these more
sustainable methods or get left behind.
Sustainability tends to produce multiple, unintended benefits. Many sustainability actions
yield unanticipated benefits. When architects design a green building to maximize natural
light, the occupant saves on energy bills; companies operating in premises so designed also
enjoy reduced absenteeism, improved productivity and increased employee satisfaction. In
retail environments, ‘daylighting’ as it is called has been shown to increase sales dramatically;
in schools, it improves learning; in nursing homes, it helps the elderly sleep well at night.
When C&A Floorcoverings set out to find a way to recycle old carpet into new carpet,
they developed a product that performed better and cost less to produce. When Portland
State University decided to emphasize sustainability in their urban planning programme,
they experienced a significant increase in enrolments. When the City of Santa Monica
wanted to reduce their use of pesticides and rodenticides, their integrated pest
management system also improved the energy efficiency of their buildings since they sealed
the holes where the creatures were getting in. When DesignTex wanted to find a way to
eliminate hazardous waste from the production and dyeing of their upholstery fabric, they
ended up creating a new fabric that performed better, produced a new product from the
fabric selvages and won international recognition for their efforts.16
When Hot Lips Pizza, a three-restaurant enterprise in Portland, Oregon, chose to
pursue sustainability because of the owner’s personal values, they began to attract a much
higher quality employee. Aspen Skiing Company credits retrofitting the lighting in their
parking garage (done to save money) with improved security. DuPont has reduced their
Chapter_01.qxd 6/10/2009 4:36 PM Page 18

18 THE BUSINESS GUIDE TO SUSTAINABILITY

greenhouse gases by 65 per cent since 1990, far beyond the Kyoto Protocol, saving
hundreds of millions of dollars in the process. Michael Northrop of the Climate Group
says of organizations that try to reduce their climate impact, ‘It’s impossible to find a
company that has acted and has not found benefits.’17
Sometimes the changes are so simple and obvious, you want to slap your forehead in
a why-didn’t-I-think-of-that gesture. Transportation giant UPS saved 3 million gallons of
fuel by eliminating most left (cross-traffic) turns. A sophisticated information technology
application that plans their routes has saved fuel, improved delivery times and probably
also improved public safety.
One of the common unintended side effects of pursuing sustainability is employee
commitment. Making any organizational change is bound to bring out the nay-sayers, but
most organizations have found sustainability unleashes a wave of excitement, creativity and
loyalty not associated with many other change efforts. As Ken Hopper, general manager for
one of the Scandic Hotels in northern Europe, says:

I’ve been involved in Scandic for ten years. We’ve had all kinds of different
campaigns or processes. Nothing has ever been close to creating as much
excitement as this environmental campaign. It was just huge. You did not have
anyone who didn’t feel something. It was incredible that people got so involved in
this that they are willing to make some sacrifices and put in some energy and
effort to get involved. It brought people together in a way we’ve never ever been
able to bring our staff together before, and we haven’t since. Nothing we’ve done
has mobilized a force that’s created such unison.18

For all these reasons, sustainability is now clearly a strategic issue. It helps organizations
make sense of current trends, examine their threats and opportunities, and see relationships
between them. From a practical, day-to-day perspective, sustainability helps you spark
innovative ideas. As long as you put those ideas through normal business filters to
determine whether they make sense as things to do now, you can’t go wrong. If you don’t
begin the learning curve, you are at risk of being left behind.

Factors that define sustainability

Earlier we explained that sustainability involves optimizing the economy, environment and
social elements. Since the economy and society are human constructions, what is considered
sustainable is to some degree governed by culture. Nature, on the other hand, provides some
non-negotiable requirements. Let’s examine what we know about the needs of each.
Chapter_01.qxd 6/10/2009 4:36 PM Page 19

SUSTAINABILITY AS A STRATEGIC ISSUE 19

Factors of a healthy economy. From Adam Smith’s time on, we have developed a set of
factors that contribute to a healthy economy, which usually include:

• multiple buyers and sellers;

• timely, accurate information;
• accounting standards and enforcement;
• absence of governmental corruption;
• markets for financing development (stock markets, bond markets, banks);
• agreed-upon method or currency of exchange; and
• absence of deflation or high inflation.

Factors for a healthy society. This element is heavily dependent upon culture. Someone
from a tribal culture might answer the question differently than someone from the Western
world, and both might have different emphases from those of a Muslim. However, Chilean
economist Manfred Max-Neef distilled basic human needs down to nine universal, non-
substitutable ones:19

1 subsistence;
2 protection/security;
3 affection;
4 understanding;
5 participation;
6 leisure;
7 creation;
8 identity/meaning; and
9 freedom.

In the Western world at least, our communities also rest upon such factors as:

• a strong education system;

• a robust middle class;
• the absence of a huge gap between the richest and poorest (a large gap often leads to
revolutions);
• access to health care;
• security and the absence of crime; and
• equal rights and the absence of discrimination.
Chapter_01.qxd 6/10/2009 4:36 PM Page 20

20 THE BUSINESS GUIDE TO SUSTAINABILITY

Factors for a healthy environment. One of the easiest ways to understand sustainability,
especially the requirements of nature, is to use The Natural Step framework. Developed
through the normal scientific peer-review process, this framework lays out four principles for
a sustainable world. The first three factors relate to the physical environment; the fourth is a
social one. We’ll paraphrase the three environmental principles here, with a little explanation.
Nature must not be subjected to increasing concentrations from substances from
the Earth’s crust. There are three main raw materials we extract from deep inside the
Earth: fossil fuels, metals and minerals. It took billions of years for nature to sequester these
elements, many of which are toxic to most life on Earth. If we remove these materials and
spread them around in nature at a rate faster than they can be redeposited, they will build
up in the environment, eventually causing problems. For example, since the industrial
revolution, we have increased carbon dioxide in the atmosphere by over 30 per cent. We
are finding high levels of mercury and other metals in fish.
Similarly, we must not allow man-made substances to build up in nature. Humans
make over 100,000 synthetic chemicals, molecules nature never made. Some of these are
persistent (they don’t break down easily) and accumulate in body tissue, the pesticide DDT
being one example. Some of these compounds mimic hormones, frequently causing birth
defects, cancer or neurological problems. Scientists and health departments are finding
these synthetic substances (as well as some elements from the Earth’s crust) in our bodies,
in our blood and in the breast milk we feed our babies.
Third, we must not continue to destroy the productive capacity of nature to provide
the services upon which we depend. Forests provide more than just wood products – they
provide habitat for endangered species, clean our water and air, and protect soils. Barrier
reefs provide habitat for the vast majority of marine life. Over-harvesting, development and
genetic manipulation all contribute to this problem.
These three lists of factors may not be complete but they are certainly a place to begin.
You can compare your practices to these factors to identify your largest impacts. You can
adjust your practices to be less dependent upon materials that are clearly going to become
more scarce, expensive or regulated.

How do you know whether your organization is sustainable?

A single organization can’t be responsible for making all of society sustainable, but each can
examine its inputs, outputs, processes and effects on the larger system in which it operates.
We often use the ‘bubble diagram’ (Figure 1.2) to help organizations develop a clear vision
of what it would look like to be sustainable.
To use this tool, follow this process. Inside the process box, list your primary processes.
Then in each circle, list your most prominent examples (eg what forms of energy you
purchase, materials you purchase the most, etc.) and describe the sustainable state. Then
Chapter_01.qxd 6/10/2009 4:36 PM Page 21

SUSTAINABILITY AS A STRATEGIC ISSUE 21

Industry
Influence others in your supply chain

Energy Product or Services

Climate neutral, renewables Valued, benign

Core Processes or Activities

Radical efficiencies, low toxics

Inputs Outputs

Materials ‘Waste’
From sustainable sources Zero waste

Community
Contribute to solving
local problems

Figure 1.2 How do you know whether your organization is sustainable?

outside the circles, coming off as spokes, list ideas for projects to reduce your major
impacts.
Let’s use a simple example. Imagine you run a pizza restaurant. Your operation would
be sustainable (or close to it) when:

• Materials: All your produce, pizza boxes, cleaning products, etc. came from
sustainable/green/socially responsible sources. (You could buy organic tomatoes from
Chapter_01.qxd 6/10/2009 4:36 PM Page 22

22 THE BUSINESS GUIDE TO SUSTAINABILITY

farmers who provide good working conditions and wages for their migrant workers.
Your pizza boxes could be made from 100 per cent recycled paper or pulp from
certified forests. Cleaning products would be environmentally benign.)
• Energy: All your energy for cooking, transportation and space heat came from
renewable sources. (You could buy ‘green power’ from your utility and your delivery
vehicles could run on biodiesel.)
• Process: Your cooking and other processes are as efficient as possible. (You could use
non-disposable tableware and capture the waste heat from your ovens.)
• Product design: Your main product is biodegradable, even edible, so it is quite benign.
(Do the ingredients come from local and sustainable or organic sources? You could
vary the menu to take advantage of seasonal availability. What about the packaging?
Could you invent a reusable pizza box?)
• Waste: All your waste products can either be reused, recycled, or composted. (You could
choose biodegradable serving items, eliminating plastic drink covers or polystyrene cups.)
• Industry influence: You apply your leadership and buying power to drive the rest of
the industry toward sustainability. (To have an adequate and affordable supply of
organic produce, you might help set up a cooperative.)
• Community contribution: You have a programme to help solve a pressing social
problem that relates in some way to your business. You might work on migrant labour
issues and/or hunger, for example. If you serve beer, then drunk driving might be an
issue to address.

Notice that all of these actions are do-able now. Granted, making a semiconductor plant
sustainable would be more complicated than a pizza restaurant, but the bubble diagram
can help you see opportunities to move in the right direction. Create one for your own
organization to understand what you can do now and what you can work towards in the
long term to become sustainable.

Conclusion
In this chapter, we have tried to show that sustainability is a field that is growing and
strategic. It helps you foresee the future and often produces many unintended benefits.
Many of the possible sustainability-inspired actions make economic sense now. Some
technologies still have a way to go, but you need to know now where the world is heading
so that you can invest in platforms for the future instead of dead ends.
Choose the sustainable course and you will often reap benefits that others may not.
Businesses may gain a competitive advantage over others in their industry. Governments
may be able to free up precious funds to do more mission-related work and build trust with
taxpayers.
Chapter_01.qxd 6/10/2009 4:36 PM Page 23

SUSTAINABILITY AS A STRATEGIC ISSUE 23

The rest of this book will describe tangible actions that will help you, your
organization, your community and the environment. It can seem daunting at first, but we
promise the journey will be both intriguing and satisfying.

RESOURCES

Articles and Reports

Resources related to climate change
The October 2007 issue of the Harvard Business Review focuses on climate change and its
relationship to business.
Lash, Jonathan and Fred Wellington (2007) ‘Competitive Advantage on a Warming Planet’,
Harvard Business Review, March, Vol 85, No 3, pp94–102.
Intergovernmental Panel on Climate Change is the UN-sponsored group of international
scientists studying the effects and options related to global warming, www.ipcc.ch, accessed
8 May 2009.
The Hadley Centre produces research on climate change, http://www.metoffice.gov.uk/
climatechange/science/hadleycentre/.
The Pew Center on Global Climate Change is also a respected source, www.pewclimate
.org/, accessed 8 May 2009.
Hoffman, Andrew J. (2006) Getting Ahead of the Curve: Corporate Strategies that Address
Climate Change. University of Michigan.

Background on the state of the environment

The Millennium Ecosystems Assessment was performed at the request of the United Nations
and employed thousands of the world’s leading scientists, www.millenniumassessment.org/,
accessed 8 May 2009.
The UN Environment Programme provides an overview of the state of the environment
called Global Environment Outlook, known as the Geo4 (the fourth in the series of studies),
www.unep.org/geo/, accessed 8 May 2009.
World Resources Institute has a wealth of data about different ecosystems.
The Living Planet Index, published by the World Wide Fund for Nature, provides useful
data about the state of the world, www.panda.org/livingplanet/, accessed 8 May 2009.

Sustainability as a strategic business issue

AtKisson, Alan (1999) Believing Cassandra: An Optimist Looks at a Pessimist’s World. White
River Junction, VT: Chelsea Green Publishing. A good overview of sustainability without a lot of
the gloom and doom found in other books.
Chapter_01.qxd 6/10/2009 4:36 PM Page 24

24 THE BUSINESS GUIDE TO SUSTAINABILITY

Brown, Lester (2001) Eco-Economy: Building an Economy for the Earth. WW Norton
Company. A good overview of both the scientific basis for concern and emerging solutions and
tools.
Hart, Stuart and Mark Milstein (1999) ‘Global Sustainability and Creative Destruction of
Industries’, MIT Sloan Management Review, Fall, pp23–33. Distinguishes green from
sustainable products and explains how to market to three different segments: consumer
economy (1 billion people), emerging markets (2 billion people) and survival economy (3 billion
people).
Hawken, Paul, Amory Lovins and L. Hunter Lovins (1999) Natural Capitalism. Little Brown
and Co. Describes good examples of sustainability-related technologies and practices in both
business and government.
McDonough, William and Michael Braungart (2002) Cradle to Cradle: Remaking the Way
We Make Things. New York: North Point Press. Inspiring reading for those who design or
manufacture products.
Pernick, Ron and Clint Wilder (2007) The Clean Tech Revolution: The Next Big Growth and
Investment Opportunity. New York: Harper-Collins.
Senge, Peter and Goran Carstedt (2001) ‘Innovating Our Way to the Next Industrial
Revolution’, MIT Sloan Management Review, Winter, Reprint #4222. Provides a good strategic
overview for those who don’t have time to read a book; some great examples.

Sustainability as it affects the national and world level

Hammond, Allen (1998) Which World: Scenarios for the 21st Century. Washington, DC: Island
Press. Lays out three possible future worlds: market world, fortress world and sustainable
world.
Huntington, Samuel P. (1996) The Clash of Civilizations and the Remaking of World Order.
Simon & Schuster. Provides a compelling theory for understanding social and political changes
in our world.
Jacobs, Jane (2000) The Nature of Economies. New York: The Modern Library. Explains
how nature and economies work in the same fashion, helping to explain why globalization
doesn’t always result in a better lifestyle.

Tools to help you build a sustainability plan

Hitchcock, Darcy and Marsha Willard (2008) The Step by Step Guide to Sustainability Planning.
London: Earthscan. Provides more detailed information about how to do impacts assessments
and the other steps associated with creating a sustainability plan.
SPaRK, the Sustainability Planning and Reporting Kit includes electronic files that help you
do this analysis and link it to metrics and a sustainability plan. See www.axisperformance.com
for more information.
Chapter_02.qxd 6/10/2009 4:37 PM Page 25

2
Change Agent/Sustainability Director:
How to Keep a Sustainability Effort on Track

Many of the organizations best known for their commitment to sustainability are those
with passionate and outspoken leaders at their helms. Ray Anderson of Interface, for
example, tours the world telling his dramatic story of getting a ‘spear through his heart’
after reading Hawkens’ The Ecology of Commerce and realizing the damage his company
was doing to the Earth. Leaders are certainly in a prime position to drive change through
their organizations; however, for most organizations change can sprout and grow in any
number of places.
Regardless of where you are in the organizational structure, you can make a difference.
Someone put The Ecology of Commerce on Ray Anderson’s desk; the change did not start with
him. People tend to point to the moment when their leader gets the ‘spear through the heart’
as the moment sustainability began in their organization, but that undervalues the critical
actions of those within the organization who often bring sustainability to the leader’s attention.
Within every organization that pursues sustainability, there is always someone who
gets the effort going, usually a person with an unflagging passion for the topic. These
change agents often begin without the overt approval of their organization. Over time they
develop a compelling business case and enrol others. Eventually they may be given official
responsibility for leading the effort.
For sustainability to be successful, it eventually must infiltrate all aspects of the
organization. Until that happens it is usually necessary to have an individual or team whose
job it is to shepherd the effort. When an individual holds this role, he or she is often called
sustainability coordinator. This may be a full-time or part-time responsibility. This chapter
is directed to those individuals who, with or without formal authority, move sustainability
forward in an organization.

WHAT YOU SHOULD KNOW ABOUT SUSTAINABILITY

Sustainability change agents have come from virtually all parts of organizations.
Sometimes, they emerge from environmental departments, but just as often they come
Chapter_02.qxd 6/10/2009 4:37 PM Page 26

26 THE BUSINESS GUIDE TO SUSTAINABILITY

from other fields. For example, the sustainability coordinator at Tualatin Valley Water
District in Oregon is also their financial analyst, a particularly nice blend of skills that gives
her credibility in the boardroom. So if you have the passion, there is a good chance you
can make a role for yourself in sustainability.
Change agents face a number of challenges, however, no matter where they reside in
an organization. Here is some advice for each of the most common hurdles.
Influencing without authority. Usually the sustainability coordinator acts in an advisory
role and does not have line authority over all the people in the organization. From this
position, they must cajole, influence, convince and assist. Expect the typical resistance and
excuses: we’re too busy, this effort is only a nice-to-have, our customers aren’t asking for it,
etc. Develop friends in high places and pick your battles. Build on successes and look for
opportune moments to raise certain issues.
Getting the ear and respect of management. If your organization has not already adopted
sustainability as a strategic focus, you will have to earn the respect of management. First,
decide whether it’s time to try to get management’s attention. You may want to work on
some small projects that fly under the radar until you can show dramatic business benefits.
Then, begin introducing the concept to management. Often, new ideas are rejected, so
begin sowing seeds. Pass on articles from respected business journals and expose your
executives to peers in other organizations who have adopted sustainability. Avoid
impassioned arguments and do not expect a quick conversion. Suggest that sustainability
be one of many emerging trends that should be considered in strategic planning. Think
strategically. How does sustainability inform your organization’s strategy? Are there threats
or opportunities? Talk in business terms.
Avoiding burn-out. All organizations are so far from a sustainable state that it’s easy to
become overwhelmed. You can’t work on everything at once, so devise a method for setting
priorities. What’s really important? What would make the most impact? What is this the
right time for? What has a high likelihood of success? What could provide a platform for
other efforts?
Enrolling others. People are often so busy that when you approach them with one more
thing to think about, you’re more likely to see exasperation rather than excitement.
Develop contacts with people and get to know their problems and challenges. For example,
cleaning staff might complain about how certain cleaning products irritate their skin and
eyes. That’s your opening to propose more sustainable options. Do some of the homework
for people and talk in terms that they use. Ask them to test the new product on a trial basis
to see if it performs at least as well as the old one. Realize, too, that some people will be
ready to listen and others not. Focus on those who are ready to hear the message or who
have a reason to collaborate.
Chapter_02.qxd 6/10/2009 4:37 PM Page 27

CHANGE AGENT/SUSTAINABILITY DIRECTOR 27

There are likely to be some in your organization who are outright resistant to your
ideas or the notion of sustainability. Be strategic about how you approach and involve these
people. If these people have influence – either because they are formal or informal leaders
or their support is necessary to implement your ideas – consider involving them in your
efforts. Invite them to participate on planning teams or convince them to come to
presentations on sustainability. It can be very useful to have sceptics involved in planning
because they may represent the position or attitudes of others and you will want to learn
about and account for their concerns or doubts. If you are successful at winning over a
sceptic in the process, you will probably build credibility with others. If these people are
not influential, you might consider working around them for the time being and directing
your energy towards those who can further your cause. You may find that engaging the
critical few is more productive than trying to win the masses.
Once, while visiting a forest products company famous for their sustainability
practices, we asked how many people in the plant really lived and breathed sustainability,
who thought about it on a regular basis. After much hemming and hawing, the
sustainability coordinator estimated ‘only’ 15 per cent. He found this figure discouraging
but we think about it differently. This shows that you can make great headway with a

RESOURCES
The following books are similar in purpose but complementary to The Business Guide to
Sustainability:

• Making Sustainability Work by Marc J. Epstein.

• The Step by Step Guide to Sustainability Planning by Hitchcock and Willard (Earthscan,
2008).

These are useful references for sustainability professionals who want to deepen their
knowledge beyond the basics:

• The Sustainability Handbook by William Blackburn.

• The Natural Advantage of Nations by Hargroves and Smith.
• Strategic Leadership Towards Sustainability by Karl-Henrik Robert.

The following resources relate to managing organizational change, a critical skill for
sustainability professionals:

• Gladwell, Malcolm (2000) The Tipping Point. Boston: Little, Brown and Co.
Chapter_02.qxd 6/10/2009 4:37 PM Page 28

28 THE BUSINESS GUIDE TO SUSTAINABILITY

• Senge, Peter M., Benyamin B. Lichtenstein, Katrin Kaeufer, Hilary Bradbury and John S.
Carroll (2007) ‘Collaborating for Systemic Change’, MIT Sloan Management Review,
Winter, Vol 48, No 2, pp44–53.
• Joiner, W. B. and S. A. Josephs (2007) Leadership Agility: Five Levels of Mastery for
Anticipating and Initiating Change. San Francisco: Jossey-Bass.
• Senge, Peter, et al (1999) The Dance of Change: The Challenges to Sustaining Momentum
in Learning Organizations. New York: Doubleday Currency.
• Wheatley, Margaret (2005) Finding our Way: Leadership for an Uncertain Time. San
Francisco: Berrett-Koehler. This book dispels many of the myths about how change
happens in organizations and suggests a more organic approach.
• Maurer, Rick (1996) Beyond the Wall of Resistance: Unconventional Strategies that Build
Support for Change. Austin, TX: Bard Books. Provides useful guidance for dealing with the
inevitable resistance change agents face.
• Moore, Geoffrey A. (1999) Crossing the Chasm: Marketing and Selling High-Tech Products
to Mainstream Customers. New York: HarperBusiness. See also the more recent book,
Inside the Tornado, also by Moore. The Tipping Point and these two books describe
important concepts about how changes happen in a population. Crossing the Chasm and
Inside the Tornado focus on high-tech products, but the concepts are equally relevant to
other industries that create discontinuous change. Up till recently, the concept of
sustainability was a discontinuous change, but the concept in most sectors has crossed
over the chasm between the innovators and early adopters. So now, these books would be
most appropriate for companies creating innovative products that will disrupt the status
quo. They are based on the concepts in Diffusion of Innovations by Everett Rogers but are
easier to read.

For a practical approach to social assessments, see Social Audit – A Toolkit: A Guide for
Performance Improvement and Outcome Measurement, from the Centre for Good
Governance, http://www.cgg.gov.in/publications.jsp.

minority of the population on board. It’s unrealistic to think that you can capture the
passion of every employee. So find those who will be intrigued and use your collective
influence to make improvements.

STRATEGIES YOU CAN USE

We have divided our schedule of tools into two sections, based on the level of authority the
change agent has. The first section looks at tools appropriate for change agents who have
no formal authority, the second for sustainability coordinators who have official authority
(even if this is only a part-time responsibility).
Chapter_02.qxd 6/10/2009 4:37 PM Page 29

CHANGE AGENT/SUSTAINABILITY DIRECTOR 29

Change agents with no formal authority

Change agents with no formal authority must carefully work to build support for
sustainability over time. The following methods may be useful and tend to build on one
another.

Begin within your span of control

Implement sustainable practices to the degree you can within your own span of control.
Practically anyone can find more sustainable options for what they are doing. A cleaner
might investigate green cleaning products; a secretary might source paper with more
recycled content. You might need to do some research outside work if you don’t have the
flexibility to do so during work time. Focus your efforts on changes that make good
bottom-line business sense, that save time or save money. Choose projects that have a high
probability of success. Then communicate your results. Let management know how you
improved productivity. They’ll want to know how you could do it again.

Sow seeds
You need to begin to develop your advocates, others who will support the idea of
sustainability inside the organization. To find those individuals, you can begin to sow
seeds:

• Talk to people about what you’ve learned about sustainability and watch their reaction.
• Share interesting articles, attaching a note asking for their reaction.
• Invite people to attend presentations on sustainability topics with you.

As you sow these seeds, you’ll find that the idea of sustainability will grow on some people.
You may be able to find a related passion, something your contacts care about that you can
reframe under the umbrella of sustainability. Invite their ideas. Together, explore where the
opportunities might lie in the organization. Who do they know who also might be
interested?

Discussion groups
Many organizations will allow employees to have informal discussion groups during lunch.
Organizations such as the Northwest Earth Institute in the US Pacific northwest and the
Global Action Plan have self-facilitated classes that can be done in this setting. Topics such
as voluntary simplicity or deep ecology often develop a sense of urgency and
empowerment. Or you might form a book group and read works related to sustainability.
These venues can leave participants eager to change their behaviour at home and at work.
Chapter_02.qxd 6/10/2009 4:37 PM Page 30

30 THE BUSINESS GUIDE TO SUSTAINABILITY

RESOURCES
For those in the US, the Northwest Earth Institute has a number of discussion courses that can
be used in organizations or in your community, www.nwei.org.
The Global Action Plan, www.globalactionplan.org, www.globalactionplan.org/uk.
The following books might also provide good material for discussions:

• Believing Cassandra by Alan AtKisson is a good overview of sustainability with a positive

spin.
• Cradle to Cradle by Bill McDonough provides positive examples of what can be done.
• The Party’s Over: Oil, War and the Fate of Industrial Societies by Richard Heinberg
explores the implications of peaking oil supplies.
• The Millennium Eco-Assessment was commissioned by the United Nations and involved
thousands of leading scientists around the world. It and a shorter summary report lay out
the global challenges we must overcome.
• Biomimicry by Janine Benyus explores how nature can be an inspiration to redesign our
products, our agricultural system and our communities.

Green teams
Discussion groups often evolve into voluntary green teams, groups of people who meet
usually during non-work time to explore how to educate others and improve the
sustainability performance of their organizations. They may host speaker series during
lunch or research opportunities to eliminate waste and conserve energy. These green teams
often have no formal authority in their organizations but they can catalyse more formal
initiatives. Make participation fun for those who attend but also work on projects that
matter. Make sure that at least some of your efforts save or make the organization money.
Realize too that these green teams often peter out, so position them so that they will evolve
into something more formal. See the examples of structures in the section below.

Sustainability coordinators with formal authority

Sustainability coordinators who are sanctioned by management have more clout. They can
set up structures and processes to affect the entire organization. The following methods
may be helpful in this situation.

Steering committees
A steering committee differs from a green team in that it is not voluntary and membership is
designed. These committees are temporary, parallel organizational structures to facilitate the
Chapter_02.qxd 6/10/2009 4:37 PM Page 31

CHANGE AGENT/SUSTAINABILITY DIRECTOR 31

implementation of sustainability in the organization. Often organizations begin with a

diagonal slice, taking people from all parts of the organization. This can be a good place to
begin. However, these often evolve to be much smaller teams with carefully selected members.
For example, at a Simplot plant in Idaho, the steering committee evolved from an unwieldy
one with over 20 members to one with a handful of well-positioned individuals including two
of their five senior managers, a member of the laboratory (a research function), a purchasing
agent, an environmental representative and representatives from maintenance and planning.
They also have seats for rank and file employees who rotate on and off the team. Together,
when they decide to move in a direction, they have the clout to make it happen.

Task forces and project teams

Steering committees often spawn task forces or project teams to work on individual
projects. For example, one team may conduct a greenhouse gas audit while another plans
a remodel. It is often helpful to hire a professional facilitator to lead these efforts so that
you have someone knowledgeable about the process leading the effort.
At the very least, assure that these teams get off on the right foot. Be thorough as you
set up these groups, carefully considering mission, membership and methods, to minimize
confusion, scope-creep and burn-out. We recommend a ‘launching’ process that addresses
each of these critical components:

• Why? Be sure you can articulate the business need for the project. Link the outcomes
you expect the team to achieve to strategic issues of the organization. The more
important this effort seems to the participants, the more energy and commitment you
will likely garner.
• Who? Be strategic in your choice of people. It’s good to have volunteers because you
are assured of their interests, but also consider enlisting people with relevant expertise,
leadership or influence and include representatives of those whose jobs or processes will
be affected (eg the facilities managers for projects related to your building).
• What? Express the aims of these teams in terms of measurable outcomes including
deadlines for deliverables. This will help them manage expectations as well as the scope
of the project. If possible, frame their task as a simple question. Make clear what they
can decide and what they can only recommend.
• When and where? It will be easier to enlist people if you can estimate the time
commitment you are asking for: how often and for how long they will be expected to meet.
Contribute to their success by assuring they have adequate time for the project and the
necessary resources – meeting space, access to data, permission from their managers, etc.
• How? Ideally these groups will be run by skilled facilitators. It is also helpful to establish
effective meeting roles and processes, and ground rules. Discuss any assumptions about
assessments, tools, research, budgets and other resources they may use.
Chapter_02.qxd 6/10/2009 4:37 PM Page 32

32 THE BUSINESS GUIDE TO SUSTAINABILITY

Individuals
Sometimes a team is not needed at all. If you approach the right people and embed
sustainable practices into the organizational systems, you can often have a larger impact.
For example, if you can convince the purchasing manager to implement environmentally
preferable purchasing policies and to embed those preferences into the online purchasing
system, the other employees don’t have to think about sustainability in this context. They
are simply presented with sustainable options. Where you can, make the more sustainable
options the easy choice or the only choice.

Award programmes and certification systems

Many organizations have found that pursuing sustainability award programmes or
certification systems has provided a powerful framework and incentive for progress.
Many regions have environmental or sustainability award programmes that provide a
structure, standards and, if you qualify, public recognition. You may also pursue certain
certification schemes, for example LEED for a building remodel, ISO 14000 for an
environmental management system or product-specific certifications like the Marine
Stewardship Council certification for fish or the Forest Stewardship Council
certification for forest products. See Appendix B for a list of common certification
programmes.

Sustainability management systems

So that your first sustainability projects don’t end up being your last, you need to develop
a management system to support sustainability. These are often modelled on quality
management systems (ISO 9000) and environmental management systems (ISO 14000).
They include:

• a policy statement that describes intent and commitment;

• methods for setting priorities, metrics and targets;
• processes for starting, monitoring and completing projects;
• processes to review both the results of the projects and also to audit and improve the
sustainability management system itself; and
• methods for institutionalizing the insights gained from projects into other systems
such as work procedures, corrective action plans and training.

See more information about SMSs in the Environmental Affairs chapter.

Chapter_02.qxd 6/10/2009 4:37 PM Page 33

CHANGE AGENT/SUSTAINABILITY DIRECTOR 33

RESOURCES
‘Developing Effective Systems for Managing Sustainability’ and ‘Embedding Sustainability into
your EMS’ are two booklets in the Sustainability Series™ that provide an overview in lay terms,
avoiding the language of ISO 14001, www.axisperformance.com/sust_series.html.
ISO 14001 is a globally accepted set of standards for and certification of environmental
management systems.

Conclusion
As the famous anthropologist Margaret Mead once said, ‘Never doubt that a small band of
caring and committed people can change the world. Indeed it is the only thing that ever
has.’ You can make a difference. It is not easy being a lone voice in an organization, so build
your cadre of supporters. Look for win–win opportunities that help the organization as
well as delivering social and environmental benefits. Build your credibility in the
organization by choosing projects with a high probability of success. Once you’ve gained
the respect of others and they have seen the positive results, it will be easier to take bigger
leaps. So many people have found that once they understand sustainability, there is no
going back to blissful ignorance. So as you introduce more and more people to the
concepts, you may not be able to see all the ripples, but you can be sure that they are there.
Try to be patient. It took a long time for humans to get to this unsustainable state and it
will take time to shift our society and economy. You are part of a worldwide effort at an
exciting turning point in human history.

SCORE THE SUSTAINABILITY COORDINATOR

INSTRUCTIONS
Scan the following checklist to see how many of these practices you have implemented in
the past five years. Where you have performed one of the practices, use the scale to
determine the number of points you can earn. We have described typical benchmarks for
the Incubator stage, the Initiative phase and the Integrated phase. You can assign a rating
between 1 and 3, or between 3 and 9, if you feel that best represents your current state. If
a practice does not apply in your situation, enter NA. If a practice applies but you can’t
qualify for the Incubator level, enter zero.
When you have completed the assessment, add up and average your scores. Then look
for opportunities to expand practices you have already started or try ones you haven’t yet
implemented.
Chapter_02.qxd 6/10/2009 4:37 PM Page 34

34 THE BUSINESS GUIDE TO SUSTAINABILITY

Sustainability Coordinator/Director of Sustainability

Practice Incubator Initiative Integrated Points

1 point 3 points 9 points

Sustainability Implement a formal Implement an Implement an SMS

Management (but perhaps environmental with sustainability
System (SMS): temporary) management system policies, criteria
Have in place a structure and that contains the and targets
process to process to identify elements prescribed embedded.
routinely set and make by ISO 14001
priorities for sustainability
sustainability improvements
improvements, (eg a steering
monitor the results committee).
and institutionalize
best practices.
(See related
practices under
Senior
Management and
Environmental
Affairs.)

Vision: Have a Develop a business Conduct a Catalyse the

clear vision for case and obtain backcasting-like organization in
how sustainability executive support process to develop a developing a long-
relates to your for pursuing clear long-term vision term vision of your
organization’s sustainability of sustainability and organization’s role
mission. (See initiatives. interim goals. Get in a fully
related practices support of leadership sustainable society.
under to communicate these Question basic
Leadership/Senior ‘audacious long-term assumptions of your
Management.) goals’. mission or business
model and engage
in long-term efforts
to transform your
organization and
sector.

Implementation Develop and Develop and Develop and

Plan: Develop a implement a plan implement a plan to implement a plan to
realistic plan for for a pilot-level spread sustainable embed
implementing initiative. thinking and actions sustainability into
sustainability in across the the fabric of the
the organization. organization. organization and
into other strategic
relationships.
Chapter_02.qxd 6/10/2009 4:37 PM Page 35

CHANGE AGENT/SUSTAINABILITY DIRECTOR 35

Sustainability Coordinator/Director of Sustainability

Practice Incubator Initiative Integrated Points

1 point 3 points 9 points

Performance Develop and track Develop a holistic set Develop metrics

Metrics: Develop metrics to show of sustainability and methods for
and track a set of return on performance metrics tracking
sustainability investment and to track the sustainability
metrics. (See other benefits of performance of the performance of
related practices sustainability organization. strategic partners
under Senior projects. (eg major
Management and suppliers) and
Finance/ major externalities
Accounting.) associated with the
operation.

Reporting: Report to Report to management Report to

Regularly report management and on progress toward management and
on the results of employees at least sustainability other stakeholders
sustainability annually about the performance metrics. on sustainability
efforts. (See benefits and costs Develop and publish performance via a
related practices of sustainability an internal publicly available
under Senior projects. sustainability report. sustainability
Management and report.
Finance/
Accounting)

Role Shift: Evolve Lead the Show all management Educate others
the role of sustainability effort. how to support the outside your
sustainability sustainability effort. organization on
coordinator over how to lead the
time so that sustainability effort
responsibility for (eg through public
sustainability is speaking, writing,
spread throughout supplier site visits).
the organization.

Total

Average
Chapter_02.qxd 6/10/2009 4:37 PM Page 36

36 THE BUSINESS GUIDE TO SUSTAINABILITY

Interpreting your score:

If your average score is Then you are

Less than 1 Lagging: You are beginning to fall behind others who are
implementing sustainable practices and should look for ways to catch
up. You may need to develop a more compelling business case for
pursuing sustainability. We recommend beginning with projects that
make good business sense from a traditional perspective.
1–3 Learning: You have made good progress but have a lot more that you
can do. Look for ways to build on your existing successes or choose
projects that are timely for other reasons.
Over 3 Leading: You are out in front, blazing the trail for others. Keep
innovating and share your lessons learned through speaking and
writing.
Chapter_03.qxd 6/10/2009 4:37 PM Page 37

Part 2

Sustainability by Industry Sector

Chapter_03.qxd 6/10/2009 4:37 PM Page 38
Chapter_03.qxd 6/10/2009 4:37 PM Page 39

3
Sustainability in Services
and General Office Practices

Service organizations often struggle to understand how they can participate in the
sustainability movement. Since they have no smokestacks coming out of their offices and
they dutifully recycle their paper, they question their impact. While it’s true that the direct
impacts of their own operations will be miniscule in comparison to manufacturing, they
need to appreciate the impacts they indirectly cause or influence through the delivery of
their services and the patterns of customer behaviour they create.

WHAT YOU SHOULD KNOW ABOUT SUSTAINABILITY

Every service organization occupies a facility, uses various forms of transportation and
consumes paper, which in and of themselves suggest improvement opportunities.
However, many service organizations also have a production component: accountants
produce reports; hotels and hospitals wash laundry; restaurants cook food; graphic artists
print posters; ski resorts make snow; non-profit organizations host fund-raisers; rental car
companies maintain their fleets; museums construct exhibits; and retail stores sell goods.
Service organizations have products too, and sustainability opportunities can be found in
all these areas.
Even if your internal practices are as sustainable as possible, it’s important to consider
three other areas:

1 the ripple effect of the service you offer;

2 strategic threats (to your customers, image or business model); and
3 emerging opportunities to make a positive contribution.

The ripple effect. Often, the biggest impact of a service organization is not what it does
itself but how it affects the behaviour and choices of its customers. When architects design
a building and specify materials, their impacts go far beyond their blueprints! Their
Chapter_03.qxd 6/10/2009 4:37 PM Page 40

40 THE BUSINESS GUIDE TO SUSTAINABILITY

decisions determine the fate of the energy use of the building, the health of forests used
for 2 × 4s, the air quality the building inhabitants will breathe and water quality in
surrounding streams. When bankers decide to fund a home or business, their impacts far
exceed the paper the loan is printed upon. Their decisions may affect the quality of life in
the community, traffic congestion, opportunities for minorities and insurance costs shared
by many. When a large superstore of a major chain locates on the edge of town and provides
acres of free parking, it affects driving patterns, air quality, greenhouse gas emissions and
the vitality of the town centre.
Strategic threats. The second area services should consider is the impact of sustainability
on matters key to their business: their customers, their images and also the foundation
factors for their businesses. The insurance industry, for example, is extremely concerned
about how climate change may affect its customers. Property insurers worry that global
warming will bring larger and more devastating storms, causing more property damage.
Life insurers are worried about the spread of diseases that used to be restricted to
equatorial zones. Swiss Re, the largest reinsurance company in the US and second largest
in the world, expects climate change to be the next hotbed of litigation, following asbestos
and tobacco. They are taking action to protect themselves and their customers before the
lawsuits begin.
In some cases, sustainability-related trends may threaten the foundation of your
business. Aspen and many other ski resorts are concerned that global warming might
eliminate snow from their mountain tops or at least dramatically shorten the season.
Sometimes the threat may be indirect. For example, many small-town barber’s shops,
garages and restaurants have been ruined when logging or fishing was curtailed in their
communities. Sustainability helps you to foresee these potential threats and plan for
them.
Service providers should also consider the impact of sustainability on their image. In
Sweden, McDonald’s was embarrassed by public demonstrations over their packaging.
They changed to compostable wrappers and containers and also took a look at other
parts of their operation. They conducted a waste audit and realized that about 35 per cent
of their refuse by weight was liquid (left-over drinks and ice) so they installed a sink next
to the rubbish bin with a sign asking customers to empty their cups before throwing
them out. They used the savings there to fund more efforts, such as buying organic dairy
products and beef. Instead of a plastic toy, their Happy Meals come with a bag of
compost and a seed, closing the loop on their organic waste stream. Leadership at
McDonald’s asked the question, ‘Where would we concentrate our sustainability efforts
if we took responsibility for changing the whole system?’ and realized that their biggest
opportunities were in agriculture, building practices, packaging and energy. McDonald’s
found that working on sustainability improved their image dramatically. Burger King
Chapter_03.qxd 6/10/2009 4:37 PM Page 41

SUSTAINABILITY IN SERVICES AND GENERAL OFFICE PRACTICES 41

tried to mimic their actions but never got the same image benefits. Being first has its
advantages.
Similarly, Home Depot, the world’s largest retailer of timber, was targeted by the
Rainforest Action Network for selling products from old-growth forests. After some
embarrassing publicity stunts, including a protester broadcasting their message over the
store’s public address system, Home Depot management finally got the message: it’s not
OK to sell wood products from old-growth forests, ecologically sensitive ‘hot spots’ or
illegal logging operations. Since then they have been quietly researching where all their
wood – from 2 × 4s to hammer handles – comes from, replacing products made from
questionable sources and giving preference to Forest Stewardship Council (FSC)-certified
wood.
Emerging opportunities. Rather than wait to be attacked, why not find ways to make
positive contributions to society and build goodwill? For example, Prison Pet Partnership
Program designed their service for maximum benefit. They get dogs from animal shelters
and give them to women prisoners who then learn how to train them to be service dogs
for disabled people, fetching items for someone in a wheelchair or warning an epileptic of
an impending seizure. Had they designed their service any other way, Prison Pet
Partnership Program would have produced fewer benefits. By design, they make valuable
use of a wasted resource (unwanted dogs), create training and meaningful work for an at-
risk population, provide assistance to an underserved population and protect the
community with lower recidivism rates of inmates in their programme.
You don’t have to be a non-profit organization to have a mission to contribute to
society. Starbucks, while sometimes vilified for their proliferation of stores, is trying to
create a reliable market for fair trade, shade-grown coffee. Through Conservation
International, they provide premium price, long-term contracts with responsible growers
who can prove they are living up to Starbucks’ sourcing guidelines. Their guidelines
include environmental requirements (eg shade-grown, bird-friendly practices), social
elements (eg fair labour practices) and economic expectations (eg transparency and fair
pay). Starbucks are doing what they can to transform the industry while only controlling
about 1 per cent of the entire coffee market:

Last year (2003), 13.5 million pounds of Starbucks coffee beans were sourced
through the Guidelines, which is way ahead of the initial forecast of 3.5 million
and has encouraged Starbucks to more than double its forecast for the coming
year. Sue Mecklenburg says the company has been surprised by its success. ‘We
were trying to do something extremely innovative and challenging, with big risks.
We were trying to change our supply chain and did not realize the impact that
we could have as a pretty small player in the coffee world.’ 1
Chapter_03.qxd 6/10/2009 4:37 PM Page 42

42 THE BUSINESS GUIDE TO SUSTAINABILITY

Sometimes, these efforts can yield new revenue streams. At least one office products retail
chain has found that their electronics take-back programme is an effective revenue
generator, especially for their commercial customers.

STRATEGIES YOU CAN USE

So what can you do? We’ve organized strategies into four broad categories:

1 Clean up your own operations.

2 Manage your ripple effect.
3 Evaluate strategic threats.
4 Explore emerging opportunities.

Clean up your own operations

Typically, the impact of your own operations will be a fraction of the impacts you have
outside your organization. For example, the amount of energy and materials used by an
architectural firm is dwarfed by the energy and materials used in the buildings they design.
However, there are two good reasons to focus first on improving your own operations:

• This is often the best way to help your employees understand what sustainability is; and
• It ensures you are ‘walking the talk’, not asking others to do things you aren’t willing
to do yourself.

There may be some actions that will save you money, but many of these actions are more
important for their symbolic and educational value than for their financial value.

Facilities
Energy efficiency is the first place to look for measures that will save costs. Unfortunately,
some businesses lease office space and so may not have separate electric meters. That means
the savings may go first to the landlord and trickle down into the rent indirectly, if at all.
If you own and operate your building, conducting an energy audit can yield significant
opportunities to save money. If you lease, try to get your landlord to improve the
sustainability of the building. See the chapter on facilities for more information.
Here are a few stories to help inspire your own ideas:

• A large US laboratory discovered that many of their computers and monitors were left
on even when not in use, often over night. According to their information technology
Chapter_03.qxd 6/10/2009 4:37 PM Page 43

SUSTAINABILITY IN SERVICES AND GENERAL OFFICE PRACTICES 43

professionals, in their situation, it was not wise to have everyone turn off their
computers, but the monitors were fair game. So they printed small reminder labels and
asked people to turn off their monitors when not in use. They estimate they saved
$150,000 per year in energy costs. Granted, they have a large facility with a lot of
computers, but this isn’t small change.
• Ashforth Pacific, a west-coast property management and construction firm in the US,
implemented a ‘cookies-for-trash-cans’ project in which employees got cookies in
exchange for agreeing to give up their individual rubbish bins and throwing all of their
refuse away in a central bin. This simple project was easy for employees to participate
in and saved the company 9000 plastic bin liners a year.2
• Progressive Investment Management focuses on socially responsible investing. When
they hired a gardener to maintain their landscaping, they of course chose one known
for organic methods. They were dismayed, in the spring, with their windows wide
open, to find the gardener using a loud leaf-blower, belching gas fumes into their
offices. They ended up agreeing to pay a little more to have the person rake instead.
• TriMet, the transit authority for Portland, Oregon, during one month of high
electricity use at its rail facility posted the electricity bill in the elevator, without
entreaties or comment. When employees saw how much they spent on energy, they
modified their behaviour. Their electricity bill dropped by 20 per cent the next month!
• Washington Park Zoo in Oregon allows their employees to bring to work items that
are difficult to recycle at home: compact fluorescent bulbs, batteries, etc. Since these
items are added to the Zoo’s considerable pile from their own operations, the quantities
are adequate to get them easily recycled.

Technology
Related to energy use is the choice of office equipment. In the US, computers, copiers,
faxes, etc. represent the third largest electrical use (after lighting and heating/cooling) in
commercial buildings. Since heating, ventilation and air conditioning (HVAC) systems are
used mostly for air conditioning, the impact of this equipment is multiplied because of the
heat they contribute to buildings.
Mark Hamilton of Triple Point Energy Services makes the following recommendations:

• When upgrading, consider efficiency specifications as part of the purchasing policy.

Does it make more sense to have a bunch of small printers or a few large multi-
function machines? When does it make sense to replace cathode ray tubes with liquid
crystal displays (which are much more efficient)? What is the life of the office
equipment and how should that be considered in terms of the environmental footprint
of the organization? Look for more energy-efficient components, in particular power
Chapter_03.qxd 6/10/2009 4:37 PM Page 44

44 THE BUSINESS GUIDE TO SUSTAINABILITY

supplies. Set defaults for duplex printing, sleep modes and automatic shut-down to
reduce resource consumption.
• Examine your practices around end of life. Do you purchase equipment from
manufacturers that take back their products, or, if you are a manufacturer, do you have
a product stewardship strategy? Do you choose suppliers that have converted their
products into services? If you donate usable equipment to non-profit organizations or
schools, are you just passing on responsibility for end-of-life issues? Are all your
components recycled or disposed of properly?

RESOURCES
‘Working 9 to 5 on Climate Change: An Office Guide’ is a helpful booklet on reducing office
climate impacts from the World Resources Institute. You can download a copy from
www.wri.org/publication/working-9-5-climate-change-office-guide.
The US Environmental Protection Agency has created environmentally preferable
guidelines for computers. Go to www.epa.gov/oppt/epp/electronics.htm.
For power supplies, see www.80plus.org and www.efficientpowersupplies.org.
Video: ‘Exporting Harm’. This 23-minute film documents the real consequences of
exporting e-waste to developing countries for ‘recycling’. Produced by the Basel Action
Network (BAN) and Silicon Valley Toxics Coalition, the video can be ordered from BAN’s
website, www.ban.org.
Williams, Eric. ‘Residential Computer Usage Patterns, Reuse and Life Cycle Energy
Consumption in Japan’ (oral presentation), 2005 ACEEE (American Council for an Energy
Efficient Economy) Summer Study on Energy Efficiency in Industry, PANEL 4 – Industrial
Energy Efficiency and Sustainability, www.aceee.org/conf/05ss/panel4.htm.

Paper products
The dream of a paperless office has yet to materialize. In fact, the proliferation of
computers and printers has only increased the rate at which we convert trees into refuse.
Copy paper. Choosing among a wall of paper reams at an office suppliers can be a
daunting task. How much recycled content is in the product? Is it pre- or post-consumer?
What’s the difference between elemental chlorine free and chlorine free? Let’s make this
easy: from an environmental perspective, generally the higher the recycled content, the
better; post-consumer is better than pre-consumer; ‘process chlorine free (PCP)’ is better
than elemental chlorine free.
Better altogether is to radically reduce the need for paper. It helps to make the usage
visible and visceral. We calculated for one of our clients, a large attorney firm, how many
Chapter_03.qxd 6/10/2009 4:37 PM Page 45

SUSTAINABILITY IN SERVICES AND GENERAL OFFICE PRACTICES 45

storeys per attorney they used in paper if you stacked the reams on top of each other, and
how many times their skyscraper the office used. The numbers were so astounding, it led
them to redouble their efforts to institute electronic document control. They figured on
saving at least $20,000 in the first year. Other attorneys who have done this have found
that the paper savings are far outweighed by productivity benefits (no more chasing around
the office for files) and retail space (all the floor space devoted to filing cabinets).
Toilet paper. You’d never imagine how uppity people can get about their toilet paper. They
assume that recycled toilet paper will chafe. So when a property management firm in
Portland, Oregon, decided to switch, they didn’t tell anyone at first. A blissful month went
by with no complaints. Then they admitted they’d switched to recycled tissue, and
suddenly people complained. The moral to this story: don’t ask; don’t tell.
Paper towels. Certainly you can choose paper towels with a high post-consumer recycled
content. You may also want to investigate the ecological trade-offs between towels and
hand dryers. Progressive Investment Management decided that it was silly to use trees or
electricity to dry your hands. So they provided cotton towels for their small office which
one employee was willing to take home once a week to add to her laundry.
Printing. When you print fliers, booklets, posters and the like, use recycled paper and soya-
based inks whenever possible. You may also want to experiment with tree-free papers. At
AXIS Performance Advisors, we sent out our 2003 holiday greetings cards on paper made
from kenaf (a lovely herbaceous annual in the mallow family) along with a poorly metered
poem that began, ‘Treeless papers may make you laugh, But this was printed on kenaf.’

RESOURCES
Conservatree provides information and sources for environmentally preferable paper,
www.conservatree.com.

Break room
One of the visible places to make sustainability real to people is in the break room. Buying
Energy Star appliances and eliminating disposable cups are two obvious actions. You can
also purchase fair trade, shade-grown and/or organic coffee. Leave a few old plastic
containers in the cabinets for people to use for their leftovers. Provide recycling or perhaps
a worm bin or compost bin for food scraps. (A worm bin produces material with more
fertilization value than a compost pile and can easily be kept inside without an odour
Chapter_03.qxd 6/10/2009 4:37 PM Page 46

46 THE BUSINESS GUIDE TO SUSTAINABILITY

problem if properly set up. Worm bins don’t need to be turned like a compost pile but do
require occasional maintenance to remove the old worm castings – which can be used for
your potted plants. You can toss in your used paper towels and old newspapers to provide
worm bedding.)

• After a six-month planning process involving a cross-section of the organization, SERA

Architects in Portland, Oregon launched their sustainability efforts by holding a
briefing for all employees to discuss their vision for creating fully sustainable buildings.
During the briefing, they presented their plan, educated staff on what sustainability
means, recruited their involvement in their various project teams and symbolically
handed each person their own set of eating utensils, bought from thrift stores,
packaged in lovely carrying cases sewn from the office’s outdated fabric samples.
• Norm Thompson, a US catalogue retailer, targeted the plastic coffee cups their vending
machines were spewing out. They approached the vendor to get a machine that would
dispense coffee into mugs instead and then issued every employee with a ceramic mug.
Eliminating the disposable cups saved Norm Thompson $10,000 a year, not counting
the savings in waste disposal.3

Take responsibility for your ripples

As we have already mentioned, a service business’s largest impact often comes not from its
own operations but from its impact on others. Some businesses may chose to ignore those
‘externalities’, but you can often differentiate yourself and build a positive image by
ensuring your impacts are positive instead of negative. Negative impacts have a way of
catching up on you eventually. The well-publicized example of Wal-Mart putting the fate
of a new store into voters’ hands in Inglewood, California and losing after spending
$1 million on the campaign is but one example. Increasingly, the public holds you
accountable not only for what you do but also for your ripple effect.

• Shorebank Pacific is a small bank based on the coast of Washington State. They were
founded to fund restoration and other environmentally sound investments. Their unique
mission has helped them attract deposits from all over the country. They employ a rating
system adapted from The Natural Step framework to rate their loans. This rating system
helps them invest in projects that will have the greatest environmental and social benefits.
• Bon Appétit runs cafeterias for a number of businesses and universities. They have
staked out a niche by providing healthy food from local organic and in-season produce.
They have adopted the Monterey Bay Aquarium’s Seafood Watch List, only buying
species that are plentiful (while over 70 per cent of the commercially harvested species
Chapter_03.qxd 6/10/2009 4:37 PM Page 47

SUSTAINABILITY IN SERVICES AND GENERAL OFFICE PRACTICES 47

are in serious decline). They boycott farmers who do not provide appropriate living
conditions for migrant workers. They take good care of their employees as well, paying
above-market wages and providing health benefits to all employees.
• The Doubletree Hotel at Portland, Oregon’s Lloyd Center offers guests the option of
offsetting their climate impacts with an arrangement through the Climate Trust. At
checkout, the guests can offset the average greenhouse gases associated with their room.
While the cost is minimal – often less than $1 – the donations can add up.
• Burgerville, a northwest fast-food chain, has committed to buying all their hamburgers
from Country Natural Beef (formerly Oregon Country Beef ), a cooperative of over 40
sustainable family ranches dedicated to raising cattle in harmony with nature, without
the use of hormones, antibiotics, genetically modified grain or any animal by-products.
This cooperative has saved a number of family farms in the area by providing a
premium product. Burgerville worked with this cooperative for several years to help
them increase their production so that this arrangement would be possible. Burgerville
also features delicious seasonal shakes and sundaes from locally sourced, seasonal
produce. They purchase green power for all of their electricity usage in their stores
between Albany and Portland, Oregon.
• Staples, the office products retailer, worked with Metafore, a non-profit organization,
to support responsible forest practices. Now most of Staples’ paper products boast
30 per cent or more recycled content. They participated in the Paper Working Group,
a collaborative effort including 11 other companies, FedEx Kinko’s, Starbucks and
Time among them, to create an assessment tool for buyers and suppliers of paper. They
also provide recycling services for electronics, ink cartridges and other office products.
• McDonald’s recently issued notices to their suppliers, specifying a humane minimum
cage size for chickens that produce their Egg McMuffins and discouraging the practice
of withholding water to increase egg production. They are also addressing the
profligate use of antibiotics, which are showing up in our rivers and creating super-
germs resistant to treatment. Approximately 70 per cent of the antibiotics produced in
the US are given to livestock, mostly to promote growth, not treat illness.4 By setting
this policy against the use of growth-promoting antibiotics, they are putting pressure
on the agricultural sector to change their practices worldwide.
• Gerding/Edlen Developers in Portland, Oregon have gained national recognition for
their green building efforts. They’ve been interviewed on Public Broadcasting,
highlighted in USA Today and touted in a host of industry journals. How did they get
all this attention? While the owners have always been interested in socially responsible
business practices, the turning point was when Dennis Wilde participated in a peer
learning group convened by the Oregon Natural Step Network. With the help of
others in the industry, they used The Natural Step’s ‘backcasting’ process to write a
White Paper describing the attributes of a fully sustainable building: creates more
Chapter_03.qxd 6/10/2009 4:37 PM Page 48

48 THE BUSINESS GUIDE TO SUSTAINABILITY

energy than it uses, keeps all rainwater on site, etc. On each of their own projects,
Gerding/Edlen raises the bar towards this ideal. Their commitment towards innovation
has paid off handsomely, not only in public recognition but also in decreased operating
costs and demand for premium-priced properties.
• While credit cards have turned into a commodity business, Barclays rose above the fray
in the UK with their Breathe Card where half of the profits will go toward carbon
reduction projects. Cardholders benefit by getting discounts on green products and are
offered environmentally friendly options for statements and payments.
• Northwest Natural, a natural gas utility, gave their customers a reason to switch to
online statements. The customers choose from a handful of worthy local charities and
the company donates the money it is saving from not having to mail invoices.
• Ashforth Pacific, a property management firm, promotes the use of alternative
transportation by its employees. It provides free bus passes, bike parking and two
parking spots for their FlexCar (a membership service that charges for car use by the
hour and mile). They even offer a half-day of personal time to employees who
commute 80 per cent or more by alternative transportation in a month.
• Norm Thompson, a US catalogue retailer, wanted to reduce the impact of shipping
products, so they started up a ‘Ship All Together’ programme. If a customer orders
several items, one or more of which is out of stock but expected to be in within a week,
the customer is asked if he or she is willing to wait for the items to be shipped all
together. This simple change is saving them over $200,000 per year and 30,000
shipping boxes or bags, along with all the other packing materials.5

Evaluate strategic threats

The insurance industry makes a business out of accurately assessing risks. So it’s no surprise
that they are the first service industry to be taking a strong stand on global climate change.
Both Munich Re (the largest reinsurance company in the world) and Swiss Re (the second
largest) have been studying this issue with growing concern.
Swiss Re created a tongue-in-cheek video of men in suits embracing trees and twirling
in fields. The punch line: ‘Now it’s really time for business and nature to fall in love.’
Insurance companies are not known for their sense of humour, so what possessed them to
make such a video? The answer is that they see storm clouds gathering over all their major
business lines. Because climate change is expected to increase the frequency and severity of
freak weather events, insurers anticipate higher damage claims. Unless they revise their rates,
this will translate into less profit. Some even fear climate change may bankrupt the industry.
Climate change is also expected to facilitate the spread of disease. Diseases that have
traditionally been limited to remote, tropical regions – malaria, ebola and dengue, for
example – will expand as the globe warms, facilitated by international travel. The West
Chapter_03.qxd 6/10/2009 4:37 PM Page 49

SUSTAINABILITY IN SERVICES AND GENERAL OFFICE PRACTICES 49

Nile virus demonstrates how quickly diseases can spread, spanning the US in about two
years. What happens to life insurance claims if people start dropping like flies from diseases
against which we have little immunity? What happens when super-bacteria, created from
our overuse of antibiotics, hit a population centre? Since 40 per cent of Swiss Re’s business
is life insurance, they need their actuarial tables to factor in these increased risks.
In addition to increased property damage and reduced life expectancy, Swiss Re is also
concerned about legal risk. They see climate change as the next great corporate litigation
theatre, following in the footsteps of asbestos and tobacco. Many of the companies they
insure are major emitters of greenhouse gases, key targets for such lawsuits. Shareholders
are restless. There has been a dramatic rise in shareholder resolutions, many of which relate
to climate change, and through proxies they are voting out directors at an unprecedented
rate. Swiss Re has already sent out the word: they may not protect directors from litigation
if the company is not doing enough to avert global warming. Since directors can be held
personally liable for environmental judgements, this gets their attention.

Explore emerging opportunities

Beyond merely protecting themselves from these threats, Swiss Re is also examining the
potential business opportunities. They want to play a role in brokering carbon credits. At
the moment, a carbon reduction project may achieve only a small return in the form of
carbon credits as there is a great deal of uncertainty about the market. Will the project
actually produce the CO2 reductions as advertised? Will the project pass muster once the
audit criteria are finally standardized? Swiss Re sees its role as buying up a large number of
projects, thus spreading the risk across them. This should improve the liquidity and price of
carbon offsets, speeding the rate at which organizations take action against climate change.
Sustainability may help you discover new markets. Economically speaking the world
can be divided up into three sectors:

1 the consumer economy (1 billion people);

2 emerging markets (2 billion people); and
3 the survival economy (3 billion people).

Traditionally, business has focused predominately on the first two, ignoring half the world!
This is even more noteworthy because much of the future population growth will be in
this part of the world.6
Do not assume that serving the survival economy is unprofitable. While these people
do not have a lot of cash to spend, products packaged to meet their needs can improve their
lives and also provide a viable business model. Michigan Business School professor
C. K. Prahalad challenged a group of business analysts to find a way to sell ice cream to
Chapter_03.qxd 6/10/2009 4:37 PM Page 50

50 THE BUSINESS GUIDE TO SUSTAINABILITY

India’s poor at a price they could afford – 1 rupee (or about 2 cents). Of course, the analysts
initially thought it couldn’t be done. They soon discovered, however, that much of the cost
of ice cream is from refrigeration. So they sidestepped electricity and used an innovative
technology and employed dry ice instead. Now, people in India are buying scoops at 2–3

RESOURCES
Hart, Stuart L. and Mark B. Milstein (1999) ‘Global Sustainability and Creative Destruction of
Industries’, MIT Sloan Management Review, Fall.
Hall, Jeremy and Harrie Vrendenburg (2003) ‘The Challenges of Innovating for Sustainable
Development’, MIT Sloan Management Review, Fall.
Young, Stephen (2003) Moral Capitalism: Reconciling Private Interest with the Public
Good. San Francisco: Berrett-Koehler.
United Nations Environmental Programme (2002) Global Environment Outlook 3: Past,
Present and Future Perspectives. UNEP and Earthscan.
Rees, Martin (2003) Our Final Hour: A Scientist’s Warning: How Terror, Error and
Environmental Disaster Threaten Humankind’s Future in this Century – on Earth and Beyond.
NY: Basic Books.
Huntington, Samuel P. (1996) The Clash of Civilizations and the Remaking of World Order.
Simon & Schuster.
Suzuki, David and Holly Dressel (2002) Good News for a Change: Hope for a Troubled
Planet. Toronto: Stoddart Publishing.
Intergovernmental Panel on Climate Change, www.ipcc.pr.

rupees and Prahalad expects the price to be down to 1 rupee soon. Similarly, Unilever has
made more profits from selling cheaper versions of detergent to India’s poor than selling the
premium product to the more affluent. Aravind Eye Hospitals manages to perform
250,000 cataract operations at a cost of US$10 each and still make a 200 per cent profit.
The trick is to use technology and innovation to find cheaper ways to provide the same
service. ‘Turning India’s poor into a viable market requires a rethinking. You need to marry
low cost, good quality, profitability and sustainability,’ advises Prahalad.7
You may also be able to use your position in industry to provide incentives for others to
get on board. Citi has partnered with Ashoka, a non-profit focusing on social entrepreneurship
to create the Changemakers Competition Award programme. They want to provide financing
for projects that promote social and economic justice. Similarly, SustainableBusiness.com
produces their list of the 20 most sustainable stocks in their SB20.8 (For their 2008 winners,
go to www.sustainablebusiness.com/index.cfm/go/news.feature/id/1579.) Programmes like
this create positive incentives for companies to get on board.
Chapter_03.qxd 6/10/2009 4:37 PM Page 51

SUSTAINABILITY IN SERVICES AND GENERAL OFFICE PRACTICES 51

Conclusion
As you can see, the responsibilities of service organizations go far beyond recycling their
paper and reducing energy use. There are a host of threats and opportunities to be
considered. But service companies must look beyond the walls of their own organization
to take advantage of these insights. They must both examine the potential threats to their
own image and to the viability of their customer base and take into account demographic
changes around the world.

SCORE SERVICES AND OFFICE PRACTICES

See page 33 for how to complete this assessment and page 36 for how to interpret your
score.

Services

Practice Incubator Initiative Integrated Points

1 point 3 points 9 points
Strategy: Develop Develop a formal Sustainability is part Actively work to
a business business case for of formal strategic affect customers,
strategy related to adopting and business suppliers and
sustainability that sustainability and planning processes; others in your
identifies your take initial steps to sustainability is seen industry to solve
opportunities and implement the as an important sustainability-
threats. insights. element of your related problems.
organization’s
competitive
advantage.

Service Delivery: Conduct a Redesign service to Change the

Embed sustainability analysis eliminate or offset all service delivery
sustainability into of your core service major external such that
the core service. and identify impacts and engage customers
sustainable targets in activities to mitigate change their
for all major impacts. common, negative behaviour to
Work on at least one side effects from the support
sustainability initiative delivery of your sustainability.
per year. product or service.
Chapter_03.qxd 6/10/2009 4:37 PM Page 52

52 THE BUSINESS GUIDE TO SUSTAINABILITY

Services

Practice Incubator Initiative Integrated Points

1 point 3 points 9 points
Office Supplies Select a couple of Have a system in 80% or more of
and Equipment: targeted purchasing place for routinely office supplies
Minimize impacts categories and assessing the impacts and equipment
associated with identify more of purchases and are come from
office supplies, sustainable options. working on finding sustainable
furnishings and better options. sources (ie from a
equipment. certified
sustainable
source, 100%
post-consumer
waste, recyclable,
product take-
back).

Energy: Improve At least every five Have a system in Achieve climate

energy efficiency years, conduct an place for monitoring neutrality for
and transition to energy audit on and communicating electricity, heating
renewables. (See office operations and energy efficiency, and cooling (eg
related practices act on the results. including behavioural via generating
under Facilities). changes. Purchase energy,
25% or more purchasing 100%
renewable power (or green power
the equivalent carbon and/or purchasing
offsets). carbon offsets).

Transportation: Encourage Offer incentives to Be climate neutral

Actively promote alternative contractors and for all
the reduction of transportation for customers to reduce organizational
climate impacts commuting through fossil fuel use. transportation and
associated with incentives and other for at least 25% of
transportation of means (eg parking commuting
people and fees, car-share). For impacts.
documents/ correspondence,
materials. (See freight and business
related practices travel, use the lowest
under Human impact carrier that
Resources.) will meet the needs
of the parties
involved.
Chapter_03.qxd 6/10/2009 4:37 PM Page 53

SUSTAINABILITY IN SERVICES AND GENERAL OFFICE PRACTICES 53

Services

Practice Incubator Initiative Integrated Points

1 point 3 points 9 points
Contract Services: Notify all major Implement a tool for Actively influence
Use contractors contractors/suppliers evaluating contractors selection of
that share a of your commitment on their sustainability contractors not
commitment to to sustainability. practices. Write hired directly (eg
sustainability (eg sustainability criteria work with building
banks, janitorial, and requirements into owner or create
landscaping, contract language for collaborative
courier, catering, all contractors. purchasing
etc.). (See related programmes with
practices under building tenants).
Purchasing.)

Food Services: Use non-disposable Label and promote Only provide

Ensure access to tableware and the sale of healthy locally sourced, in
healthy, energy-saving foods (organic season,
sustainable food devices. produce, low-fat, sustainable food
and minimize etc.). Use green or items. All food
waste (cafeterias, sustainable cleaning waste is
vending machines, products. composted.
etc.)

Remodels: Employ Achieve LEED Achieve LEED silver Achieve LEED

green building certified or or equivalent. platinum or
principles when equivalent. equivalent.
choosing a new
site or remodelling
an existing one.
(See related
practices under
Facilities.)

Total

Average
Chapter_03.qxd 6/10/2009 4:37 PM Page 54
Chapter_04.qxd 6/10/2009 4:37 PM Page 55

4
Sustainability in Manufacturing
and Product Design

Several decades ago, the quality revolution hit the manufacturing sector before the others,
crippling the US auto sector, whose leaders didn’t see it coming, and creating an economic
boom in Asia. Similarly, the sustainability movement is affecting the manufacturing sector
first. The reasons are straightforward. Manufacturing often deals with hazardous
chemicals, uses a lot of energy, depletes natural resources, generates tons of waste and
employs factories around the globe. Usually, those most in the cross-sights, and thus
prompted to be more active in the sustainability movement, are multinational corporations
selling branded products to the general public (eg Nike, Toyota) or industries formerly
reviled by environmentalists, whether associated with energy and fossil fuels (BP, Royal
Dutch Shell), natural resources (Louisiana Pacific, the Collins Companies) or the chemical
industry (Monsanto, DuPont). Just as with the quality revolution, those who got on board
first have tended to benefit the most and those who wait risk losing market share.

WHAT YOU SHOULD KNOW ABOUT SUSTAINABILITY

Some of the hottest growth industries in the manufacturing sector are part of clean-tech, a
term that didn’t exist until recently. This industry crosses over multiple sectors, including
renewable energy, cleaner transportation, water conservation and materials engineering.
They share a focus on making money from innovations that reduce pollution and conserve
natural resources. According to Ron Pernick, author of The Clean Tech Revolution, clean-
tech is now one of the largest areas for venture capital investment in the US. Clean-tech is
simply sustainability as seen through the lens of manufacturing.
Manufacturing companies are implementing sustainability for a variety of reasons.
Here are a few of the benefits they have realized:
Uncovering innovations that provide competitive advantage. When you examine your
product through the lens of sustainability, you unleash creative thinking that often results
in startling innovations. C&A Floorcoverings, for example, was getting uncomfortable
Chapter_04.qxd 6/10/2009 4:37 PM Page 56

56 THE BUSINESS GUIDE TO SUSTAINABILITY

questions from their customers about end-of-life issues associated with carpeting, since
construction waste is a significant percentage of what goes into landfills and carpeting may
last 20,000 years there. When they set a goal of creating new carpet from old carpet, they
had to challenge a number of long-standing assumptions in the industry. One such
assumption was that to recycle commercial carpet, you needed to separate the vinyl
backing from the nylon nap. When one of their operators decided to melt down and
extrude the whole carpet, combining both materials, they discovered the resulting carpet
performed better and, after some tinkering, actually cost less to manufacture. Now they are
eager to take back used carpeting instead of having it go to the landfill.
Saving energy. Even if your organization implemented energy conservation measures half
a dozen years ago, you should do it again. Technologies are changing so fast that you are
undoubtedly leaving money on the shop floor. For example, BP set a goal of meeting the
Kyoto Protocol in ten years and achieved that in only two years at no net expense. The
energy savings they discovered are going straight to their bottom line, giving them an edge
over their competitors. If an energy company had this many opportunities to conserve, you
have to wonder about the rest of us!
Improving product reliability. Philips Microelectronics designs a ‘flagship’ green product
in every product category. While trying to decide how to eliminate fire retardants (which
are accumulating in human body tissue) in TV housings, they discovered a simple way to
eliminate the hot spots in the unit. Since heat is the major cause of electronic failure, they
simultaneously improved the life span of their products.
Reducing hazardous materials. The use of toxic materials costs you more than you
probably realize. Unless you have an activity-based cost accounting model, you may have
never added up all the costs associated with training, spill response, special equipment,
permits, disposal fees, community outreach, health-related expenses and insurance costs.
Eliminating a toxic material can save you money in many budget line items.
Eliminating waste. A number of organizations have achieved the goal of zero waste to
landfill, so don’t need dumpsters (or skips, to use the British term). Even more have at least
reduced their waste by 90 per cent. While all processes have some residual by-products,
that doesn’t mean the resulting material is necessarily waste. An Epson plant in Hillsboro,
Oregon diverted all of their waste from landfill and saved about $300,000 in the first year.
As a manager of an electronics manufacturer once said, ‘If you haven’t found someone to
take all your waste, you’re not trying hard enough.’ In some cases, the recipients will pay
for the material as well as removing it, turning a waste stream into a revenue stream.
Manufacturers also pursue sustainability to manage their risks. Here are some
examples of situations that could have been avoided had the manufacturer been more
aware of sustainability and its implications:
Chapter_04.qxd 6/10/2009 4:37 PM Page 57

SUSTAINABILITY IN MANUFACTURING AND PRODUCT DESIGN 57

Losing customers. Customers are increasingly aware of and concerned about what’s in the
products they buy, and nowhere is this stronger than when their children are concerned.
The repeated Mattel recalls in 2007 sent parents running from anything made in China.
Media coverage of concerns about bisphenol-A had the BornFree baby bottle – priced at
about three times a typical feeding bottle – flying off the shelves.1
Bad press. Nike was raked over the coals by the media for their international labour
practices. Nike doesn’t manufacture anything themselves – they use suppliers, mostly in
Asia, to manufacture shoes and clothing. They had assumed that they were not responsible
for the practices of their suppliers. The public jury was not influenced by the Nike defence.
After stories about worker abuses hit the papers, Nike’s image took a dive. This experience
drove them to wonder what other issues might catch them off guard. Sarah Severn, director
of corporate responsibility, decided that the environmental arm of sustainability could be
their next public relations debacle unless they did more.
Shut out of large markets. Sony experienced an expensive embarrassment in 2001 when,
just in time for the holiday season, The Netherlands banned Sony Playstations because
their cables contained too much cadmium, causing a media uproar and earning Sony a
hefty fine. But their biggest problem was one of corporate image: do you want to buy your
child a toxic toy for Christmas? The European Union in particular is passing more and
more legislation about toxics in products. (See, for example, the Restriction of Hazardous
Substances (RoHS) Directive and the Registration, Evaluation and Authorisation of
Chemicals (REACH) Directive, which switches the burden of proof regarding the safety of
a chemical on to the manufacturer.)
Harassment by an NGO. In 1995 Royal Dutch Shell became the focus of international
controversy for their plan to scuttle the Brent Spar platform, an oil storage platform in the
North Sea. Even though the plan had been carefully developed by scientists to minimize
environmental impacts and all the appropriate ministries had approved the plan,
Greenpeace staged a made-for-TV protest. The intensity of the public reaction stunned
Shell executives. In Germany, the sales at some Shell petrol stations dropped by 50 per
cent. Phil Watts, Shell Group’s regional coordinator in Europe at the time, called this ‘a
life-changing experience in business terms’. Even though Greenpeace later acknowledged
that their statements about the toxicity of the platform were inaccurate, his ‘awareness level
on the broader, softer issues went up by a factor of 10 to 100’. The experience left a lasting
impression on Shell employees. ‘[It was] like being in a plane crash,’ said Watts.2
Pressured by customers. It’s not just the large multinationals that are being affected – the
shock waves cascade down the supply chain. Royal Philips Electronics recently extended
their own sustainability principles to their 50,000 suppliers. This goes far beyond just
expecting them to have an environmental management system, something many
manufacturers already expect of their vendors. Their criteria include minimum
Chapter_04.qxd 6/10/2009 4:37 PM Page 58

58 THE BUSINESS GUIDE TO SUSTAINABILITY

expectations on the environment, health and safety, and labour issues. ‘Adhering to these
minimum requirements will be an important factor in the company’s decisions to enter
into or remain in business relationships. In 2004, a self-assessment tool and audit
methodology will be introduced to Philips’ suppliers.’3
Proliferation of regulations. E-waste is a current battleground. Certain countries and US
states are banning electronics, especially monitors and batteries, from landfills because of
the high levels of hazardous materials, in particular heavy metals, which could leach into
groundwater. Several US states are already considering imposing ‘take-back’ legislation
similar to regulations in place in Europe to force manufacturers to take responsibility for
their products at the end of their useful life. But in the US, manufacturers have not been
able to reach a consensus on a product stewardship strategy. Until they do, or until the
government imposes a solution, recycling seems like a logical response. In the interim,
most of the equipment is sent to China, where environmental protection is nil. There,
they burn off the plastic, generating dioxin, and let toxic sludge flow into their rivers. All
this was documented in a damning video, ‘Exporting Harm: The High-Tech Trashing of
Asia’.
Losing insurance coverage. Similarly, the issue of greenhouse gases and global climate
change is generating attention. Even before the Kyoto Protocol was ratified, insurance
companies and regulators were worrying about the risks. Swiss Re, the largest property and
life insurance reinsurer in the US (and second largest worldwide) considers climate change
the next big litigation risk, following asbestos and tobacco. They worry not only about
property damage from weather events but also possible disease outbreaks associated with
climate change. To manage their own risks, they are targeting the energy industry and large
emitters of greenhouse gases:

Company executives could find themselves losing protection against climate

change-related liability claims brought by shareholders. Swiss Re has announced
it will withdraw coverage against such claims for senior executives of companies
that fail to adopt adequate climate change policies.4

Being sued. When the wells ran dry in Kerala, India, citizens were quick to blame Coca-
Cola’s recently opened bottling plant for misuse of water resources. While lower courts
have sided with the company, the case is still working its way through the appeals process.
The incident led Coca-Cola to do some soul-searching. ‘We realize that the world’s
operating environment is much smaller than it used to be. With today’s communication
technology, everything you do is known all over the world very quickly,’ says Perry
Cutshall, director of operations, global public affairs.5
Chapter_04.qxd 6/10/2009 4:37 PM Page 59

SUSTAINABILITY IN MANUFACTURING AND PRODUCT DESIGN 59

RESOURCES
Pernick, Ron and Clint Wilder (2007) The Clean Tech Revolution: The Next Big Growth and
Investment Opportunity. New York: Harper-Collins.

STRATEGIES YOU CAN USE

As you can see, there are a host of sustainability-related issues affecting the manufacturing
sector. To counteract these threats and take advantage of the opportunities, industry is
pursuing a number of practices that we have loosely organized into two categories: product
design and operations.

Product design
Most of the impacts of a product are determined in its design. A Ford Explorer will never
get the same mileage as a hybrid Toyota Prius, no matter how carefully the owner drives or
maintains the vehicle. So it comes as no surprise that most of the strategies for producing
sustainable products are related to design.

Design for environment

Design for environment (DfE) is a set of practices that strives to reduce the environmental
impacts of a product in its production as well as in its end use. It includes, at the front end,
choosing materials with the lowest impact to achieve a certain outcome. This may include
considering such factors as recycled content, recyclability, embodied energy (how much
energy it took to create the material), more abundant materials (especially metals), toxicity
and harvesting practices (as in the case of natural resources that have been certified as
sustainable). Some designers try to ‘demassify’ a product, ie to get the same results using
less material in order to reduce both the pressure on natural resources and costs associated
with shipping. They consider ways to eliminate the use of persistent or toxic chemicals
such as fire retardants, wood preservatives and industrial solvents.
Sustainable designers are not daunted by what at first appears to be a price premium
for greener alternatives. For example, Nike, which recently released its Air Jordan XX3,
their first premium product designed according to their sustainable standards, discovered
that while water-based cleaning solvents cost more per gallon to buy, they didn’t evaporate
as quickly as petroleum-based ones. The water-based ones ended up costing less when
Chapter_04.qxd 6/10/2009 4:37 PM Page 60

60 THE BUSINESS GUIDE TO SUSTAINABILITY

functionality was considered. The Air Jordan XX3 is made with only water-based cements
and they even reduced the needs for glues by stitching more of the components.
Unfortunately these innovations did drive up costs by 25 per cent but perhaps in part due
to their commitment, Nike has stolen market share during a soft economy.6
But don’t get the impressions that design for environment increases costs. Hewlett-
Packard eliminated an adhesive that was preventing recycling of inkjet cartridges and saved
the company $2.4 million over two years, reducing production costs by 17 cents per
cartridge.
DfE also considers the efficiency and eco-effectiveness of the manufacturing process. How
much energy is required? How can we use waste heat? Can water be reused? Are the most benign
chemicals being used? How much of the raw material actually ends up in the end-product?
And last, DfE considers waste not only in the manufacturing process but also to some
extent in what happens at the end of the product’s useful life. For example, Steelcase’s Think
Chair is reportedly 99 per cent recyclable and can be disassembled in only five minutes.
Designers should ask these questions: can production by-products (formerly known as
waste) be sold as an input to some other manufacturing process? Are all the plastic parts
labelled and is each part made from only one type of plastic so that it can be recycled? Can
the products be easily disassembled? Often, designing for disassembly speeds the
manufacturing process because it makes the product easier to make as well as take apart.
Philips, the Dutch electronics giant, which manufactures TVs, CDs, DVDs and a host
of other alphabet-soup electronics, has pioneered DfE practices. They choose a ‘green
flagship’ product in each product category and seek to maximize the environmental
features of the product. This practice usually not only produces a product that can be
marketed on its environmental benefits but almost always uncovers insights and
innovations that can be applied across the product line.
For example, as we mentioned before, Philips wanted to find a way to eliminate the
fire retardants in their TV housings, since these chemicals have been found to be endocrine
disruptors, mimicking hormones. The fire retardants are there to prevent the TV set from
combusting. Philips designers asked themselves why TV sets caught fire at such relatively
low temperatures. They discovered that their units had ‘hot spots’. Just as the logs in your
fireplace flare when you push them together and the flames die down when you separate
them, Philips rearranged the components in their TVs to reduce the hot spots. Since heat
is a primary cause of failure of electronic components, this strategy also improved the
quality and longevity of their products.
Aveda, a manufacturer of natural personal care products, provides designers with a list
of guiding questions. Notice the bookend questions:

• Do we need it? Can we do without it?

• Can we borrow, rent or get it gently used?
Chapter_04.qxd 6/10/2009 4:37 PM Page 61

SUSTAINABILITY IN MANUFACTURING AND PRODUCT DESIGN 61

• Is the project designed to minimize waste? Can it be smaller, lighter, or made from
fewer materials?
• Is it designed to be durable or multi-functional?
• Is it available in a less toxic form? Can it be made with less toxic materials?
• Does it use renewable resources?
• Is reuse practical and encouraged?
• Is the product and/or packaging refillable, recyclable or repairable?
• Is it made with post-consumer recycled or reclaimed materials? How much?
• Is it available from a socially and environmentally responsible company?
• Is it made locally?
• Do we need it? Can we live without it?7

RESOURCES
Kurk, Fran and Curt McNamara (2006) Better by Design: An Innovation Guide. Minnesota
Pollution Control Agency.
Lewis, Helen and John Gertsakis (2001) Design + Environment. Sheffield: Greenleaf
Publishing.
US EPA website, www.epa.gov/dfe.
Design for Environment Guide published by the Minnesota Office of Environmental
Assistance, www.moea.state.mn.us.
The Ecodesign Section of the Industrial Designers Society of America has produced
Okala, a tool for assessing the impacts of various materials. Visit the ISDA website for a White
Paper on the curriculum, www.idsa.org/webmodules/articles/anmviewer.asp?a=516.
White, Philip (ed.) Business Ecodesign Tools: Ecodesign Methods for Industrial Designers.
Industrial Designers Society of America Environmental Responsibility Section, www.idsa.org/
whatsnew/sections/ecosection/pdfs/IDSA_Business_Ecodesign_Tools.
Hannover Principles, www.virginia.edu/~arch/pub/hannover_list.html.
Fuad-Luke, Alastair (2002) EcoDesign: The Sourcebook. San Francisco, CA: Chronicle.

This list provides a way to choose between options. Often, trade-offs must be made
between one criterion and another. However, a list like this does prompt designers to look
beyond their existing set of suppliers for more responsibly produced materials.

Life cycle assessment

Life cycle assessment (LCA) is a process of examining the impacts of a product over its
entire lifetime: where do the raw materials come from? How are they transported? How
Chapter_04.qxd 6/10/2009 4:37 PM Page 62

62 THE BUSINESS GUIDE TO SUSTAINABILITY

is the product manufactured? How is the product transported and sold to a customer?
How does the customer use the product? What happens at the end of its useful life?
LCA quantifies the environmental impacts at each step in this life cycle. You can use
LCA to design products so that they have the least negative environmental and social
impacts.
Doing a full-blown LCA can be a daunting and complicated process, fraught with
embedded assumptions, and unfortunately the results are often not easily transferable from
place to place because the energy, transportation and use profile may differ greatly from
country to country. If you hope to make public claims that your product is
environmentally better than a competitor’s, such a thorough analysis may be necessary.
However, a more cursory analysis can still yield useful insights.
Electrolux, after solving a customer challenge discussed on page 258, began to wonder
what they should do to improve the environmental performance of their other products.
When they examined their washing machines, they asked, where is the biggest impact of
this product? Is it in the manufacture, use or disposal? Based on their analysis, they
discovered that most of the impact was in the use of the product, the many years of laundry
loads, using 40 gallons or so of water, and often energy-intensive hot water, a time.
So they developed new, now common, front-load washers that use a fraction of the
water needed by traditional machines. This new design also reduced energy use and
lengthened the lifetime of the clothes being laundered. The innovation gave them early
access to the burgeoning Chinese market. And over the past several years, their
environmentally preferable products have been making up a larger and larger percentage of
sales, and with higher profit margins than their traditional lines.
The practice of life cycle assessment and life cycle inventories is evolving rapidly and
many new tools are being developed to reduce the time and costs associated with doing
them. The following are some of the resources and tools you should investigate.

Life cycle costing

Related to LCA is life cycle costing (LCC), examining the costs (as opposed to the
environmental impacts) over the life cycle of a product: from research and development
and manufacturing to maintenance and disposal. Similar to activity-based costing, LCC
helps you get a clearer picture of the true costs of several product options. Through LCC,
it becomes clear that the cheapest first cost is often not the cheapest in the long term.
LCC allows you to take into account such factors as the longevity of the product,
associated safety precautions and disposal costs.
For example, vinyl flooring is usually one of the cheapest first-cost flooring options.
However, many other flooring options last longer, avoiding the cost of buying more
Chapter_04.qxd 6/10/2009 4:37 PM Page 63

SUSTAINABILITY IN MANUFACTURING AND PRODUCT DESIGN 63

RESOURCES
Graedel, Thomas E. (1998) Streamlined Life-Cycle Assessment. Englewood Cliffs, NJ: Prentice Hall.
Schenck, Rita (2000) LCA for Mere Mortals. Vashon, WA: Institute for Environmental
Research and Education, www.iere.org/mortals.html.
‘Life Cycle Assessment, Integrated Environmental Management, Information Series 9’
(2004). Pretoria: Department of Environmental Affairs and Tourism (DEAT), www.environment
.gov.za/Documents/Publications/2005Jan7/Book4.pdf.
American Center for LCA, www.aclca.org.
UNEP and the Society for Environmental Toxicology and Chemistry (SETAC) are
collaborating in the Life Cycle Initiative (LCI) – a standardized approach to global ‘best
practice’ for LCA. LCI aims to build on the ISO 14040 standards, the objective being to develop
and disseminate practical tools for evaluating the opportunities, risks and trade-offs associated
with products and services over their entire life cycle.
The Ecodesign Section of the Industrial Designers Society of America has produced
Okala, a tool for assessing the impacts of various materials. Visit the ISDA website for a White
Paper on the curriculum: http://new.idsa.org/webmodules/articles/anmviewer.asp?a=516.

Software tools
See EPA’s website for a summary of life cycle assessment databases, www.epa.gov/ORD/
NRMRL/lcaccess/. The following are some of the better known software programs:

• Building for Environmental and Economic Sustainability (BEES) is a software tool to help
you select environmentally preferable building products, www.bfrl.nist.gov/oae/software/
bees.html.
• Eco-indicator 99 is a method of evaluating the impacts (human health, ecosystem and
resources) of various materials and processes. It was developed by PRé Consultants for
the Dutch government. A Complete Eco-indicator 99 Manual for Designers is available at
http://www.pre.nl/download/EI99_Manual.pdf.
• GaBi software for LCA, www.gabi-software.com.
• SimaPro www.pre.nl/simapro/default.htm.

flooring and the associated installation. Over the lifetime of the floor, in other words, vinyl
is often not the best choice.
LCC can help you determine the best overall return between options in capital
projects. For example, most of the cost of a building is in its operation, not its
construction, so LCC can help you determine which environmental features make
financial sense over the long term, even if they add up-front costs. LCC can also help you
Chapter_04.qxd 6/10/2009 4:37 PM Page 64

64 THE BUSINESS GUIDE TO SUSTAINABILITY

work out which of your product lines is really most profitable. Once you factor in training,
safety equipment, hazardous waste permits and disposal costs, a product you thought was
profitable might turn out not to be.
LCA and LCC can be combined to help you sell your products: you can emphasize the
life cycle benefits of your products over those of competitors which may initially cost less
(see the Finance and Accounting chapter for more information).

Product life cycle management and product life cycle tools

Related to life cycle assessment is an emerging field of product life cycle management
software tools. ‘Product Lifecycle Management (PLM) is more to do with managing
descriptions and properties of a product through its development and useful life, mainly
from a business/engineering point of view; whereas Product life cycle management
(PLCM) is to do with the life of a product in the market with respect to
business/commercial costs and sales measures.’8 These tend to be industry-specific. For
example, Gerber Technology and Infor recently introduced the latest versions of their
product life cycle management system for the apparel/textile industry, Conformia is
working on the life sciences and alcoholic beverages industries, Siemens offers a product
for the process industry, and Enovia’s Life Sciences Accelerator for Engineering Design
addresses the medical devices industry.9

Grey lists, black lists and supply chain management

A number of countries and customers are publishing grey lists (of chemicals that they want
phased out) and black lists (of chemicals they will not permit in their products). This is
where Sony ran into conflict with the European Union by having too much cadmium in
certain components of its Playstation. Of course, to know what is in your product, you
must also know what is in the components, dyes and other inputs that you purchase from
suppliers. And if you make a product such as PVC plastic that is commonly being listed,
you have a major business threat.
What gets a chemical on to one of these lists? Usually it possesses, or its manufacture
creates as a by-product with, one or more of the following attributes:

• carcinogen – causes cancer;

• teratogen – causes birth defects;
• endocrine disruptor – mimics hormones (often also a teratogen);
• mutagen – causes mutations of genetic code, thus passing on the problem to future
generations;
• persistent bioaccumulative toxin (PBT) – a chemical that is not easily broken down by
biological processes which accumulates in body tissue.
Chapter_04.qxd 6/10/2009 4:37 PM Page 65

SUSTAINABILITY IN MANUFACTURING AND PRODUCT DESIGN 65

William McDonough and Michael Braungart worked with a Swiss textile mill, Rohner, to
produce upholstery for DesignTex furniture products. They collaborated to create a high-
fashion fabric that was created and dyed with a limited array of chemicals. Rohner had
been informed by Swiss authorities that the trimmings from the factory were now classified
as hazardous waste and that the closest waste disposal site was in Spain. McDonough and
Braungart examined the roughly 1600 dyes in use, eliminating those that caused cancer or
other health problems, and identified 16 that were safe. From these 16 chemicals, they
could make virtually any colour at a competitive price. They designed a new fabric made

RESOURCES
Forging New Links: Enhancing Supply Chain Value through Environmental Excellence,
published by the Global Environmental Management Initiative, www.gemi.org.
McDonough, William and Michael Braungart (2002) Cradle to Cradle: Remaking the Way
We Make Things. NY: North Point Press.
Dolphin Software has developed a helpful system for comparing the costs and toxicity of
different chemicals that perform a similar function (eg solvents and adhesives). Go to
www.dolphinsafesource.com for more information.

from benign inputs that performed better than the traditional fabrics, was biodegradable
and won them design awards. The waste trimmings can now be converted into mulch and
weed fabric, a new product line. When the inspectors came to check their factory, they
thought their equipment was broken – the water leaving the factory was as clean or cleaner
than the water coming in! The process of making fabric was actually filtering the water. As
William McDonough says, ‘Here, the filters of the future will be in our heads, not on the
ends of pipes. They will be intelligence filters.’10

Green chemistry
Closely related to grey lists and black lists is the emerging field of green chemistry.
Whenever you produce something, you create not only a product but also unintended by-
products. Until recently, chemists never concerned themselves with how toxic these by-
products were. This led to odd ironies such as pharmaceutical companies making
carcinogens and other toxic by-products in the process of producing medicines, potentially
making us sick while they make us well.
Environmental risk has long been seen to be a function of the hazard as well as exposure:
Risk = Hazard × Exposure
Chapter_04.qxd 6/10/2009 4:37 PM Page 66

66 THE BUSINESS GUIDE TO SUSTAINABILITY

To manage the risk, most effort to date has been put into reducing or eliminating exposure:
protective clothing, scrubbers, filters, warning labels, training, etc. Green chemistry, on the
other hand, addresses the hazard portion of the equation. Even with our best efforts,
accidents happen. According to the Toxics Release Inventory (which only covers about 650
chemicals out of the 80,000–100,000 we produce and only larger emitters operating in
the US), we released 6.16 billion pounds of these chemicals in 2001, 45 per cent of this
contributed by the mining industry.11
The costs of managing environmental and health risks through regulations and
compliance are enormous. In 1996 DuPont’s environmental compliance budget equalled
that for research and development! Together these two items represented 41 per cent of
chemical sales revenues. But managers are often blind to these costs because they are
usually buried in different accounting line items – training, permitting, protective gear,
insurance, health costs, paperwork, fines, legal fees, etc. – instead of being linked directly
to specific products or production lines.
The old response – the solution to pollution is dilution – doesn’t work when the
chemicals are persistent and bioaccumulative. Studies around the world confirm that people
of all nations are carrying a ‘body burden’ of hundreds of synthetic chemicals – wood
preservatives, industrial solvents, pesticides, fire retardants – and that these are being passed
on to our children via, among other things, breast milk. So we are warned against eating
certain types of fish because of the high levels of mercury. Where is the mercury coming
from? Mostly from coal-burning power plants. Entropy happens. Everything spreads.
Green chemists recognize that the best way to control these emissions is to not make
them in the first place. And often changing the production process yields other benefits.
For example the BHC Company (Boots, Hoechst-Celanese) in Bishop, Texas, applied
green chemistry principles to the manufacture of ibuprofen, a common painkiller. The old
‘stoichiometric’ process took six steps and roughly 60 per cent of what was created was by-
product, not ibuprofen. They switched to a process using a catalyst that can be recovered
and reused after the chemical reactions. This green chemistry process took only three steps
(versus six) and 99 per cent of what is created is either product (80 per cent, twice as much
as before), recovered catalyst (which can be used again to make more ibuprofen) or a by-
product, acetic acid, which is the dominant ingredient in vinegar.12
More recently Pfizer has been quoted as saying that green chemistry has saved the
company ‘tens of millions of dollars’ on two of its top-selling drugs. They reduced organic
solvents like acetone. In the case of Viagra, they reduced it from 1300 litres per kilogram
of drug produced to only 6.3 litres.13

Converting products to services

One of the reasons our manufacturing processes are so problematic is that the incentives
are wrong. If you view yourself as a product company, then the way to make more money
Chapter_04.qxd 6/10/2009 4:37 PM Page 67

SUSTAINABILITY IN MANUFACTURING AND PRODUCT DESIGN 67

RESOURCES
For an excellent overview about the pressures to eliminate toxic chemicals in manufacturing,
agriculture and other sectors, read Schapiro, Mark (2007) Exposed: The Toxic Chemistry of
Everyday Products. Who’s at Risk and What’s at Stake for American Power. White River, VT:
Chelsea Green.
Other resources for technical information about chemicals:

• American Chemical Society Education – Green Chemistry, www.acs.org/education/

greenchem.
• EPA Green Chemistry Homepage, www.epa.gov/greenchemistry.
• The Green Chemistry Institute, http://chemistry.org/portal/Chemistry?PID=acsdisplay.html
&DOC=greenchemistryinstitute\index.html.
• Green Chemistry Network, www.chemsoc.org/networks/gcn/.
• Royal Society of Chemistry Green Chemistry Homepage, www.rsc.org/is/journals/current/
green/greenpub.htm.
• Green Chemistry at the University of Oregon, www.uoregon.edu/~hutchlab/greenchem.
• More Green Chemistry Links, http://zerowaste.org/resources/07b_gc_resources.htm.
• National Health Information Center, Harmful Chemicals in Everyday Products – What to
Look Out For, www.natural-health-information-centre.com/harmful-chemicals.html.

RESOURCES
The University of Oregon specializes in green chemistry, www.uoregon.edu/~hutchlab/
greenchem/.
Green Chemistry Institute, www.lanl.gov/greenchemistry.
US EPA website, www.epa.gov/opptintr/greenchemistry/.
The Toxics Network has information on various chemicals, www.oztoxics.org.

is to sell more products, regardless of how hazardous such products may be. Functional
obsolescence is the key to profitability. The sooner the customer throws it away and needs
a new one, the better.
However, some progressive companies are seeing a better business model, both for
themselves and for the environment. The answer is sometimes to convert a product into a
service. Usually the customer doesn’t really want to own the product; instead they want the
service it provides. I don’t want a drill bit; I want holes.
Chapter_04.qxd 6/10/2009 4:37 PM Page 68

68 THE BUSINESS GUIDE TO SUSTAINABILITY

In a business-to-business situation, a number of organizations are using service

contracts where they align their own interests with those of their supplier. This is most
commonly used in resource management and haulage contracts or in purchases of toxic
chemicals (paints, cleaning products, etc.). DuPont, for example, has changed its
relationships with auto companies. They used to sell car paint, and thus were rewarded the
more they sold. Now they are selling the service of painting cars. The car maker specifies
the level of quality and the price they are willing to pay; DuPont operates a paint shop on
the car maker’s own factory floor. The car maker never has to take possession of the paint,
which means they don’t bear the responsibility for storing, handling, clean-up or disposal.
And DuPont is now rewarded for conserving the amount of paint used, as long as quality
levels are maintained.
In a business-to-customer situation, Interface, one of the largest makers of commercial
carpet tiles, offers the Evergreen Lease programme. Customers don’t buy carpet but lease
it. Interface monitors the carpet, removing tiles as they show wear. The customer benefits
by saving the initial capital investment, converting it instead to an expense item. Interface
benefits because they level out their revenues across the boom-and-bust construction
cycles. They turn the old carpet into new carpet, saving on raw material costs, and they
maintain a long-term relationship with their customer.

RESOURCES
Rothenberg, Sandra (2007) ‘Sustainability Through Servicizing’, MIT Sloan Management
Review, Winter, Vol 48, No 2, pp83–89.
‘Servicizing: The Quiet Transition to Extended Product Responsibility’ by Mark Stoughton,
www.epa.gov/nrmrl/std/mtb/pdf/stoughton.pdf.
Anderson, Ray C. (1999) Mid-Course Correction: Toward a Sustainable Enterprise. White
River, VT: Chelsea Green Publishers.

Biomimicry
If you compare humans’ approach to making things to that of nature, nature is far more
elegant and efficient. Engineers have long talked in terms of three processes: heat, beat and
treat. In comparison to nature, our approach to manufacturing typically consumes huge
amounts of energy and results in piles of toxic waste.
Nature cannot be so profligate. It can’t harness ‘ancient sunlight’, as fossil fuels are
sometimes called, and nature is careful not to foul its own nest.
Biomimicry, using nature as an inspiration for design, can yield surprising insights.
Most of what we want to do nature also does, only better: compute, colour, cleanse, build,
Chapter_04.qxd 6/10/2009 4:37 PM Page 69

SUSTAINABILITY IN MANUFACTURING AND PRODUCT DESIGN 69

fortify, and so on. Spiders’ webs are stronger than Kevlar, and more flexible. Mussels create
a glue that works under water and then biodegrades. Geckos can adhere to glass. Slugs
create their own highway over rough terrain. Janine Benyus, the biologist who coined the
term ‘biomimicry’, does not envision industrial slug farms or spider factories. Instead, she
and other ‘biomimics’ learn from nature’s ingenuity to inspire their own designs.
Much of this research is years away from saleable products, but some products are
already in use. Better by Design includes a number of inspiring examples of biomimicry:
Speedo swimsuits mimicking sharkskin to reduce drag, a dehydrated vaccine for use in
developing countries imitating lichen, and dirt-resistant paint using the same process as the
lotus to clean its leaves.
Benyus provides the following advice: invite a biologist to your design meetings and ask
him or her to consider what in nature has the same problem and how does that organism solve
the problem? We should ask: how does nature do this? How would nature want us to do this?

RESOURCES
Benyus, Janine M. (1997) Biomimicry: Innovation Inspired by Nature. NY: Wm Morrow.

Operations
While much of a product’s impact is decided during design, everyday operational decisions
also have an impact. Here are some of the most common strategies to improve your
sustainability performance.

Energy and greenhouse gases

A few years ago, we were asked by the Oregon Department of Energy and the Portland
Office of Sustainable Development to do research on resource efficiency strategies for
certain manufacturing sectors. We interviewed many local plant managers and engineers.
We were shocked to find that many did not understand the connection between energy use
and greenhouse gases. When asked about carbon dioxide (CO2) emissions and greenhouse
gases, the interviewees often said they had none. It was as if they expected to find a tank
out back with CO2 written on the side. So let’s get this straight, if you don’t already
understand: if you use energy made from oil, natural gas or coal, you emit greenhouse
gases, indirectly perhaps, but it still counts.
Your process may also directly create CO2 (as in the manufacture of cement), or
you may emit methane, which is 21 times more powerful as a greenhouse gas per molecule,
Chapter_04.qxd 6/10/2009 4:37 PM Page 70

70 THE BUSINESS GUIDE TO SUSTAINABILITY

through anaerobic processes (cows, rice paddies, landfills and forest practices that increase
the population of termites). Then there are designer, man-made greenhouse gases such as
perfluorocarbons, mostly from aluminium smelting, and sulphur hexafluoride (SF6), used
in utility switchgear and substations and, for a while, Nike Air Jordans.
The Kyoto Protocol lists six greenhouse gases and the Intergovernmental Panel
on Climate Change has assigned each a factor to make their molecules equivalent to
CO2:

• carbon dioxide (CO2);

• methane (CH4; 21 times CO2);
• nitrous oxide (N2O; 310 times CO2);
• hydrofluorocarbons (HFCs; 1300 times CO2);
• perfluorocarbons (PFCs; 6500 times CO2); and
• sulphur hexafluoride (SF6; 23,900 times CO2).

For most, however, your biggest climate contribution is likely to be energy: transportation,
space heating and cooling, and energy related to producing your products. Of course, every
organization is convinced that they are extremely lean and mean. Most carried out energy
efficiency measures back in the 1970s and 1980s and now assume that they’ve already
achieved all the efficiencies they can.
Dow’s experience would suggest otherwise. In 1982 their Louisiana Division started
a contest to find energy-saving projects with a high rate of return. In the first year,
27 winners, with projects requiring capital expenditures of $1.7 million, provided
an average annual rate of return of 173 per cent. For the next six years, during a period
of declining fuel prices, the ideas kept rolling in and, by 1988, productivity gains from
the ideas were exceeding the environmental gains. After ten years and over 700
project winners, one might think all the best ideas had been tapped, but the contests
in 1991–1993 yielded over 100 ideas per year with an average return on investment of
300 per cent, saving Dow over $75 million a year just for the projects in those years.14
Over the years, employees became increasingly sophisticated in their ability to identify and
fix inefficiencies.
You’d think at least an energy company would be wise enough not to waste energy. In
the past few years, during which BP formally changed their name to no longer stand for
British Petroleum, and also branded themselves ‘Beyond Petroleum’, they set a goal of
becoming Kyoto compliant, meeting the goals of the international climate change
agreement for reductions in greenhouse gas emissions. They gave themselves ten years, but
reported having achieved the goal in only two years at no net cost to the company. The ease
with which they met the Kyoto goals shows how unnecessarily wasteful their practices had
Chapter_04.qxd 6/10/2009 4:37 PM Page 71

SUSTAINABILITY IN MANUFACTURING AND PRODUCT DESIGN 71

been in the past. They achieved their target by creating an internal carbon trading system
similar to that proposed in the Kyoto Protocol.
Sometimes you can not only save money by eliminating inefficiencies, you can also tap
into new funding sources. For example, the Gerding/Edlen Development Company in
Portland, Oregon is developing a number of blocks in an old industrial district. Passionate
about the environment, they invested in extra green features in their Brewery Block
project. The extra construction costs they incurred for green design were around
$600,000–700,000, but this was offset twice over by grants, technical assistance and tax
credits.15 Now they benefit from the reduced operations and maintenance costs.
Some of the funding may be linked to energy so, in the US, check out both the
Environmental Protection Agency and your state energy department; elsewhere similar
grants are almost certainly available. Other sources may come from the developing market
in carbon credits and carbon offsets. Even without the ratification of the Kyoto Protocol,
these markets are developing, for example in Australia, the European Union and in
Chicago. If you have a project that can be audited to show a significant reduction in
greenhouse gases (eg through energy reduction or carbon sequestration), you may be able
to sell carbon credits, usually to a middleman/broker such as The Climate Trust or Climate
Neutral Network, or through one of the emerging regional or national exchanges. Other
organizations may then purchase these carbon offsets, often as a way of hedging against
future carbon cap-and-trade regulations or merely to take responsibility for their impacts.
Some of the largest purchasers of carbon offsets include Johnson and Johnson as the second
and HSBC Bank as the seventh largest purchaser of US credits. Even government can get
in on the act, with the US General Services Administration coming in fifth.16

RESOURCES
Bayon, Ricardo, Amanda Hawn and Katherine Hamilton (2007) Voluntary Carbon Markets: An
International Business Guide to What They Are and How They Work. London: Earthscan.
The Voluntary Carbon Standard provides the basic threshold for carbon credits on the
voluntary market. The Voluntary Gold Standard defines quality for the high-end carbon credit.
WRI/WBCSD has the GHG Protocol which sets standards for GHG reporting.
Green-e is the most widely accepted certifier of Renewable Energy Credits (RECs)
ISO 14064 is standard for carbon projects.

Collaborate with the supply chain

Managing your supply chain has become increasingly important as a business strategy, not
only to reduce environmental impacts but also to manage costs and uncertainty. In ‘The
Chapter_04.qxd 6/10/2009 4:37 PM Page 72

72 THE BUSINESS GUIDE TO SUSTAINABILITY

RESOURCES
Tufts has compared the quality of various carbon offset programmes. Go to www.tufts.edu/
tie/tci/carbonoffsets.
Bayon, Ricardo, Amanda Hawn and Katherine Hamilton (2007) Voluntary Carbon Markets:
An International Business Guide to What They Are and How They Work. London: Earthscan. This
may be more than you want to know about carbon markets but it includes good information.
Flannery, Tim (2005) The Weather Makers: How Man is Changing the Climate and What It
Means for Life on Earth. New York: Atlantic Monthly Press. This is a great overview of the
science and issues.
Monbiot, George (2007) Heat: How to Stop the Planet from Burning. Cambridge, MA:
South End Press. This book explains how we can reduce our greenhouse gases by 90 per cent
while maintaining our standard of living.
Aston, A. and B. Helm (2005) ‘The Race Against Climate Change’, Business Week, 12
December, pp59–66. Also see case studies at www.businessweek.com/go/carbon.
Romm, Joseph J. (1999) Cool Companies: How the Best Businesses Boost Profits and
Productivity by Cutting Greenhouse Gas Emissions. Washington, DC: Island Press.
The Intergovernmental Panel on Climate Change is the UN body coordinating research on
climate change. Their summary papers on the scientific consensus, likely impacts and
possible mitigation measures can be downloaded from their website, www.ipcc.ch.
The Greenhouse Gas Protocol is the emerging standard for reporting on greenhouse gas
emissions. Go to www.ghgprotocol.org.

Supply-Chain Management Effect’ Kopczak and Johnson identify six different shifts in
thinking in supply chain management, all of which imply or require collaboration across
organizational boundaries:

1 from functional integration to cross-enterprise integration (ie outside your own

organization);
2 from physical efficiency to market mediation (eg matching market demand with
supply);
3 from supply focus to demand focus;
4 from single-company product design to collaborative, concurrent design;
5 from cost reduction to breakthrough business models (eg Dell, IKEA); and
6 from mass market to tailored offerings.17

Because manufacturers are now being asked about and held responsible for what is in their
product, many organizations are trying to ‘green’ their supply chain. Sometimes this takes
Chapter_04.qxd 6/10/2009 4:37 PM Page 73

SUSTAINABILITY IN MANUFACTURING AND PRODUCT DESIGN 73

the form of sending questionnaires to suppliers or switching to more environmentally

preferable vendors. Some organizations require first-tier suppliers to have an
environmental management system or to be ISO 14000 certified. These actions help a
business understand what risks they are assuming when they buy components.
Furthermore, in this age of just-in-time manufacturing and sole-sourcing, these actions
help build confidence that the suppliers have robust management systems to prevent
environmental disasters which could disrupt the supply chain and reflect poorly on their
own company.
One of the most powerful and profitable practices is often overlooked: sitting down
face to face to explore opportunities to improve the overall supply chain process to address
quality, environmental or other concerns. According to a study done by Business for Social
Responsibility, waste and inefficiencies across organizational boundaries can be staggering:
inefficiencies across the supply chain can waste up to 25 per cent of a company’s operating
costs and a 5 per cent reduction in waste throughout the supply chain can double a typical
company’s profit margin.18
General Motors, for example, discovered that by requiring their supplier of ignition
sets to manufacture different versions for different cars, they inadvertently had added
significant costs for themselves and their supplier.
You don’t have to be a large corporation to initiate or benefit from supply chain
changes. NACHI Technology in Greenwood, Indiana manufactures ball bearings for the
automotive industry. Though tiny by comparison, with only 115 employees, they
approached GM about greening the supply chain. They eventually focused on making
changes in their packaging. It took some convincing and some testing, but eventually they
were able to get GM to agree to a smaller, standardized pallet size (so they could use the
pallets they got from their own vendors) and reusable shipping containers. This has saved
them about $55,000 per year.

Product certification
A number of third-party certification systems intended to give purchasers certain
assurances about the products they buy are being developed for natural-resource-based
products. These may include aspects of both the product itself and the way it is
manufactured or harvested. Some even take into account the social impacts of the
operation on the surrounding communities. In agriculture, ‘organic’ has been defined by
the US Department of Agriculture, but other labelling systems exist such as that of the
Food Alliance, which allows some pesticide use but emphasizes social and other factors.
Green Seal certifies a wide range of mostly household products – cleaners, showerheads and
paper towels – and also alternative fuel vehicles. They also have programmes for
government and the hospitality industry. Wood products may be certified, most
Chapter_04.qxd 6/10/2009 4:37 PM Page 74

74 THE BUSINESS GUIDE TO SUSTAINABILITY

RESOURCES
‘Forging New Links: Enhancing Supply Chain Value through Environmental Excellence’, Global
Environmental Management Initiative (GEMI).
The Pollution Prevention Resource Center provides an overview of the topic as well as
links to resources, www.pprc.org/pubs/topics/grnchain/index.html.
Hitchcock, Darcy (2004) Partnering with Vendors: Supplier Workshops for Mutual Gain.
Portland, OR: AXIS Performance Advisors. Part of the Sustainability Series™,
www.axisperformance.com.
‘Suppliers’ Perspectives on Greening the Supply Chain’, Business for Social
Responsibility, www.bsr.org.
‘The Lean and Green Supply Chain’, US Environmental Protection Agency, www.epa.gov/
wastewise.
Going Green, Upstream: The Promise of Supply Chain Environmental Management
(2001), Washington, DC: National Environmental Education and Training Foundation (NEETF),
www.neetf.org.

commonly by the Forest Stewardship Council or the Sustainable Forest Initiative. Similar
schemes are emerging for fisheries and other natural resources. The construction industry
has LEED, which stipulates tiers of building performance.
If you are in a natural-resource-intensive industry, you will need to evaluate the
relevant certification options for your products. Typically, the costs associated with third-
party certifications can be high. Maintaining a chain of custody can be complicated if your
business is not vertically integrated (eg if you don’t grow and process your own trees). But
the absence of certification may lock you out of certain markets, especially in the European
Union or certain Asian countries (Japan, for example).
Non-governmental organizations have been targeting the major retailers of certain
products. For example, the Rainforest Alliance targeted Home Depot, which sells a large
percentage of timber in the US. Once educated about the issues (the hard way), Home
Depot made a commitment to give preference to certified wood products. At the time,
they had trouble finding an adequate supply. Still, very quietly, without waving a green
flag in front of customers or giving them green options, they have been identifying the
source of all their wood (from 2 × 4s to hammer handles) and taking off the shelves
products with wood from illegal, ecologically sensitive or over-harvested sources. It is
actions like these that led the infamous Indonesian timber giant, Sumalindo Lestari Jaya,
known for its rapacious forest practices and devastating impacts on indigenous peoples, to
partner The Nature Conservancy for fear they would lose out entirely on US and European
markets.19
Chapter_04.qxd 6/10/2009 4:37 PM Page 75

SUSTAINABILITY IN MANUFACTURING AND PRODUCT DESIGN 75

If you are not in a natural-resource-intensive industry, you can still purchase certified
products. While they may cost more, this not only builds the market for the certified
products but may also provide you with opportunities for new, higher margin profit lines.
For example, Neil Kelly Company, a design/build firm specializing in residential remodels
in Portland, Oregon, got virtually all their income locally. When they started looking into
sustainability and networking with other companies with the same interest, they developed
a line of sustainable furniture using wood from the Collins Company, the first timber
company in the US to have all their forests certified. Today, in addition to their local
remodelling business, they sell furniture to customers across the country, giving them
access to a market they could never have tapped under their traditional business model.20

RESOURCES
General information can be found at the Consumer Reports eco-label website, www.eco-label.org/
home.cfm.
See Appendix B for common certification schemes in use around the world.

Zero waste
Nature operates on the principle that the waste of one organism becomes food for another.
The industrial revolution was built on quite a different, linear model, which Paul Hawken
and others have referred to as Take–Make–Waste. Manufacturers were not expected to
consider what happened to a product after its useful life. That was an externality, a cost
imposed on municipalities and their citizens. But all that is changing.
Zero waste strives to eliminate all forms of waste in an organization. Like the ‘zero
defect’ policies of the quality movement, this bold goal drives radical innovation and
improvement in efficiencies. Zero waste does not mean that you produce no by-products;
instead it implies that you think of waste as a resource and find markets for all your residual
products. Some people use the term ‘zero waste to landfill’, which helps to make this
distinction, but this term only relates to solid waste and does not look at other forms of
waste (eg air emissions, energy). Any manufacturing process is likely to have by-products
that are not needed in the process. Zero waste simply means that none of those by-products
go to waste.
If you have any waste, then you are also wasting money. This isn’t just bad for nature;
it’s bad for your bottom line! Remember, waste is something you paid for and then were
not able to sell. One study of ‘material throughput’ in US manufacturing discovered that
only 6 per cent of the cumulative inputs ended up in the final product! The remaining
Chapter_04.qxd 6/10/2009 4:37 PM Page 76

76 THE BUSINESS GUIDE TO SUSTAINABILITY

94 per cent generated in the extraction, manufacture and transportation can be thought of
as waste.21 In addition, waste costs you even more because you often have to pay to dispose
of it or pay for permits to emit it. As the GrassRoots Recycling Network likes to quip, ‘If
you’re not for zero waste, how much waste are you for?’
So how do you really eliminate the concept of waste? Is it possible to get to zero waste?
To some degree it may depend on how you define ‘zero waste’. The GrassRoots Recycling
Network lists organizations that have eliminated 90 per cent or more of their waste
streams. As an example they cite Hewlett-Packard in Roseville, California, which reduced
its waste by 95 per cent and saved $870,564 in 1998. One action that contributed to this
savings was switching from pallets to reusable slip-sheets to transport products.
Certainly zero waste to landfill is easier to achieve than zero waste in everything.
Imagine no skips. In 2000 Epson in Portland, Oregon reduced its waste to landfill to zero
and saved over $300,000 in the first year (through avoided disposal fees and income from
the sale of residual products). They bought a compactor to compress foam packaging so
that it could be manufactured into floor moulding by another company. Excess printer ink
was used as pigment by paint manufacturers. Ninety per cent of their waste was reused,
recycled or sold as input to someone else’s product. The 10 per cent that was left was
shipped off to a power plant to be burned for electricity.22
Of course, if you do sell or give your residual products to others, make sure they will
be used for safe purposes along their entire life cycle. Unbelievably, for decades industry
has legally turned hazardous waste into fertilizer, spreading arsenic, lead, cadmium,
chromium, dioxins and radioactive ingredients on to agricultural lands, some of which got
absorbed by crops and showed up on our dinner tables. This practice has also been
implicated in clusters of health problems in farming communities (it is linked to cancer
and lung disease) and is alleged to have rendered some farms incapable of growing
anything for years.23 Just because a practice is legal doesn’t make it right.

Extended producer responsibility, product stewardship and product take-back

Product stewardship is basically synonymous with EPR (extended producer responsibility
in the EU or extended product responsibility in the US). Product stewardship involves
taking responsibility for your product for its entire lifetime. Planning for proper
management and handling at the end of its useful life is one aspect of this, usually the part
that gets the most attention, which is why we consider it under the operations category
rather than design. But what we are really talking about is a full life cycle approach.
At its core is a fundamental shift in responsibility, one that many in industry have
resisted. In the past, companies were held responsible for the manufacturing of their goods
and also the performance of those goods. Did you cause effluent to flow into the river? Did
the disposal of your hazardous waste cause people to become ill? Were the safety features
Chapter_04.qxd 6/10/2009 4:37 PM Page 77

SUSTAINABILITY IN MANUFACTURING AND PRODUCT DESIGN 77

RESOURCES
Connett, Paul and Bill Sheehan (2001) ‘A Citizen’s Guide to Zero Waste – A United
States/Canadian Perspective: A Strategy that Avoids Incinerators and Eventually Eliminates
Landfills’, www.zerowaste.co.nz/assets/Reports/CitizensGuide.pdf.
Hitchcock, Darcy (2007) ‘Zero Waste and the Future of the Waste Management Industry:
An Interview with Wayne Rifer’, AXIS Advisory, Spring, Vol 17, No 2, www.axisperformance
.com/S30Zerowaste.html.
See the GrassRoots Recycling Network website for information on what they did and how
much they saved: www.grrn.org.
Biocycle is a journal on compostables and recycling organic waste, www.jgpress.com/
biocycle.htm.
The Xerox Business Guide to Waste Reduction and Recycling and its companion
workbook are available from the Xerox website, www.xerox.com/environment.html.
The California Waste Management Board has information on waste profiles, laws, loans,
etc., www.ciwmb.ca.gov.
Zero Emissions Research Initiatives focuses on air, land and water and so provides
resources especially helpful for those working on issues other than solid waste, www.zeri.org.

of your product adequate to prevent injury in use? But until recently no one asked who
was responsible for managing the disposal of a product at the end of its useful life.
To be fair, the ‘bottle bills’ in Oregon and California during the early 1970s set a
precedent for EPR at least in the US. But it has only become a hot issue as a result of the
massive rise in electronic waste. Suddenly, municipalities with waning budgets and an
impending tidal wave of hazardous e-waste filled with lead and other rare metals are
baulking at having to manage its disposal.
Germany was one of the first countries to go to the manufacturers to ask them to foot the
bill. Not surprisingly they declined. So the municipalities refused to accept certain types of
waste and compelled the manufacturers to come up with a system for disposing of it
responsibly. At present, EPR regulations vary from country to country. The European Waste
Electrical and Electronic Equipment (WEEE) Directive covers basically anything with a cord.
In June 2008, the European parliament updated their regulations, which now specify a
recycling target and lay out a five-step hierarchy for waste disposal: prevention, reuse, recycling,
recovery and disposal. The European Union countries will have two years to enact these
regulations into law.24 Even packaging must be taken back. In Canada, British Columbia
passed legislation that covers paints, pesticides, pharmaceuticals and other household products.
Once the genie was out of the bottle, other municipalities piled in and the
manufacturers will probably never be able to put the responsibility for disposal back on the
Chapter_04.qxd 6/10/2009 4:37 PM Page 78

78 THE BUSINESS GUIDE TO SUSTAINABILITY

taxpayer. While Europe is far ahead of the US in this matter, the US has begun to address
carpeting waste and e-waste. Producers of nickel-cadmium batteries set up a voluntary but
poorly advertised programme. However, thanks to some enterprising work from some of
our Zero Waste Alliance colleagues, electronics has been thrust into the limelight. The
Electronic Products Environmental Assessment Tool (EPEAT) voluntary standard is based
on product stewardship concepts. While the standard is voluntary, the US General Services
Administration announced in advance that the vast majority of the computers and
monitors they would buy must meet this standard. Other countries are also adopting
EPEAT. This has shifted the entire industry and the Green Electronics Council is now
working on other electronic products. The writing is on the wall.
Their criteria would be useful in many settings, both for product design and purchasing.
Go to www.epeat.net to look at the detailed criteria. Here are the main categories:

• reduction/elimination of environmentally sensitive materials;

• materials selection;
• design for end of life;
• product longevity/life cycle extension;
• energy conservation;
• end-of-life management;
• corporate performance;
• packaging.

Many businesses look at this as a Pandora’s box situation and wonder what other product
categories will be affected next.
The first reaction from manufacturers when their product is targeted is panic – what
are we going to do with all this refuse? But then they begin to understand how to mine the
waste stream. Xerox has excelled at this. Since they leased many of their copiers, the
product already tended to come back to them. At least in part to save jobs, they created a
disassembly plant. Now they carefully test the components that come out of the old
copiers. If the recycled parts match the performance of new parts, they are put into ‘new’
copiers. Xerox has saved more than US$2 billion since 1990 and diverted the equivalent
of 2 million printers and copiers from the landfill.
To make this work, they have had to develop sophisticated systems for forecasting
when these recycled parts will be available. This has also had an impact on product design.
As Elizabeth Graves, environmental health and safety regulatory affairs manager at Xerox,
explains:

Our engineers design product components for durability over multiple lives and
commonality with a wide range of models. As a result, components can not only
Chapter_04.qxd 6/10/2009 4:37 PM Page 79

SUSTAINABILITY IN MANUFACTURING AND PRODUCT DESIGN 79

be reused in the same model but also in the next-generation models (through a
process some call ‘up-cycling’).25

The Japanese computer manufacturer NEC has created a new business refurbishing old
computers. They purchase their old computers (2000 or later models) from customers, fix
them up, load new software, and then resell them as ‘NEC Refreshed PCs’ with a six-month
warranty. Noboru Ozawa, group manager of the refreshed PC sales group, said they expected
to lose money, at least initially, but instead, the operation has been profitable from the first
year: ‘It’s often said that environmentalism does not generate profits, but we were actually

RESOURCES
Green Electronics Council (EPEAT), www.epeat.net.
Product Stewardship Institute at www.productstewardship.us.
WEEE (Waste Electrical and Electronic Equipment) Directive, www.europa.eu.int/comm/
environment/waste/weee_index.htm.
For British Columbia’s EPR programmes, see Driedger, R. J. (2001) ‘From Cradle to Grave:
Extended Producer Responsibility for Household Hazardous Wastes in British Columbia’,
Journal of Industrial Ecology, Vol 5, No 2, Spring, p89.

able to successfully reduce environmental impact while contributing to our bottom line.’
While one might expect this business to undermine their new computer sales, they have
found the opposite. New PC buyers and second-hand buyers are different pools of people,
so they have actually expanded their user base. Each refreshed PC is estimated to save 100kg
of greenhouse gases. In addition, for every second-hand computer they purchase, NEC also
pays for one tree to be planted in the Kangaroo Island, Australia reforestation effort.26

Conclusion
As you can see from the examples above, there is a lot of profit being left on the table by
manufacturers still oblivious to sustainable business practices. Sustainability, on the one hand, is
a risk management issue, protecting against legal liability, new regulations, shareholder initiatives
and NGO publicity stunts. On the other it is a strategic issue, honing competitiveness, gaining
access to high-margin markets, and developing innovative new products.
When you can, eliminate negative social and environmental impacts in the design
process. Since design tends to be episodic, however, also investigate the practices associated
with operations and waste management. See the following checklists for possible actions
that could improve your triple bottom line.
Chapter_04.qxd 6/10/2009 4:37 PM Page 80

80 THE BUSINESS GUIDE TO SUSTAINABILITY

SCORE MANUFACTURING
See page 33 for how to complete this assessment and page 36 for how to interpret your score.
NOTE: Manufacturing businesses should also take the services assessment (page 51)
to capture their office and service-related activities.

Manufacturing
Practice Incubator Initiative Integrated Points
1 point 3 points 9 points
Design
Design for At least every five At least every five Have significant
environment years, redesign one years, review and products third-party
(DfE)/sustainability product with redesign most certified as
(DfS): Redesign sustainability in products to ‘push sustainable.
your product to mind. Disseminate the envelope’ of
maximize lessons learned sustainable
sustainability from other related performance. Use
benefits using the products. Apply DfE DfS techniques that
best available practices when incorporate social as
technology. designing any new well as environmental
products. criteria for all new
products.

Packaging: Conduct a cursory Reduce packaging Convert to

Minimize life cycle analysis by at least 20% packaging that is
packaging and its on packaging and (weight and/or 100% reusable,
associated take appropriate volume). recyclable and/or
impacts. action. compostable.

Supplier influence: Engage at least one Engage all first-tier Work to change the
Engage suppliers first-tier supplier. suppliers (eg entire supply chain
in a formal process materials to achieve
for redesigning declaration, supplier sustainability.
products and workshops, technical
processes. support).

Life cycle thinking: At least every five At least every five Make available
Apply life cycle years, conduct a life years, conduct and independent LCA
thinking to your cycle analysis (LCA) publish a life cycle comparisons
products, on prevalent assessment paper available on your
processes, product on one or more and your
packaging and components and/or products. competitors’
distribution. packaging. products.
Chapter_04.qxd 6/10/2009 4:37 PM Page 81

SUSTAINABILITY IN MANUFACTURING AND PRODUCT DESIGN 81

Manufacturing
Practice Incubator Initiative Integrated Points
1 point 3 points 9 points
Operations
Energy efficiency Reduce energy Reduce energy Reduce energy
and renewables: usage by 10–15% usage by at least usage by more than
Conduct a process per unit of 25% and get at least 50% with at least
energy audit and production. 25% of your 75% of energy
implement the best electricity from (electricity and other
available renewables or fuels) coming from
technology. cogeneration. renewable sources.

Climate change: Reduce GHGs to Exceed Kyoto Be climate neutral

Conduct a process 1990 levels. Protocol standards. (through reductions
greenhouse gas and offsets).
(GHGs) audit and
take appropriate
action to reduce
GHGs.
Resource Reduce inputs of Reduce inputs by Reduce inputs by
efficiency: Conduct raw materials (water more than 10%. 25% or more, and
a (non-energy) and other natural source at least 75%
resource process resources) by 10%. (by volume or
efficiency audit and weight) from
act on the results. certified sustainable
sources.

Transportation and Factor in distance Switch to at least Redesign the

distribution: when sourcing 50% biofuels made distribution systems
Reduce impacts supplies. Install best from preferable and logistics to
associated with available feedstocks. minimize
moving raw technology to transportation. Use
materials and enhance fuel at least 75%
products. efficiency. alternative fuels.

Social impacts: At least every two Conduct social Require all suppliers
Ensure fair and years, conduct an audits of your major to adhere to SA
humane working internal work climate suppliers. 8000 or equivalent
conditions. survey and act on standards.
the results.
Chapter_04.qxd 6/10/2009 4:37 PM Page 82

82 THE BUSINESS GUIDE TO SUSTAINABILITY

Manufacturing
Practice Incubator Initiative Integrated Points
1 point 3 points 9 points

Operations

Chemicals: Reduce Complete a Eliminate all Eliminate all toxic

exposure risks to chemical inventory hazardous chemicals on all
all toxic chemicals. that ranks or rates chemicals and customer grey lists.
them by toxicity and persistent
volume. Reduce bioaccumulative
toxic and hazardous toxins (PBTs). If
materials by 25%. appropriate,
Assure that all implement a
MSDSs are chemical pharmacy
available, easy to system.
access and up to
date.

Product Take responsibility Work with industry to Turn product into a

stewardship: for your product at eliminate waste. service; cradle to
Implement a the end of its useful cradle.
product life (eg reverse
stewardship distribution
strategy. systems). Dispose
of any waste
responsibly.

Waste Reduce solid waste Reduce solid waste Achieve zero waste
management: by 20–50% by 50–89%. to landfill (90–100%
Eliminate the reduction).
concept of waste.

Total
Average
Chapter_05.qxd 6/10/2009 4:40 PM Page 83

5
Sustainability in Government Agencies

Government has a huge role to play in sustainability. Administrations use a large amount
of resources and employ a lot of people, but more importantly they are also responsible for
protecting the ‘commons’: air-sheds, watersheds, fisheries and huge tracts of publicly
owned land. Through infrastructure and incentives, they set the stage upon which the rest
of civilization acts. Their decisions determine to a large extent the liveability of our
communities and the environmental impacts of our lifestyles. For example, China has been
heralded as having dramatic economic growth, but the World Bank recently estimated that
they are losing 8 per cent of gross domestic product (GDP) in environmental costs.
Governments must see their communities as a whole system and make decisions that
simultaneously improve the health of the community, the economy and the environment.
Often, the necessary vision and courage are not in evidence. And even when the vision
is there, it can be hard for government to make significant changes. Bombarded by
competing interests, public servants often retreat to safe, tried-and-tested but unsustainable
practices. In the US much of the public no longer respects or values the role of
government, yet they still want good roads, great schools and better security, exactly the
services government provides. The US is caught in a Catch-22 situation: people need more
leadership from government but government waits for pressure from its constituents, many
of whom have a vested interest in the status quo. In this chapter, we highlight those who
have taken risks and made at times unpopular decisions to drive us toward a more
sustainable world. We need more heroes like these!
According to Susan Anderson at Portland, Oregon’s Office of Sustainable
Development, partnerships are key. Government plays a host of roles – modelling,
facilitating, educating, regulating – but can only go so far on their own. The most
successful efforts integrate government, non-profit organizations and business.
The situation is better in the European Union, where there is a greater respect for the
role of government. The United Kingdom and Sweden both have a cabinet-level ministry
for sustainability. These bodies are responsible for both analysis and implementation. They
are charged with ensuring policy coherence across a number of objectives, including
development aid, governance, international objectives, trade policy, global public health
Chapter_05.qxd 6/10/2009 4:40 PM Page 84

84 THE BUSINESS GUIDE TO SUSTAINABILITY

and environmental policy. Because of the whole-systems view that sustainability provides,
this is a brilliant role for them to assume.1

WHAT YOU SHOULD KNOW ABOUT SUSTAINABILITY

It is easy for government, local governments especially, to get tunnel vision. They are so
strapped providing fire, police, water treatment, building permits and library services, that
it can be hard for them to think about larger, longer-term issues. However, they must. No
one else is in the position to do what is needed to protect our society in the long term.
That’s not to say that the other sectors don’t have an important role to play; they do. But
public policy sets the playing field.
Mark Roseland, in his book Towards Sustainable Communities, recommends the
following principles to guide public policy:

• Sustainable development requires sustainable communities.

• Rules can and must be changed.
• Sustainability can mean less as well as more.
• Where the market works, use it.
• Where the market fails, don’t be afraid to mandate changes.
• Polluters should pay, but it is more important to prevent pollution.
• Social equity is not only desirable, it’s essential.
• Public participation is itself a sustainable development strategy.2

The Melbourne Principles, created by the International Environmental Technology Centre

of the UNEP, provide even more specific guidance about what government should do.
They are encapsulated in ten principles:

• Principle 1: Provide a long-term vision for cities based on sustainability;

intergenerational, social, economic and political equity; and their individuality.
• Principle 2: Achieve long-term economic and social security.
• Principle 3: Recognize the intrinsic value of biodiversity and natural ecosystems and
protect and restore them.
• Principle 4: Enable communities to minimize their ecological footprint.
• Principle 5: Build on the characteristics of ecosystems in the development and
nurturing of health and sustainable cities.
• Principle 6: Recognize and build on the distinctive characteristics of cities, including
their human and cultural values, history and natural systems.
• Principle 7: Empower people and foster participation.
Chapter_05.qxd 6/10/2009 4:40 PM Page 85

SUSTAINABILITY IN GOVERNMENT AGENCIES 85

• Principle 8: Expand and enable coordinated networks to work toward a common,

sustainable future.
• Principle 9: Promote sustainable product and consumption, through appropriate use
of environmentally sound technology and effective demand management.
• Principle 10: Enable continual improvement, based on accountability, transparency
and good governance.

For more information, see www.cidb.org.za/Documents/KnowledgeCentre/melbourne_

principles.pdf.
For the purposes of this book we’ve organized strategies into six general categories.
Spending revenue wisely, maximizing the benefits to society. We want government to
provide its services efficiently. However, governments operate within a tangle of legislative
rules and mandates. Ideas that sound great on the floor of the legislature often cause
problems in practice. For example, when a homeowner in Oregon installs a new furnace,
the job is inspected twice. The electrical and gas pressure test are done before the system is
turned over to the homeowner for use. But the homeowner may get a call several months
later by another inspector required to look at furnaces and air conditioners prompted by
paperwork turned in by the contractor. In these cases, the inspection is completely
redundant. Right now, a supervisor is trying to find a way around this, but it takes
initiative to overcome the stupidity of certain rules.
Agencies, acting within their own narrow frame of reference, often pass on costs and
problems to other agencies, leading to sub-optimal results. For example, consider the
problem of rainwater. Traditionally, buildings are constructed with gutters that dump
huge quantities of water into the rainwater system. At the same time, roads funnel
rainwater into the same pipes. As more and more impermeable surfaces expand on the
landscape, wastewater treatment centres become overloaded. Treating all this water is
expensive. Because we rarely use the rainwater, we also need large potable water systems
and reservoirs. The solution should not be bigger pipes, more dams and larger
wastewater treatment centres. Instead we need to rethink how we construct buildings,
communities and roads. In Portland, Oregon, some houses have been legally permitted
to use rainwater in the home, including for drinking water. With the area’s legendary
rainfall, these homes easily provide enough storage for most of the year. They
simultaneously reduce the pulse of rainwater and reduce the need for drinking water
supplies. Bioswales could collect street run-off. The technologies exist to solve this
problem. It’s a matter of design. Agencies need to collaborate and understand their
interdependencies.
Providing infrastructure and security. Enrique Peñalosa, the former mayor of Bogotá,
Colombia, said that solving traffic congestion by building more roads was like solving
Chapter_05.qxd 6/10/2009 4:40 PM Page 86

86 THE BUSINESS GUIDE TO SUSTAINABILITY

obesity by giving people larger belts. But this is exactly the strategy of many transportation
departments. Already in many US cities 50 per cent or more of the urban landscape –
streets and parking lots – is devoted to cars.3 The choices governments make determine the
quality of neighbourhoods, the viability of public transportation, air quality and the
fitness of citizens. By building roads, they create suburban sprawl, which is more expensive
for government to serve with infrastructure.
When people think about security, they think about the military and first responders.
Certainly these are critical pieces of our security system; however, the military, in particular,
is responsible for a significant amount of pollution and human misery. The range of
security issues is also expanding. In the US, the CIA has warned that certain environmental
issues may destabilize the world. Global warming and fresh water are on the top of their
list of such concerns. Social, economic and cultural issues are feeding terrorism.
Sustainability provides a framework for the Pentagon and first responders to anticipate
future problems.
Protecting the commons. Government is the guardian of all public resources, those things
critical for life but which may not have been assigned a market value or owner. Without
sufficient regulation, protection and enforcement, we can experience a ‘tragedy of the
commons’, the tendency to overexploit public resources. Sometimes governments make
things worse rather than better. Take fisheries for example: when stocks of cod, which had
been abundant for centuries off the coast of Canada, began to decline, the actions of
government actually precipitated the collapse. To shore up the economies based on the cod,
government subsidized the fishermen, keeping prices low and harvest high. Now the
fishery is closed and few expect it ever to recover.
Creating a level playing field. Government sets the stage for commerce, but often the stage
is tilted, and not toward the audience. Government is rife with perverse incentives. As Paul
Hawken, author of Natural Capitalism explains, ‘The US government subsidizes energy
costs so that farmers can deplete aquifers to grow alfalfa to feed cows that make milk that
is stored in warehouses as surplus cheese that does not feed the hungry.’ Conservative
estimates calculate the total cost of subsidies as $2.6 trillion per year, approximately five
times corporate profits. By some estimates, around 77 per cent of these are perverse, having
serious, unintended negative side effects.4
Protecting and helping people who need it. Here again, problems get passed from agency
to agency. In the US, mental institutions have been closed to protect the rights of those
inside, paradoxically resulting in many becoming homeless, shivering on the streets and
begging for food. Overwhelmed social service agencies lose track of at-risk children who
end up in foster homes, correction facilities or on the police roster of missing persons. Even
the progressive Oregon Health Plan, providing health insurance to the neediest
Chapter_05.qxd 6/10/2009 4:40 PM Page 87

SUSTAINABILITY IN GOVERNMENT AGENCIES 87

Oregonians, lost funding during an economic downturn; but the savings may have been
illusory because more people ended up in emergency rooms and jails after losing their
access to essential prescriptions and health services. These costs were paid out of different
budgets but may have cost the state even more.
Guiding us towards a better future. Government is the only institution clearly tasked to
attend to the long term. Community growth plans are drawn up for a period of 20 years.
Energy policy sets the direction for half a century. Schools prepare students for their
lifetimes. Too often, vested interests preserve the status quo; many communities, however,
like those cited below, have set in place visionary goals that have affected the quality of life
for generations.

RESOURCES
Roseland, Mark (1998) Toward Sustainable Communities. Gabriola Island: New Society
Publishers. This book provides an excellent overview of all the different elements a community
should consider, including transportation, waste, water, economic development and land use.
Eisler, Riane (2007) The Real Wealth of Nations: Creating Caring Economics. San
Francisco: Berrett-Koehler. This book helps develop ideas associated with the often-
undervalued social sustainability.
If you want to know how your country compares to others, Yale University publishes an
Environmental Sustainability Index, www.yale.edu/esi. In 2005 Finland, Norway and Uruguay
were at the top; North Korea was at the bottom. Major US cities can see how they rank in the
SustainLane ranking; San Francisco, California and Portland, Oregon were at the top of their
list in 2005, www.sustainlane.com/cityindex/citypage/ranking/.
The Millennium Ecosystem Assessment was commissioned by the UN and involved
thousands of scientists from around the globe. Their report (and an easy-to-read summary)
identifies the biggest environment-related issues facing our planet. To access them, go to
www.millenniumassessment.org. See also the Millennium Goals, www.un.org/millenniumgoals.
United Nations Environmental Programme (2002) Global Environment Outlook 3: Past,
Present and Future Perspectives, UNEP and Earthscan.
Hammond, Allen (1998) Which World: Scenarios for the 21st Century. Washington, DC:
Island Press.
World Business Council on Sustainable Development (2002) ‘The Business Case for
Sustainable Development’, www.wbcsd.org. Outlines the reasons why their 150 international
companies think sustainability should be pursued.
Huntington, Samuel P. (1996) The Clash of Civilizations and the Remaking of World Order.
Simon & Schuster. Provides an interesting theory of how power is shifting in the world and
explores both social and environmental issues in that context.
Chapter_05.qxd 6/10/2009 4:40 PM Page 88

88 THE BUSINESS GUIDE TO SUSTAINABILITY

Jacobs, Jane (2000) The Nature of Economies. NY: The Modern Library.
Kinsley, Michael J. (1997) Economic Renewal Guide: A Collaborative Process for
Sustainable Community Development. Snowmass, CO: Rocky Mountain Institute.
The ‘Agency Sustainability Planning and Implementation Guide’ was designed to help
Massachusetts state agencies develop internal sustainability plans and programmes but will
also be of interest for other governments developing sustainability plans. It includes sections on
waste reduction and recycling; mercury and PBTs (persistent bioaccumulative toxins) reduction;
sustainable design and construction; and environmentally preferable purchasing. For each
section, the report includes a one-page sheet of ‘Action Steps’, a list of 8–12 short-term actions
that state facilities can take to reduce their environmental impacts,
www.state.ma.us/envir/sustainable/pdf/ss_guide_web.pdf.
Federal Government (US) web addresses:
www.sustainable.doe.gov.
www.gsa.gov/environmentalservices.
www.federalsustainability.org.
www.ofce.gov.
www.epa.gov/sustainability.
www.federalelectronicchallenge.net.
State and local governments:
ICLEI: Local Governments for Sustainability, www.iclei.org.
Intergovernmental Committee on Urban and Regional Research (Canada).
International City Management Association.
International Institute for Sustainable Development (Canada).
Sustainable Communities Network (Washington, DC).
EcoCity Journal.
The Urban Ecologist.
For metrics related to community well-being, Sustainable Measures has a number of useful
resources including a searchable database of indicators and a Guide to Sustainable Community
Indicators, www.sustainablemeasures.com.
European Campaign of Sustainable Cities and Towns, www.global-vision.org/city/
aalborg.html.
National League of Cities, www.nlc.org/home.
EKOS (2000) ‘Urban Sustainability: Leading Approaches, Tangible Results’. This report,
written for the City of Seattle by a consulting firm, contains profiles of the efforts of a variety of
cities. It can be ordered from the EKOS website, www.ekosi.com.
Amarillo, Texas has a demonstration village. www.globalecovillage.com.
Curitiba, Brazil, www.solstice.crest.org/sustainable/curitiba.
Madison, Wisconsin, www.sustaindane.org.
Oregon, www.sustainableoregon.net.
Portland, Oregon, www.sustainableportland.org.
Santa Monica, California, www.santa-monica.org/edp/scp.
Seattle, Washington, www.sustainableseattle.org.
Whistler, British Columbia, www.awarewhistler.org.
Chapter_05.qxd 6/10/2009 4:40 PM Page 89

SUSTAINABILITY IN GOVERNMENT AGENCIES 89

STRATEGIES YOU CAN USE

Let’s start by providing positive examples of ways in which governments have promoted a more
sustainable future. Hopefully these examples will spark actions your administrations might
take. If you are in the private sector, these stories may inspire policy changes to suggest to your
representatives. You may even uncover strategies you can use inside your own organization.

Spend tax revenue wisely, maximizing the benefit to society

Taxpayers want the biggest benefits for their money, not inefficiencies and red tape. Smart
agencies have found ways to provide multiple benefits from the same tax revenue. These
agencies not only attempt to be cost-effective, they also track their overall impact on the
economy as their investments cycle through the community. Here are a few examples from
the western US.

Conserving energy
Like many prison systems in the US, the Oregon Department of Corrections has been
swamped with prisoners, following the three-strikes-and-you’re-out legislation. They
struggle to house all these people without commensurate funding increases. Prematurely
releasing prisoners for lack of space did not endear them to the public. They needed to find
a way to get more services for the same amount of money.
One answer was to focus on energy efficiency. Many prisons have large boilers used for
laundry, showers and sometimes also heating. They take municipal water in the 50 to 60°F
range and heat it to 230° or so. In Oregon one prison discovered thermal solar systems
(designed to heat water as opposed to generating electricity) were quite cost-effective. By
letting the sun preheat the water during the summer months to close to 125°, they reduced
their natural gas consumption by 10 to 20 per cent. They are working with an out-of-state
manufacturer of one of the components to use prison labour to manufacture these simple

RESOURCES
Romm, Joseph (1999) Cool Companies. Washington, DC: Island Press.
US Environmental Protection Agency, www.epa.gov.
Better Bricks green building site, www.betterbricks.com.
Energy Star programme for energy-efficient equipment and appliances, www.energystar.
gov.
Urban Consortium Energy Task Force (1992) ‘Sustainable Energy: A Local Government
Planning Guide for a Sustainable Future’.
Chapter_05.qxd 6/10/2009 4:40 PM Page 90

90 THE BUSINESS GUIDE TO SUSTAINABILITY

systems. They realize that many other government buildings also use boilers, as does most
of the industrial sector. By testing these units, the Department of Corrections may lay the
foundation for a new industry in the state and simultaneously improve the efficiency and
competitiveness of organizations there as well.

Take advantage of wasted resources

The Oregon Department of Corrections is also seeking ways to improve its image with its
host communities. Someone realized one day that the vehicles used to transport prisoners
from the cities to the prison in Pendleton, Oregon, which is in the sparsely populated
eastern portion of the state, usually returned to urban areas empty. At the same time,
farmers around Pendleton were ploughing-under surplus produce. So they have set up a
system to take tax-deductible donations of surplus produce from farmers, use prisoners to
sort and bag it, and transport it in the empty buses to the Food Bank in Portland for
distribution across the Pacific northwest. The prison gets a boost to its image, the
prisoners do something they can be proud of, the farmers get a tax deduction and the
hungry get fed.
Many governments have adopted zero waste goals. Gary Liss, who is affiliated with
the GrassrRoots Recycling Network, has been trying to track these. His list includes
communities from San Luis Obispo County in California to Halifax, Nova Scotia.
Entire nations, including New Zealand, have also adopted zero waste as a goal.
Like many sustainability initiatives, one effort can have multiple benefits. A study in
Northern California showed that encouraging water-efficient landscaping resulted in a
54 per cent reduction in water but also a 25 per cent reduction in labour, 61 per cent
savings in fertilizer and 44 per cent savings in fuel use.5

RESOURCES
GrassRoots Recycling Network, www.grrn.org.
Connett, Paul and Bill Sheehan (2001) ‘A Citizen’s Guide to Zero Waste – A United
States/Canadian Perspective: A Strategy that Avoids Incinerators and Eventually Eliminates
Landfills’, www.zerowaste.co.nz/assets/Reports/CitizensGuide.pdf.

Streamline red tape

Red tape usually translates into increased costs and long lag times. Plans go from agency
to agency for approval and any one can stop the process. Contractors hate it. So the
Oregon Department of Transportation, preparing to rebuild many of the state’s crumbling
bridges, pulled all the relevant regulating agencies – state and federal – together to define
Chapter_05.qxd 6/10/2009 4:40 PM Page 91

SUSTAINABILITY IN GOVERNMENT AGENCIES 91

the criteria and specifications for the work. When they issued their requests for proposals,
sustainability criteria were embedded in the requirements. A contractor submitting a
proposal can be assured of immediate approval unless they wish to suggest a different way
of constructing a bridge. On one project alone, they saved 100 days and over $1 million.
Streamlining usually involves analysing the work process to find redundant and
wasteful steps. The total quality movement has created many of these tools, the most useful
of which is likely to be process mapping.

RESOURCES
Brassard, Michael (1989) The Memory Jogger Plus. Methuen, MA: Goal/QPC.

Employ green building practices

According to the National Research Council, 60 to 85 per cent of a building’s real costs are
related to operations; the initial construction cost is 10 per cent or less. Since many
government buildings are owner-occupied, you may want to pay a little extra for ‘green’
features so that you can save operating costs over the long term. The California Department
of Finance, with the help of Capital E Group and Lawrence Berkeley Laboratory, studied
national data on 100 green buildings. They concluded that the financial benefits of a
LEED-rated green building are $50–70 per square foot, more than ten times the additional
construction costs. The cost savings come not only from conserving energy and water but
also from productivity and health-related human benefits.6
For more on this topic, see Chapter 7.

RESOURCES
Morton, Steven (2002) ‘Business Case for Green Design’, Building Operating Management,
FacilitiesNet, November 2002, www.facilitiesnet.com.
The Green Building Council’s LEED rating system is available at www.worldgbc.org,
www.usgbc.org.
California study, www.colorado.gov/rebuildco/services/highperformance/Costs_and_
Benefits_of_Green_Buildings.pdf.
Better Bricks, a programme under the Northwest Energy Efficiency Alliance,
www.betterbricks.com.
Portland, Oregon’s G/Rated programme and their Tenant Improvement Guide,
www.green-rated.org.
Chapter_05.qxd 6/10/2009 4:40 PM Page 92

92 THE BUSINESS GUIDE TO SUSTAINABILITY

Find new funding sources

Occasionally, agencies can catalyse new business models. One irrigation district funded by
the Oregon Watershed Enhancement Board invented a new type of fish screen to prevent
fish from moving into irrigation canals. Typically these screens clog and need to be cleaned
out, sometimes several times a day. Their new design rarely clogs and has no moving parts.
Farmers Irrigation District has now patented the fish screen and the Farmers’ Conservation
Alliance is promoting the screens. They will use all of the profits to further their mission
of developing solutions to ensure fish, farms and families thrive.
Revolving loan funds have been used successfully to fund expensive upgrades in
wastewater treatment plants. Unlike grants that go to the first in the pipeline, revolving
loan funds continue to provide resources for change and may grow over time.
Sometimes the challenge is front-loaded cost. Renewable energy is an example where
the fuel may be free but most of the cost is in the up-front capital costs. Individual citizens
are particularly resistant to factoring life cycle costs into decision-making. Many would
rather pay a small amount for an incandescent bulb even though the compact fluorescent
will cost them less over the long haul. To counteract that problem, Berkeley, California
became the first city in the US to help citizens install solar panels without having to pay
for the cost of the system up front. Instead, the city spreads the cost over 20 years, thus
removing this barrier.7
To solve the same problem within government, Ann Arbor, Michigan created a
Municipal Energy Fund in 1998 as a revolving fund for energy improvements in city
facilities. It’s invested in street lighting improvements, electric vehicles and solar cells. By
providing the capital for approved projects, the fund removes a barrier, and 80 per cent of
the savings from the projects replenish the fund.8

See the municipality as a whole system

The obvious opportunity here is to develop land use patterns that promote sustainable
behaviours. In the report, ‘Growing Cooler: Evidence on Urban Development and Climate
Change’, the authors analysed scores of academic studies. Not surprisingly, they concluded
that compact, mixed-use development could do as much to lower emissions as many of the
climate policies now promoted by state and national politicians. This trumped such
strategies as improved auto efficiency standards, green building codes and international
treaties. This is a perfect example of the maxim, ‘Think globally, act locally’. Local
governments don’t have to wait for national action to make a huge impact.9
Too often, organizational silos represent mental barriers. When you look at your
municipality as a whole system, though, new opportunities become apparent. Think about
closing the loops, living off what is available within your boundaries, and getting more
benefits from each function. For example, Portland, Oregon uses their drinking water
Chapter_05.qxd 6/10/2009 4:40 PM Page 93

SUSTAINABILITY IN GOVERNMENT AGENCIES 93

system to generate electricity. They installed a micro-hydro system in the water pipes
leading from a reservoir. Most water departments would never think about generating
electricity; energy isn’t their responsibility. But with creative thinking, many cross-
organizational efficiencies can be uncovered.
Industrial ecology prompts us to think even across sectors. Eco-industrial parks are
popular in Europe. Kalundborg, Denmark is probably the most famous example, where
steam, water, fly ash, sludge, fuels and sulphur are traded among the different entities, the
waste of one becoming the input for another. China has grasped this concept and
implemented a ‘circular economy initiative’. ‘China can no longer afford to follow the
West’s resources-hungry model of development and it should encourage its citizens to
avoid adopting the developed world’s consumer habits,’ says Pan Yue, Deputy Minister,
State Environmental Protection Administration. ‘It’s important to make Chinese people
not blatantly imitate Western consumer habits so as not to repeat the mistakes made by the
industrial development of the West over the past 300 years.’10
Part of seeing the community as a whole system is to change how we measure
community health. Heidelburg, Germany uses eco-budgeting processes developed by
ICLEI. In the same way that a government periodically reviews its financial performance
against a budget, eco-budgets follow similar processes related to natural resources. They
don’t set monetary values but they account for how the natural resource budgets within a
community are ‘spent’ over time. Heidelberg accounts for CO2, water consumption and
waste generation, along with other resources. This approach makes intuitive sense to
anyone who has managed a cheque book. You know if you continue to deduct more from
the ‘account’ than is being deposited, you’re headed for trouble.11

RESOURCES
Allenby, B. R. (1995) Industrial Ecology – Policy Framework and Implementation, Prentice Hall,
New Jersey.
International Society for Industrial Ecology, www.is4ie.org.
Journal of Industrial Ecology, www.yale.edu/jie/.
The Economic Policy Institute makes policy recommendations, for example their
published report on ‘Clean Energy and Jobs’, http://epinet.org.

Provide infrastructure and security

Government is responsible for the planning, design and construction of our
infrastructure, the framework that supports our society. Infrastructure comes in many
forms. Urban planning, roads, public transportation and utilities are all interdependent
Chapter_05.qxd 6/10/2009 4:40 PM Page 94

94 THE BUSINESS GUIDE TO SUSTAINABILITY

but housed in different agencies. The trick is to design them to optimize their collective
effectiveness.

Ensure security
In the past, the US Defense Department used to be one of the worst polluters in the
country. However, many in the military are proving that security can go hand in hand with
sustainability. Lieutenant General Hill at the US Army Base in Fort Lewis, Washington
recognized that in order to continue as a good neighbour in the community they needed
to clean up their act. He set goals of zero net waste and an 85 per cent reduction in air
emissions within 25 years. They have reduced the amount of hazardous materials used by
54 metric tons (from 2001 to 2004) and reduced their air emissions from 333 tons in 2000
to 175 tons in 2004. Their sustainability programme is projected to reduce their operating
costs by over $1 million annually in direct cost savings and cost avoidance.
In designing logistics exercises, the Alaska National Guard decided to solve a real-
world problem at the same time. They gathered up abandoned cars and unwanted
appliances for recycling. The exercise provided skills in recon and logistics while
contributing a valuable service to the Mat Su Valley.
It’s important to look beyond the typical actors that provide security. What about
energy, water and food? Berkeley, California is one of the first cities in the US to
undertake an assessment of the security and sustainability of their food system. In 2001
their city council passed the Berkeley Food and Nutrition Policy, which provides a
framework for moving them towards sustainable regional agriculture while fostering a
local economy.
With the combined threat of biological weapons and the spread of disease from global
warming and international travel, the Center for Disease Control may be an equally
important player. Since ecological problems can cause mass migrations of people,
destabilizing nearby countries, foreign policy and foreign aid also play a role. Security is
not just about getting the bad guys. It also has to be about preventing people from
becoming so desperate they become bad guys. To that end, city, state and national climate
strategies are part of security. International aid for family planning is part of security.
Renewable energy standards are part of security. Security is not just intelligence, border
guards and special forces. Health, social services, energy and environmental departments
also play a role. Take this into account when you allocate funds.

Design efficient, vibrant urban spaces

In 1971 Curitiba, Brazil elected Jaime Lerner, an architect schooled in urban planning, to
his first of three terms as mayor. Like many cities in developing countries, Curitiba has
been subjected to an ‘invasion’ of people hoping for a better life. But Lerner did not want
Chapter_05.qxd 6/10/2009 4:40 PM Page 95

SUSTAINABILITY IN GOVERNMENT AGENCIES 95

Curitiba to become like Sao Paulo and other large cities, inundated with traffic, pollution,
crime and squalid favelas (shanty towns).
One of his insights was that cities usually expand from the centre out in all directions,
like an inflating balloon, becoming increasingly dense and clogged. To avoid this, he and
his colleagues hypothesized it would be better to define corridors of high-density
development which could be efficiently served by public transit and other city services.
While this layout looks odd from the air, with skyscrapers extending out like tentacles, it
provides a number of benefits. In addition to providing efficient transportation, which we
will describe in the next section, it also ensures that those in the high-density areas have easy
access, visually and physically, to less dense areas including Curitiba’s many public parks.
Most of the parks were created to solve a problem. Curitiba’s eastern border is the
Iguaçu River, which floods from Brazil’s tropical rains on a regular basis. Rather than using
federal funding to build embankments, Lerner used the money to purchase the land along
the river for their largest park. In addition to recreation, it provides natural, cost-effective
flood control. It also prevents development in an area that would otherwise cause human
suffering and property losses from the inevitable flooding on a regular basis.
Sometimes disasters provide opportunities to correct past mistakes. Soldiers Grove in
Wisconsin flooded repeatedly. The US Army Corps of Engineers looked into a technical
solution – building embankments – but realized that just the upkeep on them would be
twice the annual tax receipts. So instead of fighting nature, they moved the town,
completing the work in 1983. It cost $1 million to move the town but that resulted in
annual savings of $127,000, a reasonable rate of return. Furthermore, they used this
opportunity to make radical improvements in energy efficiency. They passed new
ordinances that specified tough thermal performance standards and required that at least
50 per cent of heating had to be served by solar systems. They passed a solar access
ordinance so that new structures couldn’t block the sun for existing structures. As in
Curitiba, the floodplain became a popular park.12 These examples should provide food for
thought in the rebuilding of New Orleans and the rest of the Gulf Coast. Instead of
spending a fortune to fight nature, it is often wiser to work with it.

RESOURCES
The American Planning Association’s ‘Policy Guide on Planning for Sustainability’ can be found
at www.planning.org/policyguides/sustainability.htm.
James, Sarah and Torbjorn Lahti (2004) The Natural Step for Communities: How Cities and
Towns Can Change Sustainable Practices. New Society Publishers.
European Campaign of Sustainable Cities and Towns.
US Department of Energy, www.sustainable.doe.gov.
Chapter_05.qxd 6/10/2009 4:40 PM Page 96

96 THE BUSINESS GUIDE TO SUSTAINABILITY

Design effective public transportation

The corridor-style urban design facilitates an incredibly efficient public transportation
system. While Curitibans have a high rate of car ownership, most trips are by public
transport, so much so that government does not have to subsidize the bus system. (In the
US, it is typical for more than half the cost of a ride to be funded through tax subsidies.)
Not having the funds for an expensive rail or underground system, Curitiba has
pushed its bus system to carry the equivalent number of passengers at one-hundredth the
cost of an underground rail system and 10 to 20 times cheaper than light rail. Their red
express buses run along dedicated streets through the high-density corridors. During peak
time, they arrive every 56 seconds. These special triple-reticulated buses with five oversized
doors stop at the large plexiglass stations that passengers enter (known locally as tube
stations), where the passengers have already paid their fares and people in wheelchairs have
already been elevated to floor level. The buses stop for 15 seconds to disgorge and load
passengers out of different doors.
Green buses travel a loop around the city, so you don’t have to travel into the centre to
get to a different barrio (district). Other colour-coded buses perform other functions,
including one that zips across town, stopping infrequently, another that serves tourist
destinations and a third for disabled people. Low-density areas are served by minivans so
that they can maintain a service at least every 15 minutes, a benchmark they consider key
to maintaining passenger levels. With only a few exceptions, the same fare works on all the
lines. The government only manages the system; the buses are owned and operated by a
host of different companies. Curitiba pays them based on kilometres travelled to maintain
the frequent service.
This system has developed over time, using existing streets, by taking advantage of
opportunities as they arose. They have not built expensive freeways that isolate
neighbourhoods. They haven’t had to waste precious downtown plots for parking
structures. Those who do drive generally find few traffic jams. And everyone breathes easier
for the lack of air pollution.
These innovations produce a higher quality of life. Based on a community survey, 99
per cent of Curitibans are happy with their town (compared to 70 percent of people in Sao
Paulo, who think Curitibans have it better). They have a high per capita ratio of green
space. They boast a 95 per cent literacy rate and 98 per cent of their children attend school.
Their biggest problem seems to be an influx of poor people who have been encouraged to
leave by surrounding communities that don’t want to fund social programmes for them.
These benefits are just as relevant in richer nations. While Atlanta, Georgia and
Portland, Oregon experienced similar population and income growth in the past decades,
their experiences were vastly different. Portland has a good public transportation system
and is encircled by an urban growth boundary intended to preserve agricultural and
forested lands. In his book, The Eco-Economy, Lester Brown compares their experiences:13
Chapter_05.qxd 6/10/2009 4:40 PM Page 97

SUSTAINABILITY IN GOVERNMENT AGENCIES 97

Table 5.1 Liveability for Portland, Oregon versus Atlanta, Georgia

Indicator Portland Atlanta

Population +26% +32%
Income +72% +60%
Vehicle miles +2% +17%
Single occupant vehicle –13% +15%
Commute time per week –9% +1%
Air pollution (ozone) –86% +5%
Energy consumption –8% +11%
Neighbourhood quality +19% –11%

Note: percentages refer to change from mid-1980s to mid-1990s.

It’s clear from these figures that sustainability is also a liveability issue. People in Portland
spent less time in traffic jams, breathed cleaner air and saw their neighbourhoods improve.
Don’t forget pedestrian-friendly and bike-friendly infrastructure. In 1992, Groningen, a
Dutch city with a population of 170,000, dug up its city centre highways and made bicycle
the main form of transport. Business has improved, rents increased and the flow of people
out of the city has reversed. Local businesses that had fought this now are asking for more.14

Protect the commons

Nature provides a host of services upon which we depend. Gretchen Daily of Stanford’s
Center for Environmental Sciences and Policy provides the following list:15

• purification of air and water;

• mitigation of droughts and floods;
• generation and preservation of soils and renewal of their fertility;
• detoxification and decomposition of wastes;
• pollination of crops and natural vegetation;
• dispersal of seeds;
• cycling and movement of nutrients;
• control of vast majority of potential agricultural pests;
• maintenance of biodiversity;
• protection of coastal shores from erosion by waves;
• protection from sun’s harmful ultraviolet rays;
Chapter_05.qxd 6/10/2009 4:40 PM Page 98

98 THE BUSINESS GUIDE TO SUSTAINABILITY

• stabilization of the climate;

• moderation of weather extremes and their impacts; and
• provision of aesthetic beauty and intellectual stimulation that lift the human spirit.

To Daily’s list, we would add the production of food, fibre and fish – even with genetic
engineering, we cannot make a tomato, tree or tilapia without nature’s help. While these
services are provided for free, they are clearly not worthless! In fact, by some albeit
controversial estimates published in an article by Robert Costanza in Nature Magazine, if
we were to provide these same services through human engineering (where we could) it
would cost more that the entire world’s gross national product!
When nature’s capacity to deliver these services is compromised, it can cost taxpayers
dearly. New York City used to have such good quality water that it bottled it. After
development and agricultural uses degraded the watershed, the city was faced with having
to build a $8 billion water treatment facility. Fortunately, someone had the wisdom to ask
first how much it would cost to restore the watershed, letting nature do the work. The
answer was $1–2 billion. So in an experimental effort under the Environmental Protection
Agency’s watchful eye, New York City is hoping to save not only three-quarters of the
capital costs but also the $300 million per year to operate the plant.16
Environmental problems can have direct human and economic impacts. A study
conducted by the medical officer of health in Toronto showed that reducing vehicle
emissions by 30 per cent could save nearly 200 lives and $1 billion in health costs. The
morbidity costs add another $2.2 billion annually.17
Bangkok, famous for its air pollution, has actually made great strides. Thai officials
pressured oil companies to provide cleaner fuels and auto companies to improve their
emissions, phased out two-stroke motorcycles, switched taxis to liquefied petroleum gas,
and convinced crematoria to use electric incinerators. While motor vehicles have increased
by 40 per cent over the last ten years, average levels of the most dangerous particulates, on
average, now fall within the clean air standards used in the US.18
You can be affected by actions outside your borders. For example, deforestation in China
has caused massive sandstorms that have disrupted air traffic as far away as Korea and Japan.
According to the World Health Organization, air pollution associated with industry and
automobiles is killing more than 500,000 Asians each year.19 Pulses of pollution cross the
Pacific and affect the Pacific northwest. African dust storms are affecting coral in the Caribbean.
In the Western world, the most common way of protecting something is through
private ownership. But by and large, no one owns these services and there is no market to
manage their efficient distribution or use. These are public goods, the commons, services
often not included in cost–benefit calculations. So we end up with ‘externalities’, impacts
not accounted for by the companies that cause them, and perverse incentives that
encourage the continuation of unsustainable practices.
Chapter_05.qxd 6/10/2009 4:40 PM Page 99

SUSTAINABILITY IN GOVERNMENT AGENCIES 99

Part of the challenge is to get a handle on what your impacts are. One method is the
ecological footprint. Basically the inverse of carrying capacity, the ecological footprint
quantifies the average amount of land needed per person to provide the resources and
ecosystem services we use. To understand this concept, imagine someone placed a glass
bubble over your city, not allowing anything in or out. You would quickly run out of
certain resources (water, timber, food, etc.) and the wastes (organic waste, carbon dioxide,
etc.) would begin to build up. So the ecological footprint of a city is actually much larger
than its physical boundaries. The ecological footprint quantifies those flows using the
number of acres per person as the measure. Santa Monica, California, used this model,
along with The Natural Step framework, to quantify their improvements. They reduced
their ecological footprint by 5.7 per cent in 1990–2000, requiring four fewer acres per
person than the US average. Unfortunately, this still represents a lifestyle that is far beyond
the Earth’s ability to provide if everyone alive enjoyed that same standard of living.
Government is centre-stage in this drama. Progressive agencies are using a variety of
regulatory and market-based solutions to protect the commons. One such example is
Abotsford, British Columbia. As part of their land use planning, they protected areas of
farmland from development through their Bill 42 Agricultural Land Reserve. In addition
to preserving green space, it increased food security for their residents.

RESOURCES
Since climate is one of the commons that has received a great deal of attention, you may be
interested in these resources:

• US Mayors Climate Protection Agreement, www.usmayors.org/climateprotection/.

• C40 is a collection of the world’s largest cities working with the Clinton Climate Initiative,
www.c40cities.org/.
• ICLEI’s Cities for Climate Protection programme, www.iclei.org/co2/.
• Climate Protection Manual for Cities, www.natcapsolutions.org/ClimateProtectionManual.htm.

Other, broader resources include:

• Costanza, Robert, et al (1997) ‘The Value of the World’s Ecosystem Services and Natural
Capital’, Nature Magazine, May, pp202–209.
• The Center for a Sustainable Economy provides economic models to determine the impact
of environmental market-based tools, http://sustainableeconomy.org.
• Redefining Progress (Ecological Footprint), www.rprogress.org.
• Ostrom et al (1999) ‘Revisiting the Commons: Local Lessons, Global Challenges’, Science,
No 284, pp278–282.
Chapter_05.qxd 6/10/2009 4:40 PM Page 100

100 THE BUSINESS GUIDE TO SUSTAINABILITY

Engineer market-based incentives

According to a Pollution Prevention Northwest article (Fall, 2004), a US Environmental
Protection Agency study in 1999 found that the agency could save almost $50 billion per
year (a quarter of the $200 billion spent annually on environmental management) by
increasing the use of economic incentives in environmental regulation. When acid rain
became a known threat to forests, lakes and buildings, the government might have
instituted tough prescriptive regulations for the major emitters of nitrogen oxides and
sulphur dioxides (fondly referred to as NOx and SOx ). Instead the US government set up
a cap-and-trade system whereby polluters could either clean up their own act or purchase
the rights to other companies’ improvements. This method allowed investments to flow to
the best opportunities and rewarded the companies that did the most. As a result,
emissions dropped much faster than expected at a fraction of the cost to industry that was
initially expected.
Based on the success of this programme, many other systems, including those to
reduce greenhouse gases, are being modelled on it. The US Fish and Wildlife Department,
for example, is using this approach to protect endangered species. They have set up
bankable permits for breeding pairs of red-cockaded woodpeckers. ‘International Paper
currently believes that it can sell banked breeding pairs for about $100,000 each. If several
pairs can nest on each acre, this means that the value of land for breeding woodpeckers is
greatly in excess of its value as a source of timber.’20
Green taxes, more common in Europe than in the US, are another way of getting the
incentives right. For example, in the UK, excise duties on leaded petrol were raised
compared to those on unleaded over time, helping to reduce lead emissions by 70 per cent
in a decade. Get the incentives right and you can change behaviour quickly. A Swedish tax
on the sulphur content in diesel resulted in a tenfold increase in the use of clean diesel in
only 18 months.21
France and Britain are working on a plan to subsidize environmentally friendly products
through tax cuts throughout Europe. The proposal is to reduce Value Added Tax on energy-
efficient products. This is in part driven by green one-upmanship amongst EU members.
‘We want people to say that after the French [took over the EU] presidency, Europe was
transformed into a greener economy with a different kind of growth and consumption
pattern, and that Europe has taken all the necessary steps to bring its partners on board’,
explains Jean-Pierre Jouyet, the Minister for European Affairs.22
Sometimes you just need to educate the citizens. A number of cities in the US are
realizing that the loss of forest cover is costing them dearly. For example, in the Atlanta,
Georgia area a study showed that the cities reportedly would need to spend $2 billion on new
rainwater treatment facilities to deal with the run-off resulting from the loss of tree cover over
25 years. In Cincinnati, Ohio the government is having success reversing this trend by telling
homeowners if they plant two trees, they can save $55 per year in air conditioning bills.
Chapter_05.qxd 6/10/2009 4:40 PM Page 101

SUSTAINABILITY IN GOVERNMENT AGENCIES 101

Public policy is also an important lever. Susan Anderson at the Portland, Oregon
Office of Sustainable Development advises looking for the action that can create a tipping
point. Portland adopted a green building policy that stated, in effect, that any city
buildings or any housing or commercial buildings receiving local tax benefits or
subsidized loans had to be to LEED-certified. Suddenly, a large volume of work was
subject to this requirement, far beyond the city’s own set of buildings. Anderson
commented:

We didn’t need to do much else, architects and developers are a creative bunch.
We provide training, technical help and product information, but they know it’s
to their advantage to learn what they need to know to get the job done. And now,
many of these firms are providing development services throughout the US using
sustainable construction practices related to LEED. It has been a great
partnership between the city and local builders, architects and ensgineers.

RESOURCES
The Center for a Sustainable Economy provides economic models to determine the impact of
environmental market-based tools, http://sustainableeconomy.org.

Reclaim public goods and charge the full cost

While economists often have the most to say in favour of privatization, even The
Economist magazine has concluded that for certain public goods, this is not the best
solution. Water is one example. Life is not possible without it, so privatizing water
resources might lead to only the rich being able to afford it, an untenable policy.
Furthermore, private water companies have not always proved to be more efficient than
their public counterparts. Instead, The Economist advocates raising prices to reflect the full
cost of water, including environmental impacts. California steeply raised prices for
irrigation and added the needs of the environment into the equation, and they also set up
a California Water Bank. Chile charges everyone the full cost of water but gives poor
people stamps to redeem against their bills. The Economist also advocates changing how
water rights are distributed, making these rights tradable so that they can go to serve the
highest value purposes. South Africa, for example, abolished riparian rights and made
water allocations temporary and tradable. Australia separated water rights from property
rights, making water a public good, and then instituted a system of trading, which now
crosses state boundaries.23
Chapter_05.qxd 6/10/2009 4:40 PM Page 102

102 THE BUSINESS GUIDE TO SUSTAINABILITY

Why should public goods – water, radio frequencies, microwave bands, fishing rights,
etc. – be sold once and then traded in the private sector when the government can lease
them instead, providing an ongoing income stream for society?

Create preserves
Often the best way to preserve ecosystem services is to protect vast tracts of habitat.
Dr Daniel Pauly, a world-renowned fisheries scientist, believes that marine preserves are going
to be key to regenerating fish stocks. To make this point in presentations, he shows a slide of
the North Atlantic from roughly the equator to beyond the Arctic Circle. The title of the slide
informs the audience that all the areas in green are protected from fishing; everything is red,
nothing is green at the scale of his map. We don’t need international agreements, he asserts,
since most of the fisheries are within the 200-mile boundary along coastlines. So nations
already have the ability to protect portions of their marine habitat to help stocks recover.
In Curitiba, Brazil, authorities recognized that their city was dependent upon the
health of habitats outside their municipality. They are experimenting with transferring
building rights to protect sensitive habitats both inside and outside its boundaries. If a
developer wants to construct a building with more floors than zoning permits, he or she
can protect one of these lands and, in exchange, the city will grant a variance. This ensures
their citizens can benefit from the ecosystem services (clean water, flood control, etc.) that
stem from lands outside their jurisdiction.

Adopt the precautionary principle

The precautionary principle to some extent switches the burden of proof. In most
situations, the government has to prove that something is unsafe to stop it. The
precautionary principle instead asks manufacturers to prove that their products are safe.
The Precautionary Principle Project defines the concept as ‘acting to avoid serious or
irreversible potential harm, despite lack of scientific certainty as to the likelihood,
magnitude, or causation of that harm’. While it is not feasible to prove that a product is
safe in every situation for every organism on Earth, it is possible to invoke the
precautionary principle when evidence begins to suggest there is a negative impact. At least
in the US, the usual protocol is for companies to continue to sell their products while their
corporate lawyers spend years fighting it out with government officials. Adopting the
precautionary principle in public policy means that a product’s use can be stopped or
phased out until the manufacturers can prove it is safe.
The precautionary principle was used in the Montreal Protocol, an international
agreement to phase out ozone-depleting substances. Because it was believed that the ozone
hole would pose a serious cancer threat, the precautionary principle was made the decision
rule. Why wait for more data when the effects could be so catastrophic? The Montreal
Chapter_05.qxd 6/10/2009 4:40 PM Page 103

SUSTAINABILITY IN GOVERNMENT AGENCIES 103

Protocol was quickly adopted for several reasons. It was a media-capturing event when the
ozone hole was discovered, creating a sense of urgency. It was framed as a human health
issue, making it more personal than vague threats to the environment. It also didn’t hurt
that DuPont had declared they could manufacture alternatives to Freon if a market could
be assured.
Both municipalities and nation states – San Francisco, California, Hungary and Brazil
among them – are adopting the precautionary principle as public policy. Jacques Chirac
has recently added an environmental charter to the French constitution whose ten articles
include the precautionary principle.

RESOURCES
The Precautionary Principle Project, www.pprinciple.net/.
The Precautionary Principle in Action: A Handbook was written for the Science and
Environmental Health Network by Joel Tickner, Carolyn Raffensperger and Nancy Myers,
www.biotech-info.net/precautionary.html#defining.
Appell, David (2001) ‘The New Uncertainty Principle’, Scientific American, January.

Implement regulations
Regulations have been successfully used around the world, especially in Europe, to shift
behaviour patterns, and while the approach is currently out of favour in the US, it still
has an important role to play even there. Examples of landmark European legislation
include:

• the WEEE (Waste Electrical and Electronic Equipment) Directive requiring

manufacturers to take responsibility for many products and their packaging at the end
of their useful life;
• the RoHS Directive (eliminating various hazardous substances in electronic
components, including lead, mercury and cadmium); and
• the REACH (Registration, Evaluation and Authorisation of Chemicals) Directive,
intended to help control chemicals.

Europe is using its significant buying power to change the behaviour of corporations
around the world. Evidence is accumulating that these regulations are already having a
positive impact on human health. Europeans, for example, have significantly lower levels
of synthetic chemicals associated with fire retardants in their bodies than US citizens.
Chapter_05.qxd 6/10/2009 4:40 PM Page 104

104 THE BUSINESS GUIDE TO SUSTAINABILITY

Create a level playing field

Too often, the playing field is tilted toward the unsustainable players. Why else should
virgin-fibre paper cost less than recycled? How can mining virgin aluminium be viable as
long as there are cans to be recovered? In most cases, the answer is that the full cost to
society is not factored into the prices. Businesses count some costs (eg harvesting trees,
making pulp and drying paper) but can ignore others (eg loss of habitat, stream
degradation, landslides and the destruction of fisheries).

Align regulations with your goals

Too often, regulations present a barrier to sustainability. They tend to lag behind
technology and are resistant to change. But if you make it harder for people to innovate,
most will take the path of least resistance and stick with the status quo.
You need to take a proactive approach. The City of Vancouver, Washington, in
partnership with the US Green Building Council–Cascadia region, decided to take six
hypothetical building applications that meet the Living Building Challenge through their
code review process to identify where their building codes and land use codes might
prevent this type of construction. This review will inform their priorities as they work to
improve their building codes. Their expected outcome is to change the codes where
barriers exist and create incentives for these types of projects to be streamlined through the
review process.

Privatize the resource within the right boundaries

People who support privatization often point out that you never wash or change the oil in
a rental car. Why bother? Ownership, if the boundaries are right, can produce better long-
term protection of a resource. However, for this to work owners, to the extent that this is
possible, must be made to internalize their externalities.
For example, imagine a timber company. Their land produces more than trees – it
provides a habitat for plants and animals; it may protect streams and downstream fisheries
and it anchors topsoil. However, traditionally timber companies have only been able to
generate revenue from cutting and selling trees, so there are strong financial incentives
to clear-cut as much as the laws allow. The traditional governmental approach has been to
regulate what they could, for example forbidding harvesting inside riparian zone buffers.
But timber owners, both large corporations and small woodland owners, tend to bristle at
these restrictions. Many clamour to be paid for these ‘losses’.
Geoffrey Heal, in Nature and the Marketplace, presents a different approach. While it
might not be possible to develop markets for all the services timberland might provide, you
can redraw the boundaries of an owner’s responsibilities. Why not combine a timber
Chapter_05.qxd 6/10/2009 4:40 PM Page 105

SUSTAINABILITY IN GOVERNMENT AGENCIES 105

company and a water company? Let the hybrid organization get income not only from
trees but also from water quality. Then the proper financial incentives would be in place
for them to protect the ecosystem services of their land.24

RESOURCES
Heal, Geoffrey (2000) Nature and the Marketplace: Capturing the Value of Ecosystem Services.
Washington, DC: Island Press.

Get the numbers right

Government (ie society) picks up the cost for many impacts caused by business. These
‘externalities’ are not included in the price of products or services. Without the right prices,
markets will make the wrong decisions. Some have suggested that we assign ‘green taxes’ to
correct the market signals, to internalize the cost to society in the product price. And in
some situations these have been effective. For example, Ireland assigned a PlasTax to plastic
bags. In short order, this move reduced demand for plastic bags by 90 per cent and earned
3.5 million euros for other environmental projects.
However, Herman Daly, the former World Bank economist, is not a fan of green taxes.
He worries we’d spend all our time trying to get the numbers just right. Instead, he
advocates taxing resources more than income. He feels that getting most of our
government revenues from natural resources would create the same result with a lot less
effort.
Governments also use broad societal measures to monitor the health of their societies.
Here again Daly highlights major problems with the methods they use: gross domestic
product (GDP) is the benchmark generally used, but GDP only measures money moving
around. It doesn’t distinguish between what most would consider good things (education,
food, housing, etc.) and costs associated with bad things (eg prisons, environmental clean-
up, domestic abuse and antidepressants) which, to some extent, are unintended negative
side effects of our society. It’s like a calculator with only a plus sign. He states, ‘empirical
evidence that GNP growth has increased economic welfare in the United States since about
1970 is nonexistent’.
Most measures of economic growth such as GDP (which has now replaced GNP as
the measure of choice) and traditional economics are blind to nature’s inputs. They may
count the costs of cutting trees, transporting them and milling them but give no value to
the tree itself (the input). Yet without this natural capital, the other steps would be
valueless. Likewise, they do not count the impacts of the outputs and waste on climate
change, water quality, soil erosion and the like.
Chapter_05.qxd 6/10/2009 4:40 PM Page 106

106 THE BUSINESS GUIDE TO SUSTAINABILITY

Daly acknowledges that markets (which GDP does measure) do provide efficient
allocation of resources. However, they don’t deal at all well with justice (redistribution of
wealth) or issues of scale (which deals with sustainability). He says we must begin to view
the economy as a subset of the environment, not separate from it, and as such the issue
then becomes the optimal size of the economy (at least in terms of its use of natural
resources for inputs or outputs/waste). The economy cannot grow forever, especially in
terms of material throughput. And the service/information economy is no saviour because
it too relies on natural resources. As Frederick Soddy put it, ‘No phosphorus, no thought.’
We need natural resources to build cells and proteins so that we can think.
Daly also emphasizes that we must stop counting natural capital as income. At present,
when a timber company harvests trees, it generates revenues, making its financial
statements look healthier. But in fact it has depleted its holdings. Depleting natural and
non-renewable resources should be treated as depreciation. Daly recommends using a
portion of the income from non-renewable resources to finance renewable substitutes.25
Part of getting the numbers right is to measure the right things. Austin Energy is one
utility that has been developing tools to measure carbon return on investment. If you are
making decisions regarding future energy production, it’s helpful to know which options
result in the biggest reduction of greenhouse gases for the least cost.

RESOURCES
Happy Planet Index measures the degree to which a nation is able to provide a high quality of life
while protecting the environment. It’s not a measure of happiness but rather the efficiency with
which a nation converts natural resources into happy and long lives, www.happyplanetindex.org/.
The Index of Sustainable Economic Welfare is similar to the Genuine Progress Indicator
(GPI) and has been calculated for nine countries to date, comparing it to GDP. The following site
has the results for the nine countries (including Chile, Australia, several European countries and
the US GPI): http://community.foe.co.uk/tools/isew/.
In the US, Vassar’s Institute for Innovation in Social Policy publish the Index of Social Health.
They show data in five-year increments and the most recent year for which they post data is
2005. They also produced a report, The Social Health of the States 2008, which provides state-
by-state comparisons. Their indicators are a good shortlist for measuring community health,
http://iisp.vassar.edu/ish.html.

RESOURCES
Cobb, C. et al (1995) ‘If the GDP is Up, Why is America Down?’, The Atlantic Monthly, October.
Daly, Herman, E. (1996) Beyond Growth: The Economics of Sustainable Development.
Boston: Beacon Press.
Chapter_05.qxd 6/10/2009 4:40 PM Page 107

SUSTAINABILITY IN GOVERNMENT AGENCIES 107

Eliminate perverse subsidies

Subsidies are, in the words of Norman Myers and Jennifer Kent, ‘a form of government
support extended to an economic sector, generally with the aim of promoting an activity
that the government considers beneficial to the economy overall and to society at large’.
These can be direct (eg federal or state tax deductions or credits for energy-efficient
appliances) or indirect (eg free parking and roads subsidize the auto industry). In Perverse
Subsidies, Myers and Kent define a perverse subsidy as one that not only hurts the
environment but also comes back to bite the economy. There are a shockingly large
number of these, as cited earlier.
The table below represents Myers and Kent’s best estimates of global subsidies by type
and sector. Note that perverse subsidies are a subset of the total, so you can get a sense of
the percentage of each subsidy type that is having perverse effects.26

Table 5.2 Perverse subsidies

Sector Conventional Externalities Total subsidies Perverse

subsidies (US$ billion) (US$ billion) subsidies
(US$ billion) (US$ billion)
Agriculture 385 250 635 510

Fossil fuel/ 131 200 331 300

nuclear

Road transport 800 380 1180 780

Water 67 180 247 230

Fisheries 25 NA 25 25

Forestry 14 78 92 92

TOTAL 1420 1090 2510 1950

(rounded)

These perverse subsidies lead us to make investments that are counter-productive. One
interesting battleground today is electronic waste. Until recently, companies were not held
responsible for the costs associated with managing the disposal of their products. However,
electronics are filled with heavy metals, which can leach into groundwater in a typical
landfill. European countries were some of the first to refuse to take on the responsibility
for managing this waste, banning TVs, computers and other electronics from their
landfills. Initially, the manufacturers baulked. Until it becomes their responsibility,
Chapter_05.qxd 6/10/2009 4:40 PM Page 108

108 THE BUSINESS GUIDE TO SUSTAINABILITY

manufacturers have few incentives to improve the environmental impacts of their

products. Wayne Rifer, a member of the National Electronics Product Stewardship
Initiative, points out that traditionally, ‘During the whole lifecycle of the product,
manufacturers take responsibility only until the point of sale. And after use when the value
of the product becomes negative, traditionally it then becomes the responsibility of
government.’ Making manufacturers responsible for the product through to end of life
prevents them from externalizing disposal costs on to governments and citizens. Instead,
product stewardship legislation creates an incentive to redesign products to maximize the
value of the materials for reuse and recycling.

Value

Retail sale

Manufacturing

Private Use phase

sector Resource
owns when extraction
value is
positive Recycling

Recovery

Life cycle

Becomes
government
responsibility
End of life
when value is
negative

Figure 5.1 Value, ownership and product life cycle

Source: courtesy of Rifer Environmental. Permission granted.

What is the solution? Product stewardship has the potential to solve the particular problem
Rifer mentions above. (See more in the Manufacturing chapter.) Beyond that, Myers and
Kent advocate making subsidies transparent. Since subsidies are often unpopular, this helps
to balance out those who have a vested interest in maintaining subsidies. It also helps to
build collaboration across constituencies. For example, environmentalists, deficit hawks
and neo-conservatives can agree we shouldn’t borrow from our children’s future. The Sierra
Club, Friends of the Earth and the Wilderness Society banded with Citizens for Tax
Justice, Taxpayers for the Common Cause and the US Public Interest Research Group to
expose perverse subsidies. Myers and Kent also recommend using regulations, user charges,
Chapter_05.qxd 6/10/2009 4:40 PM Page 109

SUSTAINABILITY IN GOVERNMENT AGENCIES 109

tradable permits and green taxes where appropriate. Sunset clauses should be included in
new subsidies to ensure that they come up for review periodically, so they can be removed
when they are no longer needed or have become perverse.
Since public utilities are usually more heavily regulated than other businesses, and
because they are a primary source of greenhouse gases, governments need to ensure that the
incentives work properly there as well. If power companies can only grow if they sell more
electricity and if they are required to invest only in the lowest-cost generation, they will
probably make decisions that undermine sustainability goals. Decoupling rates and
production is key. In California, for example, the utilities are rewarded for investing in energy
conservation, and when they meet certain goals, the state allows them to charge higher rates.27

Protect and help people who need it

In the early part of the last century taking care of the needy was largely a task for churches
and communities. Now, however, many citizens expect governments to take care of
homelessness, hunger, illiteracy, drug abuse, child abuse, gangs and domestic violence. It’s
a tall order, especially in times of reduced funding.
In troubled Oakland, California, Van Jones of the Ella Baker Center is spearheading a
Green Jobs Corps programme to solve several problems at once. He plans to train
disadvantaged people in poor communities to do ‘green jobs’, including installing solar
panels, fixing bicycles and farming organically. He’s secured funding to create these green
jobs in the area in the hopes of lifting many minorities into the new economy. The
offshoots of this effort are employing young adults who might otherwise join gangs to do

RESOURCES
Myers, Norman and Jennifer Kent (2001) Perverse Subsidies: How Tax Dollars Can Undercut
the Environment and the Economy. Washington, DC: Island Press.
Subsidy Watch, www.iisd.org/subsidywatch.
The Product Stewardship Institute at www.productstewardship.us is a non-profit organization
of governmental entities that sets priorities for product stewardship initiatives in the US.
The National Electronic Product Stewardship Initiative, see www.nepsi.org/, is a US
initiative to solve end-of-life issues for electronic products.
WEEE (Waste Electrical and Electronic Equipment) Directive, www.europa.eu.int/comm/
environment/waste/weee_index.htm.
For British Columbia’s extended product responsibility (EPR) programmes, see Driedger,
R.J. (2001) ‘From Cradle to Grave: Extended Producer Responsibility for Household
Hazardous Wastes in British Columbia’, Journal of Industrial Ecology, Vol 5, No 2, Spring, p89.
Chapter_05.qxd 6/10/2009 4:40 PM Page 110

110 THE BUSINESS GUIDE TO SUSTAINABILITY

energy audits and recently incarcerated convicts to build green homes on brown fields.
This is an elegant coupling of social, economic and environmental goals. While the
challenges are immense, if it works, this could become a model for other troubled cities.28
The developed world can learn a lot from the developing world in this area, as people
there have more profound problems and even less money. We’ll use Curitiba again as a
source of inspiration.

Focus on prevention
The old adage, an ounce of prevention is worth a pound of cure, is certainly true in the
sustainability realm. Our societies seem all too eager to pay for the misery after the fact
but resist investing in prevention. We should invest in programmes that are proven to
reduce health and psychological problems: parenting skills, early education and healthy
habits.
For example, take Ontario’s Healthy Baby, Health Children programme which screens
and assesses all pregnant women and all new mothers. They provide home visits and
referrals. This programme has led to higher scores in infant development (a marker for
their future earning ability as adults), and family violence has dropped. Note that in the
US, child abuse costs $94 billion per year).29
Early treatment is key as well. Instead of locking up juvenile offenders in large prison-
like compounds, Missouri puts their troubled youth into small group settings with highly
trained staff. As a result, only 8 per cent of these kids end up in adult prisons, while in
California half are behind bars within two years. Missouri’s programme also costs less.
They spend $43,000 per year per child whereas California pays about $80,000 per
child.30

Perform triage
On a recent visit to Curitiba, one of the authors saw no homeless people, a dramatic
contrast to her home in Portland, Oregon. Certainly, some people lived in conditions that
many in the developed world would find unacceptable, but no one was wandering the
streets, pushing stolen shopping trolleys or urinating in alleys. How had this relatively
favourable situation been accomplished? In Curitiba, if you see someone on the street who
appears to need help – perhaps you see a homeless man or a runaway teenager – there’s a
central number to call. A social worker is dispatched to offer assistance. That is one entry
point to their network of public–private partnerships to address social needs, everything
from food and housing to job training and substance-abuse programmes. The authorities
provide free rent in business incubators, where they also provide training in marketing and
other business skills. They also set up markets for people to sell their wares. Curitibans are
working hard to move away from a care-taking philosophy where government is
Chapter_05.qxd 6/10/2009 4:40 PM Page 111

SUSTAINABILITY IN GOVERNMENT AGENCIES 111

responsible for taking care of people to one where individuals and communities share in
the responsibility to make things better.

Combat hunger
Curitiba’s programmes emphasize good nutrition. Instead of just providing food stamps,
there are a number of ways to put fresh fruits and vegetables into the hands of the poor. In
the favelas, a waste-for-food exchange as a way of cleaning up the shanty towns and
reducing disease was implemented. People bring refuse and recyclables to the edge of the
favela (an area with streets too narrow for the refuse collection vehicles to manoeuvre) and
exchange them for surplus produce. There are also low-cost groceries at Citizenship Streets,
buildings along the major transportation routes which house, in a decentralized fashion,
the city services people are likely to need: job training, legal assistance, business licences,
social services, etc. When people come to pick up their packet of staples (rice, beans, flour,
etc.), they are asked to spend an hour in training where they learn to read, develop job
skills, discover how to make meals from kitchen scraps, and hone their parenting skills.

RESOURCES
Smith, Stephen C. (2005) Ending Global Poverty: A Guide to What Works. Palgrave Macmillan.

Provide housing
As in any city, providing affordable housing is a challenge. One mechanism Curitiba uses
to fund new projects is transferring building rights. Similar to the programme mentioned
earlier in this chapter where they used building rights to preserve precious habitat, in some
situations they allow builders to construct a taller building than zoning allows. The
developer pays a fee for the additional floors that goes into a low-income housing fund.

RESOURCES
Bullard, Robert (2005) The Quest for Environmental Justice: Human Rights and the Politics of
Pollution. San Francisco, CA: Sierra Club Books.
Sachs, Jeffrey D. (2005) The End of Poverty: Economic Possibilities for our Time. New York:
Penguin Press.
For a fascinating example of creating healthy communities in the poorest communities and
settings (in Colombia), see Weisman, Alan (1995) Gaviotas: A Village to Reinvent the World.
White River Junction, VT: Chelsea Green Publishing.
Chapter_05.qxd 6/10/2009 4:40 PM Page 112

112 THE BUSINESS GUIDE TO SUSTAINABILITY

Guide us toward a better future

We all hope that our governments have the foresight to set into motion policies that will lead
us toward a better future. In addition to all the strategies we have already mentioned, there are
many ways, both big and small, for government to use its clout. Here are a few to consider.

Model and encourage new behaviour

Habits are hard to break. Sometimes government needs to model new patterns of behaviour.
For example, Japan wanted to change energy use patterns to achieve their Kyoto greenhouse
gas goals. So their prime minister, Jurichiro Koizumi, built a campaign to encourage workers
to dress casually during the summer. To be without a coat and tie was considered
unprofessional, so this represented a major cultural shift. He told his cabinet ministers to
show up in shirtsleeves and was photographed in casual attire with US President George
Bush. He decreed that air conditioning thermostats be set to 28°C (82°F). He even
sponsored a Cool Biz Collection fashion show that he hoped would result in a boost to the
economy, resulting in an estimated US$92 million in consumer purchases.
Educating the community is also a critical task. The resort community of Whistler,
British Columbia convened a group of community leaders and businesses to create the
Whistler: It’s Our Nature programme. The members included the municipality of Whistler-
Blackcomb, the Fairmont Chateau Whistler, Tourism Whistler and the Association of
Whistler Area Residents for the Environment. They developed four toolkits: a household
kit, a small business kit, a kit for schools and a community sustainability kit. These were
funded in part by foundations and were distributed in the community to build awareness.
In this global world, inspiration can come from far away. The mayor of Kamikatsu, a
small community in eastern Japan, is pushing community leaders around the world to
follow his lead and make their towns zero waste. Kamikatsu residents compost all their food
waste and separate rubbish into 34 different categories. There are no waste collection
services at all, so residents must take responsibility for anything they throw away.31

Use purchasing as a way to drive markets

The high-tech industry was launched a few decades ago by the military. Their long-term
demand accelerated production, drove down costs and inspired research and development.
Similarly, governmental purchasing guidelines for recycled content paper and LEED-rated
green buildings have created a cost-effective market for those products and services.
Oregon’s Department of Administrative Services is trying to enlarge their influence and
bulk purchasing power by encouraging schools to use the state’s purchasing programmes.
Recently, the City of Portland in Oregon issued a request for proposal (RFP) to
purchase all their electricity on the open market from wind farms rather than through their
Chapter_05.qxd 6/10/2009 4:40 PM Page 113

SUSTAINABILITY IN GOVERNMENT AGENCIES 113

local utility. To protect the interests of their taxpayers, the RFP stated that it couldn’t cost
a cent more than what the city was paying now, even though the green power programmes
in the area all cost a premium. The city is currently in negotiations with a company and it
appears that the power will actually cost less. The main benefit to the community, though,
is this contract creates a larger market for renewable energy. It also helps to heal the
urban–rural divide. In Oregon, there has historically been friction between the
conservative rural areas and the more liberal, populated and powerful urban areas. Since
the wind farms will be in the rural parts of Oregon, this is a way to benefit these
economically challenged regions. Also, it may be possible, once this contract is in place, for
other communities and large power users to be added to this groundbreaking agreement,
multiplying the market effects.
Don’t underestimate the power of putting the word ‘sustainability’ in your RFPs.
Making it one of many criteria sends a strong signal to potential respondents and it will
create a ripple of learning. AXIS Performance Advisors were once asked to become part of
a team proposing on a waste treatment job. We have no experience in that field but the
engineering firm needed someone on the team with knowledge of sustainability since it
was mentioned in the RFP. By the time the proposal was written, our firm had provided
them with a grounding in the concept.
Write sustainability-related terms into your contracts as well, perhaps as add-on
options. For more information about using purchasing as a lever, see the chapter on
purchasing later in this book.

Develop social capital

To a large extent, the social fabric of a community is defined by the connectedness among
its members – what social researchers call the social capital of a community. Government
can play a significant role in developing social capital by providing an infrastructure that
promotes interaction and involvement. Robert Putnam, noted professor at Harvard and
author of Bowling Alone and Better Together, has documented an interesting phenomenon in
the US. His research shows a steady decline in civic participation and social connectedness
in the US since the 1970s as measured by a drop in membership in civic organizations and
clubs, attendance at public meetings, involvement in school groups, voter registration and
even a decline in social gatherings like picnics and card parties. He draws compelling
correlations between these indicators and other trends such as increasing crime rates.
Interestingly this trend has been consistently documented in every American city save
one. Portland, Oregon has succeeded where every other American city has failed in
engaging its population and actually increasing civic involvement. Steven Johnson, a
professor in the Urban and Public Affairs department at Portland State University, built on
Putnam’s research to examine what was going on in Oregon. Though the reasons for the
Chapter_05.qxd 6/10/2009 4:40 PM Page 114

114 THE BUSINESS GUIDE TO SUSTAINABILITY

countervailing trend are complex, Johnson cites the state’s opportunities for involvement
in formal activities such as neighbourhood associations (that have surprising authority over
neighbourhood governance), watershed councils (that work across territories and agency
jurisdictions to protect and restore Oregon waterways) and a multitude of public hearings
that give citizens a voice in major decisions such as school management, urban growth
boundaries and civic projects. Johnson also believes that along with these formal
opportunities communities need to create informal gatherings that bring people together
in social settings to enable them to develop holistic relationships. People who have had a
social relationship understand each other better and are less likely to fight with one another
when it comes to doing the formal work of shaping community policies.32 While this level
of involvement often seems cumbersome and time-consuming, the result is actually less
government as the community takes more direct responsibility for its governance,
requiring less regulation and interference.
Denmark also has a strong system for civic involvement. Danish citizens engage in
dialogue about the impacts of policy decisions, giving them a voice in shaping their
communities on important public policy issues.

When a new technology is presented to the Danish government for approval, the
Board of Technology invites a number of ordinary people, from various
backgrounds, to serve as a sort of jury. In 1992, for example, such a jury tackled
the question of genetic engineering in animal breeding. The jurors sat through
two background briefings, then went on to hear and cross-examine witnesses for
and against: scientists, experts on the social effects of technology and
representatives of interest groups. After due deliberation, they gave their verdict
to a national press conference. Among other things, they found against using
genetic manipulation to make new kinds of pets, but in favour of using it to help
find a cure for human cancer. Though their decision was not binding, it had
enough moral weight to sway parliamentary votes on the matter.33

Processes like these can ensure that policy decisions are thoroughly weighed and can also
provide a means of educating the public.

RESOURCES
Putnam, Robert D. (2000) Bowling Alone: The Collapse and Revival of American Community.
New York: Simon and Schuster.
ICLEI is working on methods to reduce violence, insecurity and conflict in communities. Go
to www.iclei.org/index.php?id=806.
Chapter_05.qxd 6/10/2009 4:40 PM Page 115

SUSTAINABILITY IN GOVERNMENT AGENCIES 115

Provide incentives and grants for needed research

Government in the US used to be a major source of funding for research. Over the last
couple of decades, however, this task has increasingly devolved to the private sector.
There are areas where business is well suited to this task. But there are a number of
drawbacks in government taking a back seat. First, company research is focused on
those areas where they expect to make huge profits. This has tended to ignore
important issues where there may not be a lucrative market, for example diseases of the
poor such as malaria, which in turn causes human misery in the developing world.
Second, business prefers patentable solutions over natural ones, creating even more
synthetic or genetically modified products to worry about. And third, and perhaps
more problematic, businesses focus on issues that are likely to pay off relatively quickly,
while it will require long-term research and development to solve some of our
sustainability-related challenges. Solar photovoltaics, for example, are still not cost-
competitive in many markets (as long as externalities are ignored) except in remote
areas far from existing power lines. We need to increase the efficiency of these solar cells
and also ramp up production to bring the costs down. Similar problems have been
encountered with social issues. Governments around the world are currently having to
spur funding for the development of vaccines and antiviral drugs to combat the threat
of a bird flu pandemic.
The Golden Carrot was a programme in 1993 that jump-started research on more
efficient appliances in the US. While it was initiated by utility companies, it still provides
one successful model. Rather than offsetting the cost of research and development, they
offered an incentive of $30.7 million to a single manufacturer that could design, build and
distribute refrigerators that were 25–50 per cent more energy efficient than comparable
models. This incentive got the attention of the entire industry. Today refrigerators are 30
per cent more energy efficient than they were prior to this programme.

Create audacious goals and policies

A clear compelling vision gets people excited and also provides business with some
certainty about the future. At least 13 US states and a number of nations have set
renewable electricity standards, goals for the percentage of energy which must come
from such cleaner sources as wind, geothermal and solar.34 Iceland has upped the ante by
setting a goal to be the first hydrogen economy. Governor Arnold Schwarzenegger
committed California to reducing greenhouse gases by 80 per cent below 1990 levels by
2050. Portland, Oregon has a goal to have the city government served by 100 per cent
renewable power by 2010. Switzerland is working toward a 2000-watt society, an idea
that started as an academic exercise but has since gained the support of the federal
government. These goals often generate excitement and coalesce different groups so that
they can collaborate.
Chapter_05.qxd 6/10/2009 4:40 PM Page 116

116 THE BUSINESS GUIDE TO SUSTAINABILITY

Government is also in a position to clarify priorities and create a context for a high
quality of life. The US has the dubious honour of having edged ahead of Japan as the most
workaholic nation. Compare that with policies in the European Union, where a directive
prescribes four weeks of vacation for all. The Netherlands has a ‘1.5 jobs’ policy for parents
with children, encouraging them to have at least one parent stay home at least part time.
They offer five to seven weeks’ paid holiday plus ten days’ unpaid personal time. Part-time
work is encouraged instead of being a blight on your career, with approximately 40 per cent
of the workforce working this way. Benefits are prorated but the national health plan
protects workers if they become ill. It is not policy to maximize GDP; instead the goal is
to maximize quality of life. In the US people seem to have forgotten what an economy is
for. Those who say that Europe, with these ‘socialistic’ practices, can’t compete should
consider that many US companies invest heavily in Europe. If Europe’s practices were
really that unprofitable, it’s unlikely this would be the case.

RESOURCES
Pollar, Odette (1999) Take Back Your Life. Conair Press.
Sustainable Communities Network.
Healthy Cities Network (World Health Organization).
ICLEI: Local Governments for Sustainability, www.iclei.org, and the Local Agenda 21
Campaign, www.iclei.org/index.php?id=798.

Sponsor award programmes

Award programmes can often help get a new concept anchored. In the US the Malcolm
Baldrige National Quality Award created a lot of interest in total quality management practices
while also providing a useful self-assessment tool. The Environmental Protection Agency’s
green chemistry award programme is serving this same need and generating inspiring stories.
Individual states or local governments have also created their own award programmes. For
example, New Mexico created the Green Zia programme, an environmental performance
award modelled on the Malcolm Baldrige National Quality Award.
One of the more creative efforts we’ve seen is in Oakland, California. Waste
Management, KTVU Channel 2 and Alameda County are collaborating, using the reality-
show craze to educate the public. At the time of writing they are seeking contestants to be
part of a zero waste challenge reality show where four families will compete for four weeks
to reduce their waste streams. We just hope they keep the cameras rolling at night lest
contestants leave bags of rubbish on one another’s doorsteps after midnight! (For more
information about this programme, go to www.ktvu.com/wastechallenge/index.html.)
Chapter_05.qxd 6/10/2009 4:40 PM Page 117

SUSTAINABILITY IN GOVERNMENT AGENCIES 117

RESOURCES
Green Zia, www.mnenv.state.nm.us/Green_Zia_website.
The European Campaign of Sustainable Cities and Towns sponsors a Sustainable City
Award, www.global-vision.org.

Make information visible

Sometimes all government needs to do is to make certain data easily retrievable. The
Toxic Release Inventory forced US companies to report their emissions. While the
method of reporting was in some ways misleading, no company wanted to be at the top
of the list: just the threat of the information becoming public prompted changes in
behaviour.
More often, governments compile important information to encourage rather than
discourage behaviour, helping the public make better decisions. For example, in both the
US and the UK, groups are publishing green ratings for cars.
Similarly, labelling requirements can make a difference. Energy Star ratings on
appliances were an early form of this strategy. Many fast-food outlets have eliminated
trans-fatty acids, associated with coronary heart disease, after the US Food and Drug
Administration proposed listing them on food labels. Agricultural interests have fought
hard to prevent genetically modified organisms from being identified for the same reason.
But information is empowering.
Portland and surrounding Multnomah County, Oregon have been tracking and
reporting on greenhouse gas emissions. In conjunction with their energy policy (the first
was written in 1979) and action plan, these measures have helped the area achieve the
Kyoto Protocol goals. The area has reduced its climate impact almost to 1990 levels despite
a significant increase in population (whereas the trend nationally is up by 13 per cent). On
a per capita basis, the area has reduced greenhouse gases by 12.5 per cent. This received
significant coverage in the media. Policy, measures, action plans and education can come
together to get results.
Similarly, Oregon measures the overall health of the state with its Oregon
benchmarks. These measures track social, environmental and economic indicators over
the long term, including everything from teenage pregnancy to air quality and job
creation. These benchmarks are linked to agencies that can affect them, with local
jurisdictions having their own set of measures. In practice, these do not drive public
policy and legislation to the degree they could, but they do provide a scorecard for how
the state is doing.
Chapter_05.qxd 6/10/2009 4:40 PM Page 118

118 THE BUSINESS GUIDE TO SUSTAINABILITY

RESOURCES
ICLEI: Local Governments for Sustainability, www.iclei.org, and their Cities for Climate
Protection Campaign, www.iclei.org/index.php?id=800.
Oregon Benchmarks/Oregon Progress Board, www.egov.oregon.gov/DAS/OPB/obm.shtml.

Integrate sustainability into education

Sustainability requires systems thinking, the ability to envision how things are
interconnected. It also requires some scientific understanding. So embedding sustainability
into curricula, beginning at an early age, will be key to its success.
Massachusetts Institute of Technology (MIT) has created activities for elementary and
secondary schoolteachers to impart systems thinking skills to children. Many universities
are now carving out niches relating to sustainability: the University of Oregon in green
chemistry, Portland State University in urban design, Iowa State in sustainable agriculture,
for example. Some have developed partnerships. For example, MIT, The University of
Tokyo, Chalmers University of Technology and the Swiss Federal Institute of Technology
have formed the Alliance for Global Sustainability to ‘promote joint research projects that
will result in realistic policy proposals for the development of a civilization that can be
sustained within the limitations required to preserve the global environment.’35

RESOURCES
University Leaders for a Sustainable Future, www.ulsf.org.
Talloires Declaration, www.ulsf.org/programs_talloires.html.
National Wildlife Federation’s ‘Campus Ecology’ programme, www.nwf.org/
campusecology.
Education for Sustainability Western Network, www.efswest.org.
Good Company’s self-assessment ‘toolkit’, www.goodcompany.com.
Reimagine Education, www.reimagineeducation.org.
Cloud Institute for Sustainability Education, www.sustainabilityed.org.
Center for Ecoliteracy, www.ecoliteracy.org.

Equalize opportunities
Government is supposed to benefit all people, but campaign financing gives undue weight
to the big, rich players who are often wedded to the status quo. Sometimes, however, their
Chapter_05.qxd 6/10/2009 4:40 PM Page 119

SUSTAINABILITY IN GOVERNMENT AGENCIES 119

interests are not mutually exclusive. When Jaime Lerner, the former mayor of Curitiba,
Brazil, decided to give preference to public transportation over those who could afford cars,
he didn’t just make life better for the poor, he made the city more liveable for everyone. He
invested in infrastructure for public transportation which could benefit everyone, instead
of infrastructure for personal vehicles alone.
One way government can improve the life of the majority of its citizens is to promote
policies that broaden ownership. In The Ownership Solution Jeff Gates tries to answer the
question, why does capitalism create so few capitalists? Why does such a small percentage
of the population benefit wildly, while the rest struggle with comparative insecurity?

One of today’s most profound tests – morally, economically and socially – is whether
global capitalism can be coaxed to create more haves and fewer have-nots. That,
in turn, may well determine the fate of democracy – which will never realize its
full potential until based on an economically just foundation in which its
constituents are full participants, not simply wage earners and occasional voters.

Company share purchase plans and retirement plans are insufficient. According to a
Harvard study, 71 per cent of US households hold less than $2000 of shares in any form.
Gates again:

Expecting a broad base of wage earners to buy their way into significant
ownership (ie from their already stretched paychecks) is what I call ‘Marie
Antoinette Capitalism’ – only instead of urging, ‘Let them eat cake’, the modern
refrain is, ‘Let them buy shares’. Today’s closed system of finance has much the
same economic effect as the enclosure movement of the eighteenth century –
creating pools of people who, deprived of any realistic chance to own, find
themselves competing against each other for an ever dwindling number of
well-paid jobs.

Gates presents a number of different options to increase the level of ownership of

everyday people. For example, in Jamaica they developed related enterprise share
ownership plans (RESOPs) that allowed employees not only to acquire shares in their
small enterprises (which are notoriously unstable) but also in their suppliers and
distributors (which could allow them to gain shares in larger firms). Under programmes
like this, even migrant farm workers can build a portfolio so their wealth is not just based
on the number of hours of back-breaking work they can do. Customer Stock Ownership
Plans allow customers to gain shares in such organizations as local utilities. Alaska’s oil
fund, which pays money to all residents annually, is another example where the benefits
of a natural resource are shared by the community. Local, barter-based currencies also
Chapter_05.qxd 6/10/2009 4:40 PM Page 120

120 THE BUSINESS GUIDE TO SUSTAINABILITY

tend to favour small, local enterprises. Perhaps the best-known example of this is in
Ithaca, New York. There citizens created their own local currency called Ithaca Hours.
These pay for everything from groceries to professional services but can only be redeemed
at local businesses.
Gates calls into question our slavish attention to job growth as an economic strategy
when real wealth and economic security are more likely to be created through ownership
and capital. He asks good questions in his book. We have environmental impact
assessments on public investment; why don’t we have ownership impact assessments?
Why do most of the growth benefits go to institutional investors instead of employees?
Why not offer preferential tax treatment to employee-owned ventures including
cooperatives, which are used extensively in Costa Rica, for example, as an economic
development strategy?36

RESOURCES
Gates, Jeff (1998 ) The Ownership Solution: Toward a Shared Capitalism for the 21st Century.
Reading, MA: Addison-Wesley.

Use public pension funds as a signal to business

Socially responsible investing is the fastest growing sector on Wall Street. Government
pension funds have on occasion played an important role, for example in protesting against
apartheid South Africa. The California Public Employees’ Retirement System (CalPERS)
has even worked to oust directors of corporations. As their Global Proxy Voting Principles
(19 March 2001) show, they use their clout intentionally.

However, actions taken by CalPERS as a shareowner can be instrumental in

encouraging action as a responsible corporate citizen by the companies in which
the Fund invests. Moreover, through its Economically Targeted Investment
(ETI) policy, the Board has recognized that the interests of CalPERS’
beneficiaries can be served by considering – in addition to maximizing
investment returns to the Fund – collateral benefits to the national, regional
and state economies.37

Conclusion
Government has such an important role to play in driving us towards a sustainable future.
Whether you work in a small, local department or in regional or national government, you
Chapter_05.qxd 6/10/2009 4:40 PM Page 121

SUSTAINABILITY IN GOVERNMENT AGENCIES 121

can facilitate the emergence of new markets through your purchasing and contracting
practices and use sustainability to uncover ways to do more with less. Emphasize positive
incentives to encourage performance beyond compliance. In the core work of your agency,
keep the long, sustainable view in mind and seek ways to deliver even greater benefits. Take
risks, even though your workplace may discourage it – we can’t get to sustainability without
your leadership.

SCORE GOVERNMENT
See page 33 for how to complete this assessment and page 36 for how to interpret your
score.
NOTE: This assessment focuses on the larger impacts government has on its community.
This assessment is intended to be used at a municipality, regional or national level,
although an individual agency may want to score itself on a practice that directly relates to
its mission. Governmental agencies should also take the services assessment (on page 51)
to capture their internal impacts and the appropriate functional assessments.

Government
Practice Incubator Initiative Integrated Points
1 point 3 points 9 points
Energy Policy: Offer and promote Have a system of Have set a renewable
Promote free energy audits incentives that standard of at least 50%
energy to constituency. encourages renewables by 2025.
efficiency, organizations and Have a viable plan and
conservation individuals to conserve are on track to reduce
and energy and switch to greenhouse gases by at
renewables. renewables. least 80% by 2050.

Land Use: Use smart growth Have in place long-term Base the long-term land
Promote and associated land use plans that use planning on an
sustainable principles and protect important natural estimate of population
land use policies in new services (clean water, growth and carrying
practices. development and carbon sequestration, capacity such that if
redevelopment recreation, biodiversity, needed, the community
projects. Provide wild lands, etc.) and could provide for 80% of
outreach and natural resources its critical needs (food,
education. (agriculture/forests/ water, fibre, etc.) locally.
fisheries).
Chapter_05.qxd 6/10/2009 4:40 PM Page 122

122 THE BUSINESS GUIDE TO SUSTAINABILITY

Government
Practice Incubator Initiative Integrated Points
1 point 3 points 9 points
Transportation: Transportation Give preference and Require major employers
Actively planning is support to public and to reduce one-person-
promote the integrated with land alternative transportation per-car commuting
reduction of use planning. All through investments, through a variety of
climate, air- public incentives, and incentives.
quality and transportation regulations.
congestion vehicles use clean
impacts fuels. Provide
associated with outreach and
transportation. public education.
Contract Include Write sustainability criteria Develop systems to help
Services: Use sustainability as a and requirements into others identify vendors/
purchasing selection criterion in contract language for all suppliers with effective
power to all requests for contractors hired. sustainable practices (eg
influence the proposals. award programmes,
marketplace. database of sustainable
organizations).
Buildings: Set a better-than- Actively promote green Increase building code
Promote green code standard for building practices in the requirements to LEED
building all new government community through silver or equivalent.
practices. buildings (LEED- education, incentives,
silver or technical assistance, etc.
equivalent); use
green building
principles when
remodelling existing
facilities.
Waste Provide convenient Build markets for Implement product
Management: recycling services recyclable materials stewardship/EPR
Move toward a for organizations through economic legislation for all toxic
‘zero waste’ and the public for development incentives, materials, requiring some
society. all recyclable/ technical assistance, and form of product take-back
compostable purchasing practices; such that it creates
materials. provide convenient incentives to the
hazardous waste manufacturers to create
collection systems for all more sustainable
toxic products including alternatives.
electronics, batteries,
pharmaceuticals, paints,
pesticides, etc.
Chapter_05.qxd 6/10/2009 4:40 PM Page 123

SUSTAINABILITY IN GOVERNMENT AGENCIES 123

Government
Practice Incubator Initiative Integrated Points
1 point 3 points 9 points
Economic Use sustainability Educate existing Create legislation,
Development: as a criterion for businesses about regulations and other
Encourage selecting targeted sustainability and provide mechanisms to eliminate
sustainable industries. services to develop unsustainable practices in
development. effective business the community.
clusters.
Human Health: Ensure all citizens Actively promote healthy Adopt the Precautionary
Promote human have access to lifestyle choices (diet, Principle as policy.
health and basic health care exercise, stress
well-being for and basic services management, etc.)
all citizens. (shelter, food, through education,
drug/alcohol events, labelling and
prevention, mental incentives.
health services, etc.).

Tolerance and Actively recruit and Have programmes that At least every five years,
Diversity: hire from teach tolerance and systematically evaluate
Promote disadvantaged conflict resolution. Provide the community’s well-
practices that populations. mediation and arbitration being and have effective
enable all Provide job and services. systems in place to
citizens to literacy training. increase social capital
reach their and civic engagement
potential. (eg neighbourhood
associations, citizen
advisory committees).
Education: Include some Embed sustainability into Sustainability education is
Ensure all sustainability the curriculum of primary required in high school
citizens have content in primary and secondary education and higher education,
the knowledge and secondary and create sustainability linked to social, economic
and skills educational demonstration and and environmental subject
necessary to materials, including community service matter. Ensure that every
participate in a systems thinking. projects. In higher citizen (children and
sustainable Assess schools on education, develop strong adults) receives regular
society. their sustainability academic and research messages about how to
performance and programmes. be more sustainable and
act on the results. gets meaningful feedback
on the overall
performance of their
community.
Chapter_05.qxd 6/10/2009 4:40 PM Page 124

124 THE BUSINESS GUIDE TO SUSTAINABILITY

Government
Practice Incubator Initiative Integrated Points
1 point 3 points 9 points
Global Peace Provide outreach Screen purchases and Actively support
and Prosperity: and education to investments to avoid sustainable economic
Promote help local citizens supporting regimes or development throughout
practices that understand global organizations that the world through
avoid war, de- sustainability contribute to world education, exchange
escalate challenges and the problems. Give programmes,
tensions, and impacts their preference to participation in
prevent mass decisions can have organizations that actively sustainability-related
migrations due on other peoples. work to prevent world organizations, technical
to famine, problems. assistance, aid, and
natural trade.
disasters, or
political strife.

Emergency Regularly educate Have an effective network Have systems for

Preparedness: the community of trained disaster relief handling sewage and
Have effective about potential workers spread containing hazardous
plans in place threats and what to throughout the community materials without
to protect do to protect and a robust electricity or other major
citizens, themselves. Have communication system; infrastructure elements
property and programmes that have a well-tested plan such that there will be no
the help them put for foreseeable disasters. harmful releases into the
environment in together an environment.
the case of emergency
natural or man- preparedness plan
made and kit.
disasters.

Total

Average
Chapter_06.qxd 6/10/2009 4:37 PM Page 125

Part 3

Sustainability by Organizational Function

Chapter_06.qxd 6/10/2009 4:37 PM Page 126
Chapter_06.qxd 6/10/2009 4:37 PM Page 127

6
Senior Management:
How to Lead the Sustainability Effort

Senior management acts as the antennae of the organization, sensing and making sense of
changes in the world. They must foresee both continuous and discontinuous change and
then develop strategies to steer around looming problems.
Sustainability can be a particularly useful tool for top management to organize their
thinking and explore issues that are currently off their radar screen. Because sustainability
is rooted in long-term worldwide trends and science, it can make strategic planning more
tangible and urgent.

WHAT YOU SHOULD KNOW ABOUT SUSTAINABILITY

According to PricewaterhouseCoopers’ sixth annual survey of 1000 chief executive
officers (CEOs) from 43 countries, 79 per cent of these executives agreed that
‘sustainability is vital to the profitability of any company’, 71 per cent said they would
consider sacrificing short-term profitability, if needed, in exchange for long-term
shareholder value when implementing a sustainability programme and 67 per cent
thought that sustainability was not just a public relations issue. Most were driven by a
desire to enhance their brand, attract employees and provide improved shareholder
value. Some of the most commonly mentioned practices they were putting into place
included writing codes of conduct, evaluating environmental impacts of their operations
and working on the sustainability performance of their entire supply chain. (The entire
report can be downloaded from www.pwcglobal.com/gx/eng/ins-sol/survey-rept/ceo6/
index.html.)1
Top management must juggle the competing interests of different stakeholder groups:
customers who want good value, shareholders who want quarterly profits, employees who
want meaningful work and regulators who want safety for employees and the
environment. Sustainability can help management come up with creative strategies that
meet multiple needs, turning ‘ors’ into ‘ands’.
Chapter_06.qxd 6/10/2009 4:37 PM Page 128

128 THE BUSINESS GUIDE TO SUSTAINABILITY

There are so many issues that demand executive attention: new regulations, climate
change, corporate ethics, diversity, quality and customer service, financial return,
globalization, and fair wages are among them. Don’t think of sustainability as something to
add to this list. Think of it as a way to integrate them. We helped one of our clients see how
sustainability could enable employee empowerment, lean manufacturing and corporate
social responsibility programmes while also adding a new, needed perspective to get ahead of
the curve rather than reacting to each issue as it arrived.
One misconception that prevents many executives from pursuing sustainability is the
assumption that it will end up costing more. In fact, as long as you filter ideas through a
normal ‘does this make sense for us to do now?’ decision process, the sustainable action
often saves money, yielding unanticipated benefits as well. Consider the following:

• Green buildings can now be constructed at about the same cost as traditionally
constructed buildings but save over 30 per cent in operating costs.
• Organizations that adopt a zero waste strategy usually find lucrative markets for their
‘residual products’.
• The Domini 400 Social Index, a stock index of socially responsible companies, has
performed as well or better than the Standard and Poors, a broad market index, for
many time periods.
• A recent award-winning study concluded that organizations that focus on the concepts
of eco-efficiency increase their market valuation as well as financial performance.2

In addition, and perhaps even more important, sustainability can help you manage risk to
your operation and your image. Consider that:

• The number of corporate social responsibility (CSR) shareholder resolutions in the US

leapt to around 800 in 2002 and was expected to increase by 20 per cent in 2003.
• Six European countries (the UK, France, Sweden, German, The Netherlands and
Switzerland) have adopted laws requiring pension funds to consider the
environmental, ethical and social performance of companies they want to invest in.
• NGO and activist groups now number over 28,000 worldwide.

If your company is publicly traded, you want to be in the good graces of important
stakeholders.
In a recent survey by The Economist magazine, a majority of executives (57 per cent)
indicated that the benefits of sustainable practices outweighed the costs, although most had
modest expectations for its ability to affect profits directly. The main benefits were
associated with reducing costs (especially energy), opening up new markets and protecting
the company’s reputation.
Chapter_06.qxd 6/10/2009 4:37 PM Page 129

SENIOR MANAGEMENT 129

But this point of view is already being seen as Sustainability 1.0, a narrow view of the
benefits of sustainability. Many are now speaking of Sustainability 2.0 where it is seen as a
core source of competitive advantage and innovation.3 Bank of America, for example, has
earmarked $20 billion for sustainability-related investments that combat climate change
and save resources. ‘Our $20 billion initiative isn’t charity by any stretch. We expect an
attractive risk-adjusted return on this capital’, Kenneth Lewis, CEO, explains. ‘[Financing
the green economy] represents the future, and a tremendous business opportunity. We
believe it’s what our customers and clients need us to do to support them.’4
It’s true that sometimes taking the more sustainable option costs more but it can still
bring other benefits. McDonald’s UK now says that cost is no longer the overriding
concern when purchasing supplies. CEO Steve Easterbrook quotes a survey showing that
70 per cent of customers consider green issues when eating out. He said, ‘Customers are
looking increasingly at issues like food provenance, welfare and the impact it has on the
environment.’ So they are now sourcing more agricultural products from nearby, well-
managed farms. All their eggs are from free-range chickens and they are working with
farmers to improve the lives of livestock. They even promote British farmers on the sides
of their trucks. Adding costs can still pay out on the bottom line. For example, McDonald’s
reports that their switch to fair trade coffee has increased sales by 15 per cent.5
In addition to using sustainability to scope out threats and opportunities, senior
management may also want to use sustainability to imbue its mission with more meaning.
As Collins and Porras assert in Built to Last, the difference between highly successful
companies and their peers is often a strong, shared set of guiding values:

Contrary to business school doctrine, ‘maximizing shareholder wealth’ or ‘profit

maximization’ has not been the dominant driving force or primary objective
through the history of visionary companies. Visionary companies pursue a cluster
of objectives, of which making money is only one – and not necessarily the
primary one. Yes, they seek profits, but they’re guided by a core ideology, values
and a sense of purpose beyond just making money. Yet, paradoxically, the
visionary companies make more money than the more purely profit-driving
comparison companies.6

Sustainability can be a powerful framework for harnessing employee commitment and

energy. Saving nature for future generations, solving social problems people care about –
these are issues that get people’s blood flowing. Even employees who flip burgers, make
pizza or pour coffee for a living can feel they are saving the world through their actions. It
may be hard to quantify the impact on productivity but many organizations have
anecdotally reported that adopting sustainability has meant that they now attract a higher
quality of employee and that morale and retention have improved.
Chapter_06.qxd 6/10/2009 4:37 PM Page 130

130 THE BUSINESS GUIDE TO SUSTAINABILITY

It’s not only important for organizations to adopt sustainability as a strategy; they must
also execute the strategy artfully. Companies that try to implement sustainability but do it
poorly can find themselves no better off. Monsanto is probably the best-known example.
Monsanto was one of the first companies to publicize sustainability in the management
literature. In a 1997 Harvard Business Review article entitled ‘Growth through Global
Sustainability’, CEO Robert Shapiro explained how sustainability was a key strategic issue
that should be examined during strategic planning:

Years ago, we would approach strategic planning by considering ‘the

environment’ – that is, the economic, technological and competitive context of the
business – and we’d forecast how it would change over the planning horizon ...
extrapolating recent trends. So we almost never predicted the critical
discontinuities in which the real money was made and lost ... But every consumer
marketer knows that you can rely on demographics. Many market discontinuities
were predictable and future ones can still be predicted – based on observable,
incontrovertible facts ... Sustainable development is one of those discontinuities.
Far from being a soft issue grounded in emotion or ethics, sustainable
development involves cold, rational business logic.7

However, their execution of this strategy, with an emphasis on genetically modified

organisms, brought them even more bad press. The public was not impressed with
Monsanto’s new genetically modified soya beans that could be nuked with even more
Round-Up. People were further concerned about embedding Bt, a natural pesticide, in
a wind-pollinated crop, and were outraged when Monsanto sued a small farmer for
patent infringement because his rapeseed plants (canola) became infected with their
GM seeds. By Monsanto’s own admission, they have at least failed the public relations
effort:

We’ve learned that there is often a very fine line between scientific confidence, on
the one hand, and corporate arrogance, on the other … It was natural for us to
see this as a scientific issue. We didn’t listen very well to people who insisted there
were relevant ethical, religious, cultural, social and economic issues as well.8

RESOURCES
‘Doing Good: Business and the Sustainability Challenge’, The Economist (Intelligence Unit –
special section), February.
Chapter_06.qxd 6/10/2009 4:37 PM Page 131

SENIOR MANAGEMENT 131

World Business Council on Sustainable Development (2002) ‘The Business Case for
Sustainable Development’, www.wbcsd.org. This report outlines the reasons why their 150
international companies think sustainability should be pursued.
Hollender, Jeffrey (2004) What Matters Most: How a Small Group of Pioneers Is
Teaching Social Responsibility to Big Business, and Why Big Business Is Listening.
New York: Basic Books.
Aston, A. and B. Helm (2005) ‘The Race Against Climate Change’, Business Week, 12
December, pp59–66. Also see case studies at www.businessweek.com/go/carbon.
Elkington, John (2001) ‘Buried Treasure: Uncover the Business Case for Corporate
Sustainability’, www.sustainability.org.
Elkington, John (1998). Cannibals with Forks: The Triple Bottom Line of the 21st Century.
Stony Creek, CT: New Society Publishers.
Esty, Daniel and Andrew Winston (2006) Green to Gold: How Smart Companies Use
Environmental Strategy to Innovate, Create Value and Build Competitive Advantage. New
Haven: Yale Press.
McDonough, William and Michael Braungart (2001) ‘The Next Industrial Revolution’
(video), Stevenson, MD: Earthome Productions. There is also an Atlantic Monthly article of the
same name.
Pernick, Ron and Clint Wilder (2007) The Clean Tech Revolution: The Next Big Growth and
Investment Opportunity. New York: Harper-Collins.
Willard, Bob (2002) The Sustainability Advantage: Seven Business Case Benefits of a
Triple Bottom Line. Gabriola Island, BC: New Society Publishers.
Willard, Bob (2005) The Next Sustainability Wave: Building Boardroom Buy-In. Gabriola
Island, BC: New Society Publishers.

STRATEGIES YOU CAN USE

So what should the management team be doing vis-à-vis sustainability? We break the task
down into five elements:

1 assessing threats, opportunities and constraints;

2 choosing frameworks and terms;
3 devising an implementation strategy and enlisting support;
4 aligning business systems; and
5 providing for transparency and stakeholder involvement.

These are some of the tasks of managers as a matter of course, but here we explore how
they are used in the context of sustainability.
Chapter_06.qxd 6/10/2009 4:37 PM Page 132

132 THE BUSINESS GUIDE TO SUSTAINABILITY

Assess threats, opportunities and constraints

In the last 50 years, we have undergone a number of seismic shifts in organizational
models. In the post-World War II mass-production world, the standard response when
something broke was that it was ‘Made in Japan’. Then came the quality revolution,
making Honda the best-selling car for years, crippling the US auto sector. Next came the
information age, which made a geek by the name of Bill Gates the richest man in America.
Globalization, spurred by transnational groups such as the World Trade Organization and
International Monetary Fund, along with associated trade agreements such as the North
American Free Trade Agreement (NAFTA), has exported white-collar work. In each of
these shifts, winners in the old world became losers in the new. As Joel Barker, author of
The Power of Vision, has long been saying, when the paradigm shifts, everyone goes back
to zero. In other words, past successes in the old world are no guarantee of success, indeed
often a liability, in the future.
Given the rate at which new business models are being created, executives must
constantly keep an eye out for emerging trends. We believe, as do many others, that the
next big shift will be toward sustainability. We laid out the case for this in the first chapter,
so we will not reiterate the points here. Assuming that you believe that some elements of
sustainability will be important in the future, the question to ask is how to systematically
assess your threats and opportunities. Below are some useful methods, beginning with ones
all executives will find familiar.

RESOURCES
To Whose Profit? published by the World Wildlife Fund and Cable & Wireless.
‘Global Warming: Why Business Is Taking It So Seriously’, BusinessWeek, 16 August 2004,
www.businessweek.com/magazine/content/04_33/b3896002_mz001.htm.

Strategic planning
Strategic planning has long attempted to take a broad view of the world. In the
‘environmental scanning’ portion of the process, executives are usually expected to
examine trends in their industry, their customers, their communities, demographics
and the physical environment. One common method is a SWOT analysis, where
executives itemize their Strengths, Weaknesses, Opportunities and Threats. And one
way to introduce sustainability into your organization, especially if the concept is new
to many on the leadership team, is to examine sustainability as one of the many
emerging trends.
Chapter_06.qxd 6/10/2009 4:37 PM Page 133

SENIOR MANAGEMENT 133

To do this, you would want to provide a briefing on sustainability and then facilitate
a discussion based on the potential implications. A number of organizational leaders,
including Ray Anderson of Interface, have had an epiphany after being asked to speak on
their environmental or sustainability policy, so invite one of the organizational leaders to
research the topic and come prepared to speak. It can also help to bring in other industry
leaders who are pursuing sustainability. As part of the strategic planning process, force
executives to examine how certain seemingly irrelevant trends (eg HIV in Africa, freshwater
supplies or global warming) could affect their organization – such conversations can often
uncover important interdependencies.

RESOURCES
Senge, Peter and Goran Carstedt (2001) ‘Innovating our Way to the Next Industrial Revolution’,
MIT Sloan Management Review, Winter.
James, Jennifer (1997) Thinking in the Future Tense. New York: Simon & Schuster.
Pfeiffer, William J., Leonard D. Goodstein and Timothy M. Nolan (1989) Shaping Strategic
Planning: Frogs, Dragons, Bees, and Turkey Tails. Glenview, IL: Scott, Foresman and Co. in
association with University Associates.

Scenario planning
Scenario planning involves creating discrete future scenarios and examining how the
organization might fare in each. You could present a scenario where sustainability was
becoming the dominant organizational model. Or you can use the three scenarios created
by the World Business Council on Sustainable Development: FROG (First Raise Our
Growth, basically business as usual), Geopolity (using international agreements) and Jazz
(improvised voluntary actions). The UN Environmental Programme also laid out four
discrete scenarios – market first, security first, policy first and sustainability first –
providing an abundance of data on their likely effects.

RESOURCES
Speth, James Gustave (2004) Red Sky at Morning: America and the Crisis on the Global
Environment. New Haven, CT: Yale University Press.
Global Environment Outlook, www.unep.org/GEO/geo4/.
World Business Council on Sustainable Development, www.wbcsd.ch.
Schwartz, Peter (1991) The Art of the Long View. New York: Doubleday Currency.
Chapter_06.qxd 6/10/2009 4:37 PM Page 134

134 THE BUSINESS GUIDE TO SUSTAINABILITY

Stakeholder management
All organizations are buffeted by the competing needs of their various stakeholders.
Businesses must address the concerns of owners, employees, customers, suppliers,
regulators and NGOs. Governments must address the needs of taxpayers and other
citizens, legislators, other governmental bodies, special interest groups and NGOs. So it is
no surprise that stakeholder management has emerged as one way to deal with these
relationships. This usually involves determining who your stakeholders are, learning more
about their interests and expectations, engaging them in productive dialogues and keeping
the channels of communication open.
This same framework can incorporate sustainability. Often the simplest way is just to
add in any missing stakeholders (the environment, the world community, NGOs, future
generations, etc.).
Another approach is to develop systematic audits of each of your stakeholders. The
Body Shop has spearheaded this approach; detailed information about their methods can
be found in The Stakeholder Corporation by David Wheeler and Maria Sillanpaa.
It is important in this process to assess the constraints each stakeholder places on you.
Will your customers respond well to your involvement with sustainability, or, like Home
Depot, do you want to keep your efforts off-stage? Will you raise red flags for some of your
stakeholders? For example, when the AES Corporation stated that having fun was one of
their core values, the Securities and Exchange Commission made them list their values as
a potential risk factor in their annual reports! These points of view do not have to prevent
your pursuing sustainability, but they may guide how you frame your efforts or determine
whether you emphasize them publicly.

Social entrepreneurship
Social entrepreneurs are ones that use the marketplace to solve gnarly social problems.
Often, they uncover innovative ideas. Consider the One Laptop per Child programme that
emerged from MIT where they designed a laptop costing about $200 that is so robust it
can be dropped in a tub of water, and it probably has better Wi-Fi reception than yours.
It is not just compassion that leads companies in this direction. It finally occurred to
some that if they only focused on serving the developed world, they forfeited five-sixths of
the world’s potential customers. C. K. Prahalad’s book, The Fortune at the Bottom of the
Pyramid, chronicles a number of different companies that are making a healthy profit
serving the very poor, people who earn less than $2 per day.
It may appear unseemly to make a profit off the poor. And this market is certainly ripe
for abuse. But consider this. Poor people often pay much higher prices for the things we
take for granted. Cooking with kerosene may cost much more to boil a kettle of water than
your electric stove. If they need a little credit, they may pay interest rates of 10 per cent
per week or day from the local loan sharks! When you can harness the profit motive and the
Chapter_06.qxd 6/10/2009 4:37 PM Page 135

SENIOR MANAGEMENT 135

financial capital of business to meet social needs, you no longer have to limit your efforts
to donations. Think about how much money you spend every year in commerce: buying
food, electricity, restaurant meals, clothes, air tickets, mortgage payments, etc. Now add up
your annual charitable donations. If you’re like most people, 98–99 per cent goes to
commerce, not charity. What if we could put a significant portion of that 99 per cent to
work on the world’s problems?
In 2007, Darcy visited the Aravind Eye Clinic in Madurai, India, which was described
in The Fortune at the Bottom of the Pyramid. It was founded by Doctor Venkataswamy
(affectionately known as Dr V for obvious reasons), a retired physician nearly crippled with
arthritis. He wanted to eliminate unnecessary blindness, which in India is not just a huge
inconvenience; it’s a death sentence. The life expectancy after going blind is about two or
three years.
He built this clinic as he could earn funds. Two-thirds of the people pay little or
nothing for their service, but those who pay and those who don’t get the same doctors, the
same quality of care. The only difference is the comfort of the facilities. You could be a
billionaire and walk into the free clinic and get served, as long as you’re willing to sit on
the waiting room floor (a common practice in India) instead of in a chair.
Dr V was inspired by the success of Coke and McDonalds. If Coca-Cola can convince
Indians to buy the sweet drink, perhaps similar methods could convince people to come
in for surgery. If McDonald’s can take people with low levels of education from anywhere
in the world and produce a consistent quality, perhaps strong systems could enable Aravind
to operate on thousands of people.
The Aravind Eye Clinic is now the largest in the world. They have sophisticated real-
time systems to monitor their performance. The quality of care is so good that the UK
sends patients to them. Surgical interns from prestigious US medical schools go there to
perfect their technique. Aravind designed their own intraocular lens for cataract surgery
because the lenses they had to import cost $200, completely unaffordable for their
patients. The model they make costs about $5 each and they are now exporting it. They
send technicians into the villages to do eye examinations and provide transportation,
food and lodging for those who need more advanced care. They discovered that people
were much more likely to wear glasses if the patients didn’t have to return to pick them
up, so they make glasses and contact lenses on site. If you need something really unusual,
they will FedEx your glasses to your village, no matter how remote. And they didn’t just
stop there; they have shown others in many developing countries how to reproduce their
results.
Tight funding was seen as a powerful catalyst for innovation. As Dr V’s nephew, one
of the surgeons, told us, ‘Innovation happens when you have scarcity. We too will become
inefficient like the US, where we can just throw money at the problem. It’s inevitable.
Eventually we will get there.’
Chapter_06.qxd 6/10/2009 4:37 PM Page 136

136 THE BUSINESS GUIDE TO SUSTAINABILITY

Rather than direct all of Madison Avenue’s wily marketing acumen on developed
nations, where we already have so much stuff it’s caused ‘Affluenza’, why not instead direct
the power of the marketplace to solve enduring inequities? The incredible interest in
Kiva.org, where people lend small sums to entrepreneurs around the world, indicates that
there is an untapped desire to help others in our society.

RESOURCES
Bornstein, David (2007) How to Change the World: Social Entrepreneurs and the Power of New
Ideas. New York: Oxford University Press.
Christensen, Clayton M., Ruggles Baumann and Thomas Sadtler (2006) ‘Disruptive
Innovation for Social Change’ Harvard Business Review, December, Vol 84, No 12, p94–101.
Hollender, Jeffrey (2004) What Matters Most: How a Small Group of Pioneers Is Teaching
Social Responsibility to Big Business, and Why Big Business Is Listening. New York: Basic Books.
Paine, Lynn Sharp (2003) Value Shift: Why Companies Must Merge Social and Financial
Imperatives to Achieve Superior Performance. New York: McGraw Hill.
Prahalad, C. K. (2005) The Fortune at the Bottom of the Pyramid: Eradicating Poverty
through Profits. Wharton School Publishing.
Shore, Bill (1999) The Cathedral Within. New York: Random House.
Yunus, Mohammad (2003) Banker to the Poor. Public Affairs. This is a poorly written book,
proving that a Nobel Peace Prize doesn’t make you a writer, but it explains how the micro-
lending industry was created and gives insights about the relationship between women’s
rights, poverty and social justice.
Organizations:

• Ashoka.
• Columbia University’s Research Initiative on Social Entrepreneurship.
• Schwab Foundation for Social Entrepreneurs,
www.schwabfound.org/schwabentrepreneurs.htm.
• Social Venture Network.

Backcasting
The problem with most strategic planning methods is they rely on projecting existing
trends into the future. But not all change is continuous: a new technology or a disaster, for
example, can completely change the rules of the game. So rather than just forecasting from
an existing point in time, it can be instructive to do ‘backcasting’ from a desired future.
The Natural Step has taken the concept of backcasting and given it traction. The
Natural Step framework provides a simple, four-rule description of a sustainable society.
The rules (referred to as ‘system conditions’; see the more complete description later in this
Chapter_06.qxd 6/10/2009 4:37 PM Page 137

SENIOR MANAGEMENT 137

chapter) were created and vetted by a wide range of scientists. They deal mostly with
environmental issues, requirements that nature places on us based on the laws of
thermodynamics. The four rules can be used to describe the ‘endgame’, what we all must
be able to do if we want a sustainable world. Executives go through a visioning process to
image how their organization might operate in that sustainable state and then work
backwards to figure out how to get there.
One of the advantages of backcasting is that it helps people get beyond current
limitations. It often unveils entirely new directions and provides clear guidance for current
decisions. It can help organizations avoid investing in dead-end technologies and instead
show them how to invest in platforms for future ones.

RESOURCES
For information on backcasting, go to The Natural Step website for your country or
www.naturalstep.org.nz/tns-f-implementation.asp.
Cook, David (2004). The Natural Step: Towards a Sustainable Society. Bristol, UK: Green
Books. This is the best, clearest overview of The Natural Step framework for a general business
audience that we’ve found in print.
See the TNS e-learning course from TNS-Canada. The course can be found at
www.naturalstep.ca/elearning/.
Wheeler, David and Maria Sillanpaa (1997) The Stakeholder Corporation: The Body Shop
Blueprint for Maximizing Stakeholder Value. London: Pitman Publishing.
Elkington, John (1998) Cannibals with Forks: The Triple Bottom Line. Stony Creek, CT: New
Society Publishers.
The first of a two-volume series entitled ‘From Words to Action: The Stakeholder
Engagement Manual’, published by the Stakeholder Research Associates in partnership with
the UN Environment Programme and AccountAbility, Practitioners’ Perspectives on
Stakeholder Engagement examines the trends, processes, key success factors and
challenges of stakeholder engagement based on the first-hand experiences of practitioners on
the front lines.
Chapter_06.qxd 6/10/2009 4:37 PM Page 138

138 THE BUSINESS GUIDE TO SUSTAINABILITY

Choose terms and frameworks

Assessing sustainability-related threats, opportunities and constraints should provide
executives with a clearer focus. What sustainability issues are most pertinent to their
organization? How urgent are the threats? Where are the most intriguing opportunities?
How do their primary stakeholders feel about sustainability? Answers to these questions
provide a basis for selecting terms and frameworks.

Alternative terms
It matters what you call something. As George Lakoff, author of Moral Politics, points
out, the choice of terms can invite or diffuse objections. Who wouldn’t want ‘tax relief ’ or
‘healthy forests’ or ‘clear skies’? We are not advocating spin-doctoring, but why not choose
terms which invite people in instead of scaring them away?
For years, ‘sustainability’ was often too much of a liability. Many people didn’t know what
it meant or it seemed too vague, abstract or academic. Those days are largely gone;
sustainability is now an accepted term, showing up in the Wall Street Journal without the need
for explanation. There are some purists who think sustainability implies maintaining a status
quo instead of restoring what has already been degraded. And like many popular terms, it has
been co-opted (to mean ‘sustaining my business’). But for many, this is still going to be the
preferred term. There may be some audiences where finding an alternative term is still wise.
We raised this issue in consultations with a client in Alaska. Alaska has had a highly extractive
economy and ‘environmentalists’ are often viewed as obstacles rather than advocates. Since
for many people, ‘sustainability’ equals ‘environmentalism’, it became important for this
client to find an alternative term. We settled on ‘sustainable economic renewal’, keeping the
term ‘sustainability’ embedded but linking it to economic development.
Be open to ‘bridging terms’, phrases that bridge the gap between where people are now
and ultimate sustainability. Manufacturers, for example, may not like the term
‘sustainability’, but ‘zero waste’ may seem a logical next step to ‘zero defects’ and ‘waste
reduction’ programmes they may already have. ‘Sustainable communities’ may bring to
mind bearded hippies, but ‘smart growth’ sounds, well, smart.
In some situations, it makes most sense to adopt one issue under the sustainability
banner. For example, the two largest reinsurance companies in the world, Munich Re and
Swiss Re, have both adopted climate change as their focus. Certain industries may lend
themselves to focusing on a particular practice, for example the construction industry
talking in terms of ‘high-performance buildings’ or chemists focusing on ‘green chemistry’.
In some situations, the framework you choose – CERES (Coalition for
Environmentally Responsible Economies), The Natural Step framework or the Ecological
Footprint, for example (see more about these common frameworks in the next section) –
can provide the overarching term for your effort. Sometimes organizations develop their
Chapter_06.qxd 6/10/2009 4:37 PM Page 139

SENIOR MANAGEMENT 139

own terms, such as the Collins Company referring to their Journey to Sustainability
programme to emphasize it is a process as much as a destination.
If you choose not to use the term ‘sustainability’, here are a few suggestions for
alternatives:

• zero waste;
• green building or high-performance buildings;
• green chemistry;
• community health;
• social responsibility;
• triple bottom line;
• three-Es (economy, environment and social equity). Since ‘equity’ tends to leave out
many other social-related issues, some replace ‘social equity’ with ‘community’ or ‘social’;
• resource efficiency or radical resource efficiency;
• risk management;
• product certification;
• product stewardship;
• stakeholder management;
• smart growth; and
• quality plus (enlarging the definition of quality to include the environment and other
stakeholders).

Frameworks
A number of different frameworks or methods have been developed to explain
sustainability. Depending on the work you do, some will seem more relevant or useful than
others. You may choose to combine a couple, The Natural Step framework and zero waste,
for example. Consider the pros and cons of several before selecting the language that will
work best in your organization.
The usefulness of a framework is often best understood by analogy. Imagine you want
to start a supermarket. Into your head pops a mental model that would, in its main
characteristics, be shared by most people; a framework, organized by produce, dairy, frozen
foods, canned goods, breakfast foods, etc. This framework makes it easy to know what you
will need and see what you may have forgotten (perhaps a pet food aisle). Because this
concept is so widely shared, it makes it easy for customers to find what they need and
employees to know where to place things on the shelf. Everyone accepts that the grapefruit
are in the produce section and not the breakfast aisle, even though most grapefruit are
consumed at breakfast. This same framework is reflected not only in the layout of the
supermarket but also the organizational structure (produce manager, butcher, baker, etc.),
the computer system and vendor relationships.
Chapter_06.qxd 6/10/2009 4:37 PM Page 140

140 THE BUSINESS GUIDE TO SUSTAINABILITY

Now, instead of building a supermarket, imagine you want to build a sustainability

programme. What comes to mind? Wouldn’t it be great if we had a shared mental model
of what should be contained in such a programme, a framework that made it clear how to
organize the effort?
There are a number of sustainability frameworks currently in use. None is perfect, but
some are more appropriate for some situations than others. (See Appendix A for a list of
common ones in use.) You will want to choose a framework or set of frameworks that will:

• ensure you are working on a complete set of issues, not forgetting anything important;
• be easy to understand and remember, will resonate with your employees and
stakeholders;
• imply clear end-points, letting you know when you have reached a sustainable state; and
• provide or imply a process for moving forward.

To meet all these criteria, you may need to blend different frameworks. Frameworks exist
in a hierarchy – some provide overarching principles of sustainability, describing what
sustainability is; others are more related to specific methods or tools and as such are more
prescriptive. As with any new field, the terms and frameworks are proliferating, so in
Appendix A we have organized the most common terms into a hierarchy so that you can
focus on the ones most likely to be relevant in your situation. You should be able to google
any of the terms to find more information.
In the building industry, for example, some use The Natural Step framework to inform
their use of LEED, a green building scoring system. Some of our clients have adopted the
triple bottom line (social, economic and environmental), which gives equal weight to the
three elements, and then embedded The Natural Step system conditions into those three
elements. Some in manufacturing and government have embedded either The Natural
Step or triple bottom line into an existing environmental management system.
Ideally, the framework or frameworks you choose will be echoed in a sustainability
policy, metrics, decision tools and your sustainability report. For more information on
sustainability metrics and reporting, see the Finance and Accounting chapter.

Devise an implementation strategy and enlist support

After developing a business case for pursuing sustainability and identifying terms and
frameworks, the next step is to develop an implementation strategy. Where are you going
to start your efforts? Who needs to be involved? What do the executives need to do to
demonstrate their support? The importance of this step cannot be overemphasized. In our
experience, many of the mistakes organizations make regarding sustainability are not
technical mistakes but mistakes in change to management:
Chapter_06.qxd 6/10/2009 4:37 PM Page 141

SENIOR MANAGEMENT 141

• A catalogue retailer trained all employees on sustainability before having any systems
in place to harness the ideas and energy that the training generated. They ended up
with hundreds of employee suggestions languishing for over a year until they hired
someone to head up the sustainability effort.
• A timber company also trained employees and then expected improvements to happen
spontaneously. They soon discovered they needed a set of teams to provide structure
and focus and a process to evaluate the ideas that were generated.
• A consultant associated with The Natural Step framework became so enamoured with
the backcasting process that he was adamant about approaching all clients with this
approach. He discovered the number of organizations willing to jump into
sustainability ‘whole hog’ was quite limited.
• One company tried to apply the same exhaustive environmental management system
that was used in their manufacturing group in their retail outlet, getting hopelessly
bogged down in terminology and technique.
• A governmental agency decided to use a voluntary green team to spearhead their
sustainability efforts. The team didn’t have enough clout or the right members to be
effective.

These are just a few of the organizational change mistakes we have witnessed, all examples
of making the implementation of sustainability unnecessarily difficult. The following
advice should help you avoid these and other problems.

Pick the best entry point

In many situations, organizations are better off starting their sustainability effort quietly,
tucking it into something already in existence. This lets you gain some experience and
avoid the eye-rolling usually associated with new organizational ‘programmes’ or
‘initiatives’. The analysis of your threats and opportunities should imply likely places to
begin. Find a place where those intersect with existing efforts you have planned:

• Are you planning any capital improvements (new/remodelled buildings or product

lines)? The catalogue retailer, Norm Thompson, began their sustainability effort when
they were constructing a new office building. Since buildings last for decades, the
impacts of design decisions go on for years. After achieving their goals of making it as
green as possible, they moved on to the next phase of their sustainability plan.
• Are you designing a new product, service or programme? Philips Microelectronics
chooses a ‘flagship’ product within a product group and applies design for environment
principles. Since most of the impacts of products are determined in design, this is a
high-leverage opportunity.
Chapter_06.qxd 6/10/2009 4:37 PM Page 142

142 THE BUSINESS GUIDE TO SUSTAINABILITY

• Where are your largest expenses and environmental impacts? Herman Miller ships
their furniture in their own trucks. They discovered that by adding an aerodynamic
scoop on to their truck cabs, the fuel savings paid for the upgrades in several months,
reducing their climate impacts.
• Where is the ‘low-hanging fruit’, something you can pick off easily to show progress
and save money? Many organizations find that energy/lighting upgrades and packaging
changes can yield significant benefits with little effort.
• Do you have an existing process that could be tweaked to make it relate to
sustainability (eg environmentally preferable purchasing policies or an environmental
management system)? The Oregon Department of Administrative services used their
purchasing power to reward those with more sustainable products and services.
• Do you have a waste stream that has potential to go somewhere other than the landfill?
At the Klamath Falls, Oregon plant of wood products manufacturer Collins
Companies, an employee wondered if the sawdust couldn’t be put back into the
product instead of burned for energy or hauled off. This single idea saved the company
over a million dollars and actually improved the quality of their product.
• Is there a nuisance (to employees, customers or the community) that you could solve
and thus generate future support for your work? A number of different property
management firms have found that by changing to green cleaning products, they
eliminated janitor complaints about skin irritation and allergic reactions.

Set up the best structure

Given your chosen entry point, you may need one or more of several common structures:
Sustainability coordinators or directors. Many organizations find it helpful to assign
someone the responsibility for leading the sustainability effort. Ideally this person should
report to top management. It can be impressive how much one person can make happen.
Two women at Multnomah County, in Portland, Oregon have jump-started everything
from eco-roofs to a global warming action plan to a food policy council. It is often wise,
however, to make these positions long term but temporary, sending the message to
managers that soon they will need to take over these functions.
Steering committees. Often the management team isn’t yet ready to manage the
sustainability effort. In these situations, a steering committee can provide supervision,
coordination and leadership. The Oregon Museum of Science and Industry (OMSI)
successfully used a steering committee for a year to increase front-line participation in and
commitment to the effort.
Task forces. Steering committees, managers and/or sustainability coordinators often spawn
task forces to work on specific projects: researching the best certification schemes, setting
Chapter_06.qxd 6/10/2009 4:37 PM Page 143

SENIOR MANAGEMENT 143

Water Air

Energy Product
Manufacturing
Materials process Waste

Community

Figure 6.1 Collins team structure

up environmentally preferable purchasing policies, redesigning the production process, etc.

At OMSI the steering committee set up a zero waste team and a climate team to attack two
of their largest environmental impacts.
Standing teams. In some situations, having standing teams that focus on certain elements
of the organization can be useful. Collins Companies, for example, created an
input–output diagram of their operation and then assigned teams to each of the inputs and
outputs: an energy team, a raw materials team, a waste team, etc.
When you set up any type of team, think long and hard about what you expect of it.
We use a ‘pre-launch’ process of working through the why, who, what, when, where and
how questions and, to really work, the process takes several hours. But taking the time up
front saves many hours of team time and associated frustration. If you are clear enough
about the boundaries, you should be able to give the team authority to make decisions.

Demonstrate support
Executives often think that all they need to do is tell people they support a new initiative
and their work is done. In fact not only must they communicate the message regularly and
repeatedly, they must align their actions. At the Oregon Museum of Science and Industry,
the task force wanted to encourage employees to use alternative transportation for
commuting. So when we talked to the executive director, we asked her to ride her bike to
work and then parade around the office in her bike helmet until she was sure at least a
dozen people had seen her.
You must ‘walk the talk’.
What you say is only effective to the degree that your actions support your words. So
here are some effective ways to demonstrate support:

• Take symbolic action. Do something no one thinks you would do to demonstrate your
commitment. This may be as simple as redesignating your hallowed parking spot for
Chapter_06.qxd 6/10/2009 4:37 PM Page 144

144 THE BUSINESS GUIDE TO SUSTAINABILITY

car-poolers or as big as dropping an environmentally or socially questionable product

line.
• Do at least as much as you expect others to do. This may involve cycling to work, using
teleconferences to avoid business travel, taking the most fuel-efficient fleet car,
volunteering in the community, etc.
• Ask people about sustainability and what they have done to work towards it. Follow
up on task forces. Ask for regular face-to-face reports from sustainability coordinators,
steering committees and task forces.
• Promote people (perhaps the sustainability coordinator) in part because of their efforts
on sustainability-related projects.
• Make it easy for employees to be more sustainable at work and at home. The Washington
Park Zoo, in Portland, Oregon, for example, lets employees add difficult-to-recycle items
like batteries to the organization’s recycle bins. Quantec, a small consulting firm in
Portland, Oregon, gives its 35 employees an incentive to buy Toyota Priuses; they have
found this a powerful employee retention strategy since the bonus is paid out over
several years. Portland State University lets employees and professors use the car-share
programme for free during working hours to encourage alternative transportation.
• Bring in people from outside to show off what your employees have done. Give the
teams visibility at important business functions.
• Put your money and your time where your mouth is. Join and attend appropriate
professional associations. Send people to sustainability conferences and training.
Expect people to work on sustainability tasks during working hours.
• Change your business systems to incorporate sustainability. (See below.)

RESOURCES
Sustainability Series™ booklets provide step-by-step instructions for how to move sustainability
into your organization. www.axisperformance.com/booklets.html.
James, Jennifer (1997) Thinking in the Future Tense. New York: Simon & Schuster. This
book includes wonderful questions to guide your assessment of your own culture.

Align business systems

Business systems are a powerful indicator of organizational priorities but they often hold
back the organizational change effort, sending mixed signals. Below are some suggestions
for how to incorporate sustainability into common business systems:
Strategic planning. Make sustainability one of the key trends you consider.
Chapter_06.qxd 6/10/2009 4:37 PM Page 145

SENIOR MANAGEMENT 145

Operational planning. Expect every department to set at least one sustainability goal.
Budgeting. When sustainability-related projects can prove a return, let the department
keep a portion of the return in their budget to use as they see fit.
Performance appraisals and compensation. Make sustainability a key part of executive and
other employee reviews.
Orientation and training. Embed sustainability into employee orientation and
management training.
Environmental management systems. If you have an EMS, incorporate sustainability into
policy statements and the criteria for setting priorities.

RESOURCES
Embedding Sustainability into your EMS (Sustainability Series™ booklet produced by AXIS
Performance Advisors, www.axisperformance.com/sust_series.html.)

Provide for transparency and stakeholder involvement

Many executives yearn for the days when all they had to do was make a profit and not break
any laws. But those days are gone. Stakeholders (including investors, customers, suppliers,
special interest groups and community members) are increasingly making their voices heard.
Even Wal-Mart, which used to focus only on keeping prices cheap, is realizing the need to
incorporate social responsibility and sustainability into its culture. They have realized that
activists have been targeting retailers, not offshore manufacturers. ‘We thought we could sit
in Bentonville [Arkansas],’ said Lee Scott, their CEO, ‘take care of customers, take care of
associates – and the world would leave us alone. It doesn’t work that way any more.’9
Recently Wal-Mart announced sweeping and specific environmental goals to reduce energy
consumption in its outlets and trucks, and reduce packaging. They also plan to push these
initiatives upstream to their suppliers.10 Wal-Mart now recognizes the need to take responsibility
for the social and environmental impacts of their entire supply chain. CEO Lee Scott again:

There will be a day of reckoning for retailers. If somebody wakes up and finds
out that children that are down the river from that factory where you save three
cents a foot in the cost of garden hose are developing cancers at a significant rate
so that the American public can save three cents a foot, those things won’t be
tolerated, and they shouldn’t be tolerated.
Chapter_06.qxd 6/10/2009 4:37 PM Page 146

146 THE BUSINESS GUIDE TO SUSTAINABILITY

One specific action they are taking is to begin buying organic cotton to remove many tons
of pesticides from use.11
As already mentioned, shareholder resolutions are increasing and the scope of their
concerns continues to increase. The Carbon Disclosure Project, representing institutional
investors worth over $31 trillion, is forcing companies to report risks associated with
climate change. In the last couple of years, shareholder resolutions related to toxic
chemicals, according to the Investor Environmental Health Network, were responsible for
over $34 billion in assets.12
Environmental and social justice lawsuits are increasing as well and are not just a
problem in the litigious US. Environmentalists in Australia sued to challenge a proposed
mine and courts in the European Union are sharpening their pencils on climate issues.
Environmental groups and other special interest groups can make their voices heard in
uncomfortable ways if you don’t involve them and listen to their concerns. Fortunately,
many of these groups, even the most fringe ones, are now open to collaborating to find
solutions.

RESOURCES
ISO 26000 is a new standard for corporate social responsibility and stakeholder involvement.
This effort is linked to the Global Reporting Initiative, which is creating standards for
sustainability reporting.
AA1000 is a standard for ethics and stakeholder engagement, www.accountability.org.uk/
aa1000/default.asp.
The UK has a Combined Code for Corporate Governance, www.fsa.gov.uk/pubs/ukla.
For checklists on stakeholder audits, see Wheeler, David and Maria Sillanpaa (1997) The
Stakeholder Corporation: The Body Shop Blueprint for Maximizing Stakeholder Value. London:
Pitman Publishing.
Hemmati, Minu (2002) Multi-Stakeholder Processes for Governance and Sustainability.
London: Earthscan.
Paine, Lynn S. (2003) Value Shift: Why Companies Must Merge Social and Financial
Imperatives to Achieve Superior Performance. New York: McGraw Hill.
Innovest is an environmental rating company, www.innovestgroup.com, rating large,
publicly held companies based on their environmental performance and then selling this
research to money managers, banks, insurance companies, industry and consultants. Many of
the ratings apply to products and services that people use (eg petroleum, foods, retailers and
banks). They have also published retail reports, which can be found at www.socialfunds.com
under the section ‘Corporate Social Responsibility’.
The Interfaith Center on Corporate Responsibility, www.iccr.org, provides a focus for
corporate responsibility issues and campaigns.
Chapter_06.qxd 6/10/2009 4:37 PM Page 147

SENIOR MANAGEMENT 147

In the aftermath of Enron, Worldcom, Tyco, Parmalat and other bad actors, there is
an obvious need for transparency, accuracy and ethics. Just the hint of ethical breaches has
already brought a number of companies down. In the US, the Sarbanes–Oxley Bill has at
least made it clear ‘where the buck stops’. It increases the responsibility of corporations to
be transparent. But you will need to do much more.
Stakeholder involvement has progressed further in the UK and Europe than in the US.
Below, we list a number of different resources to help provide guidance.

Sustainability reports
With regard to transparency, one obvious option is to publish a sustainability report. This
should cover all your major impacts and expose your warts as well as your successes. The
Global Reporting Initiative is an international standard for sustainability reporting and in
2006 more than one-third of the Standard and Poors 100 used them.13 Go to the
CorporateRegister.com to find sustainability and corporate social responsibility reports.
We cover reporting in more detail in the Finance and Accounting chapter.

Partner with NGOs

Many organizations are finding it enormously helpful to use environmental or other non-
governmental organizations as partners to help them improve their own performance.
These NGOs can act as a proxy for certain stakeholder groups and can also provide
technical assistance.

RESOURCES
The Global Reporting Initiative is attempting to develop international standards for
sustainability reporting, www.globalreporting.org.
If you’re trying to convince your organization to publish an environmental or sustainability
report, this article might help you make the case: ‘10 Reasons Why: The Surprising Truths about
the Business Value of Sustainability Reporting’, Green at Work Magazine, July/August 2001, p36.
Estes, Ralph (1996) Tyranny of the Bottom Line: Why Corporations Make Good People Do
Bad Things. San Francisco: Berrett-Koehler Publishers, Inc.

For example, Norm Thompson, a catalogue retailer in the Pacific northwest, decided
one of the best things they could do for the environment would be to shift the entire
catalogue industry to using recycled content paper. Shockingly, most catalogues still use
100 per cent virgin paper, based on concerns about appearance. Norm Thompson’s
Chapter_06.qxd 6/10/2009 4:37 PM Page 148

148 THE BUSINESS GUIDE TO SUSTAINABILITY

management figured they could switch their entire catalogues to 100 per cent recycled but
they’d just represent a tiny blip on the environment’s fluttering electrocardiogram. If they
could instead convince the entire industry to shift to only 10 per cent recycled content,
they could make a much bigger impact. In order to do this, they had to prove that 10 per
cent recycled paper catalogues sold merchandise just as well as ones on virgin paper. Also
they had to bring pressure on the paper manufacturers to offer the recycled content paper
at the same price. To pull off this feat, they partnered the Alliance for Environmental
Innovation, affiliated with Environmental Defense.
Other organizations have worked with the World Wildlife Fund, the National
Resources Defense Council, The Nature Conservancy, even Greenpeace, which formerly
had earned a reputation for confrontational rather than collaborative approaches.
Starbucks worked with Conservation International. Ben Packard, director of
environmental affairs, cautions:

It’s critical that your interests and those of the NGO overlap because the
organizations can be so different. It’s not enough for them to be a great organization
addressing an important issue. The issue [that the two of you are going to work on]
must be centrally relevant to both you and the NGO. For example, we worked with
Conservation International on shade-grown coffee where they were trying to protect
biodiversity and local economies and we could provide a market for their product.14

Chiquita Banana now partner with Rainforest Alliance. They spent $20 million in the first
decade of their efforts to clean up their act but saved $100 million in operating costs. Farm
productivity is up 27 per cent and the cost per box of bananas is down 12 per cent. They’ve
cut use of pesticides, eliminating some insecticides altogether. They manage waste and keep
it out of local rivers. Employee morale is up and executives claim that the change in worker
attitude alone was worth the effort.15

RESOURCES
Business for Social Responsibility has advice and papers on partnering NGOs. See for
example BSR Update, March/April 1999.

Stakeholder engagement activities

There are a number of different ways that you can engage stakeholders in discussion and
exploration: community meetings, public hearings, private interviews, by-invitation round-
table discussions, etc. We recommend that you find a number of ways to engage them. One
Chapter_06.qxd 6/10/2009 4:37 PM Page 149

SENIOR MANAGEMENT 149

gutsy example is US office equipment manufacturer Pitney Bowes’ long-standing practice

of holding annual worker stakeholders meetings. ‘Stockholders meetings are usually tame
compared with the annual jobholders meetings,’ they report. Held in auditoriums near
their main sites, the meetings give every employee a chance to ask management questions
or air personal gripes. Senior officers sit on the stage while groups of up to 500 attend. They
also hand out prizes – $50 Savings Bonds – for the best questions.16

Stakeholder audits
Some organizations, The Body Shop among them, do formal stakeholder audits. In The
Stakeholder Corporation: The Body Shop Blueprint for Maximizing Stakeholder Value, the
authors identify different classifications of stakeholders:

• primary social stakeholders: local communities, suppliers and business partners,

customers, investors, employees and managers;
• secondary social stakeholders: government and civil society, social and third world
pressure groups, media and commentators, trade groups and competitors;
• secondary non-social stakeholders: environmental pressure groups, animal welfare
pressure groups, etc.; and
• primary non-social stakeholders: the natural environment, non-human species, future
generations.

The book provides guidelines for how to audit each of these areas.

Conclusion
Sustainability is an important strategic trend. Your organization may be able to delay
significant financial commitments associated with sustainability. There is no need to install
uncompetitive equipment, for example. However, you do not want to delay the learning
process. Just as with the quality revolution, where it took years to understand what quality
meant, how to measure it, what customers expected, etc., so each organization must answer
similar questions regarding sustainability. The more you and your employees understand
about sustainability, the more sophisticated you will all become in identifying threats and
opportunities. You may choose not to be first to market but don’t be last to begin this journey.
Chapter_06.qxd 6/10/2009 4:37 PM Page 150

150 THE BUSINESS GUIDE TO SUSTAINABILITY

SCORE SENIOR MANAGEMENT

See page 33 for how to complete this assessment and page 36 for how to interpret your score.

Executives

Practice Incubator Initiative Integrated points

1 point 3 points 9 points

Sustainability Have a formal Have implemented Have an ISO-compliant

Management (but perhaps an environmental EMS with sustainability
System: Have in temporary) management system policies, criteria and
place a process to structure and that contains the targets embedded.
routinely set process to elements prescribed
priorities for identify and by ISO 14001.
sustainability make
improvements, sustainability
monitor the results improvements
and institutionalize (eg a steering
best practices. committee)
Vision: Have a Establish vision Conduct a Have a long-term vision
clear vision for and framework backcasting-like of your role in a fully
how sustainability for sustainability process to develop a sustainable society.
relates to your that clearly clear long-term Question basic
organization’s defines the vision of assumptions of your
mission. business case sustainability and mission or business
for pursuing it. interim goals. model and engage in
long-term efforts to
transform your
organization and sector.

Strategy: Integrate Create a strategy Embed sustainability Have a plan for

sustainability into to spread into the strategic and transforming your
the strategy and sustainable business planning industry or supply
mission. thinking process of the chain.
throughout the organization.
organization.
Communication Explain the need Train all employees in Speak regularly to other
and Education: for pursuing sustainability and groups about your
Clearly sustainability and your chosen efforts, encouraging
communicate the take symbolic framework(s). Provide them to adopt
importance of the action to back up frequent updates and sustainable practices
vision and strategy the rhetoric. ways to reinforce and learn from your
to all affected sustainability thinking. experience.
employees.
Chapter_06.qxd 6/10/2009 4:37 PM Page 151

SENIOR MANAGEMENT 151

Executives

Practice Incubator Initiative Integrated points

1 point 3 points 9 points

Commitment: Form a steering Require each Build sustainability into

Demonstrate committee and/or department to budgets, reviews,
commitment to create work on selection criteria, and
sustainability sustainability sustainability compensation.
through coordinator initiatives and Demonstrate your
accountability and position. goals. commitment externally.
resources.

Implementation: Implement pilot Embed Undertake efforts to

Embed efforts and sustainability in move sustainability into
sustainability into achieve some business processes your suppliers,
the organization. measurable (planning, customers, and other
results. budgeting, stakeholders’
appraisal, rewards, operations.
procedures, etc.)
and make it part of
every department’s
and person’s
responsibility.

Transparency and Provide ready Provide Conduct regular, formal

Stakeholder access to mechanisms to assessments of
Involvement: complete and solicit input from all stakeholder
Operate in a accurate major stakeholder expectations and
transparent and performance data groups. satisfaction levels.
involving manner. to investors,
regulators and the
public.

Sustainability Produce an Produce reports Produce reports that

Reporting: internal document available to the meet standards such
Annually produce used by managers public. as the Global Reporting
and review a and employees Initiative or the
sustainability report that reports on Greenhouse Gas
reflecting your goals, projects, Protocol and are
goals and and sustainability audited by a third party.
progress. metrics.
Total

Average
Chapter_06.qxd 6/10/2009 4:37 PM Page 152
Chapter_07.qxd 6/10/2009 4:37 PM Page 153

7
Facilities: How to Save Energy and Water,
Improve Productivity and Reduce Waste

Buildings, their construction and operation, are usually a significant cost for any
organization. They both displace habitat and affect transportation and land use patterns.
They also consume a large percentage of our energy and produce much of our waste.

Consider that US buildings, which represent about half of the nation’s wealth,
consume 70 per cent of the nation’s electricity, generate 30 per cent of waste, and
are responsible for more global warming than any other nation’s economy except
China. In contrast, green buildings – with more natural light, better air quality
and greater comfort – typically also contribute to improved occupant health,
comfort and productivity. A more complete accounting of these costs and benefits
demonstrates that green buildings are generally cost effective today, with average
financial benefits exceeding additional costs by a factor of ten to one.’ 1

According to the Climate Protection Manual for Cities, schools in the US spend over $6
billion on energy each year, more than they spend on computers and books combined! In
the typical school, about a third of that energy is wasted.2
Thus facilities managers have a tremendous opportunity to make their organizations
more sustainable while also saving money. Because buildings last for decades if not
centuries, their choices have long-term consequences for the building owners and
occupants and the community at large.

WHAT YOU SHOULD KNOW ABOUT SUSTAINABILITY

Facilities managers often find it hard to believe that they are not already doing all they can.
However, sustainability often uncovers new opportunities. Facilities managers need to
guard against the following common mistakes:
Chapter_07.qxd 6/10/2009 4:37 PM Page 154

154 THE BUSINESS GUIDE TO SUSTAINABILITY

Being pound foolish. Often facilities will choose the cheapest first-cost option. But this
can end up costing more in the long run. For example, vinyl flooring is typically cheaper
than linoleum. However, linoleum usually lasts about four times as long. If materials
represent about half the cost of a flooring job, the cost of the vinyl should be multiplied
by eight to give a true comparison. Looking at the life cycle costs can make the more
expensive product seem cheaper!
Wasting energy. When building designers apply a sustainability lens to the creation of a
building, they invariably identify efficiencies not previously revealed. A green building is
designed with an integrated team approach with a focus on optimizing trade-offs. For
example, the building orientation, insulation and glazing may substantially reduce the size
of the heating, ventilation and air conditioning (HVAC) system required, saving both capital
and operating costs. Similarly, laying the piping out first to minimize angles and maximize
diameter can radically reduce the costs associated with pumping compressed air or water.
Making people sick. Indoor air quality is often six to seven times worse than outside,
sometimes resulting in sick building syndrome. Carpets, vinyl flooring and plywood
cabinets and work surfaces may ‘off-gas’ chemicals into the air. Toxic and fragranced
cleaning products may also contribute to allergies and illness. Toxic mould, caused by
inadequate ventilation, has forced the closure of many buildings.
Paying twice. Waste can be defined as something you paid for that you pay again to get
rid of. Portland State University in Oregon discovered during a waste audit that they were
disposing of 1400 paper cups a day. They bought them and then had to pay to dispose of
them. Sometimes the waste is not as obvious: a refrigerator near an oven, a return air vent
near a heating vent. The executives in one office building were so intolerant to fluctuations
in temperature that they set the thermostat for such a narrow range that air conditioning
and heating alternated on and off all day.

STRATEGIES YOU CAN USE

To help you identify opportunities for eliminating the waste in your building, we’ve
organized this section around the functions a facilities manager typically performs:

• constructing/remodelling a high-performance building;

• operating the building;
• managing waste;
• providing green cleaning and landscaping services; and
• managing transportation issues.
Chapter_07.qxd 6/10/2009 4:37 PM Page 155

FACILITIES 155

Construct/remodel a high-performance building

It still comes as a surprise to many that so-called ‘green building’ practices do not
necessarily increase building costs. Furthermore, buildings so constructed typically save
30 per cent or more on energy and related operating expenses. For owner-occupied
buildings, green building practices are now a no-brainer. In many markets, it also makes
sense for developers to use green building practices even if they intend to lease or sell the
structure – tenants and buyers are often willing to pay somewhat more for the improved
amenities and there is good evidence that such properties lease faster than their equivalent
conventional competitors.
Green building (or high-performance building) is an emerging field, driven largely
by the success of the US Green Building Council’s LEED (Leadership in Energy and
Environmental Design) scoring system. This system has now been adopted by Australia,
Canada, Brazil, India, Mexico and Taiwan. Similar to the checklists at the end of each of
our chapters, LEED provides a laundry list of things you can do, each with points
assigned. A building or remodelling project can be certified at several levels (certified,
silver, gold and platinum) based on the number of points the building is able to earn. The
intention of the World Green Building Council and its affiliates is to keep pushing
building practices toward sustainability as new methods and technologies become
available.
The California Department of Finance commissioned a study by the Capital E group
and Lawrence Berkeley Laboratory to determine whether green building practices paid off.
After studying 100 buildings across the country and other studies, they concluded that the
financial benefits of green design are between $50 and $70 per square foot in a LEED
building, over ten times the additional cost associated with building green.
The subject of green building practices could fill a book of its own, so here we only
provide a sample of tactics to give you a feel for what is possible.

Deconstruction and recycling

Building is wasteful, especially if you’re remodelling or redeveloping existing structures.
Construction waste represents a significant portion of municipal landfills. Now there are
services that deconstruct rather than demolish buildings. This might not satisfy the same
destructive urges, but it makes a lot of sense. As does recycling and reusing many materials.
In a major renovation, the contractors at the Natural Capital Center in Portland, Oregon
reportedly recycled and reused 97 per cent of the materials. In a recent study financed by
the Environmental Protection Agency, four house deconstruction projects by RE Store, a
non-profit retailer of used building supplies in Seattle, Washington, achieved recycle or
reuse rates of 70 to 97 per cent.3
Chapter_07.qxd 6/10/2009 4:37 PM Page 156

156 THE BUSINESS GUIDE TO SUSTAINABILITY

RESOURCES
For some examples of green building and an understanding of why it is important, see
McDonough, William and Michael Braungart (2001) ‘The Next Industrial Revolution’ (video),
Stevenson, MD: Earthome Productions, www.thenextindustrialrevolution.org.
Here are several green building standards and tools:
LEED: World Green Building Council, www.worldgbc.org, www.usgbc.org.
BREEAM: BRE Environmental Assessment Method, www.breeam.org.
BEES: Building for Environmental and Economic Sustainability is a software tool for
selecting environmentally preferable building materials, www.bfrl.nist.gov.

Daylighting
In principle, daylighting simply involves letting natural light into a building. In practice,
it is more complicated, for you want visibility, not glare, and in most commercial
buildings, you want light but not heat. Daylighting’s most obvious benefit is energy
savings – you don’t need to turn on the lights. But that is often the least of its benefits.
In an organizational setting, the highest cost associated with a building is not the
building itself but the people in it. With that in mind, minor increases in capital costs to
incorporate certain green features can at times provide a healthy return on investment.
‘The biggest benefit of daylighting is the impact it has on the people in the space. If it
weren’t for people, we wouldn’t be designing interior environments. Your highest overhead
walks into the office on two legs every day. The cost of loss of productivity is incredible to
a corporation,’ says Stefan Graf, principal at Illuminart, based in Ypsilanti, Michigan.

Assume the cost to employ a worker is roughly $75,000 per year. If that employee
works in approximately 150 square feet of space that originally cost around
$15,000 to build, a 20 per cent productivity uptick on a $75,000-per-year
worker pays back the entire cost of building construction in the first year
($15,000). ‘These productivity benefits are just huge,’ emphasizes Loveland, ‘and
we know that they’re most directly correlated to daylight.’ 4

A 20 per cent increase is not unrealistic. Based on the best research available from Carnegie
Mellon University and others, daylighting appears to improve productivity and reduce
absenteeism by up to that level. There are benefits beyond the workplace as well.
Daylighting improves learning in schools, increases sales in retail environments and helps
the elderly in retirement homes sleep better and live longer. In hospitals, people recover
faster when they have access to daylight.
Chapter_07.qxd 6/10/2009 4:37 PM Page 157

FACILITIES 157

Of course, you will still need some lighting systems, but you can choose the most
efficient fixtures and use daylight and motion sensors to limit their use. Lighting retrofits
can often pay for themselves in just a couple years. Make sure lights can be turned on in
sections of the building so that, for example, the entire building doesn’t have to be lit when
the janitors are in one area.

Site selection
Where you place the building and what direction you point it can be important factors
as well. In most cases, you want to choose a site that can easily be accessed by a variety
of transportation modes – public transport, bike and car. This makes alternative
transportation a viable option. Portland State University intentionally situated its parking
farther away than the transit stop so that people who take the light rail or bus only have to
walk one-third as far to reach their destination as drivers do.
Industrial ecology involves co-locating properties that make use of one another’s waste
products. The most widely cited example is Kalundborg, Denmark where waste heat,
biomass, water and other resources are exchanged among synergistic operations. This kind
of relationship is easier to achieve when planning new sites, but at least consider who your
neighbours are and investigate whether they might be dumping something you need.
The orientation of your building can have energy and lighting impacts as well.
Combining a sun-facing orientation with an engineered overhang enables you to take best
advantage of sunlight and heat. Exterior glazing helps you efficiently manage light and
heat. It is also wise to have at least part of your roof facing sunward so that you are
positioned to make use of photovoltaic technology when it becomes feasible or so that you
can easily add solar thermal systems to preheat water for boilers or hot water heaters.

Material selection
Obviously, buildings use a tremendous amount of the world’s resources. So it is critical to
minimize the impact of construction or remodels for the benefit of both the natural world
and the building’s users. You can buy low-VOC (volatile organic compound) paint,
recycled and recyclable carpet and certified sustainable timber, often at prices competitive
with traditional products. You can further avoid unnecessary materials by, for example,
leaving rafters or piping exposed or by colouring a concrete floor instead of covering it with
underlay and carpet.
In the building shell, give preference to materials with lower embodied energy (the
amount of energy necessary to make them) where possible. For example, wood (which you
would want to source from certified or well-managed forests) has a relatively frugal
embodied energy of 639 kWh/ton. Brick has 4 times as much, concrete 5 times, glass 14
times and steel 24 times.5
Chapter_07.qxd 6/10/2009 4:37 PM Page 158

158 THE BUSINESS GUIDE TO SUSTAINABILITY

Consider also how best to use the materials. Deschutes Brewery, a microbrewery in
central Oregon, for example, put the insulation on the outside of their concrete building.
This put the thermal mass inside the building. At night, they flush in the cool night air,
which is then absorbed into the concrete walls and slowly released during the day. Because
of their climate, they only need to use refrigeration to keep their cases of beer cold for two
months a year.

RESOURCES
‘Creating a High Performance Workspace G/Rated Tenant Improvement Guide’ by the City of
Portland Office of Sustainable Development. There is a chapter on finishes and furnishings.
LEED Green Building Rating System for New Construction and Major Renovations.
Architecture 2030 is a challenge for architects to make buildings climate neutral by 2050.
Yudelson, Jerry (2008) The Green Building Revolution. Washington, DC: Island Press.
OpenEco is a new global on-line community that provides free, easy-to-use tools to help
participants assess, track, and compare energy performance, share proven best practices to
reduce greenhouse gas (GHG) emissions and encourage sustainable innovation,
www.openeco.org.
The RETScreen International Clean Energy Decision Support Centre offers software
decision-making tools that reduce the cost of pre-feasibility studies. English homepage:
www.retscreen.net/ang/home.php.

Mechanical systems
With good design, you may be able to radically reduce or eliminate your HVAC system.
The Eastgate office complex in Harare, Zimbabwe requires no air conditioning and almost
no heating, despite the fact that the weather oscillates between 35 and 104°F. The
architects took a lesson from termites to maintain a comfortable climate inside the
building. Termites in Africa build tall, complex structures that must be kept at a narrow
temperature range to grow food. They use underground tunnels to draw in cool air from
the earth and open and close their ‘windows’ to create air flow and manage the
temperature. Similarly, the Eastgate complex is actually two buildings linked by bridges
across a shady, glass-roofed atrium open to the air. Fans suck fresh air in from the atrium,
blow it upstairs through hollow spaces under the floors and from there into each office
through skinting board (baseboard) vents. As the air rises and warms, it is drawn out
through ceiling vents. Finally, it exits through 48 round brick chimneys.
To save energy, plan any system that requires piping carefully. The amount of energy
needed to move something through a pipe increases geometrically as the pipe diameter
Chapter_07.qxd 6/10/2009 4:37 PM Page 159

FACILITIES 159

shrinks. Bends in the piping also increase energy requirements. Lay out water pipes,
compressed air pipes and the like in as straight a line as possible with the largest pipe size
feasible. Then consider variable speed drives that can adjust the fan or pumping speed as
needed. At the Collins Company mill in Klamath Falls, Oregon, they installed a back-
pressure steam turbine generator to utilize wasted energy in their compressed air system,
providing almost half the power needed to run the plant. They figure the annual savings
to be around $250,000.

Construction waste
Construction waste is clogging our landfills. But carpet, concrete, studs, steel, plasterboard
and other building materials can often be reused or recycled. Setting up the Natural
Capital Center in Portland, Oregon involved turning an old warehouse into office space.
They were able to reuse or recycle 97 per cent of their construction debris. So before you
begin any construction or remodelling project, set stretch goals for the diversion of waste.

RESOURCES
Morton, Steven (2002) ‘Business Case for Green Design: Sustainable Design is More than
Good Intentions; It’s a Way of Reaching Business Goals’, www.facilitiesnet.com/bom/Nov02/
Nov02environment.shtml.
Yale produces its Journal of Industrial Ecology, which is published by the MIT Press,
mitpress.mit.edu/catalog/item/default.asp?ttype=4&tid=32.
Graedel, T. E. and B. R. Allenby (1995) Industrial Ecology. New Jersey: Prentice Hall.
Allenby, B. R. (1999) Industrial Ecology – Policy Framework and Implementation. New
Jersey: Prentice Hall.
www.healthybuilding.net provides information on health impacts.
The Northwest Energy Efficiency Alliance has a useful website, www.BetterBricks.com.

Operate the building efficiently

The design of a building will clearly dictate the range of performance you can expect.
However, everyday decisions can have a huge impact as well. Some are within your purview
as a facilities manager, but you will need to become a behaviour modification expert as well.

Commissioning
It would be funny if it weren’t so common: most buildings simply don’t function as
intended. Parts of the building may be hot while others are cold. The electronic controls
Chapter_07.qxd 6/10/2009 4:37 PM Page 160

160 THE BUSINESS GUIDE TO SUSTAINABILITY

may not be set properly. Building commissioning is the process of checking, usually with
a third party, if the building is functioning the way it was designed. Aster Publishing in
Eugene, Oregon saved more than $40,000 on its annual electricity bill in part by
correcting an improper economizer operation and disabled HVAC controls.6 These
services may not be free, but they often pay for themselves in the first year.

Energy management
Probably the biggest operations and maintenance (O&M) cost a facility manager
watches is energy. Certain factors are largely within your control: flushing the building
with cool evening air to reduce the air conditioning (AC) load the next day; bringing
parts of the building on over time so you don’t create as much of a spike in energy
demand; etc.
The big headache is usually the occupants: whining about being too hot or too
cold, twiddling the thermostat, sneaking space heaters under their desks, leaving lights
and computers on, etc. There are actions that you can take which will have some
success. For example, Tufts University in Massachusetts estimated that if all students
turned off their computers for six hours at night, they could save 572 tons of carbon
equivalents and $87,000. Comparing current energy use in your buildings with past
records can also uncover unnecessary use. But in reality, this will be the hardest part of
the job.
Find creative ways to educate and inform occupants about the impacts of their
decisions. TriMet, the transit authority for Portland, Oregon’s metropolitan region,
employed at least one elegant tactic – they posted the electricity bill in the lifts. No
entreaties. No guilt tripping. Just information. And their energy use dropped by 20 per
cent in the next month!
When doing remodels, set up better measurement systems. For example, SERA
Architects in Portland, Oregon installed a separate electrical metering system when
they remodelled their offices so that each would pay its own energy bills. They
immediately switched to green power (at a nominal annual cost of $800 for 9000
square feet) and further divided their metering to separately track lighting, mechanical
systems and plug loads. This separate metering enables them to target improvements and
monitor energy use.

RESOURCES
DSIRE is a comprehensive listing of energy-related incentives in every US state,
www.dsireusa.org.
Chapter_07.qxd 6/10/2009 4:37 PM Page 161

FACILITIES 161

RESOURCES
Selling Energy Projects, by Loren Snyder, GreenBiz.com, www.greenbiz.com/news/reviews_
third.cfm?NewsID=27384.

Manage waste
The first step in managing waste is to change your thinking. It’s not waste, it’s a resource.
This new mindset has allowed a number of organizations to achieve the goal of zero waste
to landfill. Just imagine no dumpsters/skips!

• Interface has eliminated over US$165 million in waste. They have learned how to
make new carpet from old carpet, reducing their need for oil. They also have a factory
powered in part by solar energy.
• Xerox has saved more than US$2 billion since 1990 and diverted the equivalent of 2
million printers and copiers from the landfill. With their remanufacturing system, they
take back old copiers and disassemble them. Parts that pass rigorous testing then get
put in new products.
• Hewlett-Packard in Roseville, California reduced its waste by 95 per cent and saved
$870,564 in 1998. One action that contributed to this was switching from pallets to
reusable slip-sheets to transport product.
• In 2000 Epson in Portland, Oregon reduced its waste to landfill to zero and saved
$300,000. One of the strategies they used to achieve this was to buy a compactor to
compress foam packaging, which was passed on as input to another manufacturer.
Excess ink is shipped off as pigment for paints. The final 10 per cent that can’t be
reused or recycled is sent to a facility to be burned for electricity.

From the above examples, certain appropriate strategies become clear. Do a waste audit to
see what is being thrown away. Even better, do a purchasing audit to see what you are
buying – for your major purchases, consider their necessity, sourcing, recyclability and
longevity. Find markets for whatever ‘residual resource’ (normally referred to as waste) you

RESOURCES
GrassRoots Recycling Network website, www.grrn.org.
Zero Waste Alliance, www.zerowaste.org.
Check with your local college or municipality to see if they offer low-cost waste assessments.
Chapter_07.qxd 6/10/2009 4:37 PM Page 162

162 THE BUSINESS GUIDE TO SUSTAINABILITY

can’t prevent through purchasing practices or process changes. Many communities have
a waste exchange website that helps connect potential users of various waste streams.

Provide green cleaning and landscaping services

Many facilities contract out their cleaning and landscaping services. Whether you do the
work yourself or contract it out, seek out greener, more benign options.
Many traditional cleaning products are loaded with hazardous chemicals and artificial
fragrances. These often cause skin irritation and/or respiratory problems for cleaning staff
and represent a significant spill risk. Such fragrances can also increase sick days for
employees who have respiratory problems such as asthma.
Much of this risk is truly unnecessary. There are effective green cleaning products to
serve almost every cleaning need. Instead of using a strong caustic product on every
surface, decide when and where the ‘big guns’ really need to be used.
Most of the same points can be made for landscaping chemicals. If you use native
plants appropriate to their location, the need for chemicals drops considerably. If you
have any lawn, lower your standards and allow some ‘weeds’ to interrupt the
monotonous carpet of green. Spray and fertilize only when needed, using the most
benign product that will do the job. Switch back to raking instead of using noisy,
polluting leaf blowers. Replace gasoline- or diesel-powered machines with ones using
cleaner fuels such as biodiesel, compressed natural gas, hydrogen or electricity (if it is
sourced from renewables).
In both cases, periodically do a chemical inventory, tallying what you use and rating
the products by hazard. Make every effort to eliminate those products that pose the most

RESOURCES
The Unified Green Cleaning Alliance has a recommended list of criteria for sustainable
cleaning products, www.zerowaste.org/ugca.htm#final.
Green Seal has a certification system for cleaning products, www.greenseal.org.
Green/Blue is working on several projects related to chemicals, packaging and design for
the environment issues, www.greenblue.org/activities.
Dolphin Software has a neat database that compares chemicals for a certain function by
both cost and toxicity so you can easily find alternatives that would meet your needs that both
cost less and are less toxic. Go to www.dolphinsafesource.com/ and look for the Green Product
Selector under Products and Services.
King County, WA has done an analysis of a number of commonly used landscape products,
rating them on a scale from high concern to low, www.govlink.org/hazwaste/publications/
COC_Report.pdf.
Chapter_07.qxd 6/10/2009 4:37 PM Page 163

FACILITIES 163

threat to environmental or human health. Material safety data sheets can help you with
these decisions.
When we have done chemical inventories for clients, we find that initiating the inventory
often leads to other business benefits. People clean out their shelves of old, unused product
so they don’t have to count it in the inventory. We often discover that the same organization
buys different products from different vendors to serve the same purpose; when they combine
purchases, they often get a significant quantity discount. To make the process of doing a
chemical inventory easy, require your vendors to provide you with your usage information.

Manage transportation issues

Add up the amount of land – both parking and access roads – that you have devoted to
the car. How much more would that property be worth if it were a building site? This is
your missed opportunity cost. Now figure out what it cost to build those parking areas and
associated swales, landscaping and sewer lines. Add these two numbers and divide by the
number of parking spaces. The purpose of this maths problem is to make the point: there
really is no such thing as free parking.
Portland State University calculated that they could not accommodate the expected
growth in student numbers if they maintained the same student to parking ratio. Their
existing 30 per cent public transport use – a level that would be the envy of many
institutions – would have to be radically improved. As previously mentioned, they placed
what parking they did provide further away from campus than the transit stops. They
charge for parking and indicate the annual total on the monthly bills to shock people into
the recognition of what it costs to own and operate a car; some of the parking revenue is
used to subsidize bus passes and bike facilities. They provide a ‘Flexcar’ (a shared vehicle
that can be rented by the hour) for people who do not have parking spaces. All this
contributes to managing costs and reducing climate impact.
When it comes to transportation, the Field of Dreams movie refrain ‘if you build it
[near bus stops], they will come [via public transportation]’ doesn’t work without carrots
and sticks. So charge at least what it costs you for parking. If you can, subsidize bus passes

RESOURCES
The Westside Transportation Alliance advocates balanced transportation choices, www.wta-
tma.org.
The US Environmental Protection Agency’s Office of Transportation and Air Quality,
www.epa.gov/otaq.
Chapter_07.qxd 6/10/2009 4:37 PM Page 164

164 THE BUSINESS GUIDE TO SUSTAINABILITY

and help people find alternative ways to get to work. Reserve the best parking spots for car
pools. Instead of validating customer parking, consider giving drivers a free bus ticket
instead.
Of course, some people will still need to drive. So Quantec LLC, a small 35-person
firm in Portland, Oregon, offers its employees a $9000 incentive to purchase a hybrid
Toyota Prius ($150 per month over 60 months). They also buy bicycles for people who
prefer to commute that way. In addition to reducing greenhouse gases and air pollution,
Quantec found these are effective programmes to recruit and retain good talent.

Conclusion
Because of the potential for cost savings and the relative size of the impacts, many
organizations begin their sustainability efforts with a focus on their facilities. While you
will find the biggest opportunities when you are first building or selecting a new facility,
there are still many measures you can take with an existing structure. Where you are a
tenant and don’t control many aspects of the management of the facility (eg you don’t have
a separate electric meter or any influence over cleaning practices), consider your leverage
with your landlord or opportunities to unite with other tenants to make requests for
different services.

SCORE FACILITIES
See page 33 for how to complete this assessment and page 36 for how to interpret your score.

Facilities
Practice Incubator Initiative Integrated Points
1 point 3 points 9 points
Energy: Reduce At least every five Have in place Purchase or produce
environmental and years, conduct an systems for at least 80%
social impacts energy audit and act monitoring and renewable energy
associated with on the results. reducing impacts (electricity and other
energy use from both equipment fuels). Demonstrate
through and human behaviour significant overall
conservation, and (eg turning off lights reductions in energy
renewables. and computers). consumption.
Purchase at least 25%
renewable energy.
Chapter_07.qxd 6/10/2009 4:37 PM Page 165

FACILITIES 165

Facilities
Practice Incubator Initiative Integrated Points
1 point 3 points 9 points

Waste: Move Conduct a waste audit Provide incentives for Achieve zero waste
toward a zero and act on the results. employees and haulers (at least 90%
waste facility. Educate staff about to divert resources from reduction in solid
reducing consumption. the waste stream. waste going to the
Have systems in place landfill) while
for waste reduction (eg directing residual
recycling is easier, products to the
monitoring and ‘next best use’
feedback systems, whenever practical.
signage).

Landscaping: Conduct chemical Minimize use of synthetic Restore or replace

Provide assessment of chemicals through a natural features of
landscaping that landscape products formal integrated pest significant
maximizes and eliminate any that management system. ecological value on
ecological qualify as ‘high Design landscaping to your property (eg
benefits. concern’ in the minimize water use and daylight a stream,
Washington state list or avoid pesticides and provide habitat on
equivalent. Use no maximize ecological an eco-roof).
PBTs. value (eg xeriscaping,
native plants).

Parking and Provide free parking Subsidize bus passes Consistently

Transportation only for carpoolers. and/or provide other choose sites that
Facilities: Create Provide bike parking incentives for alternative permit commuting
incentives for and shower facilities. transportation. choices, including
alternative convenient
transportation. alternative
transportation.

New Construction Achieve LEED certified Achieve LEED silver or Achieve Living
and Remodels: or equivalent. Use life equivalent. Building standard
Use green cycle costs, not first or equivalent.
building principles costs, as the basis of
and practices. decision-making.

Building Achieve LEED EB Achieve LEED EB silver Achieve LEED EB

Operation: Use (existing buildings) or or equivalent. platinum or
green building equivalent. equivalent.
principles and
practices in
building operation
and maintenance.
Chapter_07.qxd 6/10/2009 4:37 PM Page 166

166 THE BUSINESS GUIDE TO SUSTAINABILITY

Facilities
Practice Incubator Initiative Integrated Points
1 point 3 points 9 points

Janitorial: Use 50% or more by 75% of cleaning 100% of cleaning

cleaning products volume are green products are products are
and pest control cleaning products green/sustainable green/sustainable
methods that (Green Seal, Green and use non-toxic and all pest control
minimize toxics. Cross, UGCA or pest control methods. methods are non-
equivalent). For Apply integrated pest toxic.
janitorial paper management
products, source those practices.
with high post-
consumer recycled
content.

Fleets: Minimize Implement a Assess the needs of Use alternative fuels

the impacts maintenance the drivers and select (biodiesel, ethanol,
of the fleet through programme that vehicles with the best hydrogen) for all fleet
the selection, minimizes hazardous fuel efficiency and vehicles.
maintenance and waste, maximizes emissions that will
use of vehicles. recycling and uses bio- meet the needs.
based and non-toxic Develop systems to
alternatives (eg the minimize driving
EcoLogical certification distance.
programme).

Water: Minimize Conduct a water Have a formal system Eliminate the need
the use of water conservation in place for reducing for water other than
and reduce storm assessment and act on water use and have what falls as
water run-off. the results. Eliminate methods for precipitation on the
any wasteful uses of capturing and property (eg through
water (eg single pass treating some of the recycling, water
cooling towers). Have storm water that falls treatment) and keep
in place a stormwater on the property. at least 90% storm
pollution prevention water run-off on site
plan. in normal rain years.

Total

Average
Chapter_08.qxd 6/10/2009 4:37 PM Page 167

8
Human Resources: How to Support the Change
Process and Bolster Employee Commitment

While at first sight it may not seem to be the case, human resource professionals are
actually in a good position to influence the sustainability of an organization. When taken
together, the practices and strategies we are addressing in this book amount to an
organizational change initiative not unlike those from the last few decades, particularly
Total Quality Management, process improvement, customer satisfaction and participative
management. However, human resource (HR) professionals have been slow to pursue
sustainability, in large part because they don’t understand how much they have to offer.
The authors can identify with this problem. We too come from an organizational
development background and when we encountered the concept of sustainability as a
business issue in Harvard Business Review in the mid-1990s, we had an epiphany: by
showing our clients how to be more productive, in many cases we had also shown them
how to deplete the world’s resources better, faster, cheaper. This was not the legacy we had
in mind! We also experienced a crisis of confidence. There was no going back to the blissful
state of ignorance but yet we couldn’t see the path forward. What did we know about
sustainability? We weren’t biologists or chemical engineers? What did we have to offer?
What we’ve discovered on our journey is that implementing sustainability is a lot like
implementing any other corporate change initiative. As an internal consultant, you need
to get up to speed on certain concepts and terms, but the most troublesome issues most
organizations face are not technical ones (do we use this chemical or that?) but concern
organizational change: how does sustainability fit with our corporate strategy? Where
should we begin our efforts? Who needs to be involved and how can we engage them?
What framing is going to be most helpful? What structures do we need in place to manage
the effort? At what point do we ‘go public’ with our efforts, internally and externally?
It’s ironic that while we tiptoed into this field, we have never felt more valued for the
contribution we bring. Technical people, including scientists and engineers, the same ones
who roll their eyes when you try to engage them in a team-building exercise, have
practically begged for our help. As one engineer put it, ‘To do this work, you have to bring
together a good cross-section of people, all of whom have their own opinions. Pretty soon,
Chapter_08.qxd 6/10/2009 4:37 PM Page 168

168 THE BUSINESS GUIDE TO SUSTAINABILITY

someone gets angry and then I don’t know what to do.’ Many human resource
professionals have excellent facilitation and conflict management skills, exactly the skills
that others in the sustainability field lack.

WHAT YOU SHOULD KNOW ABOUT SUSTAINABILITY

Increasingly, sustainability is becoming an important recruitment and retention strategy:

• Youth: MonsterTRAK.com, a career website for students and entry-level employees

found that 92 per cent would be more inclined to work for a company that is
environmentally responsible. 80 per cent of young professionals wanted a job that
directly improved the environment.1
• Canadian workers: In a similar study in Canada, Monster.ca found that 78 per cent of
employees surveyed would gladly quit their jobs for a more environmentally friendly
employer. In the same poll, 81 per cent were less than impressed with their current
employer’s performance in that regard.
• US workers: An Adecco USA survey of employees in the US found that 36 per cent
would be more inclined to work for a green company, 59 per cent think their company
should be more environmentally friendly (a desire that is more pronounced with
women and young adults), and 68 per cent of adults think companies’ actions don’t
always match their green hype.2

Of course, improved social conditions in the workplace also help with retention: on-site
day care, flexible work schedules, and incentives to bike to work are examples of
programmes HR can implement to contribute to the sustainability effort.
Don’t underestimate the power of giving people a meaningful mission. We remember
talking to an employee at a lumber mill who used to dodge questions about where he
worked. After his employer adopted sustainability, he became proud to tell people about
his work. Many executives have found that sustainability motivates people in a way that no
other organizational change programme has. Programmes like total quality, Lean, Six
Sigma and self-directed work teams focused on making the organization better.
Sustainability is about making the world better. It gives people a way to address their latent
concerns (about climate change, toxics, poverty, etc.). These seem like overwhelming
problems and many retreat into denial or learned helplessness. The psychic toll of this
often goes unacknowledged but it is significant. When you give people permission to use
their job as a catalyst for positive, transformative change, many end up with a passionate
calling, not just a career.
Chapter_08.qxd 6/10/2009 4:37 PM Page 169

HUMAN RESOURCES 169

Be sure to talk to your facilities people as well because green building practices have
been found to improve productivity. Based on a study of 12 retrofits of federal buildings
in the US, these remodels resulted in a 29 per cent boost in employee satisfaction while
also reducing water and energy use as well as greenhouse gases.3
Human resources is often the department which provides organizational development
advice about how to launch and sustain new initiatives. As we consulted with
organizations, we found many organizations making unnecessary implementation mistakes
that will be familiar to anyone with an organizational development background:
Spray-and-pray training. A manufacturer of wood products trained all their employees in
The Natural Step framework and then sat back, waiting for miracles to happen. Of course,
many people forgot what they were taught since there was no planned way to use the
knowledge immediately. Few ideas were suggested until the organization put into place a
more structured way to involve staff.
The big black hole. Another company trained all employees on sustainability and asked
employees to share ideas about actions the organization could take. These ideas were
collected but there was no process to assess them, act on them or give feedback to
employees about them. So for about two years, the ideas disappeared into the black hole,
leaving employees wondering just how serious the organization was.
A rose by any other name. An organization based in ‘Ecotopia’ (Oregon) found out the
hard way that their employees on the east coast of the US didn’t have the same
connotations for such terms as ‘environmentalist’. Rather than building excitement with
their training, they were deepening the resistance to the concept.
If you don’t know where you’re going ... A boss in a property development firm got the
sustainability bug and hired someone to lead the effort. However, the top management
team had never had a conversation about how sustainability fitted into their business
strategy. At this point in time, they have got through two sustainability coordinators, both
of whom left in frustration.
Unrequited expectations. The owner of a construction firm got his employees too excited
about sustainability. Employees started leaving because they felt the company wasn’t
changing fast enough.
You should recognize these change management mistakes. They are generic problems.
Had these organizations involved an HR professional in their plans, they might have
avoided these unnecessary complications.
So don’t be intimidated if you don’t yet know the difference between PVC and PBTs.
It doesn’t matter. Your skills are critical to carrying out sustainability. It’s your job to be the
generalist, the change consultant, the process designer, the meeting facilitator. These are all
things you know how to do. For the technical sustainability topics you don’t already have
Chapter_08.qxd 6/10/2009 4:37 PM Page 170

170 THE BUSINESS GUIDE TO SUSTAINABILITY

under your belt, take a class, read a book or hire a sustainability expert as a shadow
consultant. You’ll pick it up quickly.
Sustainability is at its core an issue requiring organizational change and cultural
change. Edgar Shein, author of Leadership and Organizational Culture, identifies five
primary mechanisms that affect culture:

1 what leaders pay attention to, measure and reward;

2 how leaders react to critical incidents;
3 what leaders deliberately role-model;
4 criteria for allocating rewards and status; and
5 criteria for selecting, recruiting, promoting and firing.4

Note how many of these mechanisms are the responsibility of human resources, either
overtly through HR systems or through management training and coaching. So HR is key
to making sustainability ‘stick’.

STRATEGIES YOU CAN USE

We see the role of the human resources director and department falling into the following
categories:

• Introduce the concept to top executives. If your senior managers are not yet well
versed in sustainability, assess when the time is right and then find the best way to
introduce the topic.
• Consult on the implementation. Help put in place a plan that has a high probability
of success.
• Align human resource systems. Incorporate sustainability into your HR systems
(eg orientation/training, hiring, reviews, pay, benefits) to reinforce the organization’s
efforts.
• Model appropriate behaviours. Assess your own impacts and make changes to your
meeting management, paper processing and other tasks.
• Measure the benefits. Enhance your existing measurement systems to track the return
on your sustainability initiatives.

Introduce the concept to top executives

Because the HR department often includes an organizational development function and
may facilitate strategic and operational sessions with top management, HR professionals
Chapter_08.qxd 6/10/2009 4:37 PM Page 171

HUMAN RESOURCES 171

are often in a good position to introduce new trends to senior management. Unfortunately,
few in HR are well versed in sustainability. Remember, you don’t have to be the expert.
Your role may be as simple as pointing out articles about sustainability as a trend and
inviting management to explore this as one of many interesting global trends that could
affect their business. Here are some ideas to get you thinking:

RESOURCES
Here are some of our favourite articles to introduce executives to sustainability:
Senge, Peter M., Benyamin B. Lichtenstein, Katrin Kaeufer, Hilary Bradbury and John S.
Carroll (2007) ‘Collaborating for Systemic Change’, MIT Sloan Management Review, Winter,
Vol 48, No 2, pp44–53.
Senge, Peter and Goran Carstedt (2001) ‘Innovating our Way to the Next Industrial
Revolution’, MIT Sloan Management Review, Winter. This article provides a good explanation of
why sustainability is going to be the real ‘new economy’ (versus the dot-com version of the not-
so-new economy). This would be an excellent summary to give to executives unfamiliar with the
issue as it includes most of the basic concepts (eg natural capitalism), quotes from big-name
executives, differentiates eco-efficiencies from sustainability, and recounts some good
profitability stories.
Hall, Jeremy and Harrie Vrendenburg (2003) ‘The Challenges of Innovating for Sustainable
Development’, MIT Sloan Management Review, Fall. This article helps to explain why
sustainability can be viewed as cutting both ways. ‘From a company’s perspective, innovation
can be a primary source of sustained competitive advantage as well as a significant source of
risk, competitive disruption and failure ... The additional interacting pressures from social and
environmental concerns make SDI [sustainable development initiatives] more complex than
conventional market-driven innovation.’ Monsanto’s GMO debacle is given as an example. The
article also explains how Suncor and Transalta have managed that risk successfully.
‘Global Sustainability and Creative Destruction of Industries’, MIT Sloan Management
Review, Fall 1999. This article does a good job of distinguishing green strategies from
sustainability ones. For example, green strategies focus on incremental improvement in existing
products, processes, suppliers and customers, while sustainability involves focusing on
emerging technologies, markets, partners and customers – a list which suggests more
emphasis on discontinuous creative destruction/restructuring of industries. It also segments the
global market into three parts: consumer economy (1 billion people), emerging markets (2
billion people) and survival economy (3 billion people). Depending upon which market you’re
in, you should be asking different questions and focusing on different results.
The ‘Millennium Ecosystem Assessment’ study, performed for the UN by scientists from all
over the world, summarizes the main issues. The 31-page overview report ‘Living Beyond our
Means: Natural Assets and Human Well-Being’ nicely covers the global challenges we face,
www.millenniumassessment.org/en/index.aspx.
Chapter_08.qxd 6/10/2009 4:37 PM Page 172

172 THE BUSINESS GUIDE TO SUSTAINABILITY

• Route a reprint of a sustainability-related article from a respected management

publication (eg Harvard Business Review, MIT Sloan Management Review or Business
Week).
• At a management meeting, show a video related to sustainability (eg ‘The Next
Industrial Revolution’) and use it as a discussion starter.
• In preparation for a strategic planning session, suggest to management that
sustainability should be one of a handful of emerging trends they should examine.
• Bring in executives from other respected organizations to talk about why they have
adopted sustainability as a strategic issue and how they use it to improve their
performance.

Consult on the implementation

Many of the mistakes organizations make implementing sustainability are predictable
change management blunders. This is hardly surprising given that most of the people
implementing sustainability have no change management training. HR professionals can
be critical partners in crafting a successful implementation plan to fit their particular
organization’s circumstances. They understand the importance of involvement; they know
how to respond to resistance; they are familiar with reframing techniques to enrol
stakeholders; they are in control of many of the communication and educational systems;
and they often coach managers in their own performance.
For example, the new executive director of the Oregon Museum of Science and
Industry in Portland, Oregon was passionate about sustainability but recognized that in her
organization, top-down directives were rarely as long-lived as bottom-up ones. So she hired
us to help her develop an implementation strategy. We formed a steering committee of
employees and managers whose job it was to study sustainability, catalyse a few pilot
projects and, by the end of the year, recommend whether the organization should adopt
sustainability as one of its strategic goals. The steering committee developed two broad
improvement goals: zero waste and climate change. A task force was formed to work on
each issue and they reported their results back to the steering committee. They made
reports to all-staff meetings about reducing their solid waste by 40 per cent and
encouraging alternative transportation. The steering committee also set up informal
lunchtime sessions where people could learn about sustainability. By the end of the year,
everyone at the museum was familiar to some extent with sustainability and the steering
committee gave the executive director the enthusiastic go-ahead she had hoped would
come.
A second role that the HR department can play is to help individual departments map
out and improve their processes. Many environmental impact analyses, especially those
Chapter_08.qxd 6/10/2009 4:37 PM Page 173

HUMAN RESOURCES 173

associated with environmental management systems, are based on a process diagram. Many
HR professionals, either through their experience with organizational development or the
quality management fields, are well prepared to do this.

RESOURCES
Doppelt, Bob (2003) Leading Change toward Sustainability. Sheffield, UK: Greenleaf
Publishing.
Eisler, Riane (2007) The Real Wealth of Nations: Creating Caring Economics. San
Francisco: Berrett-Koehler.
Natrass, Brian and Mary Altomare (2002) Dancing with the Tiger: Learning Sustainability
Step by Natural Step. Gabriola Island, BC: New Society Publishers. Provides an overview of
the popular Natural Step framework with case studies from North America.
MonsterTRAK, in alliance with ecoAmerica, a non-profit environmental group, started
GreenCareers. The site lists positions in companies that reduce their impact on the
environment, making it easier for students to connect with businesses that support their
environmental goals.

Align human resource systems

Human resource systems have a powerful influence on employee behaviour, so it’s
important to ensure that your systems are supporting the behaviour that you want.
Companies that touted teamwork and collaboration, for example, soon discovered that
their individually focused performance appraisal and reward system undermined the
collaboration they were trying to instil. If you don’t watch for these types of mismatches
you can undermine your own implementation efforts.
Orientation. Many organizations run a blanket training programme when they begin a
sustainability effort but then forget about employee turnover. Including sustainability in
your new employee orientation will ensure that you don’t lose ground.
Selection and job descriptions. Eventually, sustainability becomes embedded in the jobs
people do. This should be reflected in job descriptions and selection criteria. Chevron
made an understanding of environmental issues a selection criterion for their CEOs.5
You will also want to reach out to disadvantaged populations. While this may already be
part of a strong diversity programme that you pursue for other reasons, sustainability
strengthens the case for engaging with this segment of society. In the US at least,
sustainability still is predominately an upper-middle-class white phenomenon. As you
hire people from disadvantaged or minority communities, you not only extend the
Chapter_08.qxd 6/10/2009 4:37 PM Page 174

174 THE BUSINESS GUIDE TO SUSTAINABILITY

concepts of sustainability to new populations, you learn more about what is important
to those communities, helping you to reframe sustainability in terms that will resonate
with them.
Training. Embed sustainability into your training programmes. In particular include it in
supervisory and management training, but you can also include sustainability-related
examples in many other classes. Make sure all employees get some basic-level
understanding of sustainability concepts and, over time, provide more in-depth training in
specialized topics as they are needed. Remember that training doesn’t just happen in
classrooms. Find ways to embed sustainability into regular staff meetings and other
corporate communication vehicles.
Training doesn’t always have to be job-related. Wal-Mart, for example, has been
providing sustainability training to its employees and encouraging them to adopt personal
sustainability projects. The programme is voluntary, but many employees are participating.
The goals include eating healthier foods, using environmentally friendly materials in their
homes, and volunteering for related causes. Many organizations have found that discussion
courses are also an effective way to engage employees. Helping employees integrate their
personal values into daily life at work and at home can be a powerful motivator.
Reviews and rewards. Align your pay and reward systems with your sustainability policies.
Often, linking a minor portion of pay to sustainability is enough to get action. Norm
Thompson, a catalogue retailer, wanted their buyers to use sustainability as part of their
decision-making process when they chose products for their catalogue. But just telling
them this was not enough to change behaviour because their pay system didn’t reward
them for the extra work. So HR told them that 10 per cent of their pay would be based on
improving the sustainability quotient of their purchases. This got their attention! Instantly,
the buyers wanted to know how they could tell if one product was greener than another.
This led to the creation of an elaborate scoring system and associated toolkit. The entire
toolkit can be downloaded from www.NormThompson.com/Sustainability (under
‘Products with a Purpose’).
Certainly, you will also want to ensure that you are paying a fair, living wage. Deciding
what constitutes a living wage can be a knotty problem, however. Rejuvenation, a small
period lighting manufacturer in Portland, Oregon, struggled with how to determine a
living wage and how to fund paying it in a world of global competition. They found a
regional research study on what constituted ‘fair pay’ but learned that what is adequate for
a single adult living alone is different from that for a dual-income couple or parents with
three children. This led them to learn more about their employees’ households. They used
this information to determine a fair wage and then did what they could afford to provide
that for their entry-level employees. Part of their strategy is to accelerate pay increases for
the lowest grade positions faster than higher grades to close the gap.
Chapter_08.qxd 6/10/2009 4:37 PM Page 175

HUMAN RESOURCES 175

Most organizations link their performance review systems to pay, so find ways to
embed sustainability there as well. This can take some effort since the goals are often linked
to job tasks. One of the barriers associated with implementing sustainability is that people
can’t imagine what they should do differently. The solid waste division of the Washington
Department of Ecology found that many people said ‘I just follow the regulations’ while
others had no problem envisioning how to incorporate sustainability into their everyday
work life.
To solve this problem, we helped them develop a process for guiding employees so they
could integrate sustainability into their jobs. The department already had Job Alike Groups
(JAGs) that were composed of people from across the state who did the same job. We
designed a process similar to ‘backcasting’ where the JAGs examined their work process,
identified their impacts, defined the sustainable future state and then worked backward to
identify what they would have to do differently in ten years, five years and one year as well as
things they could change now. We trained people to facilitate these JAG meetings. The
management JAG went through a slightly different process to determine how to support these
efforts. This included a process linked to their performance review system. Employees were
expected to bring ideas about how to change their work practices to the performance review
discussion so that these new practices could be reflected in individual performance plans.
Reward programmes. Award/reward programmes and contests can be risky because the
psychological effects of rewards on human behaviour are quite complex. (We recommend
Punished by Rewards by Alfie Kohn for more on this.) Sometimes it’s just a matter of
making sure there is something in it for the employee. Luper Brothers is an auto repair
shop in Lewiston, Idaho. In the office, Luper Brothers’ employees recycle aluminium,
cardboard, plastics, scrap iron and polystyrene. They realized that nagging wasn’t the best
way to get employees to recycle. Instead, they developed an incentive programme that
enabled employees, on their own time, to recover the more valuable metals and metal
parts (copper, aluminium, bearings) from waste components and earn extra income by
selling them.
One of the most famous and effective reward programmes was run by Dow Chemical
Company back in the 1980s to improve environmental performance. While the example
is dated, there is a lot to learn from their success. In 1982, their Louisiana Division created
a contest to find energy-saving projects with a high return on investment. In that first year,
there were 27 winners, requiring capital investments of $1.7 million and an average return
on investment (ROI) of 173 per cent. What was most surprising, violating the commonly
held assumptions about diminishing returns, was that each year the employees found
better and better projects yielding better ROIs. Many of these projects involved process
improvements such that the productivity gains started to exceed the energy and
environmental benefits. After ten years the programme was generating ideas that on
average returned 300 per cent! What was going on? Why didn’t they quickly exhaust the
Chapter_08.qxd 6/10/2009 4:37 PM Page 176

176 THE BUSINESS GUIDE TO SUSTAINABILITY

low-hanging fruit? We believe the employees got increasingly sophisticated in their ability
to identify improvement opportunities.6
Transportation-reduction programmes. Many HR departments operate programmes to
reduce commuting impacts. These range from subsidizing bus passes and coordinating car
pools to encouraging telework. For service organizations, transportation may be a major
source of environmental impact. For example, at SERA Architects in Portland, Oregon, their
backcasting process revealed that commuting and travel were by far their biggest impacts,
bigger by a factor of two over any other activity. At the time they began investigating travel
issues, they were issuing each employee with the cash equivalent of a monthly bus pass.
Employees could do what they wanted with the cash, so drivers were using it for parking
expenses. The firm didn’t feel that the policy really sent a strong enough message. When they
crunched the numbers they discovered that 33 per cent of their staff were commuting alone
in cars and that the travel subsidy the firm paid out to them came to enough to give every
employee an extra two days’ paid holiday. SERA decide to revoke the payment to single
occupancy commuters and gave every employee the extra two paid days of holiday. Now they
ask each employee to submit a quarterly travel report. If an employee can demonstrate that
he used alternative transportation to get to work at least 80 per cent of the time, he is paid
a quarterly bonus equal to the cost of a three-month bus pass.
Governmental agencies have also been able to justify significant incentives to
encourage alternative commuting. Clark County, Washington is a suburban and rural
community outside Portland, Oregon. Clark County recently adopted a sustainability
policy and is embarking on several initiatives including significant incentives to encourage
alternative commuting. In addition to providing employees fully subsidized bus passes and
car-pool parking, Clark County offers two hours’ vacation bonus for any employee who
takes at least 12 round trips via alternative transportation in a month. While some people
argue that could represent a loss of work time, Pete DuBois, Sustainability Coordinator,
argues that people tend to compress their work into the time available. ‘Think about the
week before you go on vacation. Somehow, you get more done that week to compensate.’
The vacation bonus is available only for car-pooling, transit, walking and cycling and can
be viewed as time back for sacrifices made waiting to catch the bus, meet up with your car-
pool partner or travelling by bike or on foot. Through a grant from Washington State
Department of Transport, Clark County also offers employees the Commute Alternative
to Shift Habits (CASH) which offers cash rewards to employees committing to trying a
new alternative commute. Not known for transit-friendly development, Clark County is
taking the lead on its commute trip reduction programme.
Reinsurance company Swiss Re is so concerned about climate change that they provide
incentives for employees to reduce their personal carbon footprint at work and at home in
their COYou2 Reduce and Gain programme. Until 2011, they will rebate half the cost of
such measures as purchasing a hybrid car, installing solar panels or taking public
transportation.7
Chapter_08.qxd 6/10/2009 4:37 PM Page 177

HUMAN RESOURCES 177

In the US you can set up a pre-tax Transportation Savings Account (similar to a health
savings account) that allows employees to pay for alternative transportation expenses (eg
bus passes) with pre-tax earnings. Japanese auto maker Mazda is paying employees 1500
yen (about US$12.50) a month to walk to work to improve their health and help the
environment. Employees must live at least two kilometres away from work and commute
by foot at least 15 days a month to qualify. Yamaha has a similar programme. These
programmes may pay for themselves in reduced health plan costs.
Historically employers have felt that employee commuting was not their business. But
take a bit of time to compute the cost of providing employee parking. What is the cost of
that asphalted land? What is the cost in obesity and related health problems to your health
plan when you make it easy for employees to limit their exercise.
Portland State University, sited in downtown Portland, Oregon, realized they couldn’t
possibly increase their student population as their strategic plan directed if all employees
needed a parking space. So they did a number of things to encourage alternative
transportation. Parking lots are inconveniently located whereas public transit stops are
close to the front doors. Monthly parking passes show the annual cost of parking on the
receipt to emphasize the true cost of driving. The university also provides ‘Flexcar’ benefits
so that professors and employees can rent a car on an hourly basis when a car really is the
best way to get around.
It’s not just commuting. HR can reduce the need for business travel through
technology. With sophisticated technologies like Cisco’s TelePresence (which provides a
realistic meeting environment) and Second Life (which provides an unreal experience!)
travelling will become less necessary. Windshield time and jet lag are productivity busters.
Collaborate with your information technology department to identify and train people on
the best tools available.
Then build in incentives to reduce transportation. Progressive Investment
Management, a socially responsible investment manager, actually charges their employees
for the climate impacts of their transportation choices. Employees track both business trips
and commuting, and a fee to purchase carbon offsets is deducted from their annual bonus.
Work/life balance support systems. With both parents working these days, it’s unrealistic
to expect people to leave their home lives at the door. Helping employees juggle their

RESOURCES
In the US, a good source of information about living-wage jobs and also green jobs is the Political
Economy Research Institute, part of the University of Massachusetts Amherst,
www.peri.umass.edu/.
Eisler, Riane (2007) The Real Wealth of Nations: Creating Caring Economics. San Francisco:
Berrett-Koehler.
Chapter_08.qxd 6/10/2009 4:37 PM Page 178

178 THE BUSINESS GUIDE TO SUSTAINABILITY

commitments can pay off in employee retention. SAS at their Carey, NC headquarters, has
on-site day care and highchairs in the cafeteria so kids can eat with their parents. Employees
can take unlimited sick days and they work seven-hour days. SAS is often in the top ten of
Fortune’s 100 Best Companies to Work For list and has a turnover rate of only 4 per cent
compared with 20 per cent in industry. Since it can cost the equivalent of up to 18 months’
salary to bring a new person up to speed, the investments are well worth it.8
Investments and retirement funds. In many organizations, the retirement benefits are part
of HR responsibility. Screening investments on social responsibility criteria can send
important signals to the marketplace. The huge California public employees’ pension
programme, CalPERS, has been a leader in this practice.

RESOURCES
For training materials, see the following resources:
Galea, Chris (ed.) (2005) Teaching Business Sustainability: Volume 1 – From Theory to
Practice. Sheffield, UK: Greenleaf Publishing. Also see Volume 2 – Cases, Simulations and
Experiential Approaches, published in 2007.
In the US, see the Northwest Earth Institute for discussion courses which can help
employees get in touch with their values and learn about ecological principles, www.nwei.org.
Hitchcock, Darcy (2001) Making Sense of Sustainability: An Employee Guide. Portland, OR:
AXIS Performance Advisors, Inc. This is a short primer for employees that includes a couple of
simple exercises. It covers the triple bottom line and The Natural Step system conditions. See
www.axisperformance.com/sust_series.html.
Hitchcock, Darcy (2008) The Dragonfly’s Question. Self-published at this time. This is
a novella and discussion guide for business and community groups to learn about
sustainability concepts and principles. Contact Darcy Hitchcock for more information:
[email protected].

Model appropriate behaviours

Certainly, HR should model sustainable behaviour by implementing the suggestions in
the chapter on services and office operations. You should also set the tone for work/life
balance. The HR department is also well placed to organize and participate in community
projects. Apply environmentally preferable purchasing guidelines when you purchase
products and services. When you arrange meetings, use a green caterer who offers locally
grown, seasonal produce, buffet-style meals that reduce packaging, and reusable flatware
and glasses.
Chapter_08.qxd 6/10/2009 4:37 PM Page 179

HUMAN RESOURCES 179

Use your influence and your contacts across the organization to align actions with
words. Encourage your legal staff to print contracts on both sides and to allow electronic
signatures. Encourage purchasing to implement environmentally preferable purchasing
policies and work with facilities to improve the comfort of and air quality in the building.

Measure the benefits

Learn how all the various parts of the business affect human health, employee satisfaction
and productivity. Did you know that green cleaning products can reduce absenteeism
related to asthma and other lung- and skin-related sensitivities? Did you know that
daylighting and other green building practices can improve productivity? Have you thought
about how sustainability can bring meaning to work and help you attract and retain
employees? So talk to your facilities manager about the cleaning arrangements and get
involved if there is a remodel planned. Work with top management to maximize
the benefits of their sustainability initiative so that it inspires both applicants and employees.
You can help make the business case for sustainability by measuring your own
improvements and also helping others gather quantitative and qualitative data. The
following list should help you see opportunities:

• Measure productivity before and after a remodel in which green building techniques
are used.
• Track absenteeism before and after the cleaning staff switch to green cleaning products.
Compute both the labour costs and the avoided medical costs.
• Ask job applicants if they are familiar with your sustainability initiative and see how
many say they approached you because of your commitment to it. Track the
percentages over time to show top management the trend line.
• Compare your retention rates with similar organizations that have not adopted
sustainability. Compute the cost savings by factoring in the cost of advertising for,
screening, hiring and training new employees.
Chapter_08.qxd 6/10/2009 4:37 PM Page 180

180 THE BUSINESS GUIDE TO SUSTAINABILITY

SCORE HUMAN RESOURCES

See page 33 for how to complete this assessment and page 36 for how to interpret your
score.

Human Resources
Practice Incubator Initiative Integrated Points
1 point 3 points 9 points

Executive Education: Expose executives to Provide executives Make sustainability

Provide executives sustainability through with formal training knowledge and
with education on articles, speakers and on sustainability commitment a
sustainability. other methods. and incorporate selection and
discussions of its performance
relevance in criterion for
planning meetings. executives.

Implementation Launch sustainability Help to manage a Embed

Strategy: Develop a pilot project(s). formal, sustainability into all
plan to support organization- wide business systems
implementation of sustainability (planning,
leadership vision and initiative. budgeting, reviews,
strategy. rewards, etc.)

Culture: Make Develop an empowered Have a formal Demonstrate

sustainability “how we culture where system for through word and
do things here”. employees routinely recognizing action, both
come up with ways to employee internally and
improve performance; contributions to externally, that
sustainability is one of sustainability. sustainability is a
the areas employees core value of the
focus on. organization.

Employee Orientation Provide training to Train the entire staff Routinely offer
and Training: Provide employees involved on sustainability training on
ongoing sustainability with sustainability concepts, advanced
education for all efforts. frameworks and sustainability
employees. tools relevant to practices.
their jobs.

Performance Have a formal process Rewrite job Incorporate

Systems: Embed to help employees descriptions and sustainability into
sustainability into job discover how to apply selection criteria to performance
descriptions, sustainability to their include evaluations.
selection criteria, and everyday work. sustainability for all
performance reviews. appropriate
employees.
Chapter_08.qxd 6/10/2009 4:37 PM Page 181

HUMAN RESOURCES 181

Human Resources
Practice Incubator Initiative Integrated Points
1 point 3 points 9 points

Compensation: Provide a fair, living Provide incentives Have a policy for

Reflects fairness wage and adequate and remove maintaining a fair ratio
and creates benefits to all disincentives for (less than 50:1)
incentives for employees. sustainability between the highest
sustainability performance. and lowest paid
performance. employee.

Organizational Conduct an employee Actively recruit from Be listed as one of the

Climate: Provide survey at least every two and provide jobs for best places to work in
a respectful and years and act on the people from the state, province or
productive results (including such disadvantaged country.
workplace. elements as employee populations (eg
involvement, diversity, people with
work/life balance, living disabilities, minorities,
wage jobs). at-risk youth).

Commuting: Only provide paid Provide assistance Provide financial

Provide effective parking for carpoolers. for alternative incentives to
incentives to Promote the use of commuting (eg encourage alternative
encourage the alternative subsidized bus transportation
use of alternative transportation. Site the passes, including bonuses,
transportation office such that it can transportation carbon offsets, etc.;
and/or reduce be easily accessed by savings accounts, and/or provide
the need to at least one alternative ride share financial assistance
commute. transportation method. assistance, personal for employees to
use of shared purchase the most
vehicles) environmentally
responsible car
models available.

Volunteering and Have systems that Allow employees to Select certain

Charities: encourage employees volunteer during paid charities or social/
Support the to donate to charities work time. environmental issue(s)
communities in and to volunteer. that are strategic to
which you your organization and
operate or which provide at least 40
you affect. hours per person of
pro bono services per
year.

Total

Average
Chapter_08.qxd 6/10/2009 4:37 PM Page 182
Chapter_09.qxd 6/10/2009 4:37 PM Page 183

9
Purchasing: How to Determine What to Buy
and How to Work with Suppliers

Over the last decade, purchasing has transformed from an administrative function to a
strategic one. It’s no longer enough to get the product on time and at the cheapest possible
price. Now purchasing has become integral to managing waste, protecting product claims
and managing the entire supply chain. Just-in-time manufacturing requires more intimate
relationships with a smaller number of suppliers. Customer requirements are driving the
need to know what is in the product. Public and shareholder expectations drive buyers to
investigate the labour and human rights practices of their vendors. So purchasing today is
key to efficiency, competitiveness and image. This chapter explores how these drivers relate
to sustainability in more depth.

WHAT YOU SHOULD KNOW ABOUT SUSTAINABILITY

The purchasing corollary to the old adage ‘what goes up must come down’ is ‘what
comes in must go out’, meaning either as product or waste. One study of ‘material
throughput’ in US manufacturing discovered that only 6 per cent of the inputs ended
up in the product!1 We are purchasing huge quantities of stuff that doesn’t get translated
into sales. And much of what’s left must be paid for again, in tipping fees or emissions
permits. Getting control over your purchasing choices can not only reduce your
environmental and social impacts, it can also save you costs relating to material input
and output.
Companies increasingly have to substantiate environmental claims about their
products. Many governments and companies are issuing environmentally preferable
purchasing policies, in some situations publishing grey lists and black lists of chemicals they
want to see less of or have phased out entirely. This requires you to know what is in the
sub-assemblies, components and additives that go into your product. In 2001, just in time
for the holiday season, The Netherlands banned Sony Playstations because the cables
contained too much cadmium, causing a media uproar and earning Sony a hefty fine.
Chapter_09.qxd 6/10/2009 4:37 PM Page 184

184 THE BUSINESS GUIDE TO SUSTAINABILITY

Through surveys and other methods, purchasing agents must understand what is in the
products they buy.
Several years ago, Nike was surprised to discover that the public held them responsible
for the labour practices of their suppliers. Nike doesn’t manufacture anything; they use
suppliers, mostly in Asia, to manufacture their shoes and clothing. After stories about
worker abuses and low wages hit the papers, Nike’s image took a dive. If the public makes
no distinction between the practices of a company and those of its major suppliers, then it
is prudent to know all you can about the social, ethical and environmental practices of your
vendors.
Just-in-time manufacturing has led to sole-sourcing or reducing the number of
suppliers. With this comes a level of risk. What happens if your only supplier of a key
component has a significant problem – their plant blows up, the department of
environmental quality shuts them down or one of their critical raw materials is suddenly
classified as a hazardous material? Instantly your entire supply chain can be disrupted. To
manage that risk, many purchasing departments require suppliers to have an
environmental management system or to be ISO 14000 certified.
The world is so interconnected, one mishap can lead to a host of problems. For
example, when a fire destroyed Philip’s semiconductor plant in Albuquerque, New
Mexico, the supply of radio frequency chips used in cell phones was cut off to both
Nokia and Ericsson. While the fire was caused by lightning, not human error, it
demonstrates the importance of having strong supply chain management systems. When
the fire prevented Philips from shipping their product, the resulting shortage devastated
Ericsson as they did not have supplier redundancy built into their system. Nokia, on the
other hand, met its production targets and took market share away from Ericsson, who
ended up by missing their production targets and posting a US$1.7 billion loss in their
handset division that year.2
Determining whether product A is more sustainable than product B can be a
daunting task, much more complicated than it would first seem. Yet purchasing
departments are now being asked to make these assessments. Often they turn to product
certification schemes (Green Seal, Energy Star, Food Alliance, Forest Stewardship
Council, etc.), which are audited by a third party. However, this is only a partial
solution as there are often competing certification schemes making different claims for
the same product. Purchasing must then assess whether certification A is better than
certification B!
Some organizations have used purchasing as a way to move an industry toward
sustainability. A number of clothing manufacturers, under the umbrella of Business for
Social Responsibility, tackle sweatshops and other international labour issues. Nike and
Patagonia have joined forces with others to create a reliable market for organic cotton
(since a quarter of the world’s insecticides are used on this crop).
Chapter_09.qxd 6/10/2009 4:37 PM Page 185

PURCHASING 185

STRATEGIES YOU CAN USE

As you can see, purchasing is not just paper-pushing any more. So what are the strategies
progressive purchasing departments are using to help their organizations become more
sustainable? We’ve organized the most common strategies into two loose categories:

1 purchasing practices – the systems, policies, and procedures that support

sustainability; and
2 purchasing projects – typical ad hoc tasks that are undertaken to solve a particular
problem.

Purchasing practices
Purchasing practices includes those policies, procedures and systems that support or
encourage sustainable choices. This section looks at some of the more common best
practices.

Adopt sustainable or environmentally preferable purchasing (EPP) policies

Many organizations, especially governmental agencies, are establishing EPP guidelines.
Forty-seven US states have some form of buy-recycled policies, and many local and state
agencies go far beyond this.3 The city of San Francisco, for example, has just become the
first city in the US to enact a law that requires all city purchases to take public health and
environmental stewardship into consideration. The law affects everything from toilet paper
to computers and covers the $600 million per year the city spends on products.4 These
policies send important market signals, rewarding those with more sustainable products
and services while hanging a carrot out for those who don’t. As the name implies, most EPP
policies focus only on environmental attributes (often including human health), leaving
out the socio-economic elements that are equally important to sustainability; but at least
they are a start. You can incorporate socio-economic elements into a sustainable purchasing
policy by adding other criteria such as labour practices, diversity and community
contributions.
Depending on the culture of the organization, these EPP programmes may take the
form of formal policies and guidelines or simply accepted practice. Don’t reinvent the
wheel; many of them are available on the internet, so borrow freely.
You can also use eco-labels as a proxy for doing all your own investigation.
Appendix B lists some of the labelling and certification programmes available. Note that
choosing to use these certifications may disadvantage small businesses, so you may want to
provide a way to offset this.
Chapter_09.qxd 6/10/2009 4:37 PM Page 186

186 THE BUSINESS GUIDE TO SUSTAINABILITY

RESOURCES
The Center for a New American Dream’s website includes a host of examples,
www.newdream.org.
For information about eco-labels used in the US go to www.ecolabels.com.
The US Environmental Protection Agency has created environmentally preferable
guidelines for computers; go to www.epa.gov/oppt/epp/electronics.htm.
The Forum for the Future in the UK makes available for free download the booklet ‘Buying
a Better World’ and also the Sustainable Procurement Toolkit, www.forumforthefuture.org.uk/
node/1408.

Embed EPP or sustainable choices into online systems

In a decentralized purchasing environment, one of the most effective ways to encourage
people to choose EPP products is to make them easiest to find and procure. When
someone searches for notepads, for example, the ones made from recycled content should
show up first. Make chlorine-free copy paper pop up first on your online purchasing
system. If an employee needs a less sustainable product, make them dig for it.
TriMet, the transit authority for the Portland, Oregon metropolitan region, worked
with Office Depot to further develop internal green purchases. They examined their top
20 purchases (this included file folders, paper, post-it pads, pens, pencils, pads, etc.) and
then worked with both Office Depot and Boise Cascade to identify recycled options to
make them the first items employees see when they go online to make purchases. As
environmental engineer Kevin Considine explains, ‘Their product lines are limited to what
I would call more conventional choices – no options for 100 per cent post-consumer
chlorine-free kenaf paper or anything like that.’ He acknowledges that the greener options
have cost them more at times, but says that these prices are coming down because of the
increasing green market they are helping to create. ‘It was relatively easy [to set this up] and
more options are being added to their product line each year that meet performance needs
and are at least a greener option.’

Embed sustainability language into RFPs and contracts

Sustainability brings together strange bedfellows at times. We once had someone approach
us to bid with them on a wastewater treatment job. We admitted to knowing nothing
about wastewater treatment. No matter; they wanted us on the team anyway because we
understood sustainability and the request for proposal (RFP) made mention of it. In the
process of writing the proposal, we were able to impart a lot about sustainability.
(Mercifully, we didn’t get the job.)
Chapter_09.qxd 6/10/2009 4:37 PM Page 187

PURCHASING 187

Never underestimate the power of including mention of sustainability or related terms in

an RFP. It definitely gets attention and it helps to pre-empt the nay-sayers who claim that
customers aren’t asking for sustainability. You don’t even need to rate it particularly highly in
your evaluation criteria. But doing so will stimulate creative thinking and innovative proposals.
Similarly, write sustainability language into your contracts. Cleaning contractors can
be asked to use Green Seal or equivalent products. Require your landscaping firm to use
integrated pest management with synthetic pesticides used only as a last resort. Building
contractors can be expected to recycle or reuse 90 per cent or more of construction debris.
Professional service firms can publish reports on chlorine-free, 30+ per cent post-consumer
recycled paper and bind reports without plastic covers or vinyl binders. Arm-twist your
lawyers into printing contracts double-sided. Maybe use existing eco-labels, third-party
certification schemes and standards as additional criteria.
Writing contract language is another place where you’ll want to leverage what others
have done. Use the resources below to fast-forward your process. Also check out the
appropriate third-party certification programmes.

RESOURCES
EPA’s environmentally preferable purchasing contracts database, www.epa.gov/oppt/epp/
database.htm.
EPPNet www.nerc.org/eppnet.html.
Government websites, especially King County, Washington and Santa Monica, California;
Massachusetts and Minnesota.
For information about eco-labels used in the US go to www.ecolabels.com. See also a
listing of common eco-labels used internationally in Appendix B.
The Unified Green Cleaning Alliance website has standards for sustainable cleaning
products, www.ugca.org.

Use service contracts to align the interests of your vendors with your own
Sometimes the solution is to change the incentives in a contract so that the vendor’s
interests are aligned with yours. Often this takes the form of service contracts that
convert products into services. Instead of buying paint, you purchase the service of
painting widgets. Now the vendor doesn’t want to sell you the maximum amount of this
toxic product but instead benefits from reducing the product’s use and reducing its
toxicity.
These service contracts are used most commonly for chemicals and resource
management issues. For example, Portland State University’s waste hauler used to be paid
Chapter_09.qxd 6/10/2009 4:37 PM Page 188

188 THE BUSINESS GUIDE TO SUSTAINABILITY

for each ton of garbage that was hauled away, creating a negative incentive for recycling.
The more that was recycled, the less waste they could haul away and get paid for. As a
result, the hauler did not have any reason to help Portland State reduce waste or increase
recycling. So the university set out to craft new contract language whereby both parties
shared in the benefits of increasing the recycling rate by compensating the hauler for
helping to reduce waste and process recyclables. ‘It’s great,’ says Michele Crim, their
sustainability coordinator, ‘Now they are setting up site visits for our recycling coordinators
to show them an effective collection process from beginning to end.’

Implement a supply chain environmental management system

Supply chains have become increasingly critical to business, requiring collaboration across
organizations. Outsourcing, just-in-time manufacturing and cradle-to-grave legal risks all
imply that you must manage beyond the walls of your own operation.
The most common approaches to greening the supply chain are summarized in the
table below:5

Table 9.1 Options for working with suppliers

Approach Use when …

Choose greener products You know what is ‘greener’ and where to get it.
Example: Switch from a petroleum-based solvent to a water-based
one.

Notify vendors You know what is ‘greener’ and your current vendors don’t offer this to
you now.
You want to keep using the same vendors.
Example: Send a letter to your contractors to inform them that when
you renew their contract, you will require they use Green Seal or
equivalent products.

Survey suppliers You need to know what is in your product.

You want to influence your suppliers’ business strategy.
Example: Send a survey to your supplier of cabinets to enquire about
formaldehyde.

Create a coalition You are a small customer for your supplier and don’t have enough
clout to get their cooperation.
Cooperating with other companies will not undermine your competitive
advantage.
You want to create a reliable market for a product..
Chapter_09.qxd 6/10/2009 4:37 PM Page 189

PURCHASING 189

Table 9.1 Options for working with suppliers (cont’d)

Approach Use when …

Example: You want to get 100% post-consumer recycled paper but it
costs more so you form a coalition of other firms in your office
building to purchase larger quantities, reducing the cost to that of
30% recycled content reams

Host a supplier workshop You need to improve your process, product or business relationship
with your suppliers.
You plan to continue using the same suppliers.
Example: Invite one of your first-tier suppliers to a workshop to explore
how to improve the quality, cost and environmental performance of
your processes.

Partner with an NGO You need the credibility of the non-governmental organization (NGO)
(eg to avoid accusations of ‘green-washing’).
The NGO has existing relationships with other suppliers who provide a
more environmentally friendly product.
You need a respected, neutral party to convene your competitors.
Example: As a coffee shop, you want to develop a market for
fair-trade, shade-grown coffee. You need an NGO with connections
to coffee growers to set up long-term contracts and to certify that your
coffee meets these claims.

Ben Packard, director of environmental affairs at Starbucks, emphasizes:

It’s a mistake to isolate ‘greening the supply chain’ as something completely different.
It should be presented and received as one of many customer expectations

RESOURCES
Hitchcock, Darcy (2001) Greening the Supply Chain. One of the booklets in the Sustainability
Series™, www.axisperformance.com/sust_series.html.
Willard, Marsha and Chris James (2001) Choosing Greener Products. Part of the
Sustainability Series™, www.axisperformance.com/publications.html.
Hitchcock, Darcy (2004) Partnering with Vendors: Supplier Workshops for Mutual Gain.
Part of the Sustainability Series™, www.axisperformance.com/publications.html.
National Environmental Education and Training Foundation (2001) Going Green …
Upstream: The Promise of Supplier Environmental Management. Washington, DC: The National
Environmental Education and Training Foundation.
Chapter_09.qxd 6/10/2009 4:37 PM Page 190

190 THE BUSINESS GUIDE TO SUSTAINABILITY

(in addition to price, performance, quality, etc.). If you treat it as a new and separate
conversation, it may look more difficult than it needs to be. Given the natural
tendency to resist change, there is no need to make this any larger than it needs to be
as long as you are able to get the performance improvements you are after. 6

To figure out which of these options you should pursue at any one time requires some up-
front planning. That’s where a supply chain environmental management (SCEM) system
can be helpful. As with any management system, you need a way to set policy and
priorities, plan, monitor the implementation and review the results.

Buy green power

No discussion of buying greener would be complete without considering the source of your
power. Many utilities are now offering ‘green power’ options. When considered collectively
the impacts of the power-generating industry are not trivial. According to the US
Environment Protection Agency (EPA), the US electric power industry produced 1.1 billion
pounds of toxic emissions in 1998, or 15 per cent of all US toxic emissions. In addition to
toxicity concerns, many electricity sources produce greenhouse gas emissions, which have
potentially adverse impacts on the global climate. In 1994, for example, 36 per cent of US
carbon dioxide emissions were attributed to the utility industry against 30 per cent for
transportation, 23 per cent for industrial facilities, 7 per cent for residential households and
4 per cent for commercial operations.7
This does not have to be an all-or-nothing decision. You can decide to increase the
percentage of your energy that comes from renewable sources by, for example, 10 per cent
a year. Use energy efficiency measures to offset the additional cost. Since the fuel cost for
renewables (eg wind and solar) is both stable and free, you may be able to set up long-term
green power contracts that sidestep the volatile prices for fossil fuels, coming out ahead in
the long run.

Create incentives and checklists for making more sustainable choices

Most of the strategies discussed above require someone to stop and think about what they
are buying. And in this busy world, only a small proportion of people will be passionate
enough to make the effort without some assistance and nudging. Such was the case at
Norm Thompson, a catalogue retailer. The owners were passionate about sustainability and
had trained practically everyone in the company. Having won over their employees they set
their sights on transforming the catalogue industry by convincing their competitors to use
10 per cent recycled content paper (currently most catalogues are printed on 100 per cent
virgin-fibre paper).
Despite all the hoopla and executive support, the buyers who sourced products for the
catalogues had a difficult time understanding how to make better choices for product
Chapter_09.qxd 6/10/2009 4:37 PM Page 191

PURCHASING 191

Table 9.2 Environmental score sheet

Product choices/ Option 1 Option 2 Option 3 Option 4
characteristics

Durable
Repairable
Reusable
Low maintenance
Post-consumer recycled content
No/low toxicity
Organic
Maintains biodiversity
Recyclable
Biodegradable
Packaging efficiency
Energy efficiency
Other vendor activities
(eg zero waste, green building)

materials and, consequently, were struggling to make progress towards sustainable

merchandise. Faced with this problem, corporate sustainability manager Derek Smith did
two things. First, he produced a simple scoring system for the buyers to use when
evaluating the products they were considering (see Table 9.2). And second, the company
tied 10 per cent of the buyers’ commission to improving their score over time. Even this
small percentage was enough to capture the attention of the buyers.

RESOURCES
Norm Thompson Sustainability Toolkit, www.bsr.org/CSRResources/Environment/
NormThompson_Sustainability_Toolkit.pdf.

The worksheet is adapted from Norm Thompson’s ‘How to Evaluate the Environmental
Value of Products’ and is reprinted with their permission. Use it to evaluate product options.
You can use checkmarks or give the items scores. If certain characteristics are more
important to you than others, you can give a multiplier or weighting to each characteristic.
Chapter_09.qxd 6/10/2009 4:37 PM Page 192

192 THE BUSINESS GUIDE TO SUSTAINABILITY

Work with disadvantaged businesses and people as an economic development strategy

The social side of sustainability often gets lost since the environmental side is easier to
address. Purchasing agreements, though, offer opportunities to also address social
considerations. Stop to ask the question, ‘How can we maximize the benefits to both
ourselves and society?’
Ben & Jerry’s has long been recognized for its interest in socially responsible business
practices. When they needed an additional source of brownies for their ice-cream, they signed
a contract with the Greystone Bakery in Yonkers, New York, a non-profit organization that
hires and trains people who are hard to employ, and uses its profits to house the homeless.
Non-profit organizations can also expand their positive impacts by designing their
services for maximum impact. The Prison Pet Partnership Program takes dogs from shelters
and gives them to women prison inmates to train the dogs as service animals. The dogs’
lives are spared, and the prisoners are taught skills in grooming and dog training. The dogs
provide low-cost services for people with a host of different disabilities, and society benefits
because the recidivism of the prisoners involved in the programme is significantly less than
the average. The charity could have made different decisions that would have resulted in
fewer benefits: they might have used pure-bred dogs from breeders, not used inmates to
train them or only prepared the dogs to be good house pets. The decisions you make about
vendors, suppliers and contractors can make a difference, big or small, to the well-being of
our society. It’s your choice.

Life cycle assessment and life cycle costing

Life cycle assessment (LCA) is a process of examining the impacts of a product over its
entire lifetime: where do the raw materials come from? How are they transported? How is
the product manufactured? How is the product transported and sold to a customer? How
does the customer use the product? What happens at the end of its useful life? LCA
quantifies the environmental impacts at each step in this life cycle and can be used to select
products that have the lowest negative environmental and social impacts.
As a purchaser, you can request life cycle assessment data from your vendors. However,
because LCA results depend entirely on the assumptions upon which they are based, it’s
important to assess whether the assumptions used are unbiased and fit your situation. ISO
standards require an external review of LCAs to mitigate this problem.
Related to LCA is life cycle costing (LCC), examining the costs (as opposed to the
environmental impacts) over the life cycle of a product, from research and development
and manufacturing to maintenance and disposal. Similar to activity-based costing, LCC
helps you get a clearer picture of the true costs of several product options – it often
becomes clear that the cheapest first cost is often not the cheapest in the long term. LCC
allows you to take into account such factors as the longevity of the product, associated
safety precautions and disposal costs.
Chapter_09.qxd 6/10/2009 4:37 PM Page 193

PURCHASING 193

For example, vinyl flooring is usually one of the cheapest first-cost flooring options.
However, many other flooring options last longer, avoiding additional replacement and
installation costs. So over the lifetime of the floor, vinyl is often not the best choice.
LCC can help you determine the best overall return between options in capital
projects. For example, most of the cost of a building is in its operation, not its
construction, so LCC can help you determine which environmental features pencil out
over the long term, even if they add up-front costs. Once you factor in training, safety
equipment, hazardous waste permits and disposal costs, a product you thought was the
most cost-effective might turn out not to be.

RESOURCES
LCA for Mere Mortals by Rita Schenck, published by the Institute for Environmental Research
and Education, www.iere.org/mortals.html.
BEES is software that helps you select more sustainable building supplies, www.epa.gov/
oppt/epp/tools/bees.htm and www.bfrl.nist.gov/oae/software/bees.html.
Eco-indicator 99 is an LCA impact assessment method developed with the need for a
practical eco-design tool in mind, www.pre.nl/eco-indicator99/default.htm.
Sustainable Products Purchasing Coalition, www.sppcoalition.org.
ISO 14040, www.iso.org.
US EPA website for LCA, www.epa.gov/ordntrnt/ORD/NRMRL/std/sab/lca/index.html.

Purchasing projects
In addition to setting up policies and systems, purchasing departments also undertake
specific improvement projects, often in collaboration with other departments or groups.
Some of the more common initiatives are described below.

Conduct a waste or purchasing audit

Trawling through dumpsters/skips is not just a way for the poorest members of our
society to make ends meet; it’s also a great way to learn about where your money is
going. Of course, if you’re smart, you divert the waste before it ends up in the dumpster
and do a representative sampling, but it’s still a messy process. However, as you sort
the detritus into categories – food, paper, recyclable metals, glass, etc. – you will gain
some interesting insights.
At the Oregon Museum of Science and Industry, a waste audit uncovered that almost
40 per cent of their waste was food, of which a third was liquids (watery soft drinks and
ice). Why, they wondered, are we paying to haul water away when we could just pour it
Chapter_09.qxd 6/10/2009 4:37 PM Page 194

194 THE BUSINESS GUIDE TO SUSTAINABILITY

down the drain? As a stop-gap solution, they marked one of their bins ‘liquids only’, which
instantly reduced their waste by 5 per cent. Then they started to think about their outdoor
bins. Portland is famous for its rain, yet the bins were designed in such a way that rainwater
got into them. So they were also hauling off rainwater.
This analysis led them to make more far-reaching changes. They now divert 3–4 tons
of food waste into a worm bin that doubles as an exhibit to teach visitors how to follow
their example. The exhibit designers are also focusing on reducing the waste associated
with exhibit construction. The goal is for 80 per cent of each exhibit to be either made
from recycled materials or be recyclable/reusable. They have discovered three main ways to
make an exhibit sustainable:

1 Design exhibit components so that they are easily updated – content can be changed
without changing structure.
2 Make exhibit components standard, allowing interchangeability of parts.
3 Choose construction methods and materials that can be recycled at the end of life of
the exhibit.

The focus of the design will be on the end of life of the exhibit. The question of
construction methods is relatively simple to address – bolting bits together makes it easier
to take them apart at the end of the exhibit’s life than gluing them. Material choices will
be made based on composition, durability and how the manufacture’s factory profile rates
with regard to environmentally friendly practices.

RESOURCES
Hitchcock, Darcy and Larry Chalfan (2001) Approaching Zero Waste. Portland, OR: AXIS
Performance Advisors. Part of the Sustainability Series™, www.axisperformance.com/
sust_series.html.
US Environmental Protection Agency resources on zero waste:

• JTRnet Archives – Zero Waste Case Studies. This EPA webpage provides information on
companies who have achieved greater than 90 per cent recycling, www.epa.gov/jtr/jtrnet/
zerocase.htm.
• JTRnet Archives – Zero Waste Contacts. Information about zero waste contacts,
www.epa.gov/jtr/jtrnet/highrate.htm.
• JTRnet Archives – Zero Waste Definitions. Discussion on defining zero waste,
www.epa.gov/jtr/jtrnet/zerodef.htm.
• JTRnet Archives – Zero Waste. Information on zero waste efforts, www.epa.gov/jtr/jtrnet/
zerowast.htm.
Chapter_09.qxd 6/10/2009 4:37 PM Page 195

PURCHASING 195

Usually, doing a waste audit is a task for the facilities department (you’ll be relieved to
know), but a purchasing employee should also participate. It’s at that point that you’ll get
a sense of how much of what you are buying is going straight into the skip. At Portland
State University, they worked out that they were buying and throwing out 1400 paper cups
a day. Doing a purchasing audit in conjunction with a waste audit can be revealing.

Create a reliable market for a targeted product

Sometimes the materials you would prefer to use aren’t available in reliable quantities (eg
organic cotton or organic hops) or production is at such a low level that the costs are
prohibitively expensive (eg kenaf paper). In these situations, the industrial infrastructure is
not yet there to track the chain of custody. The only way to solve this problem is to partner
those in the industry; roll up your sleeves and figure it out collaboratively. Long-term
purchasing commitments build confidence in potential suppliers that making sustainable
investments pays off.
Government plays a particularly important role in using purchasing as a market driver.
Short-term incentives (tax credits, deductions, rebates, etc.) can offset the additional cost of
innovative new products until the market is large enough to create production efficiencies.
For example, the Northwest Energy Efficiency Alliance set up a system of rebates for buyers
and dealers to offset the cost of front-loading washing machines, which used a fraction of
the water and energy of traditional models. Initially these front-loaders sold at a premium
over traditional, inefficient ones, in part because there were no US manufacturing plants
making them. By offsetting that cost premium, it made it easy for customers to choose the
greener option. ‘The market share of these machines has increased from a few percentage
points at the beginning of the programme to over 12 per cent after the first 18 months,’
said Margaret Gardner, executive director of the Alliance. ‘Our consumer and dealer surveys
have also demonstrated acceptance of these machines by the market.’ In the past, the lack
of domestically produced front-loaders held back consumer purchases of the more efficient
machines. Within two years, several major manufacturers including Frigidaire, Maytag and
Amana introduced resource-saving models, making it possible to phase out the incentives.8
Nike and Patagonia teamed up to create a market for organic cotton. Cotton is
responsible for about a quarter of the world’s use of insecticides, which pollute streams and
make workers sick. The problem for Nike was that there was an insufficient supply of the
organic alternative – they could buy up the entire global harvest and still not have enough
for their T-shirts and other clothing – so they instead made long-term commitments to
increase the percentage of organic cotton in their clothing over time. They are now the
largest US buyer of organic cotton – in 2000 $182 million or 20.9 per cent of Nike’s US
net revenues of $868 million were generated by sales of organic cotton-blended products
(T-shirts, sweatshirts and fleece) sold in the US. Currently these products are 5.7 per cent
Chapter_09.qxd 6/10/2009 4:37 PM Page 196

196 THE BUSINESS GUIDE TO SUSTAINABILITY

organic cotton, according to Heidi Holt, global environmental director for Nike’s clothing
division, and the company has a goal of a minimum of 3 per cent organic cotton in all of
its cotton clothing by 2010 and plans to launch a 100 per cent organic cotton women’s line
in the US.9
Creating a market for environmentally or socially preferable products doesn’t always
have to cost more, at least not for long. Portland, Oregon architectural firm Yost Gruba
Hall made a commitment to pay more for recycled paper; within a year their vendor was
able to lower the price to that of traditional products, at least in part because YGH helped
to establish the demand.

Research sustainable alternatives for a specific function or product

Unfortunately, in the real world, what is better is not always obvious. Rarely is there a
perfect answer. So deciding whether to choose product A or B is often a matter of weighing
priorities. One product comes from farther away but provides employment to indigent
women in Bangladesh. One flooring material is filled with recycled plastic but is not
recyclable at the end of its useful life while the alternative is wood but not from a
sustainable source. The #5 plastic container is not easily recycled but is lighter so it saves
on fuel. How do you wade through these confusing variables?
One solution is to do an LCA, but in reality there will never be enough time to do one
on all your options and you often can’t rely on LCAs done by others because they may be
skewed by bias (as in the case of a manufacturer picking assumptions that favour their
product) or they may be based on assumptions that don’t apply in your situation (eg an
LCA that was done for France, so the transportation and energy mix assumptions don’t
represent the situation in the US).
So the practical response is usually to determine your own priorities and then assess
your options against those criteria. This may seem obvious, but cost is always on the list.
A sample of environmental and social criteria is given in the example below. A weighted
criteria chart helps you manage multiple variables where the importance of each variable is
different. If the criteria are all of equal importance to you, you can simply score each
option without the weighting or check the option that best meets each criterion and
compare the number of checks each option earned.
The two weighted criteria charts overleaf provide examples of criteria you may find
important when making purchasing decisions. Once you have listed all the relevant
criteria, weight each one on a one to ten scale, with ten being very good or high. Grade
each option against each criterion, again from one to ten and put the result in the grey box.
Multiply the weight by the grade to produce a score and insert that in the white box
beneath the grey one. Add all the scores in each column to see which option fared the best.
The first of the two charts has been completed as an example.
Chapter_09.qxd 6/10/2009 4:37 PM Page 197

PURCHASING 197

Table 9.3 Sustainable products checklist

Environmental Characteristics

Criterion Weight Option A Option B

Reusable 10 3 5

30 50

Recyclable 8 5 4

40 32

Bio-based 3 1 10

3 30

Biodegradable (in a reasonable time 5 1 10

frame)
5 50

Energy efficient 10 5 8

50 80

Water conserving 7 5 5

35 35

Non-toxic 8 6 8

48 64

Harvested in a sustainable manner 5 3 2

15 10

Cruelty-free 4 10 8

40 32

Minimally packaged 7 7 4

49 28

Locally available 5 8 3

40 15

TOTAL 355 426

Chapter_09.qxd 6/10/2009 4:37 PM Page 198

198 THE BUSINESS GUIDE TO SUSTAINABILITY

Table 9.3 Sustainable products checklist (cont’d)

Social Characteristics

Criterion Weight Option A Option B

Provides living-wage jobs

Helps disadvantaged people or

groups

Encourages a work/life balance

Develops people within the

organization

Promotes diversity

Provides gay/lesbian couples with the

same benefits as straight couples

Demonstrates safe work practices

Protects rights of indigenous people

Promotes human rights

Donates time and money to community

needs

TOTAL
Chapter_09.qxd 6/10/2009 4:37 PM Page 199

PURCHASING 199

One note about cost: don’t just assume that the sustainable product will cost more,
even if it appears to. Compare actual usage. For example, Nike found that even though a
water-based solvent cost more per gallon, it didn’t evaporate as fast as the petroleum-based
equivalent. It stayed in the bath, instead of exposing workers, and thus cost less per shoe
to use. So before you settle for the less-sustainable option based on cost, ask yourself
whether you will avoid any costs (disposal costs, sick days and medical costs, training in
the use of hazardous materials, protective gear, legal liabilities, insurance costs, etc.) by
choosing the more sustainable option.
Be sure also to test out the new product to make sure it works as well or better than
the old one, following the directions carefully. Sometimes green products need to be
applied differently than traditional ones. For example, with cleaning products it can make
a difference whether you spray the cleaner on a rag or on the surface. It may be necessary
to leave it on the surface for a few minutes before wiping.

Partner an NGO
Sometimes you might not be able to successfully complete your project without the help
of others. NGOs can bring credibility, contacts and expertise to your sustainability effort.
For example, Dow has collaborated with the National Resources Defense Council to find
ways to reduce the environmental impacts of their manufacturing process. Norm
Thompson has used the Alliance for Environmental Innovation (affiliated with
Environmental Defense) to encourage the catalogue industry to use recycled paper, and
Starbucks has worked with Conservation International to support efforts to grow coffee in
a more responsible manner.
Ben Packard, director of environmental affairs at Starbucks, warns:

It’s critical that your interests and those of the NGO overlap because the
organizations can be so different. It’s not enough for them to be a great
organization addressing an important issue. The issue [that the two of you are
going to work on] must be centrally relevant to both you and the NGO. For
example, we worked with Conservation International on shade-grown coffee
where they were trying to protect biodiversity and local economies and we could
provide a market for their product.10

Conclusion
We’ve made the case in this chapter that purchasing is key not only to competitiveness but
also to your environmental and social impacts. As a corollary to the Butterfly Effect, wave
Chapter_09.qxd 6/10/2009 4:37 PM Page 200

200 THE BUSINESS GUIDE TO SUSTAINABILITY

money around in the US and you may create storms elsewhere. Changing purchasing
policies and procedures will go a long way to improving the sustainability of your
operation. We’ve also provided examples of the kinds of individual sustainability-related
projects you might initiate. The SCORE section overleaf contains ideas for what you might
do next.

SCORE PURCHASING
See page 33 for how to complete this assessment and page 36 for how to interpret your score.

Purchasing

Practice Incubator Initiative Integrated Points

1 point 3 points 9 points

Policy: Have a As a matter of Have a formal At least 80% of

purchasing practice, evaluate sustainable or purchases (by
policy related to major purchases environmentally weight, volume or
sustainability. based on preferable purchasing cost) are from
sustainability and policy that incorporates environmentally
other criteria but have waste reduction. Shun preferable or
no formal policy in suppliers that sustainable
place. contribute to human sources (eg third-
misery, war, or party certified eco-
environmental labels)
degradation.
Audits: Conduct At least every five Conduct an Use life cycle
purchasing years, conduct an assessment on majority assessments or life
audits against assessment against of purchases and cycle thinking to
goals to assess sustainable criteria on routinely seek out more determine the
the impacts of the largest categories sustainable options. impacts of major
your purchases, of purchases and act categories of
including items on the results. purchases.
with a short
lifespan, toxic
materials, and
social impacts.
Chapter_09.qxd 6/10/2009 4:37 PM Page 201

PURCHASING 201

Purchasing

Practice Incubator Initiative Integrated Points

1 point 3 points 9 points

Supplier Send out letters Actively work with Engage in

Influence: and/or surveys to suppliers to develop processes to
Choose suppliers to express most sustainable transform the
suppliers based your commitment to solutions. industry.
in part on their sustainability and
sustainability your intent to give
performance. preference to
sustainable suppliers
with positive
environmental and
social practices.

Contracting: Include sustainability Include in contracts Transform your

Include criteria and language requirements to relationship with
sustainability in RFPs. Make perform sustainability- major suppliers to
criteria in the sustainability at least related functions or provide incentives
selection of a minor selection tasks (eg construction for sustainable
contract criterion (eg worth up waste recycling, green performance.
services. to 15%). cleaning products).

Reinforcement: Have purchasing Measure and report Provide employees

Have systems that progress toward goals with training and
meaningful automatically give and targets on major incentives (via
systems for preference to more categories of compensation,
assessing sustainable options purchases, broken performance
progress toward (eg the first choice down by individual or appraisals or other
sustainable presented in your group so as to provide formal means) to
purchasing. online purchasing meaningful encourage
system is the comparisons. purchasers to seek
preferred one) but out sustainable
may not prevent options.
people from
purchasing less
sustainable options.
No feedback is
provided on
purchasing choices.

Total
Average
Chapter_09.qxd 6/10/2009 4:37 PM Page 202
Chapter_10.qxd 6/10/2009 4:37 PM Page 203

10
Information Technology: How to Save Energy,
Reduce Waste and Facilitate the Transition to a
Low-Impact Operation

Because it operates behind the scenes in most organizations, we tend to neglect the
contribution that information technology makes to operations. Most of us come to work,
sit at our desks, flip on our computers and start work without thinking about all that goes
into running and supporting our transactions. Today, however, information technology
(IT) is getting more and more attention not only for its contribution to our productivity
and efficiency but for its negative environmental impacts as well. As we look behind the
screen into our data centres, we find tremendous opportunities for improving the
environmental footprint of our operations.

WHAT YOU SHOULD KNOW ABOUT SUSTAINABILITY

Information technology has offered up the biggest boon to productivity since the advent
of mechanized production. Computers and related communications technologies have
enabled us to produce more with fewer resources and less hazard and sweat. These
technologies have also contributed to globalization, linking people to markets and enabling
instantaneous transmission of information, images and currency. Information technology
is erasing borders and boundaries, enabling the smallest businesses to operate at a scale and
distance historically limited to large corporations. We can instantly share ideas without
leaving our offices. Information that used to take weeks or even months to amass is now
available within minutes at the click of a mouse. There is a dark side to IT as well, however.
All the progress and economic development that computers and communication devices
have brought us have come at a price.
Information overload. Instead of simplifying our lives and creating more leisure time
through its efficiencies, IT has contributed to an increased pace of life and an expectation
to continuously produce more. IT has enabled us to create and distribute more
Chapter_10.qxd 6/10/2009 4:37 PM Page 204

204 THE BUSINESS GUIDE TO SUSTAINABILITY

information; so we do! The result is that we are inundated with more data than our brains
can process. And the increased connectivity means we never have to be away from work.
Raise your hand if you check your emails at the weekend.
Energy use and greenhouse gas emissions. Another aspect of IT that is getting more and
more attention is the energy required to run this proliferating equipment. Currently
information and communications technology account for about 2 per cent of global
climate emissions. Growing demand for information technology, principally in India and
China, is predicted to result in a doubling of this impact, even taking into account the
trend in equipment efficiencies.1 The energy consumption comes not just from plugging
in your PC. Think of all the data centres around the world that house the big servers that
connect intranets in organizations and power the global use of the internet. These centres
not only use electricity to run the servers, but require energy-intensive mechanical systems
to keep the equipment cool.
Toxic exposure. This frenzied demand for immediate output has an environmental impact
as well. The equipment that drives all this activity is made from a whole host of nasty and
toxic materials. Since much of the manufacturing of electronic equipment takes place in
developing nations with minimal environmental protection, people who live downstream
from these manufacturing plants are exposed to the flame retardants, phthalates,
plasticizers, chlorinated solvents and heavy metals used to construct computers, cell phones
and other electronic equipment.2
Waste accumulation. Then, of course, once we are finished with our equipment – which
is at an increasingly frequent rate due to its rapid obsolescence – we are faced with the
problem of disposal. The conversion to digital TV in the US next year will itself take over
25 million otherwise functioning television sets out of service. More relevant to business
are the statistics regarding office equipment. According to a report by the US
Environmental Protection Agency, about 30 to 40 million personal computers will be at
the end of their useful lives in the next few years and looking for a place to go. When taken
collectively, TVs, VCRs, monitors, cell phones, computers and other equipment amount
to about 50 million tons of trash a year – 70 to 80 per cent of which end up in landfill,
where we are once again exposed to the same toxins released at their manufacture.3 What
doesn’t end up in landfill is often exported for ‘recycling’. While there are responsible
recycling programmes, a disturbing amount of this waste stream ends up back in
developing nations in Asia and Africa, where the poor burn the plastic parts to salvage the
valuable metal in the circuits and wiring putting toxins into the air and heavy metals in
their water supplies. Even software is not without its impacts. Consider the CDs and
packaging involved in every software program you buy. Even greater are the indirect
impacts software creates because a new program frequently requires updated hardware
perpetuating the cycle of continuous replacement.
Chapter_10.qxd 6/10/2009 4:37 PM Page 205

INFORMATION TECHNOLOGY 205

The digital divide. IT has a social impact as well. Without intending to do so, technology
(including telecommunications, internet access and computing) has contributed to the
widening gap between rich and poor. Just as access to this technology has an equalizing and
democratic effect, lack of access contributes to the gulf between the haves and the have-
nots. Current estimates put the number of people online at about 333 million, but 72 per
cent of those people live in Europe and North America. This digital divide is not only
huge; it’s growing. A World Bank study reports that even in East Asia where we see rapid
economic growth and acquisition of technology, it will be more than 40 years before they
catch up with the fast-moving Western countries.4
IT also enables the export of jobs around the world. Following the lead of
manufacturing, which seeks out low-wage countries for cheap labour, organizations are
increasingly offshoring call centres, technical support and other computer-based jobs.
There is both an up and down side to this phenomenon. Whichever way you view it, it is
one more illustration of how IT contributes to globalization.

STRATEGIES YOU CAN USE

There are two broad aspects to consider when planning your strategies for making IT more
sustainable: the operation of the system and its equipment and the opportunities for IT to
facilitate energy and resource efficiencies throughout your organization’s operations.

Manage your equipment purchases

The first and easiest place to begin is with the equipment that supplies your IT function.
IT managers will need to coordinate with purchasing managers to assure that purchasing
guidelines and vendor contracts contain appropriate IT-related criteria. The City of
Portland, Oregon, for example, screens vendor bids for the thousand or so computers they
buy each year with a list of 20 IT purchasing criteria. The criteria include issues like end-
of-life disposal, packaging volume and hazardous materials. Portland expects to add new
criteria as the field evolves and will probably soon include some of the European standards
such as the Restriction of Hazardous Substances (RoHS) and Waste Electrical and
Electronic Equipment (WEEE) directives. They also require manufacturers to sign an
agreement that they will guarantee proper disposal of their old equipment to assure that
the city does not contribute to the growing e-waste problem.5
The Green Electronics Council has made sustainable purchasing even easier. In
partnership with members of the electronics industry, they have created the Electronic
Product Environmental Assessment Tool (EPEAT). This tool was design to facilitate both
the design and purchase of electronic equipment by establishing performance standards for
Chapter_10.qxd 6/10/2009 4:37 PM Page 206

206 THE BUSINESS GUIDE TO SUSTAINABILITY

components and energy consumption. Currently, over 600 desktops, monitors and
notebooks from manufacturers like Hewlett-Packard, Lenovo, Dell, Panasonic, Sony,
Toshiba and Apple have been ranked by EPEAT. The EPEAT standard has already made a
big difference. In 2007 alone the Green Electronics Council reported that EPEAT purchases
resulted in a reduction in the use of toxic materials like mercury by 3220 metric tons and
prevented the disposal of 124,000 metric tons of hazardous waste. And because EPEAT
includes energy reduction requirements, EPEAT purchases will save 42 billion kWh of
energy over the lives of their equipment and eliminate the release of 3.1 million metric tons
of carbon emissions, which is the equivalent of removing 2.6 million cars from the roads for
a year. The immense volume of EPEAT registered products sold worldwide in 2007, and
the very significant environmental and financial benefits resulting, confirm the EPEAT
system’s success as a driver for environmental change in the electronic products market.6

RESOURCES
The EPEAT website, www.epeat.net, offers a registry of products that conform to environmental
performance standards for electronics products, from IEEE 1680 to IEEE 2006.
You can take an e-waste ‘IQ’ test at http://ngm.nationalgeographic.com/ngm/2008-
01/high-tech-trash/carroll-text.html.
The Climate Group (2008) SMART 2020: Enabling the Low Carbon Economy in the
Information Age. A report by The Climate Group on behalf of the Global eSustainability Initiative
(GeSI).

Reduce energy consumption

Equipment
Buying the right equipment is the first step; running it responsibly is the next. Given the
amount of energy associated with our growing use of electronics, it’s worth an organization’s
while to manage IT use wisely. At the desktop level this means assuring the optimal use of
equipment. IT managers can begin by simply encouraging users to power down or switch
idle computers off. The US Environmental Protection Agency estimates that the typical
1000-PC office can save $40,000 in energy costs annually by using existing power
management features on their desktop computers and monitors. Hewlett-Packard, for
example, saves about $600,000 each year just by activating dormant energy-saving devices
on their 183,000 monitors.7 In addition, IT managers should look for other features in
their equipment procurement. LCDs, for example, are 30 to 50 per cent more energy
efficient than the more traditional CRT displays. Printers, scanners and other peripherals
Chapter_10.qxd 6/10/2009 4:37 PM Page 207

INFORMATION TECHNOLOGY 207

frequently have their own sleep modes as do copiers and fax machines. Energy Star (a
programme of the US EPA) power supplies and battery chargers used for cameras, cell
phones, routers and PDAs use about a third less energy than non-rated models. According
to Bill Boland, vice president of sales and marketing at PavelComm, Inc., ‘Mitel provides
one such example in its partnership with Sun Microsystems. Together they’ve developed
such innovative technology as the Sun Ray thin client which incorporates the functionality
of the phone and PC in one device. This innovative solution reduces the amount of power
consumed by a traditional PC desktop from 80 watts down to 4 watts.’8

Data centres
Behind most desktop systems is a larger, more complex server which houses software and
coordinates connections both within organizations and with the internet – and,
incidentally, consumes a growing amount of electricity. After conducting a few calculations,
engineers at Hewlett-Packard were startled to discover that increasing consumption and
rising energy costs would soon make it more expensive to keep a server going for a year than
to acquire one in the first place.9 Data centres use 50 times as much energy per square foot
as any other office function and that consumption is doubling every five years.10

Cooling
There seem to be two main reasons for this rate of growth. The first source of energy
consumption is in the mechanical systems that keep data centres at optimal operating
temperatures. In 2005 the energy consumed by these cooling systems accounted for
1.2 per cent of the entire US electricity consumption. Since IT managers rarely see or are
accountable for energy bills, there’s been little notice of this issue. It’s not escaped the
government’s attention, however. In December of 2006 the US Congress passed a law
requiring the Environmental Protection Agency to assemble a report about power
consumption in data centres.
The good news is there are many opportunities for improvements. Research conducted
by consulting firm Gartner estimates that ‘anywhere from 30 percent to 60 percent of the
energy in a data centre is wasted. One big culprit is the inefficiency of the cooling systems
required to keep servers from overheating.’11 Partly, this is due to the misconception that
data centres should be kept cold. According to the American Society of Heating,
Refrigeration and Air-Conditioning Engineers, the mid-point of their recommended range
for data centres is 74°F (23°C) and 50 per cent humidity.12 Monitoring these cooling
systems is a simple first step. Another misconception is that data centres should be cool
everywhere when, in fact, you need only assure that the area around the equipment’s intake
vents is cool. Appropriate placement of temperature sensors can help to manage the
conditions efficiently. Some organizations are getting very creative in maximizing their
Chapter_10.qxd 6/10/2009 4:37 PM Page 208

208 THE BUSINESS GUIDE TO SUSTAINABILITY

cooling system efficiency. A Wells Fargo Bank facility in Minnesota takes advantage of the
local weather by venting outside air into their server room when the outside temperature
gets down to 40–42°F (about 5°C). This enables them to shut their cooling system off
altogether for hours at a time.

Layout
The arrangement of the equipment in your centre impacts its operation as well.13 The most
common layout involves a hot-aisle, cold-aisle arrangement in which all the intake vents
for equipment face each other on an aisle where the air conditioning blows and all the
exhaust vents face each other on the aisle with the air return vents are placed. This works
fine until you encounter equipment that vents to the top or side. These pieces of
equipment will require special placing or vent redirection in order to prevent them from
overtaxing the cooling system.
Some data centres have raised floors that provide space for cabling as well as air flow.
As data centres grow and get rearranged to accommodate new equipment, managers
inadvertently undermine the efficiency of the original layout by overpopulating the under-
floor space with extra cables. Changes in room or rack configuration can also result in
inappropriately placed floor tile perforations. Cool air coming out of the floor in a hot
aisle, for example, is a waste of energy. Moving equipment on racks can upset the original
design as well. If you have a hot-aisle, cold-aisle arrangement and equipment is moved or
replaced, you may leave holes in racks that let hot air from the hot aisle enter the cold aisle.
Blanking plates are an easy way to fill the gaps and maintain the integrity of your layout.14

Efficient use
The other contributor to the growing use of energy in IT results from the way we use our
equipment. A report by McKinsey & Company found that as many as 30 per cent of the
servers in use in the US are being underutilized and are just wasting energy and space.15
This is partly because servers are conventionally used to run one program per machine to
assure reliability. This is true in spite of the fact that servers have become increasingly more
powerful over the years. The result is that we are leaving most of the capacity of each server
unused and generating more waste through unnecessary consumption of equipment. One
study estimates that there is conservatively $140 billion in excess server capacity
worldwide.16 Many organizations are moving toward consolidated data centres to
maximize use of existing equipment before adding to capacity.

Data storage
Another factor that impacts server efficiency, and therefore energy efficiency, is data storage.
Data centre space limitations and rising energy prices are driving data managers to redesign
Chapter_10.qxd 6/10/2009 4:37 PM Page 209

INFORMATION TECHNOLOGY 209

their data processing and storage operations. One recommended strategy to reduce energy
is to reduce the amount of data on spinning disks and move as much data as possible to
more energy-efficient, tiered storage.17 Hu Yoshida, CTO of Hitachi Data Systems, predicts
a growing market for new types of archiving systems that can hold more data for longer
periods without interfering with active processes. He goes so far as to suggest, ‘data stored
on production systems for more than 60 days will soon be considered “toxic waste”’.18
All told, there is tremendous potential for reducing the direct footprint of IT
departments. One study conducted by the Climate Group concludes that making smarter
use of our technology could reduce global greenhouse gas emissions by as much as 15
per cent and save the world’s industries $800 billion in annual energy costs.

TOP TEN WAYS TO REDUCE COMPUTING ENERGY USE

1 Use computer and monitor power management features. Doing so can save nearly half a
ton of CO2 and more than $60 a year in energy costs.
2 Don’t use a screen saver. Screen savers are not necessary on modern monitors and
studies show they actually consume more energy than allowing the monitor to dim when
it’s not in use.
3 When replacing old equipment make energy efficiency a priority. Check Climate Savers or
EPEAT websites for product lists.
4 Turn down the brightness setting on your monitor. The brightest setting on a monitor
consumes twice the power used by the dimmest setting.
5 Turn off peripherals such as printers, scanners and speakers when not in use.
6 Fight phantom power; plug all your electronics into one power strip and turn the strip off
when you are finished using your computer.
7 Use a laptop instead of a desktop. Laptops typically consume less power than desktops.
8 Close unused applications and turn off your monitor when you’re not using it.
9 Use a power meter to find out how much energy your computer actually consumes and to
calculate your actual savings.
10 Establish multiple power schemes to address different usage models. For example, you
can create a power scheme for playing music CDs that shuts off your hard drive and
monitor immediately, but never puts your system into standby mode.19

Dematerialize organizational operations

The second set of strategies deal with ways IT can support processes in other parts of the
organization. First on our list is the ability of IT to facilitate dematerialization within an
organization. This is the ‘atoms to bytes’ transition that will enable us to deliver service to
customers without consuming natural resources. There are several areas ripe for inclusion
Chapter_10.qxd 6/10/2009 4:37 PM Page 210

210 THE BUSINESS GUIDE TO SUSTAINABILITY

RESOURCES
For more information about Energy Star compliance, go to www.energystar.gov and click on
‘Office equipment’, located under the Products tab.
On 2 May 2008, IBM launched a free, web-based benchmarking tool to help IT managers
establish energy efficiency targets for datacenter operations, http://ibmgreen.bathwick.com/.
The tool helps measure your organization’s IT functions and then compares your score with
over 600 other organizations.
Climate Savers is a special organization dedicated to greening up the IT function. Visit
their site and explore their rsources at www.climatesaverscomputing.org

in this dematerialization. The software industry is already moving in this direction shifting
from software as a product delivered in wrapped packages containing books and CDs to
software as a service (SaaS) which you can license and log into – eliminating the need for
you to load, store and continually update on your own equipment. In this model you
effectively ‘rent’ the use of the software rather than ‘own’ it.
Another area ready for dematerialization is paper use. The paperless office has been the
promise of IT for decades, but not only has it eluded us, the technology poised to deliver
on this goal seems to have facilitated an increase in paper consumption. Old habits die
hard, but in the same way we managed to rid our offices of typewriters, we need to migrate
to electronic document management systems. While this move will add to the energy
demands of an organization, they are more than offset by the benefits in increased
productivity. Our legal clients provide a good example. Attorneys are notorious for their
love of paper (they named a pad after their profession). One of the legal firms we have
worked with estimated that their operations consumed a stack of paper about 15 times the
height of their 22-storey office tower each year. That same firm began its migration to
electronic data management and in the first year – with only a fraction of the files done –
saved $20,000 in paper costs. The savings from paper, however, are only the beginning.
There are the savings associated with all the ancillary products that go with each printed
document as well: binders, envelopes, file folders, etc. And all those documents need
storing. In addition to dedicating 15 per cent of their prime, downtown real estate to file
rooms, our client had tens of thousands of documents stored off site. That’s a lot of
unnecessary rent. Also there is the staff time required to manage the files. Every time an
attorney wanted a file, an assistant had to locate and retrieve it, and then return it when
the attorney was finished. It may only take a few minutes, but multiply the time of both
the assistant and the waiting attorney by the number of files being managed and you start
to see the size of the cost. There are also costs associated with lost productivity. As was
explained to us, when an attorney checks out a file and takes it home, no one else can work
Chapter_10.qxd 6/10/2009 4:37 PM Page 211

INFORMATION TECHNOLOGY 211

on it. And if the file gets lost, the cost is immeasurable. Last, the file purging conventions
are necessarily different for electronic files than they are for paper. Our client regularly
purged paper files older than a certain age because their accumulation in storage just
became too great. Inevitably there were times when a purged file was needed, but all trace
of it had been destroyed. Switching to electronic document management not only resolves
these inefficiencies but opens the possibility for entire process redesign eliminating whole
steps usually associated with the paper process. This can lead to faster customer response
time and fewer errors.
Dematerialization can also apply to people. How necessary is it for us to physically co-
habit in our work places all day, every day? Do we really have to fly to the other side of the
country to meet with that client for a few hours? BT (formerly British Telecom), for
example, makes extensive use of technology’s conferencing capabilities to eliminate more
than 860,000 face-to-face meetings and as a result have reduced their carbon footprint by
97,000 tons. A study conducted at BT by the University of Bradford found that ‘every
conference call that replaced a meeting saved a minimum of 40kg of travel-related CO2.
In addition, each call avoided travel and subsistence costs of at least £178, freeing up £120
of management time for more productive purposes. In the last year, this equated to a
benefit of £238 million for BT as a whole – £135 million in avoided travel and subsistence
costs, and the equivalent of £103 million in total time saved.’ They also found that
employees appreciated the greater control over their time that teleconferencing affords as
they were spending less time travelling.20
In addition to holding virtual meetings, many organizations are creating virtual offices.
Sun Microsystems conducted a study earlier this year to see what impact telecommuting
had on the organization’s footprint. They found that there were significant energy savings
because their high-tech office equipment consumed twice as much power as employees’
home office equipment. By their calculations, they reduced their total energy input by
5400kWh each year. The extra energy and expense that employees incurred by working in
their own home offices was more than offset by the time, fuel and vehicle wear avoided by
not having to commute. Currently about 56 per cent of Sun’s workforce telecommutes at
least half time. With that many fewer people on site, the company has been able to
downsize its facilities saving $63.9 million in real estate costs.21 The US Environmental
Protection Agency corroborates this finding. They estimate that if just 10 per cent of the
nation’s workforce telecommuted just one day a week, Americans would conserve more
than 1.2 million gallons of fuel per week.
Similar approaches can work for customer interfaces as well. Direct sales and
centralized inventories enable much more efficient delivery of goods. A study by TIAX, a
technology processing company, determined that e-commerce of material goods reduced
emissions by 29 per cent if the goods were ground shipped to customers directly rather
than having individual customers drive to a retail outlet. Just taking one industry as an
Chapter_10.qxd 6/10/2009 4:37 PM Page 212

212 THE BUSINESS GUIDE TO SUSTAINABILITY

example, if half the videos rented throughout the US each year were delivered on line, it
would save about 1.3 million tons of CO2 emissions.22

RESOURCES
Softchoice is a company that connects customers to thousands of technology products and
solutions. The organization has special expertise in sustainable IT strategies. See their Ecotech
Solutions webpage for specific strategies, www.softchoice.com/about/sustain-enable/
ecotech/?r.
ZDNet offers a clearing house of information related to video and teleconferencing
options. It includes links to vendors, White Papers and more, http://updates.zdnet.com/tags/
teleconference.html.
Mitel’s hosted web conferencing offers a tool that allows you to track your CO2, cost and
travel reductions through a ‘green’ meter. The green meter enables users to measure the
environmental benefits of online meetings, classes, conferences and support sessions by
calculating the CO2 reductions achieved by eliminating air or car travel (for each participant),
as well as measuring cost and mileage savings of meeting virtually instead of face-to-face,
www.mitel.com.
Videoconferencing Resources. The purpose of this page is to share resources and
information relating to videoconferencing, www.ri.net/vidcon/resources.htm.
Second Life. A growing number of respectable organizations (eg Harvard, The
Conference Board, National Public Radio) are taking advantage of Second Life to hold virtual
meetings and conferences. It’s a step up from teleconferencing if you can handle the creative
expression of avatars, http://secondlife.com/.

Facilitate efficient organizational operations

In addition to changing employee work habits, IT can also positively affect organizational
processes. Technology can play a vital role, for example, in helping facilities managers
monitor and control energy consumption. High-tech equipment like motion sensors,
energy trackers and the like can reduce consumption dramatically. Paul Marcoux, Cisco’s
newly minted chief sustainability officer, predicts, ‘In 2008, we’ll see a slew of technologies
developed to offer real-time monitoring intelligence to measure energy consumption for
products. By 2009, there will be few products available that cannot be monitored for
energy consumption.’23 In the future we’ll not only have devices that monitor energy
consumption but that read information from the grid as well, to enable equipment to take
advantage of off-peak usage, potentially lowering rates for the organization while
minimizing the demand on the providing utility.
Chapter_10.qxd 6/10/2009 4:37 PM Page 213

INFORMATION TECHNOLOGY 213

IT support can go well beyond energy monitoring. DOW Chemical, for example, uses
sophisticated computer systems to monitor and manage all sorts of processes and practices,
like plant emissions, safety records, contractor performance and more. The systems are so
stringent and exert so much control over operations that they have the ability to shut down
production if they detect, for example, an emission that is above limits.24 UPS uses its
logistical software to find the most efficient route for their trucks. The result has been a
savings of over 3 million gallons of fuel.25 Enterprise, the car rental agency, is installing a
new computerized transaction system based on emerging ‘thin client’ technology. ‘It will
consolidate processing activities for many networked machines on a central server. The
system will connect the reservations, billing, and reporting operations of more than 7,000
Enterprise rental offices on a network of 45,000 energy-saving thin client terminals.’26

Support sustainable product design

IT plays a role not only in operations but in product design as well. In order for companies
to replace toxic or resource-intensive materials with more benign and abundant ones,
designers will need to have easy access to life cycle data for all kinds of materials. For example,
Timberland has built a new, consolidated bill of materials (BOM) system to track the
materials they use in the manufacture of their boots. The sophisticated tracking system will
help them phase out undesirable materials and replace them with more environmentally
friendly ones.27 At Herman Miller, designers have access to a materials database that contains
information on where appropriate materials can be reliably sourced. These tracking systems
also prove useful for reporting purposes. DOW uses their system to provide stakeholders with
key information related to the safety and the risk associated with every chemical.

RESOURCES
US EPA/DfE. The Office of Pollution Prevention and Toxics (OPPT) DfE programme at the US
Environmental Protection Agency uses the office’s chemical assessment tools and expertise to
inform substitution to safer chemistries, www.epa.gov/dfe/pubs/about/index.htm.
US EPA LCAccess is a website that provides educational material regarding LCAs,
www.epa.gov/nrmrl/lcaccess/.
The International Organization for Standardization (ISO) is a source for information about
the family of ISO standards including LCA, ISO 14040 series, www.iso.org/iso/catalogue_
detail?csnumber=37456.
The United Nations Environment Programme is a rich resource of environmental
information including tools to help assess the risks and trade-offs associated with the life cycle
impacts of products and services, www.unep.or.jp/ietc/spc/index.asp.
Chapter_10.qxd 6/10/2009 4:37 PM Page 214

214 THE BUSINESS GUIDE TO SUSTAINABILITY

Conclusion
As our reliance on technology increases so too does the impact the technology generates.
While information and communication technology has the potential for helping us reduce
impacts through dematerialization, more efficient material use, safer and faster processes,
we need to be careful not to trade one impact for another. Using technology to solve
problems is justifiable, but indulging our appetites for the newest and coolest could result
in the generation of more waste than the products can save. IT managers can apply their
expertise to helping organizations make the wisest and most efficient use of this technology
and assure it provides solutions instead of generating new problems.

SCORE INFORMATION TECHNOLOGY

See page 33 for how to complete this assessment and page 36 for how to interpret your score.

Information Technology
Practice Incubator Initiative Integrated Points
1 point 3 points 9 points
Data Centre The energy There are efforts to Data centre efficiency is
Management: consumption reduce energy maximized through
Ensure the most of data consumption of IT continuous power
efficient centres and (using sleep modes, monitoring/balancing,
operation of all related IT turning off idle server virtualization, efficient
information and equipment is equipment, upgrading rack and room layout and
communications tracked and cooling systems, similar strategies. The
technology. reviewed by replacing old inefficient operation is powered by
IT manager. equipment, etc.) renewable energy.

Equipment: 30% of 60% of equipment 100% of equipment meets

Purchase only the equipment meets EPEAT standard EPEAT standard for design
most efficient and meets EPEAT for design and and construction.
sustainable standard for construction.
products. design and
construction.
E-waste: Develop Send at least Responsibly manage Recycle all technology-
systems and policies 50% of e- the end-of-life handling related consumables
for appropriate waste to of at least 80% of (batteries, printer
managing of recyclers or computer-related cartridges, PDAs, cell
electronic reuse centres. equipment: monitors, phones, etc.). Achieve
equipment at the keyboards, PDAs, etc. zero e-waste.
end of its useful life.
Chapter_10.qxd 6/10/2009 4:37 PM Page 215

INFORMATION TECHNOLOGY 215

Information Technology
Practice Incubator Initiative Integrated Points
1 point 3 points 9 points
Dematerialization: Make Make electronic Over half the meetings
Contribute to the videoconferen- document with people at a distance
transition from cing technology management the norm. are done using electronic
atoms to bytes. available, conferencing. More than
support half of employees
electronic telecommute at least part
document time. Achieve a virtually
management. paperless office.
Process Support: Assure the Support use of best Through the strategic
Support the efficiency of available technology use of best available
efficient program design (eg digital metering, technology, optimize the
management of to minimize route optimization performance of the
operations unnecessary tools, demand entire supply chain.
(transportation use of server response energy Apply applications to
logistics, energy. Help software, process create solutions to
manufacturing facilities, design and simulation environmental and social
processes, shipping and tools) to optimize the problems.
facilities use, etc.) other performance of the
departments entire organization and
monitor energy provide useful data on
use. sustainability metrics.
Product Design Provide material Manage product Maintain sophisticated
and Selection tracking content information for databases of life cycle
Support: Maintain systems to reporting and information for use in
the data measure and certification. product design or
necessary to monitor the materials purchase.
support types and
sustainable amounts of
design. materials used
in product
design or in
materials
consumed.
Total
Average
Chapter_10.qxd 6/10/2009 4:37 PM Page 216
Chapter_11.qxd 6/10/2009 4:38 PM Page 217

11
Environmental Affairs: How to Support
the Move Beyond Compliance
and Eco-Efficiencies to Sustainability

In many organizations there is a person or department whose job it is to attend to

environmental issues and/or employee health and safety (EH&S). In large operations,
especially in manufacturing, there may be a separate EH&S department. Some
governmental agencies, such as departments of environmental quality or those responsible
for solid waste and wastewater, have this environmental focus embedded in their mission.
Other organizations may have a pollution prevention coordinator for whom this is only
one role. Some organizations have product stewardship groups. Practically every
organization has someone responsible for workplace safety, if only to coordinate
cardiopulmonary resuscitation training and to maintain the first aid kit. Even service
companies may have an environmental affairs department. In small businesses, sometimes
it’s just the person everyone knows is passionate about the environment.
Regardless of what they are called, these are the people organizations often turn to
when they first decide to pursue sustainability; indeed it’s not uncommon for sustainability
initiatives to spring from these groups. And while they are often undervalued in an
organization, viewed as a necessary evil instead of a strategic part of the operation,
sustainability can provide them with an opportunity to elevate their status and make a
greater difference in their organizations.

WHAT YOU SHOULD KNOW ABOUT SUSTAINABILITY

EH&S professionals and pollution prevention coordinators have useful technical
knowledge that can help an organization in its sustainability efforts. They are likely to be
familiar with toxic chemicals, be knowledgeable about climate change and other
environmental challenges, and keep important organizational data about environmental
performance. They are also in an excellent position to advise management on and educate
staff about sustainability. They can, for example, help top management select the
Chapter_11.qxd 6/10/2009 4:38 PM Page 218

218 THE BUSINESS GUIDE TO SUSTAINABILITY

frameworks and tools that are most relevant to the organization. (See Appendix A for more
information on frameworks.) These technical professionals do, however, have several
hurdles to get over; some of the more common ones are explored below.
Beyond compliance. One of the first concepts that EH&S professionals and their
organizations must understand is how sustainability differs from business as usual. Many
unenlightened executives may assume that if their organization is in compliance with the
law, they have done enough. Others may be aware of the benefits of pollution prevention
and eco-efficiencies only since such practices often focus on saving money as well as other
resources. And even pollution prevention and eco-efficiencies, with their focus on doing
better, being greener, don’t begin with an understanding of the end-point or with what we
must do to be sustainable. In order to convince management to go beyond eco-efficiencies
will require a strong, strategic business case.
Technical jargon. The field is littered with intimidating terms with so many syllables that
they are commonly reduced to acronyms, making them even more obscure. One of the
big-name sustainability gurus repeatedly strings together in his speeches such terms as
endocrine disruptor, teratogen and mutagen as if these were everyday conversational
English. To be effective, environmental workers have to pull themselves out of their jargon
to talk in everyday business language: return on investment, insurance costs, business risks,
cost per product, absenteeism, health insurance premiums, and so on.
Feel-good activities. Many organizations launch voluntary green teams or pollution
prevention teams to examine environmental or sustainability opportunities. Too often
these teams end up focusing on feel-good activities that have no link to the strategic needs
of the business. Switching from polystyrene coffee cups to reusable mugs is a good thing
to do but won’t win you the attention of top management.
Voices of doom. Environmentalists have a reputation for painting gloomy pictures of the
future. They are often not the most popular people at parties. Passion is commendable but
should be tempered so as not to drive others away. Most people in our society know that
we are doing damage to the planet but feel powerless to do much about it; unless you can
give them something meaningful to do, rubbing their noses in the problems will only force
them further into denial. As James Speth so eloquently points out in Red Sky at Morning,
‘Apathy is a shield people use to protect themselves against despair and powerlessness.’1
Getting overwhelmed. One of the enduring challenges of working in the sustainability
field is reconciling all the huge, global sustainability problems with our own tiny span of
influence. There is a tendency to want to change everything now; perhaps indeed we
should, but that is simply unrealistic. Start with a clear sense of priorities. What will make
the biggest difference at this time? Start with projects that show a healthy rate of return and
a high probability of success. Patiently gather data that will help you build a business case
Chapter_11.qxd 6/10/2009 4:38 PM Page 219

ENVIRONMENTAL AFFAIRS 219

for stronger organizational commitment. For example, at the large international

engineering firm CH2M Hill, one person kept a record of all the times requests for
proposals asked for evidence of an environmental management system. After a period of
time, this individual had an impressive list, which led CH2M Hill to develop one.
Forgetting the social side of sustainability. When organizations begin to work on
sustainability, they often focus on the environmental aspect, and it is easy for EH&S or
pollution prevention people to fall into this narrow definition. Remember, though, that
sustainability has a social and economic component to it.
Owning the sustainability initiative. Probably the most insidious problem is the tendency of
leadership to delegate sustainability to the ‘environmental people’ (and then wash their hands
of it). The EH&S or pollution prevention staff may be excited to get this responsibility, but
in the long term this is not the right place to leave things. At some point, sustainability has
to become integrated into the entire organization. If you have an environmental management
system, you can use it to drive sustainability into other portions of the organization. Try to
get it included into strategic planning so that it is overseen by management, not just your
own department. Steering committees and other involvement mechanisms can help as well.
See the Human Resources chapter for change management suggestions.

STRATEGIES YOU CAN USE

EH&S and pollution prevention groups have powerful tools and knowledge to help in the
implementation of sustainability. Often you can be most effective by embedding
sustainability principles into what you already do.

Environmental management systems

Many organizations, both manufacturing businesses and some governmental agencies,
already have an environmental management system (EMS). Whether or not your EMS is
ISO certified, it can provide a powerful engine for sustainability. Such was the case at the
Fort Lewis Army Base in Washington State. They had implemented an EMS to save money
and reduce environmental impacts. When Paul Steucke then learned about sustainability,
he at first thought that sustainability could help their EMS. ‘But I had it all wrong,’
comments Steucke, ‘Our EMS helped our sustainability initiative.’ The EMS provided the
process and sustainability provided the vision, ie where they were headed.
There are a number of points in an EMS where sustainability can be incorporated:
Vision statement. Here the organizational leaders commit to sustainability as a principle;
in some cases, a specific framework such as The Natural Step can be referenced.
Chapter_11.qxd 6/10/2009 4:38 PM Page 220

220 THE BUSINESS GUIDE TO SUSTAINABILITY

Aspects and impacts analysis. In examining the environmental impacts of your organizational
activities, you can employ a sustainability framework as the structure. Doing this is likely to
change your priorities. For example, a traditional EMS may rate impacts based on energy use
whereas a sustainability management system might evaluate climate impacts. While energy
and climate are related, this switch can result in different priorities. For example, if you happen
to use one of the obscure gases with a high climate impact (for example sulphur hexafluoride),
this might become more of a priority than something else that might reduce energy use.
Targets. Sustainability, at least the environmental part of it, provides what some call non-
negotiable targets for human activity. We can’t negotiate with nature to tolerate more mercury
in living tissues so that we can burn more coal. With a sustainability management system,
these long-term targets often spur innovative thinking. As one architect put it, ‘Ask me to
design a building so that it saves 10 per cent more energy than an equivalent building, it’ll cost
you more. Ask me to design a building that saves 50 per cent, and I’m forced to rethink the
entire design and it may cost less.’ In the case of the Fort Lewis army base, their 25-year goals
set ambitious targets rooted in an understanding of a sustainable end-point. These included
achieving zero waste, reducing the base’s drinking water use by 75 per cent, rehabilitating all
endangered species in the South Puget Sound region, having zero discharge of wastewater to
Puget Sound and using renewable energy for all their base-generated energy needs.

RESOURCES
ISO 14000 is a globally accepted set of standards to guide the development and certification
of an EMS, www.iso14000.com.
In the US, the Environmental Protection Agency set up Local Resource Centers, regional
groups to support the implementation of EMSs. Many are housed in universities. Go to
www.peercenter.net.
Developing Effective Systems for Managing Sustainability and Embedding Sustainability
into your EMS are two booklets in the Sustainability Series™ that provide an overview in lay
terms, avoiding the terminology of ISO 14001, www.axisperformance.com/sust_series.html.

Chemical management systems

Organizations often have a host of different toxic chemicals on site: paints, pesticides,
cleaning products, solvents, air fresheners, adhesives, etc. Typically, different people in the
organization purchase different products, products pass their use-by dates and all too often
material safety data sheets are missing or out of date. Until you pull all this data into a
chemical inventory and establish a chemical management system, it is hard to evaluate
your risk and to identify what you should work on next.
Chapter_11.qxd 6/10/2009 4:38 PM Page 221

ENVIRONMENTAL AFFAIRS 221

When we conducted such an inventory for one of our clients, we discovered that in
addition to all the problems above, they were missing opportunities to save a significant
sum of money by consolidating their purchases. Since the inventory combined both a
toxicity rating and annual volume data, it provided the client a clear sense of priorities with
regard to products for which they wanted to find less toxic alternatives.
Part of an effective chemical management system involves controls on purchasing.
Some organizations have implemented a chemical pharmacy approach where there is a
single location where chemicals are purchased and stored. These are dispensed in small
quantities as needed and left-over supplies are returned to the pharmacy. This approach can
be particularly useful in universities, where without such a system odd containers of
chemicals may be spread out in departments all over the campus.

RESOURCES
Schapiro, Mark (2007) Exposed: The Toxic Chemistry of Everyday Products. Who’s at Risk and
What’s at Stake for American Power. White River, VT: Chelsea Green.
The European Union is leading the world on eliminating toxins. Check out these regulations:
the Waste Electrical and Electronic Equipment (WEEE) Directive; the Restriction of Hazardous
Substance (RoHS) Directive; and the Registration, Evaluation, Authorisation and Restriction of
Chemicals (REACH) Directive.
Dolphin Software has a neat database that graphs chemicals for a certain function (eg a
solvent or adhesive) on two axes: cost and toxicity. In this way, you can easily find alternatives
which both cost less and are less toxic. Go to www.dolphinsafesource.com/ and look for the
Green Product Selector under Products and Services.
The Stockholm Convention on Persistent Organic Pollutants (POPs) lists the ‘dirty dozen’
chemicals of greatest concern, www.unido.org/doc/29428.
The Chemical Assessment Ranking System or CARS is a database managed by the Zero
Waste Alliance. It provides a much more thorough way of rating products than the method
explained above and incorporates data from reputable sources regarding greenhouse gases,
carcinogens and the like, www.zerowaste.org.
King County, Washington produced a listing of chemicals by use and ranked them from
highest concern to lowest, www.govlink.org/hazwaste/publications/COC_Report.pdf.
The Unified Green Cleaning Alliance developed standards for sustainable cleaning
products (beyond the ‘green’ standard that is commonly in use), www.zerowaste.org/ugca.htm.

Chemical substitution
Once you have an up-to-date chemical inventory, you can evaluate products for
replacement. Often this is just a matter of asking vendors about less toxic options. In many
Chapter_11.qxd 6/10/2009 4:38 PM Page 222

222 THE BUSINESS GUIDE TO SUSTAINABILITY

fields, there are already green product lines. In other cases, you may need to secure the
services of a green chemist to investigate options.
For example, the Port of Portland, in Oregon, wanted to switch to greener cleaning
products. Their existing vendor didn’t have a line of green cleaning products at the time, but
rather than seeking a different cleaning firm, the Port used their influence to get the vendor to
investigate different, safer chemicals. The cleaning company discovered that their supplier, the
distributor, also didn’t have a line of green products, so they involved the formulator. The Port
worked with the whole supply chain to develop a line of green cleaning products so that
everyone benefited: the formulator and distributor now had a product that provided a
competitive advantage and the Port reaped the benefits associated with reducing toxics on site.

RESOURCES
The Northwest Coalition for Alternatives to Pesticides (NCAP) has a lot of information about
alternatives to pesticides, www.pesticide.org.

Green chemistry
Green chemistry is an emerging field that seeks the most benign ways to make chemical
products. It considers the toxicity of by-products as well as that of the product, and the
efficiency of the process. This technique can be helpful if you need to research alternative
production methods. For example, BHC, in Bishop, Texas applied green chemistry
principles to the manufacture of ibuprofen, a common painkiller. The old ‘stoichiometric’
process took six steps and roughly 60 per cent of what was created was by-product, not
ibuprofen. They switched to a process using a catalyst that can be recovered and reused
after the chemical reactions. This green chemistry process took only three steps (versus six)
and 99 per cent of what was created was either product (80 per cent, twice as much as
before), the recovered catalyst (which can be used again to make more ibuprofen) or the
by-product, acetic acid (the main ingredient in vinegar).2

Conclusion
EH&S and pollution prevention professionals all have an important role to play in
sustainability. They can act as a technical resource and they may control an EMS that can
embed sustainability into the fabric of the organization. However, they should be careful
not to take on too much responsibility. In the long term, this is not the right place for
sustainability to reside – you don’t want it to be the responsibility of just one department.
Chapter_11.qxd 6/10/2009 4:38 PM Page 223

ENVIRONMENTAL AFFAIRS 223

RESOURCES
Schapiro, Mark (2007) Exposed: The Toxic Chemistry of Everyday Products. Who’s at Risk and
What’s at Stake for American Power. White River, VT: Chelsea Green.
The University of Oregon specializes in green chemistry, www.uoregon.edu/~hutchlab/
greenchem.
Green Chemistry Institute, www.lanl.gov/greenchemistry.
US Environmental Protection Agency (EPA) website, www.epa.gov/opptintr/greenchemistry.
The Toxics Network has information on various chemicals, www.oztoxics.org.

As applies to the total quality movement, you want sustainability to become

institutionalized throughout the organization. EH&S and pollution prevention
professionals’ expertise is probably best used first as a catalyst for change and then later as
a source of technical knowledge and data.

SCORE ENVIRONMENTAL AFFAIRS

See page 33 for how to complete this assessment and page 36 for how to interpret your score.

Environmental Affairs
Practice Incubator Initiative Integrated Points
1 point 3 points 9 points

Sustainability Have an EMS Have an ISO 14001 The SMS has

Management Systems: that has many conformant EMS. become part of the
Convert your existing elements of Sustainability clearly overall
environmental ISO 14001. is reflected in the management of the
management system policy and targets. A organization and is
(EMS) into a Sustainability long-term plan is in no longer a
Management System place to reach discrete, separate
(SMS). [Note: If you don’t sustainable levels of system. The SMS
have an EMS, see all significant impacts. takes responsibility
Sustainability The SMS includes for the full life cycle
Management System goals associated with of your product or
under Leadership/Senior customer and service.
Management] supplier impacts.
Chapter_11.qxd 6/10/2009 4:38 PM Page 224

224 THE BUSINESS GUIDE TO SUSTAINABILITY

Environmental Affairs
Practice Incubator Initiative Integrated Points
1 point 3 points 9 points

Chemicals and Toxics: Complete a Reduce use of Use the Precautionary

Eliminate exposure and chemical hazardous materials to Principle for
emissions of chemicals that inventory and below the level needed purchasing,
adversely impact human rate them for permits. Complete processing and
health and the environment. based on a ‘grey’ and ‘black’ list products. Have
toxicity and of chemicals to phased out all grey
volume. eliminate from the and black listed
Eliminate all workplace and your chemicals. Have
use of products. If implemented a
persistent appropriate, implement cradle-to-cradle
bioaccumulative a chemical system for technical
toxins (PBTs). management system. and biological
nutrients.
Water Quality and Conduct a Provide on-site water Water discharged is
Conservation: Minimize the water audit at treatment for majority as clean or cleaner
use of water, keep water on least every five of storm water. Reuse than the source; no
site, and treat years and act water where practical. discharge of storm
discharges/run-off. on the results. water off the site.
Assess water Maximize water reuse
discharge and and conservation
run-off and opportunities.
develop a
conservation
plan.
Natural Resources: Protect Conduct an Consider natural Restore habitat to
natural resources on your assessment of resource impacts in replace natural
own properties. natural decision-making. resources lost by
resources and development.
act on the
results.
Air Quality: Protect the air- Conduct air Switch to low-VOC Switch to benign
shed inside and outside quality testing (volatile organic alternatives (eg
your facilities. in all work compounds) products plant based,
areas and take for all coatings, biodegradable).
appropriate solvents, paints,
action to bring adhesives, etc.
them within all
government
regulations.
Chapter_11.qxd 6/10/2009 4:38 PM Page 225

ENVIRONMENTAL AFFAIRS 225

Environmental Affairs
Practice Incubator Initiative Integrated Points
1 point 3 points 9 points

Emergency Response: Have effective Actively engage Actively promote

Have effective plans in crisis response stakeholders in industry-wide
place for all serious plans for any identifying ways to practices and
contingencies. foreseeable prevent and deal standards that
problem. Give with foreseeable protect public
higher priority to crises. health and the
protecting environment.
public health
and the
environment
than protecting
your short-term
financial
interests and
image.

Role Shift: Redistribute Sustainability Sustainability Organization has

responsibility for Coordinator leadership is fully evolved to one of
environmental issues and/or integrated into disseminating
and sustainability environmental management. sustainability
across the organization. affairs is the information to the
main source of broader community
sustainability (eg lectures,
leadership. supplier
workshops).

Hazardous Waste: Have an Systematically find Eliminate all

Manage hazardous inventory plan replacements for hazardous
waste to protect human that is fully hazardous chemicals from site.
health and the compliant with chemicals.
environment. all government
regulations and
OHSAS 18000.

Total
Average
Chapter_11.qxd 6/10/2009 4:38 PM Page 226
Chapter_12.qxd 6/10/2009 4:38 PM Page 227

12
Marketing/Public Relations: Whether and How
to Promote your Sustainability Efforts

Most organizations are concerned about their image and their brand, and many
organizations are finding that sustainability can enhance both. Marketing and public
relations professionals have an important role in this. They can help an organization
understand how its market segments feel about such things as corporate social responsibility
and the environment, and they can help an organization develop a coherent and compelling
message. These issues are ultimately senior management decisions but, as with all
marketing, it is best when sustainability is embedded in the entire design and delivery
process than added as an after-thought at the end of the process. In this chapter we cover
issues that marketing and public relations directors should discuss with top management.
If you know what to look for, you’ll find that sustainability is a growth industry. In
many sectors, the more sustainable options are experiencing double-digit growth: organic
produce, wind power, green buildings, socially responsible investments, to name but a few.
Granted, these still represent a small percentage of the entire sectors in which they operate,
but at these growth rates they also represent a sweet business opportunity.
Marketing influences our culture. Marketing’s detractors might say that marketing is
simply a way to trick people into wanting things they don’t need, to keep the capitalistic
machine in motion. But as the inputs to that machine are getting scarce and expensive
(eg energy and natural resources), it behoves marketing professionals to both encourage
customers to want the sustainable product, instead of the unsustainable one, and to
dematerialize the product. As Wal-Mart and others have finally surmised, encouraging
growth in an unsustainable business model is not a good business strategy. You don’t make
that up in volume!
Marketing, of course, is much more than just advertising and product positioning. You
find out what customers need and want and then participate in designing the products and
services to meet those needs. New, profitable business models are emerging. Marketing
professionals can help unpack what customers know to ask for to uncover what they really
need. Maybe there are less environmentally damaging ways to deliver the benefits your
customers want.
Chapter_12.qxd 6/10/2009 4:38 PM Page 228

228 THE BUSINESS GUIDE TO SUSTAINABILITY

Can you translate your product into a service? We take for granted that we can travel
somewhere and rent, not buy, a car for a week. Home Depot must get more profit from
renting a tool repeatedly than selling it once. Interface Carpet lets customers lease carpet.
In the electronics world where upgrades are a constant headache, computing services are
likely to be a growing industry, where people don’t own their hardware. The Oakland and
Berkeley Public Libraries run Tool Lending Libraries. Bag, Borrow and Steal is a company
that rents the latest designer handbags, sunglasses and jewellery. Why should everyone buy
the same fashion accessories, which they may only use a few times, when it’ll be passé a
year later?
Sustainability can help you protect and enhance your brand. Coca-Cola, considered
the world’s best brand name, is pursuing sustainability after being sued in Kerala, India for
allegedly causing local wells to run dry. These days incidents like this can quickly become
public knowledge around the world. And whether or not the individual case has merit, the
public relations damage is done. So after some soul-searching, Coca-Cola, with the
involvement of The Future 500, has now developed an elaborate corporate evaluation tool.
‘We want to develop a virtuous, sustainable business cycle,’ says Perry Cutshall, director of
operations, global public affairs, ‘Because of our resources, scope and reach, we can then
address broader needs of society in alignment with our mission as a private company.’1
The issues needing attention vary from industry to industry. For example, in electronics,
e-waste is a hot-button issue; in beverages, it’s water; for insurance, it’s climate change. For
a thoughtful analysis by industry, see the McKinsey reports references below under
resources.
Sometimes sustainability can turn around a languishing business through product
differentiation. Such was the case with Scandic Hotels in Sweden, who were a run-of-the-
mill hotel chain with weakening financial returns and nothing to distinguish themselves
until they learned about The Natural Step framework and used it to transform their
practices and their image. Not only did this turn around their financial situation,
sustainability also helped them create many innovative changes to their operation that have
saved time and money.
Consider also the so-called first-mover advantage. By being the first oil company to
acknowledge the threat of global warming, BP (formerly British Petroleum) captured the
world’s attention. It’s always riveting when an insider breaks rank. Many of the other
energy companies whine that they are doing as much or more regarding sustainability, but
they haven’t been able to surpass BP’s reputation in this regard.
The positive press you can generate by being the first to market with an innovative
product can be tremendous. Gerding/Edlen, a small property development firm based in
Portland, Oregon, has been nationally recognized in print, on television and on radio for
their green building practices. Dennis Wilde commented, ‘We couldn’t have bought all the
Chapter_12.qxd 6/10/2009 4:38 PM Page 229

MARKETING/PUBLIC RELATIONS 229

PR that this has brought us. We’ve had one or two articles published about us or our
projects every week for the past two years.’2
However, communicating about sustainability is a tricky business. You don’t want to
make your customers feel guilty, either about themselves or about your other products.
Sustainability is a complex field so it can be very difficult to frame messages so they don’t
just confuse people. You certainly don’t want to set your organization up for accusations of
greenwashing, ie of just using sustainability as a public relations ploy without any action
to back it up.
According to Steve Kokes, head of the Coates Kokes marketing firm, marketing
professionals need to learn about sustainability and then apply to it what they already know
about marketing. He believes that as customers become more aware of environmental
issues, they will demand better options. Only a small percentage will pay more or go out
of their way to get green products, but, all things being equal, most people would choose
the environmental option.
Furthermore, many countries are now increasing their environmental standards,
blocking products which contain certain chemicals or which lack a certain certification. You
will want to stay ahead of these trends or risk embarrassing media fiascos. Sony, for
example, received lots of unwelcome media attention when, just in time for the holiday
season, The Netherlands banned Sony Playstations because their cables contained too much
cadmium. The European Union in particular is passing more and more legislation about
toxics in products. (See, for example, the ‘Restriction of Hazardous Substances’ (RoHS)
Directive and the REACH (Registration, Evaluation and Authorisation of Chemicals)
Directive, which switches the burden of proof for a chemical’s safety on to the manufacturer.)
From a public relations perspective, you’ll want to enhance your organization’s reputation
and protect your organization from other forms of negative attention. The number of
shareholder resolutions in the US has experienced a meteoric rise. Few organizations want to
spar publicly with the Investor Relations Research Center, whose long-term members include
the Adrian Dominican Sisters and other religious groups as well as pension funds and
foundations. Similarly, NGOs like to target the biggest companies in a sector for boycotts and
attention-grabbing media campaigns. There are also websites panning various organizations
such as Wal-Mart, Nike and the World Trade Organization. Pursuing sustainability, if
handled artfully, can be an insurance policy against bad press. Type your company name into
Google and you may be surprised to find other sites blasting you.
Sometimes you have to go beyond what your customers are asking for. Toyota and
Honda weren’t just doing what their customers were asking for when they developed their
hybrids; instead they had looked into the future and saw that they needed to redesign the
car from the ground up. They bet on a stepping-stone model, rather than deciding, as did
General Motors, to go directly to research on hydrogen fuel-cell vehicles. While the
American car makers kept saying that the additional cost of a hybrid didn’t pay for itself in
Chapter_12.qxd 6/10/2009 4:38 PM Page 230

230 THE BUSINESS GUIDE TO SUSTAINABILITY

gasoline, they completely missed the point. Buying is never a completely rational
experience. Did they think Hummer owners were going to cover the additional cost with
fuel efficiency? Toyota knew that there would be enough people for whom the Prius would
have an emotional appeal, people who would see the Prius as an expression of their values.
And now, with record petrol prices, a predictable result of peaking oil supplies and other
sustainability issues, Toyota can’t keep up with demand.
Remember, too, that it’s not just about green or environmental marketing; there is also a
social component to work with as well. Nike, for example, learned that the hard way. Nike
management had assumed they were not responsible for the policies and practices of their
contract manufacturers but the public saw the issue differently and the issue was debated at
length in the media. Nike is still trying to rebuild its image. On the positive side, many
organizations are aligning themselves with non-profit organizations to solve thorny social
issues such as hunger, domestic abuse and AIDS. Starbucks recently ran a marketing campaign
to sell Ethos bottled water to raise money for safe drinking water projects around the world.
Finally, recognize that you have an internal audience as well. Sustainability can fire up
employees and attract talent. Hot Lips Pizza in Portland, Oregon is one of many employers
that report that they attract and retain a much higher quality employee because of their
sustainability commitment. So use your marketing and public relations know-how to help
management craft meaningful communication strategies for internal use as well.

WHAT YOU SHOULD KNOW ABOUT SUSTAINABILITY

Marketing sustainability is fraught with challenges. The field is littered with poorly
executed marketing plans that did more damage than good. There are a number of strategic
issues you will need to navigate so as to avoid the biggest pitfalls.
Is there such a thing as green or sustainable marketing? ‘People talk about the green
market, but I don’t believe there is one,’ says Harvey Hartman, president and founder of
the Hartman Group in Bellevue, Washington. His research and consulting firm specializes
in environmental strategies:

We’ve gotten on an emotional bandwagon with this subject. We’ve developed a

sense that the environment is more important in most people’s daily lives than it
really is. This doesn’t mean there’s no market out there. It means that the
approach has to adapt to the changing moods of consumers.3

Hartman’s point is well taken. For the vast majority of people, environmental issues are
secondary to their immediate needs. Green marketing won’t make up for a detergent that
doesn’t get the dirt out, or a car that can’t go the distance.
Chapter_12.qxd 6/10/2009 4:38 PM Page 231

MARKETING/PUBLIC RELATIONS 231

The other problem with the concept of green marketing is that it can be devilishly hard
to target that market segment. According to Paul Ray’s research (at least in the US), most
demographic distinctions used by marketers (geography, political affiliations, religious
affiliations, etc.) are useless. These do not differentiate the segment most likely to be
attracted to environmentally preferable products, a segment Ray calls the Cultural
Creatives. So you run the risk of turning off as many people as you entice. Interestingly,
the only demographic that Ray found was predictive of environmental values was
gender – women were far more likely to care than men.
Choose your terms carefully. According to a recent survey by market branding firm
BBMG, ‘green’ is already passé. Only 18 per cent of Americans consider themselves ‘green
consumers’ (which often has political overtones) while 39 per cent preferred ‘socially
responsible’, 37 per cent saw themselves as ‘conscious consumers’ and 34 per cent liked
‘environmentally friendly’.4
It’s a terminology minefield. You are probably better off thinking about sustainability
as just being part of your marketing and public relations messages, not a different way of
approaching the world.
Will you (or when will you) go public with your sustainability efforts? It can also be
tricky to decide if you should promote your sustainability efforts. Many organizations keep
it quiet for a long time until they have significant results to report. Household name
companies are at the greatest risk of accusations of greenwashing. The public is suspicious
of corporate motives and wary of self-aggrandizement.
Furthermore, unless your organization has already branded itself as the environmental
choice, you may run the risk of alienating those for whom environmentalist is a dirty
word. Home Depot, a giant retailer of building products, adopted sustainability after
being targeted by a Rainforest Action Network campaign. They have researched the source
for all or almost all their wood products, from timber to hammer handles, and slowly,
quietly, removed products from questionable sources. They don’t give customers the
choice of a green door or a non-green door. Their sales staff are surprisingly ignorant about
the Forest Stewardship Council certification labels on some of their products. We assume
this laudable but clandestine approach was based on a desire not to offend or confuse
Home Depot’s customer base. The company doesn’t just operate in the Pacific northwest
(once dubbed ‘Ecotopia’) – they have outlets in areas where the local community still
doesn’t have a decent recycling system. They want to be known as one of the biggest
suppliers of building products, not as a green supplier of building products. Yet they want
to do the right thing and now see their organizational interest in becoming more
sustainable. Finally in 2007, when it seemed everyone was touting green values, Home
Depot began putting eco-labels on shelves, apparently satisfied that their customers were
ready for them. If your organization decides to promote its sustainability efforts, you then
Chapter_12.qxd 6/10/2009 4:38 PM Page 232

232 THE BUSINESS GUIDE TO SUSTAINABILITY

have to answer the question, are you ready? We have four acid-test questions to help clients
decide this.

1 Do you have several good stories to tell? The best stories involve slap-your-forehead
why-didn’t-we-think-of-that insights. UPS saving 3 million gallons of fuel by
eliminating left-hand turns (where people drive on the right) is one example. Have you
taken significant action in major impact areas and can you back up your claims with
measurable results?
2 Are you further ahead than your competitors? If several other organizations in your
industry are already known for sustainability, you’ll need to have an even more
compelling story so that your announcement won’t just sound like me-too.
3 Is there anything you should be embarrassed about? If you were to take someone on a
walk-through of your operation, is there anything they’d point to and say, ‘If you’re
serious about sustainability, why are you still doing that?’ These can often be relatively
insignificant but symbolic things, for example, plastic water bottles, disposable
flatware, or recyclable materials in the trash. These may include practices where your
firm is most likely to have a positive impact, for example, a financial services firm that
doesn’t offer its employees a socially responsible pension plan option.
4 Is your organization committed to sustainability? Once you set the expectation, the
public will expect to see future progress. Past projects will be old news. Remember,
your competitors aren’t standing still. You’ll want to be sure you have enough executive
commitment to sustain your sustainability initiative far into the future. This, at a
minimum, means having a clear spiel on the business case, why sustainability isn’t just
the right thing to do but a critical piece of your corporate strategy.

If you can give clear, positive answers to the four questions above, start thinking about a
public relations strategy. Remember that factual data and observations of a respected third
party will be more likely to be trusted than anything in your own assertions. Be willing to
show your warts as well as your successes, demonstrating with resources and action that
you are working hard to remove barriers to further progress. Use your commitment not
only to help your own brand but also to transform your industry and supply chain.
Do you attach the green or sustainable label to one product or to all products? If you do
decide to promote your sustainability efforts and features of your products, you will need
to decide if this applies to all your products or just some of them. Toyota, for example, has
caught all the US car makers flat-footed with their hybrid Prius. Here they have made the
sustainable choice an option. Since most of their vehicles get good mileage compared to
other vehicles in their class, they aren’t at great risk of making their other products look
bad in comparison.
Chapter_12.qxd 6/10/2009 4:38 PM Page 233

MARKETING/PUBLIC RELATIONS 233

The other option is to move your entire line toward sustainability. IKEA, the European
furniture retailer, realized that by offering an Eco-Plus line of products, their efforts could
make their other products look bad in comparison. They also realized that selling a green
line would do less for the environment than would transforming all their products. So they
decided to begin ‘greening’ their entire line an increment at a time.5
Green labels have interesting psychological impacts on the behaviour of so-called
ethical consumers. In 2005, ABC Home Furnishings allowed an experiment in their New
York shop. Two Harvard researchers added a ‘Fair and Square’ logo on one set of towels
with the following message: ‘These towels have been made under fair labour conditions, in
a safe and healthy working environment which is free of discrimination, and where
management has committed to respecting the rights and dignity of workers’. The control
set had no such label. The study, which lasted five months, showed that not only did the
labelled towels sell better, they continued to increase sales even as their price increased in
comparison to the control group.6
Do you sell to one market segment or entice everyone to choose the sustainable option?
In the US the Roper Green Gauge tracks environmental views. They have identified five
different market segments:

1 The True Blue Greens, a 10 per cent segment, are ardent environmentalists. They take
time to investigate options and claims and try to affect other people’s beliefs and
actions. They are much more likely to donate to environmental groups or be politically
active. They are willing to make lifestyle changes to live their values.
2 The Greenbacks, a 5 per cent segment, are willing to pay a little more or go to a little
more trouble to get an environmentally preferable product. They claim they will pay
up to 22 per cent more, although behavioural studies refute this. They are too busy
with their lives to make major lifestyle changes but routinely use their purchasing
power to reinforce their environmental beliefs.
3 The Sprouts, making up about a third of the US population, are willing to engage in
environmental activities or buy green products, but only if it requires little extra effort.
Roadside recycling or taking plastic bags back to the grocery are examples of
programmes they support.
4 Grousers, a 15 per cent segment, do not feel that individuals can make much of a
difference. They think it’s someone else’s job – government or corporations. They will
do what is required but very little more, unless there is an incentive (such as a deposit
they get back for returning bottles).
5 Basic Browns, the remaining 37 per cent, are not at all convinced that environmental
problems are serious. They are not tuned in. It’s just not a priority. It’s not as if they
wake up wondering how to trash the environment. They just don’t think about the
impact of their actions and inactions.7
Chapter_12.qxd 6/10/2009 4:38 PM Page 234

234 THE BUSINESS GUIDE TO SUSTAINABILITY

Faced with these or similar demographics, you have to decide if you want to just appeal to
the most ardently green citizens, whose identity is dependent upon owning and not
owning certain products. Or do you want to appeal to the majority of the population, who
care about the environment but to varying degrees? Or do you want to make your product
appeal to even the Basic Browns? This is a product positioning decision that will affect
where you sell your product, how it’s packaged and how much you can charge.
If you choose to focus your marketing, you might investigate the market segment that
is becoming known as LOHAS, people seeking a Lifestyle of Health and Sustainability.
This market segment combines several groups – people interested in sustainable economics,
healthy lifestyles, personal development, alternative healthcare and ecological lifestyles.
Together, worldwide, this market is estimated to represent US$546 billion.8
It has been common to link green or sustainable features with premium pricing. This
tactic, however, can cut both ways – it encourages farmers to produce organic fruits and
vegetables because they can get a higher price, but by charging a premium you reinforce
the notion that doing the right thing costs more and you eliminate much of the market.
However, the sustainable option doesn’t have to cost more and some are actually
earning higher margins on cheap products sold to the poorest people on Earth. If your
company is selling to industrial nations, you only have a sixth of the world’s population as
potential customers. But if you can find a way to meet the needs of the most needy, you
have a marketplace three times as large. The food and personal care products giant Unilever
markets laundry detergent to the poorest in India. The small, inexpensive packages meet
the needs of the people there, yet the company is earning a higher margin than on their
regular boxed soaps. In 2007, Darcy visited the Aravind Eye Clinic in Madurai, India, a
site that was described in C. K. Prahalad’s book, The Fortune at the Bottom of the Pyramid.
In India, blindness isn’t just a major inconvenience; it’s a death sentence, with average life
expectancy between two and three years. This clinic offers world-class care. Even though
two-thirds of their patients get the services for free, Aravind doctors have improved their
productivity to such an extent that their hospital has a gross profit margin of 40 per cent
without taking charitable donations or government grants. The lack of funds has driven
creativity. Instead of continuing to import intraocular lenses that cost about $200, they
invented a process to make them for $5 and now they export them. They operate their own
eye bank, have invented low-vision products and make glasses on site.9
Sustainability can also spur innovations that lead to new products. Hewlett-Packard,
for example, sponsored an electronic inclusion programme, bringing technology to villages
around the world. Walt Rosenberg, vice president of corporate and social responsibility said:

After developing that product [a solar powered printer to make photo ID cards
in rural India], we started thinking more clearly about how to serve markets
where there is little reliable or even no electricity, and no local power systems.
Chapter_12.qxd 6/10/2009 4:38 PM Page 235

MARKETING/PUBLIC RELATIONS 235

That got us into working on solar power, and other local power plants, which can
enable people who live in rural areas to gain access to our technology. 10

In 2005 the MIT Media Lab unveiled a US$100 laptop computer in the hope that
every child in the world could afford one. Using existing technologies in new ways, it
may transform the personal computer industry. It gets energy from a hand-crank, uses
open-source software and saves data on a flash memory instead of a hard drive. Once again,
a desire to help the world’s poor unleashed creative new solutions.
How do you frame the message? Once you’ve determined whom you are targeting, you
have to formulate a message that will resonate with that segment. Since this is the life-
blood of marketing, we won’t labour the issue other than to share some insights about
doing this in the context of sustainability:

• You can sell green products to the Basic Browns, you just have to find the right hook.
In the long term, we need to make the sustainable option the logical choice for
everyone. Austin Energy in Texas structured their GreenChoice green power
programme to appeal to Browns as well as Greens. It offers a ten-year locked-in rate
that was particularly appealing during these turbulent energy prices, especially when its
rate dipped below the natural gas fuel charge in January 2006. Elizabeth Kaspronwicz,
sales representative for GreenChoice said, ‘We thought [GreenChoice for business]
would move slowly, that it’d be just the hard-core greenies or those who believed
conventional prices would soar. Now I can’t keep them off me. It’s becoming more and
more chichi to be green and the price lock is the total clincher.’11
• For a vast majority of the population, you must keep the message simple. The dolphin-
safe tuna campaign worked, using its emblem of the charismatic mammal with a smile
on the side of every approved tin of tuna. At the same time, your claims must be
squeaky-clean and accurate or you will be attacked by those who know the difference.
The so-called biodegradable plastic rubbish bags that just broke apart, not down, is an
example of a marketing fiasco that reinforced the public’s cynicism about corporate
claims.
• Use the credibility of others to vouch for your products where possible. This may take
the form of third-party certifications, independently verified labels, NGO partnerships
or award programmes.
• Make green features secondary to personal benefits. Philips Microelectronics, a
European manufacturing firm known for their design for environment programme,
discovered that they should emphasize personal benefits first and environmental
benefits second. For example, the energy saver button on their televisions reduces eye-
strain.
Chapter_12.qxd 6/10/2009 4:38 PM Page 236

236 THE BUSINESS GUIDE TO SUSTAINABILITY

• Finally, it’s important to make sure your own marketing and public relations materials
reinforce rather than violate your sustainability message. Are you handing out throw-
away plastic trinkets at trade fairs? Or have you converted your materials to the web
and started to send postcards as prompts?

RESOURCES
Business for Social Responsibility published a report, ‘Eco-Promising: Communicating the
Environmental Credentials of Your Products and Services’, which you can download from their
website, www.bsr.org.
Bonini, Sheila M. J., Kerrin McKillop and Lenny T. Mendonca, ‘The Trust Gap Between
Consumers and Corporations’, mckinseyquarterly.com, May 2007; and Sheila M. J. Bonini,
Kerrin McKillop and Lenny T. Mendonca, ‘What Consumers Expect from Companies’,
mckinseyquarterly.com, May 2007.
BBMG’s Conscious Consumer Report can be ordered from their website or you can
download their free White Paper, www.bbmg.com/.
Ottman, Jacquelyn (1998) Green Marketing: Opportunities for Innovation. New York:
J. Ottman Consulting/Book Surge.
Pernick, Ron and Clint Wilder (2007) The Clean Tech Revolution: The Next Big Growth and
Investment Opportunity. New York: Harper-Collins. The chapter on green marketing provides a
good overview of the principles that should underlie any green marketing effort.
Hart, Stuart L. and Mark B. Milstein (1999) ‘Global Sustainability and Creative Destruction
of Industries’, MIT Sloan Management Review, Fall 1999.
Hall, Jeremy and Harrie Vrendenburg (2003) ‘The Challenges of Innovating for Sustainable
Development’, MIT Sloan Management Review, Fall 2003.
Ray, Paul and Sherry Ruth Andersen (2000) The Cultural Creatives: How 50 Million People
are Changing the World. NY: Harmony Books.
Lakoff, George (2002) Moral Politics: How Liberals and Conservatives Think. Chicago, IL:
University of Chicago Press.
US Federal Trade Commission, Guides for the Use of Environmental Marketing Claims,
www.ftc.gov/bcp/grnrule/guides980427.htm.
McKenzie-Mohr, D., L. S. Nemiroff, L. Beers and S. Desmarais (1995) ‘Determinants of
Responsible Environmental Behaviour’, Journal of Social Issues, Vol 51, No 4, Winter 1995.
Word of Mouth Marketing Association has published the ‘Word of Mouth 101: An
Introduction to Word of Mouth Marketing’, www.wordofmouth.org/wordofmouth101.htm.

STRATEGIES YOU CAN USE

Community-based social marketing
Community-based social marketing is a method for changing behaviour. It takes into
account social norms and other social factors to encourage these changes. It usually
Chapter_12.qxd 6/10/2009 4:38 PM Page 237

MARKETING/PUBLIC RELATIONS 237

includes three steps: a request for commitment, prompting/reminder to follow up on the

commitment and reinforcing new social norms. Some of the insights associated with social
marketing include:

• Explaining what people are losing now is more effective than telling them what they
can gain by changing a behaviour (eg how much money you’re wasting each month in
energy bills versus how much money you could save by insulating).
• Making a small commitment (such as signing a petition or wearing a pin) increases the
likelihood that a person will make much larger changes in their behaviour.
• Public recognition can backfire as a way to motivate organizational changes. Some
people don’t appreciate being paraded in front of their peers and others may feel
slighted.
• Seeking commitments in cohesive groups improves the likelihood of follow-through.
If you promise your friends you’re going to do something, you are more likely to do it.
• Involving people in assessments (eg energy audits) makes it more likely they will follow
through with the recommended actions.

Peter Cooke at the Department of Environmental Quality in Maine decided to use social
marketing techniques to encourage employees to do such things at home as checking tyre
pressure to improve fuel economy, installing compact fluorescent bulbs and purchasing
green power from their utility. He also used this method to encourage changes in behaviour
at work, including setting printers to double-sided printing:

Each campaign consisted of three emails sent to employees. The first email was a
stand alone ‘article’ in the institution’s electronic newsletter. For example, the
article on double-sided printing raised awareness about the financial cost to
organizations and the environmental cost of unnecessary use of paper. Several days
later, Peter, the organization’s pollution prevention coordinator, sent all employees
a listserv message that referred to the newsletter article and provided step-by-step
instructions on how to set double-sided printing as the default for office printers
or, alternatively, how to select double-sided printing for single print jobs. The
email then asked employees to make a formal commitment to use double-sided
printing. Individuals could indicate whether or not they would make a
commitment by using pre-designated reply buttons (an MSN Outlook feature).
Three days later, the employees who made a commitment to double-sided printing
were asked to indicate if they had actually begun using double-sided printing. 12

Using Outlook to compile responses, Peter was able to quantify the results of each
campaign. Interestingly, the results varied significantly between campaigns. Not
Chapter_12.qxd 6/10/2009 4:38 PM Page 238

238 THE BUSINESS GUIDE TO SUSTAINABILITY

surprisingly, the campaign for green power (which would cost employees more on their
household utility bills) was much less successful than the others. Duplex printing, an easy
work-related change, resulted in some of the best results. Of the 420 employees, about 37
per cent responded to the initial email to make a commitment. Of those, almost 38 per
cent said they already did this and an additional 59 per cent made a commitment to do so.
Close to 80 per cent of those who made the commitment followed through and only about
20 per cent said they had not done so yet.

RESOURCES
McKenzie-Mohr, Doug and William Smith (1999) Fostering Sustainable Behavior. New Society
Publishers.

Cause-related marketing
Cause-related marketing is often more associated with social than environmental issues.
It comes about usually through a partnership of a for-profit organization and non-profit
organization, with the company promoting their product to raise money for the non-
profit organization’s efforts. The term was first coined by American Express in 1983
when they raised money to restore the Statue of Liberty. Levi Strauss took on AIDS
when it was ravaging their home city of San Francisco. Recently, as mentioned before,
Starbucks launched its Ethos bottled water to fund safe drinking water projects around
the world.
Cause-related marketing can get you great public relations opportunities. Liz
Claiborne worked to reverse domestic violence and as a result their representatives
ended up on many TV talk shows and in many fashion magazines. Their former CEO
was also invited to the White House to celebrate the signing of relevant crime
legislation.
See if there is a cause that fits with your brand, your customers and your mission.

RESOURCES
Adkins, Sue (2000) Cause Related Marketing: Who Cares Wins. Wobern, MA: Butterworth-
Heinemann.
Chapter_12.qxd 6/10/2009 4:38 PM Page 239

MARKETING/PUBLIC RELATIONS 239

Labelling, certification and standards

Labels can be particularly helpful for consumer products and there are a host of labelling
systems that already exist. If none exists in your sector, you will need to engage a multi-
stakeholder group to determine standards. Since most people are familiar with product
labelling, we’ll only list some of the more common sustainability-related labels below.
Labelling is most effective if the label is simple, clear and respected. Coffee is a product
where labelling has gone berserk – you have to choose between fair trade, shade grown,
bird friendly and organic. It leaves the customer having to decide who gets hurt: the bugs,
the birds or the bean-pickers.
Many labelling schemes require third-party certification. These can be expensive but
are often necessary to access markets. Certain governments use certification as a selection
criterion for purchases. One of the biggest problems with certification and labels is the
rate at which they are proliferating, risking confusing the customer. For example, for
coffee, you can choose between fair trade, organic, bird friendly and shade grown. Green
cleaning products may sport a label from EcoCert, Eco-Label, EcoLogo, Green Seal,
GreenGuard, CleanGredients, Nordic Swan or the Environmental Protection Agency’s
Design for the Environment programme. It is probably inevitable that consolidation will
occur, so choose carefully and hedge your bets by keeping data that would let your
product qualify for multiple programmes. (See Appendix B for common labelling and
certification schemes.)

Stakeholder involvement
Stakeholder involvement and transparency are important tenets of sustainability, and
public relations people may participate in planning or running associated tasks. Since just
about anyone can be considered a stakeholder, you’ll need a way to narrow the field. You
want to be sure to include people or representatives with a strong vested interest so you
don’t get blind-sided. On the other hand, you can’t involve everyone. A chart like the one
in Figure 12.1 can be a helpful way to organize your thinking.
Place the people or groups into the appropriate quadrants. There may be some who
are concerned but have little influence and others who have a lot of influence but are fine
with what is happening. You want to focus on people or groups that have both high
concern about what you are doing and are highly influential.
We covered stakeholder involvement in some detail in the Senior Management chapter.

Sustainability reporting
Similarly, public relations is often involved with stockholder reports and other non-
financial reports, including sustainability reports. According to Corporate Register, which
Chapter_12.qxd 6/10/2009 4:38 PM Page 240

240 THE BUSINESS GUIDE TO SUSTAINABILITY

High Concern / Low Influence High Concern / High Influence

CONCERN

Low Concern / Low Influence Low Concern / High Influence

INFLUENCE

Figure 12.1 Concern versus influence

tracks non-financial reports, two-thirds of Fortune 500 companies already produce a

sustainability or corporate social responsibility report.
Be careful not to overwhelm people, though. Use your marketing acumen to parse the
messages for different audiences. For example, Starbucks and Hewlett-Packard produce a
small summary of their full report. There is a move away from print to web-based reports
and these provide more flexibility. BP has an interactive map on their website highlighting
environmental activities at their different locations. GE and Nokia allow customers to create
personalized reports.13 (See the Finance and Accounting chapter for more information.)

Market transformation
Governmental agencies and non-profit organizations are usually less interested in marketing
what they are doing and more interested in creating markets for more sustainable products.
They want to transform the entire sector, raising the bar for all. For example, in 1993, in
the US, 25 electricity companies, representing one-quarter of the nation’s electricity usage,
wanted to dramatically improve the efficiency of refrigerators, so they offered the ‘Golden
Carrot’. Rather than offsetting the cost of research and development, they offered an
Chapter_12.qxd 6/10/2009 4:38 PM Page 241

MARKETING/PUBLIC RELATIONS 241

incentive of $30.7 million to the manufacturer that could design, build and distribute
refrigerators that were 25–50 per cent more energy efficient than comparable models. This
incentive got the attention of the entire industry. Today’s refrigerators are 30 per cent more
energy efficient than they were prior to the Golden Carrot.
Organizations have used a host of different strategies to transform the marketplace. In
addition to using their purchasing power, they have:

• designed informational labelling (such as the Energy Star labels on appliances);

• created standards and certifications (eg the LEED green building system);
• offered incentives (eg ‘feebates’, where a fee on less sustainable models is used to
provide a rebate on more sustainable models);
• offered technical assistance;
• provided grant funding;
• used tax credits and deductions (eg in the US, Oregon’s energy tax credits have been
particularly effective in changing behaviour);
• worked through trade associations;
• threatened or implemented new regulations (eg in September 2004 a European Union
ruling went into effect banning hundreds of carcinogens and reproductive toxins from
all personal care products on the European market);
• created cap-and-trade market mechanisms; and
• set up third-party organizations (eg to handle the take-back of electronic products).

The strategy will depend upon your target market (eg the general public or business-to-
business transactions), your mission and your product.

Conclusion
Marketing and public relations people have critical skills to support a sustainability
initiative. They can use their understanding of their marketplace and stakeholders to
design more sustainable products and services as well as frame their organization’s messages
effectively. Marketing people are key to creating increasing demand for more sustainable
products. Public relations people can help an organization use sustainability to enhance its
image. Learn all you can about sustainability and then help your organization understand
how best to communicate their commitment to it.
Chapter_12.qxd 6/10/2009 4:38 PM Page 242

242 THE BUSINESS GUIDE TO SUSTAINABILITY

SCORE MARKETING AND PUBLIC RELATIONS

See page 33 for how to complete this assessment and page 36 for how to interpret your score.

Marketing

Practice Incubator Initiative Integrated Points

1 point 3 points 9 points

Marketing Assess market Develop a message Develop an

Strategy: Have a segments for their that will resonate with aggressive
strategy in place understanding and each market segment customer education
that encourages opinions about encouraging them to campaign around
all your customers sustainability. Use make the sustainable sustainability to
to choose the this information to choice (eg take-back build demand for
more sustainable target the green opportunities as a sustainable
options. market segment. marketing strategy). products and
services.
Product Assess all your major Eliminate or redesign All products are
Positioning: Make product lines for their lines with the worst sustainable (eg
all products more sustainability sustainability third-party certified).
sustainable. impacts. performance. Seek Demonstrate
credible eco-labelling significant
or certification for innovations that
some of your push the limits of
products. existing ‘green’
practices and move
the industry forward.
Internal Incorporate Communicate at least All employees are
Marketing: sustainability into quarterly via two fully aware of
Educate all employee types of media or sustainability
employees about communications on more. activities.
the organization’s an ad hoc basis.
sustainability
efforts.
Chapter_12.qxd 6/10/2009 4:38 PM Page 243

MARKETING/PUBLIC RELATIONS 243

Marketing When printing, use high Minimize the use Promote the
Materials and post-consumer recycled of printed concepts of
Give-Aways: content paper and soy- marketing sustainability in
Make based inks. Reduce the materials through marketing materials
sustainable use of give-aways and the use of to educate
choices about choose products that technology where customers.
collateral. exemplify sustainability. life cycle
Make it easy for assessment
customers to eliminate indicates this
duplicate mailings or would be
get off your mailing list. preferred.
Honour do-not-call lists
for telemarketing.
Public Relations
Practice Incubator Initiative Integrated Points
1 point 3 points 9 points
PR/Outreach Assess your After the Produce a publicly
Strategy: stakeholders’ opinions organization has available, formal
Educate of sustainability. shown significant annual sustainability
stakeholders internal progress report that honestly
about your on sustainability, portrays your
sustainability promote progress as well as
efforts. sustainability as your areas for
part of your improvement.
image to those
stakeholders or
markets that will
care.
Stakeholder Identify your major Conduct formal Partner with key
Engagement: stakeholders and stakeholder stakeholders on
Provide actively assess their audits and projects to shift the
mechanisms for trust, perception and involve key sustainability
stakeholders to ideas for improvement. stakeholders in performance of
express their major, sensitive your industry (eg
expectations, decisions. aggregating
priorities and purchasing power,
concerns. setting standards,
creating political
pressure for
change).
Chapter_12.qxd 6/10/2009 4:38 PM Page 244

244 THE BUSINESS GUIDE TO SUSTAINABILITY

Public Relations

Practice Incubator Initiative Integrated Points

1 point 3 points 9 points
Incident/ Provide timely, accurate Proactively Operate with
Emergency and complete provide ready integrity and
Response and information to access for the transparency,
Media authorities and the media and the avoiding the
Communications: public when a crisis public about temptation to spin
Ensure everyone does occur (eg bad incidents and bad news in your
has the best press, accident, high- responses (eg via favour. Take full
information. profile mistake). Give website, press responsibility for
higher priority to releases, etc.). your actions and
protecting public health move quickly to
and the environment sustainable
over protecting your solutions.
short-term financial
interests and image.

Total
Average
Chapter_13.qxd 6/10/2009 4:38 PM Page 245

13
Accounting and Finance: How to Account for
Environmental and Social Impacts

Most people are familiar with the old maxim ‘what gets measured gets done’; finance and
accounting departments are primarily responsible for what gets measured and so have a
powerful influence on organizational strategy and decisions.
One problem, however, is that traditionally these fields have only tried to measure one
‘leg’ of the three-legged stool of sustainability: economic impacts. As Ralph Estes, author
of Tyranny of the Bottom Line: Why Corporations Make Good People Do Bad Things,
eloquently explains, our accounting system is a vestige of the early corporations’ focus on
trading. When this became our only measure of success, it led to a host of predictable
problems: short-term thinking, employee and public safety problems, and even corporate
fraud. Estes and many others contend that the solution is to begin measuring performance
against other stakeholder expectations as well.
In this chapter we focus on issues pertinent to accounting and finance inside
organizations. Related issues for economists are also equally important but space does not
allow us to go into those issues as well. For readers interested in sustainable economics, we
suggest beginning with works by Herman Daly, Geoffrey Heal and Gretchen Daily.

WHAT YOU SHOULD KNOW ABOUT SUSTAINABILITY

Increasingly, accounting and financial analysts are being expected to develop metrics and
decision frameworks for social and environmental performance. There is also a significant
rise in the number of companies publishing sustainability or corporate social responsibility
reports. As already mentioned, almost 80 per cent of the Standard and Poors 100 published
some form of a sustainability report, a 2006 KLD research and analysis report revealed. A
2005 KPMG international survey of corporate responsibility found that 64 per cent of the
Global 250 (the top companies in the Fortune 500) published either a separate
sustainability report or included a section in their annual report.1
This then raises the question of how an organization should measure non-financial
performance. While financial accounting has been standardizing for over a century, there
Chapter_13.qxd 6/10/2009 4:38 PM Page 246

246 THE BUSINESS GUIDE TO SUSTAINABILITY

are as yet no generally accepted practices for evaluating social and environmental
performance. The Global Reporting Initiative issued by the Coalition for Environmentally
Responsible Economies (CERES) has attempted to provide guidelines for such reports.
While more companies are using the GRI guidelines, they still represent a minority. So
until appropriate standardization occurs finance and accounting professionals must resolve
a number of thorny issues.
Many of the negative impacts of organizational operations are externalities. Externalities
are costs that are borne by someone other than those that caused them. These are usually
caused by organizational boundaries (ie the limits on what we consider the organization to
be responsible for) and subsidies (tax breaks and the like). When a timber company chops
down trees and sends silt into the rivers, they do not pay for replacing or cleaning the water
treatment centre’s filters or for compensating the fisherman for his poor catch. Car
companies do not have to pay for building and maintaining roads. A governmental agency
does not pay for the business impacts of its regulations. Too often, these conventions
reinforce unsustainable practices in organizations.
Government has a particularly useful role in this situation. If an individual business
internalizes some of the costs that are traditionally externalized, they may be at a
competitive disadvantage, so often business needs government to create a level playing
field. Currently, it is popular to use market forces, for example cap-and-trade systems,
rather than prescriptive regulations. One example of a market solution is the European
programme of carbon trading to offset climate impacts associated with burning fossil fuels.
As Robert Kennedy, Jr writes in Crimes against Nature:

You show me a polluter and I’ll show you a subsidy. I’ll show you a fat cat using
political clout to escape the discipline of the free market and load his production
costs onto the backs of the public.
The fact is, free-market capitalism is the best thing that could happen to the
environment, our economy, our country. Simply put, true free-market capitalism,
in which businesses pay all the costs of bringing their products to market, is the
most efficient and democratic way of distributing the goods of the land – and the
surest way to eliminate pollution. Free markets, when allowed to function,
properly value raw materials and encourage producers to eliminate waste –
pollution – by reducing, reusing and recycling.
As Jim Hightower likes to say, ‘The free market is a great thing – we should
try it some time.’ 2

We believe that Kennedy is overstating the situation here in that there is no such thing as
a completely free market. However, his basic point is valid: if organizations bore the costs
of the impacts they caused, they would make more sustainable decisions. Applying this
Chapter_13.qxd 6/10/2009 4:38 PM Page 247

ACCOUNTING AND FINANCE 247

concept to our complex, global economy will be no easy task, but the paradigm is ripe for
consideration.
There are no accepted ways to measure social and environmental performance. There are
a number of people and groups working on ways to measure social and environmental
performance. However, it’s likely to be decades until any standardization occurs; in the
meantime, financial analysts will have to blaze their own trails. There are some places to
look for guidance; however, much of the work being done in Europe. For example, the
Accounts Modernisation Directive requires publicly traded companies in Europe to
include future environmental liabilities in their accounting of costs and potential future
profits. ‘What the Europeans are saying’, Mike Wallace of the US office of the British
consulting firm TruCost explained, ‘is that costs that have been externalized will no longer
be paid by society.’ Wallace said that until now the lack of reporting of such potential
liabilities has had the effect of inflating the value of companies that may be forced to
contend with the price of environmental irresponsibility, or that attempt to shift those
costs onto the public. A profit-and-loss statement that does not include either current or
future environmental liability paints a falsely rosy picture of a company’s financial future.3
Here are other places to look for guidance:

• The Global Reporting Initiative (GRI), is intended to provide standards for

sustainability reporting. It is increasing in popularity but is most appropriate for large
companies. Smaller organizations may want to use the GRI as a menu from which to
choose the most relevant metrics, rather than complying with the entire set of
guidelines, www.globalreporting.org.
• The European Academy of Business in Society, www.eabis.org, and Forum for the
Future, www.forumforthefuture.org, are also working on these issues, especially vis-à-
vis social impacts. Similarly, the European Federation of Accountants (FEE) has a
Sustainable Working Party working on these issues, www.fee.be.
• SA 8000 is a framework for social accounting.
• SEAAR, Social and Ethical Accounting, Auditing and Reporting is a formal tool
designed to drive standards.
• AccountAbility 1000 (also known as AA 1000) is an assurance standard emphasizing
stakeholder involvement.
• Global Citizenship 360 (GC360) is an assessment process developed by Coca-
Cola and The Future 500. It produces a 360-degree summary of corporate performance,
a report builder for corporate social responsibility reports and a data repository.
• The British Standards organization is working on sustainability management
guidelines for corporations called BS 8900, www.BSI-global.com/British_Standards/
sustainability/index.xalter.
Chapter_13.qxd 6/10/2009 4:38 PM Page 248

248 THE BUSINESS GUIDE TO SUSTAINABILITY

• Japan’s Ministry of the Environment provides its Environmental Accounting

Guidelines, www.env.go.jp/en/ssee/index.html.
• Highwater Research, established by Paul Hawken, is raising the standards for the
socially responsible investment industry as a whole. The Highwater methodology is
structured to focus the investment universe on only those companies that are truly
beneficial to society and the environment. The key component of this methodology is
an examination of a company’s business intention and model. Does the company
contribute to social and environmental health? Marketing junk food to children does
not qualify; renewable energy does. Making violent video games does not; creating
childcare facilities does. Ultimately, Highwater Research will be available to all
investors and hopes to become the preferred method for socially responsible investing
selection in the future, www.highwaterresearch.com.
• For some elements of sustainable performance, especially where consistency across
organizations is critical, reporting protocols have been developed. One example is the
Greenhouse Gas Protocol for reporting climate-related impacts, www.ghgprotocol.org.

Traditional accounting methods mishandle natural assets. It seems unbelievable to those

outside the field, but economists often value natural assets and natural systems at zero. If
humans treat wastewater, there is an economic impact on GDP, but if nature does it,
nothing goes on the ledger. Similarly, a fishing fleet counts the cost of the vessel, the fuel,
people, rigging and transportation but treats fish, the primary raw material as free. There
is no accounting system factoring in the fact that fish stocks have now been depleted. This
leads to a ‘tragedy of the commons’ problem: as fish become scarce, they become more
valuable, which only encourages more fishing. Should there not be a debit on the balance
sheet? Shouldn’t there be a requirement to invest in the natural capital?
Sometimes the trick is getting the denominator right. The Collins Companies, a
vertically integrated US forest products company, bases the ‘value growth’ of a tree on the
amount of ground that it occupies rather than the value growth on the tree’s existing value.
This is uncommon thinking in the forest management world. While mature trees grow
more slowly, their girth is larger so adding a little around a large circumference, in their
view, can be better than having more small-diameter trees on the same piece of ground.
This economic model supports their decision to maintain a diversity of tree ages, including
trees over 50 inches in diameter, supporting much greater biodiversity than the standard
tree plantation. Owner Terry Collins says, ‘You have to look at economics in a more
timeless way, for the next generation,’ instead of as discounted cash flows.4
Current financial decision tools cannot easily account for risk or intangible benefits.
Common financial tools, including payback periods, internal rate of return and net present
value, only account for direct financial effects; they do not factor in such issues as risk
Chapter_13.qxd 6/10/2009 4:38 PM Page 249

ACCOUNTING AND FINANCE 249

avoidance or intangible benefits except where those can be clearly and definitively estimated.
However, sustainability has as much to do with risk management as it does direct payback.
What is it worth to eliminate all toxic chemicals from your property? It’s more than just the
cost of the chemicals and permits. Your insurance risk declines. The liability for employee
and community safety problems declines. The potential for catastrophic environmental
disasters also goes down. Sustainability often generates multiple unintended benefits, but if
you don’t account for them, they often count for nothing in management decisions.
Discounting underestimates the needs of future generations and long-term impacts. To
deal with the effects of time on the value of money, discount rates are usually factored into
financial analyses. However, this makes no sense when it comes to natural assets. Is a forest
going to be less valuable in the future? Will water? How do we deal with the
inter-generational equity issues associated with sustainability? As Geoffrey Heal points out
in his paper ‘Interpreting Sustainability’:

A positive discount rate forces a fundamental asymmetry between the present and
future generations, particularly those very far into the future. This asymmetry is
troubling when dealing with environmental matters such as climate change, species
extinction and disposal of nuclear waste, as many of the consequences of these may
be felt only in the very long run indeed, a hundred or more years into the future.
At any positive discount rate these consequences will clearly not loom large (or even
at all) in project evaluations. If one discounts present world GNP over two hundred
years at 5 per cent per annum, it is worth only a few hundred thousand dollars, the
price of a good apartment. Discounted at 10 per cent, it is equivalent to a used car.

Instead, Heal says, we need methods that provide symmetry between current and future
generations while also recognizing the intrinsic value of environmental assets.5
The accounting system itself results in aberrations. The structure of the accounting system
itself causes problems. Sustainable decisions often have multiple positive benefits, but they
often occur across different departmental budgets. Eliminate a hazardous substance in your
manufacturing process and you may simultaneously reduce environmental permits and
paperwork for the EH&S department, protective equipment for plant operations, hazmat
training in the training department, and expenses in the human resources benefits plan.
Similar problems exist between capital and operations and maintenance budgets. The person
managing the capital budget for a building expansion gets hassled if he goes over budget, even
if those additional costs would be paid back in two years through energy savings in the
facilities budget. Maintain a creaky old energy system and you get to write off the whole
expense this year but install a new renewable energy system and the Internal Revenue Service
makes you amortize the capital expenditure over many years. How do you create incentives
Chapter_13.qxd 6/10/2009 4:38 PM Page 250

250 THE BUSINESS GUIDE TO SUSTAINABILITY

to optimize the whole system? How do you make it easy for someone to take a reduction in
their own budget if the savings will show up in someone else’s? This is not a problem unique
to sustainability, but because sustainable thinking tends to affect many elements across the
organization, it is more pronounced.

RESOURCES
For a practical approach to social assessments, see Social Audit – A Toolkit: A Guide for
Performance Improvement and Outcome Measurement, from the Centre for Good
Governance, http://www.cgg.gov.in/publications.jsp.
Schaltegger, Stefan and Roger Buritt (2000) Contemporary Environmental Accounting:
Issues, Concepts and Practice. Greenleaf.
Heal, Geoffrey (2000) Nature and the Marketplace: Capturing the Value of Ecosystem
Services. Washington, DC: Island Press.
ACCA, the British accounting body (www.accaglobal.com), has an accounting and
sustainability e-newsletter that can help you stay abreast of this emerging field.
Natural Logic’s Business Metabolics provides an interesting dashboard: http://
businessmetabolics.com/.
Visible Strategies, based in Vancouver, British Columbia, has a powerful tool for
sustainability metrics and reporting, www.visiblestrategies.com. For one example of where this
is used, see the courier company Novex’s ‘see-it’ tool on their website at www.novex.ca. It has
real-time data on their performances around different aspects of sustainability.
E-Quilibrium is working on an exciting and sophisticated sustainability information
technology platform. See http://equilibrium.net.
Those not needing a sophisticated information system may find our SPaRK™
(Sustainability Planning and Reporting Kit) system helpful. It includes an Excel file with
common analyses and metrics, which is linked to an MS Word template for sustainability plans
and reports such that the charts and graphs are pulled directly into the document. Go to
www.axisperformance.com for more information.

STRATEGIES YOU CAN USE

At one level or another, you will need to solve these problems. You’ll have to help your
organization develop a management framework and metrics so that you can report
(internally and/or externally) on your performance in social, economic and environmental
areas. We have organized the practices and tools here into three main areas:

1 developing a metrics framework and reporting on results – you need a system in place
to gather and report appropriate sustainability performance metrics;
Chapter_13.qxd 6/10/2009 4:38 PM Page 251

ACCOUNTING AND FINANCE 251

2 determining what is ‘better’ – you’ll need methods to help you understand, from a
holistic perspective, which options are more sustainable; and
3 developing decision tools to help you manage the inevitable trade-offs.

Develop a metrics framework and report on results

Whether you work on an internal or external sustainability report to track your
organization’s progress, you will need a framework to organize your data and to ensure it
is complete. At present there is no universally accepted way of doing this, so you will need
to choose, modify or invent one. In the chapter for senior managers there is a list of
common sustainability frameworks, so we will only provide a couple of examples here so
that you can see a range of options. The framework you choose will affect what you
measure and how you report your sustainability performance. Here are some general
guidelines:

• Choose a framework that can provide a shared mental model inside the organization.
Find one that fits the culture and mission.
• Create linking, cascading measures. For example, your external stakeholders may be
interested in your progress toward eliminating greenhouse gases but your plant
manager may be more interested in energy use per product produced. But the latter
can inform the former.
• Focus on measuring the most important elements rather than everything. Develop
metrics for your most egregious impacts, not every paperclip. Choose metrics that will
be useful, where the data gathering is worth the effort.
• Take advantage of the work of others. It can be better to use a method that is generally
accepted or used by others so that you can compare your results with other organizations.
• Be satisfied with imprecise data where it is just not possible or practical to get accurate
data, as long as you are confident the trend lines will represent what is happening on
the ground.
• Report both normative data (eg energy use per product) and gross totals. Management
will care about the ratios but nature only cares about absolute values.
• Show the data in relation to other trends as appropriate (eg economic growth, sales
increases, new plant start-ups or population growth).
• As you would do for any financial measures, put into place effective systems for
gathering, tracking, reporting, evaluating and improving on metrics.
• In addition to the traditional web and hardcopy reports, consider creative ways to get
people to focus on the data. When TriMet, a transit authority in Portland, Oregon,
posted their electricity bill in the elevator, the employees were so horrified to see what
Chapter_13.qxd 6/10/2009 4:38 PM Page 252

252 THE BUSINESS GUIDE TO SUSTAINABILITY

the organization was paying that usage decreased by 20 per cent the following month!
Use the data to encourage behavioural change.

Below we describe several different frameworks that are commonly used in organizations.
See if one fits your situation. If not, look at the other frameworks described in Appendix
A or invent your own.

The Natural Step

The Natural Step is based on the physical sciences and does a good job of describing
environmental sustainability, with only a quick nod to the socio-economic realm. Its four
principles, or ‘system conditions’, can provide a useful way to organize your activities and
they also imply end-state targets for your metrics. Because the framework was created by
scientists, the language of the system conditions is sometimes hard for the average person
to understand, even though the wording is precise and meaningful. To avoid going into a
long-winded explanation here, we provide in Table 13.1 a simpler version of the principles
and suggested metrics. The system conditions describe what we should not do to have a
sustainable world. You can see how these metrics can cascade, providing different data for
different groups.
Depending on your line of work, it can be just as important to create metrics for those
outside your organization as for those within. ShoreBank Pacific, based in Ilwaco, Washington,
used The Natural Step as the basis for evaluating their loan applications. The bank has a
mission to promote sustainability so it only made sense to evaluate their loans based on it.
Over time, Kathleen Sayce, their bank scientist, developed their own system of metrics.

Triple bottom line/Three Es

Many corporations have focused on corporate social responsibility or what is often called
the triple bottom line (economic, social and environmental) or the Three Es (Economy,
Environment and social Equity). It may be simpler to use this existing framework and then
embed something like The Natural Step principles where appropriate (see Table 13.2).
The Oregon Museum of Science and Industry in Portland, Oregon has taken this
approach. We helped them identify internal and external performance metrics and are in
the process of creating a decision framework to balance the trade-offs between them when
faced with a decision.

Sustainability or environmental management system

Many organizations have an environmental management system (EMS), either ISO 14001
certified or not, and this can provide a process for managing sustainability, especially if
Chapter_13.qxd 6/10/2009 4:38 PM Page 253

ACCOUNTING AND FINANCE 253

Table 13.1 Metrics based on The Natural Step system conditions

Principle or ‘System Condition’ Possible Metrics

Don’t move substances from the crust into Energy use per unit of product (eco-efficiency).
nature faster than they are redeposited. (This
Proportion of energy from sustainable sources/
relates mostly to fossil fuels and to rare/toxic
renewables (energy sources).
metals and minerals.)
Carbon-equivalent emissions, including carbon
offsets (climate impact).
Don’t make things that nature can’t handle. Proportion of solid waste diverted from landfill (ie
(This relates mainly to man-made substances, reused, recycled, upcycled or composted) (zero
especially those that do not readily waste).
biodegrade, but also to excessive quantities
Proportion of products in chemical inventory that
of other materials that are produced faster
contain chemicals of concern (eg the ‘dirty dozen’
than nature can process them.)
or grey/black listed chemicals) (toxicity).

Don’t take from nature faster than it can Proportion of major purchases that come from
regenerate. (This refers to natural resources sustainable sources (eg organic, certified).
that can be depleted through over-harvesting,
Investments in natural capital (eg restoration
development and genetic manipulation.)
activities).

Don’t hurt quality of life and human dignity. Employee satisfaction (internal quality of work life).
(This acknowledges that basic human needs
Community contribution in hours and money (local
must be met worldwide for the above
impacts).
conditions to be possible.)
Proportion of vendors/suppliers with SA 8000 or
equivalent commitment to fair labour practices
(international impact).

Table 13.2 Metrics based on the triple bottom line

Environmental Social Financial

Internal Energy reduction Employee satisfaction Net operating dollars

Waste reduction Turnover Net margin percentage

Proportion of sustainable Museum attendance

materials in museum exhibits

External CO2 emissions reduction Scoring of sustainability Scholarships

content in educational
programmes and exhibits
Chapter_13.qxd 6/10/2009 4:38 PM Page 254

254 THE BUSINESS GUIDE TO SUSTAINABILITY

sustainability becomes embedded into the EMS. (This is covered in more detail in the
Environmental Affairs chapter.) Since such a management system provides a mechanism
for setting goals, identifying priorities, choosing long-term targets and monitoring results,
it can benefit from the involvement of a financial analyst.

Organization’s vision or values

Some organizations discard all available sustainability frameworks and use as their primary
organizing structure something core to their operation. Staff at Stonyfield Farms based in
New Hampshire, which sells organic dairy products, translated their organization’s mission
into measures, as outlined in the table below:6

Table 13.3 Metrics based on mission and values

Mission Statement What they measure

To serve as a model that environmentally Resource use (solid waste, wastewater, packaging)
and socially responsible businesses can Pesticides and toxics
also be profitable.
Energy use and global warming for facility and supply
chain
Acidification
To educate consumers and producers Proportion of organic sales
about the value of protecting the Organic acres supported
environment and of supporting family
Number of small dairy farms supported
farmers and sustainable farming
methods. Proportion of milk from small family dairy farms
Price paid to farmer (milk)
To provide a healthy, productive and Lost work day illness/injury rate
enjoyable workplace for all employees, Compensation, holidays, vacation, turnover, etc. as
with opportunities to gain new skills and compared with national benchmarks
advance personal career goals.
Internal promotions
Education and training; tuition reimbursement as
compared with national benchmarks
Employee climate survey
To recognize our obligations to Net sales
shareholders and lenders by providing Gross margin
an excellent return on their investment.
Share price
Earnings before interest and taxes
Net income
Overheads
Chapter_13.qxd 6/10/2009 4:38 PM Page 255

ACCOUNTING AND FINANCE 255

Table 13.3 Metrics based on mission and values (cont’d)

Mission Statement What they measure

Market share
Earnings before interest, taxes, depreciation and
amortization
To produce the very highest quality all Quality checks (over 900 each day)
natural and certified organic products Consumer complaints
that taste incredible
Shelf-life studies
Chill cell compliance
Sanitation

RESOURCES
The Global Reporting Initiative is developing standards for sustainability reporting,
www.globalreporting.org.
The Corporate Register provides an online directory of non-financial corporate reports.
They also have an awards programme and produce a report, summarizing best practices and
other useful data. The most recent reports, ‘Corporate Climate Communications Report 2007’
and ‘CR Reporting Awards Report: Global Winners and Reporting Trends for 2007’ can be
downloaded from their site. These can be useful tools for improving your own sustainability
report. You can register to receive announcements when sustainability reports are issued and
these emails include a short summary of the main features of the reports,
www.corporateregister.com.
EciAdvantage Strategies (2007) ‘Secrets of High-Impact Sustainability Reporting’,
7 November, www.sustainablelifemedia.com/files/webform/documents/ecoadvantage
strategies11052007.htm, accessed 10 May 2009.
The Carbon Disclosure Project is a coalition of institutional investors responsible for over
US$21 trillion in assets. They have created a database of information on the business implications
associated with climate change.
For metrics related to community well-being, Sustainable Measures has a number of
useful resources including a searchable database of indicators and a Guide to Sustainable
Community Indicators, www.sustainablemeasures.com
The Center for Sustainable Management in Lüneburg, Germany has a sustainable
balanced scorecard. See Figge, F., T. Hahn, S. Schaltegger and M. Wagner (2001)
Sustainability Balanced Scorecard. Wertorientiertes Nachhaltigkeitsmanagement mit der
Balanced Scorecard. Lüneburg: Center for Sustainability Management.
The accounting firm KPMG published the International Survey of Corporate Sustainable
Reporting in 2002.
For a registry of corporate reports, go to www.accaglobal.com.
Chapter_13.qxd 6/10/2009 4:38 PM Page 256

256 THE BUSINESS GUIDE TO SUSTAINABILITY

The State and Territorial Air Pollution Program Administrators and the Association of Local
Air Pollution Control Officials have produced software for communities to track their
greenhouse gas emissions.
Beckett, R. and J. Jonker (2002) ‘AccountAbility 1000: A New Social Standard for Building
Sustainability’, Managerial Auditing Journal, Vol 17, Nos 1–2, January, pp36–42.

Determine what is ‘better’

In addition to helping their organizations develop valid and useful sustainability metrics
and reports, financial analysts must also help their organizations make better, more
sustainable decisions. To date, there are three main accounting and financial decision-
making methods that can overcome some of the problems associated with traditional
financial analyses covered at the beginning of this chapter. Table 13.4 below ranks these
from minor change to major shift in traditional practice.

Activity-based costing (ABC)

Activity-based costing is a good place to begin as it collects all or most of the costs
associated with products or services. As we have already noted, sustainable thinking tends
to create multiple benefits that may show up in different parts of the organization.
Activity-based costing helps you get a handle on the true costs, regardless of how the
organization and budgets are structured. The basic process is to:

• analyse the activities associated with a product or service;

• gather the costs associated with these activities;
• establish output measures; and
• analyse the costs as compared with other options.

Table 13.4 Comparison of ABC, LCC and LCA

Activity-based costing Life cycle costing Life cycle assessment

Assigns costs that are typically Considers longevity, taking into Assesses the full impacts of
hidden in overheads or other account the useful expected life decisions along the entire life
departments to products or of certain products or financial cycle, from resource extraction,
other relevant units. decisions. transportation and manufacture
to use and end-of-life disposal.

Minor change → Major change toward sustainability

Chapter_13.qxd 6/10/2009 4:38 PM Page 257

ACCOUNTING AND FINANCE 257

On one occasion, talking to managers from a department store chain about sustainability,
we raised the issue of all the pesticides they carried in their garden section. The company’s
policy was to dispose of any broken bottles or spills as if they were a hazardous waste
generator, even though their small volumes did not put them in a regulated category
requiring these more expensive steps. We asked if they had ever analysed all the costs they
incurred associated with carrying these products (hazmat training, spill response, disposal
fees, legal liability, etc.) against the profits they earned from them. There was a stunned
silence. It had never occurred to them to ask.

RESOURCES
A global portal for activity-based costing is www.offtech.com/au/abc/Home.asp.
Shank, John K. and Vijay Govidarajan (2003) Strategic Cost Management. New York: The
Free Press.

Life cycle costing (LCC)

The next step is to take into account the longevity of decisions you make. All too often,
the cheapest first cost is not the cheapest in the long term. For example, vinyl flooring costs
much less than many other floors in terms of initial outlay, but if you take into account
the cost of replacing it two to three times more frequently than other flooring options, it
may in fact be the more expensive choice. An LCC analysis may reveal that it would save
time and money to go with the alternatives.
The financial department can help organizations make more sustainable decisions by
doing LCC studies. As we noted in the chapter for facilities, the California Department of
Finance commissioned a study by the Capital E group and Lawrence Berkeley Laboratory
to determine whether green building practices paid off. Often building a ‘green building’
carries a much as a 10 per cent premium in construction costs. Is it worth it, they wondered?

RESOURCES
Life Cycle Cost Analysis Handbook, www.eed.state.ak.us/facilities/publications/
LCCAHandbook1999.pdf.
Life Cycle Costing, www.ogc.gov.uk/sdtoolkit/deliveryteam/briefings/businesschange/
PDFs/lifecyclecosting.pdf.
Chapter_13.qxd 6/10/2009 4:38 PM Page 258

258 THE BUSINESS GUIDE TO SUSTAINABILITY

After studying 100 buildings across the country and other studies, they concluded that
financial benefits of green design are between $50 and $70 per square foot in a LEED-
certified building, over ten times the additional cost associated with building green.

Life cycle assessment (LCA)

Unlike the two tools discussed above, LCA emphasizes impacts more than costs. If your
goal is to produce more sustainable products and services, you should take into account
the full life cycle impacts of your decisions. This helps to answer the many ‘paper or plastic’
dilemmas. Are cloth nappies better than disposables? Is it better to use certified wood that
has been transported thousands of miles or local uncertified timber?
For manufacturers, LCA can help you determine what is most important to improve.
For example, when Electrolux wanted to redesign their washing machines, they discovered
that the biggest impacts of their products had less to do with what they were made of or
how far they were transported than with the amount of water and energy their customers
used in operating their washers. This led them to develop the now-common front-loading
machines that use a fraction of the amount of water and energy of traditional models.
Stonyfield Farms in New Hampshire conducted an LCA on their yogurt product
delivery system. In part, they wanted to compare different options for containers. They
found that the size of the container and the distance to retailer were actually more
important. If all of their yogurt were sold in 32-ounce containers, they could save the
equivalent of 11,250 barrels of oil per year. And transportation to the retailer represented
about a third of the energy impact. The LCA also indicated that thermoformed cups would
be preferable as a container.7
LCAs can be conducted at two levels. Initially you might carry out a cursory LCA for
internal use to guide your decisions. However, if you want to make public claims about
your product, a full LCA study, most likely by a disinterested third party, will be needed.
Refer to ISO 14040 for guidance on how LCAs should be done.
The maxim ‘the devil is in the details’ was never more true than for LCAs. Your
assumptions can make all the difference, so it’s important to ‘ground-truth’ your
assumptions and make sure your comparisons are based on a function or service of the
products studied. For example, Ecobalance in Bethesda, Maryland conducted an LCA for
the Textile Rental Services Association. They wanted to compare the impacts of reusable,
washable incontinence pads versus single use disposables. The research behind the LCA
discovered that when disposable pads were being used, the thinner composition gave rise to
the perception of their being less sanitary and less effective at keeping the patient and bed
dry. As a result, nurses would use two to three disposable pads. On the other hand, only one
thicker, seemingly more absorbent reusable pad would be used. Thus the true comparison
was not one disposable versus one reusable but two disposable to one reusable. While a
Chapter_13.qxd 6/10/2009 4:38 PM Page 259

ACCOUNTING AND FINANCE 259

sensitivity analysis was performed on the number of disposable pads (from 1 to 4 pads), the
modelling assumption of using one versus more than one pad really skewed the results.
In practice, LCAs can often be frustrating and unsatisfying. They are hard to do, the results
are often not easily transferable and they don’t always provide unequivocal results. For example,
in the hospital linen example above, one of the main factors determining which product was
more sustainable was whether the hospital washed its own linen on site or sent it out.
Nevertheless, the field of practice has evolved significantly since our last edition. Here
are some useful tools associated with LCA:

• Dutch Guide to Life Cycle Assessment from the Leiden University Institute of
Environmental Sciences (CML).
• Eco-indicator 99.
• Ecoscarcity Approach (Swiss Ecopoints).
• EDIP97. The Environmental Design of Industrial Products (EDIP) programme is the
result of collaborative efforts of five major Danish companies, two institutes of the
Technical University of Denmark, and the Confederation of Danish Industries.
• IMPACT 2002+. The IMPACT 2002+ life cycle impact assessment methodology is a
combined mid-point, end-point and damage approach.
• EPS 2000. The Environmental Priority Strategies (EPS) design method is a tool
intended to augment a company’s internal product development process, specifically
for the purposes of supporting a choice between two product concepts.
• Japanese LCIA (LIME). A life cycle impact assessment method based on end-point
modelling (LIME).
• Tool for the Reduction and Assessment of Chemical and Other Environmental
Impacts (TRACI). TRACI is an impact assessment methodology developed by the US
Environmental Protection Agency that facilitates the characterization of environmental
inventory flows that have potential effects, including ozone depletion, global warming,
acidification, etc.8

RESOURCES
LCA for Mere Mortals by Rita Schenck, published by the Institute for Environmental Research
and Education, www.iere.org/mortals.html.
Graedel, Thomas E. (1998) Streamlined Life-Cycle Assessment. Englewood Cliffs, NJ:
Prentice Hall
For one example of an LCA, see Brachfeld, D. et al (2001) ‘Life Cycle Assessment of the
Stonyfield Product Delivery System’, Ann Arbor, MI: University of Michigan, 5 April 2001.
Chapter_13.qxd 6/10/2009 4:38 PM Page 260

260 THE BUSINESS GUIDE TO SUSTAINABILITY

Decision tools to balance trade-offs

Regardless of whether your organization uses the three formal tools described above, you
will need a way to balance trade-offs and enhance sustainability performance. We have
identified three distinct decision-making methods that are in use at this time; these are
described below in order of least to most sophisticated.

Brainstorm how to add more value

Probably the simplest way to enhance the sustainability performance of any activity you do
now or are planning is to ask the question, ‘How could we change how we do this to get
more social and/or environmental benefits?’ This often leads to innovative ideas that don’t
add costs. For example, the Oregon Department of Corrections routinely sends a bus-load
of newly convicted criminals a couple of hundred miles to the rurally located prison. For
years, the bus came back empty, until department employees wondered if there was
something else that could be done with the empty bus. Now they work with local farmers,
who donate their surplus produce (instead of ploughing it under), enlist the prisoners to
sort and bag it, and transport the bagged produce back to the city in the empty buses for
the Oregon Food Bank to distribute to the needy. Everyone wins. The farmers get a tax
deduction, the prisoners get something meaningful to do, the prison improves its image in
the community and the hungry get more fresh produce.

Weighted criteria charts

Whichever method you use to analyse your impacts and costs, eventually you will find
yourself in the position of having to make trade-off decisions. A weighted criteria chart lets

Table 13.5 Weighted criteria chart

Criterion Weight Option 1 Option 2 Option 3
Financial 10 5 10 3
50 100 30
Social 5 10 1 3
50 5 15
Environmental 5 10 3 1
50 15 5
TOTAL 150 120 50
Chapter_13.qxd 6/10/2009 4:38 PM Page 261

ACCOUNTING AND FINANCE 261

you evaluate multiple options against multiple criteria and to assign different degrees of
importance to certain criteria. Using this method, you can balance the social,
environmental, and economic benefits and costs of your options. The simple weighted
criteria chart above (Table 13.5) gives equal weight to financial and social/environmental
performance. (For another example of such a chart, see Table 9.3, page 197.)
For those unfamiliar with these decision tools, here is an explanation of how to use
them. For any particular decision, identify the relevant criteria on which the choice is
based. In the example, we use the three elements of sustainability, but you could just as
easily use other frameworks or add other criteria such as ease of adoption, opportunity to
enhance corporate image, or ability to educate employees.
Assuming the importance of the criteria varies, you then assign a weight to each,
usually from one to ten with ten being the most important. Your alternatives are listed
along the top of the remaining columns. For example, if you are comparing different copy
papers, the different brands would be listed. Then you look at each option against each
criterion, assigning a score from one to ten; this score is recorded in the box. Then multiply
the score by the weight to get a weighted score. When all options have been scored against
all criteria, add up the weighted scores. Note that in the example above, option two was
the best financially but option one came out with the highest score, balancing the trade-
offs between cost and social/environmental benefit.

Compare a sustainability rating with cost

Scott Dethloff and Paul Burnet from the large international engineering firm CH2M Hill
developed a software product called SD Solutions (Sustainable Development Solutions).
This tool is basically a large weighted criteria chart in spreadsheet form which evaluates
sustainability performance separately from cost. In the weighted criteria example above,
‘financial’ was interpreted as simply reflecting cost. SD Solutions provides a model for how
to evaluate economic benefit to the community separate from cost.
This tool can help groups make complex decisions. First, for each of the three
sustainability elements (social, economic and environmental) the team identifies specific
factors they consider important and relevant for their project. For example, under ‘social’
they may determine that providing educational opportunities for young people is key. If
desired, the team can then determine benchmark standards for each factor, ie what would
earn a ten, five or one.
In a similar way to the weighted criteria example in the previous section, the team then
evaluates each of its options against all the factors they have identified. This then produces
a sustainability score for each option. Sensitivity analysis can also be carried out to
determine if changes to certain scores (perhaps advocated by a vocal minority) would make
any difference to which option received the highest sustainability score.
Chapter_13.qxd 6/10/2009 4:38 PM Page 262

262 THE BUSINESS GUIDE TO SUSTAINABILITY

High No-brainers
Evaluate
A
C I
B H
J

Sustainability G
score

E
K Ignore

D
F L
M

High
Cost

Figure 13.1 SD Solutions results

The final step is to map the sustainability score against cost for each option. This yields
a scatter diagram similar to the one shown above. Projects or options that have both a high
sustainability score and a low cost are no-brainers, things to approve without more
discussion. Projects with low sustainability benefits, regardless of cost, can be eliminated
unless there are other compelling reasons to do them. The team can then focus on
discussing the relative merits of options with high sustainability benefits but also high
costs.

Leverage emerging ecosystem markets and governmental incentives

As we explained earlier, our capitalistic system is fraught with externalities. Usually these
are expenses that aren’t borne by the organization but instead are passed on to society. But
this cuts both ways. If you are creating positive externalities, you may be able to offset the
costs with ecosystem credits. The best known are carbon credits where you can sell the
greenhouse gas reduction benefits of projects your organization has undertaken to others
who need those credits. However, similar systems are being set up for a host of different
ecosystem services, including flood control, wetland mitigation, water temperature, habitat
and the like. In Portland, Oregon, for example, the Willamette Partnership is developing
a system to bundle and create a market for ecosystem service credits to pay for the
restoration of the watershed. In a nearby community, their water utility, Clean Water
Chapter_13.qxd 6/10/2009 4:38 PM Page 263

ACCOUNTING AND FINANCE 263

Services, avoided spending $60 million in needed water treatment upgrades by restoring
35 miles of Tualatin River instead, using the funds to pay farmers for the use of and
restoration of their lands along the river. The environmental benefits of this restoration far
exceeded these direct cost savings.
Similarly, many jurisdictions have incentives for energy and water conservation efforts
which often are underutilized because people are not aware of them. Often these can be
compounded. In Oregon, for example, a business or landlord can get state tax credits and
also Energy Trust rebates which reduce the cost of energy conservation projects often by
close to half! Be sure to talk to sustainability professionals in your city, state/province and
nation to uncover these opportunities.

RESOURCES
Bayon, Ricardo, Amanda Hawn and Katherine Hamilton (2007) Voluntary Carbon Markets: An
International Business Guide to What They Are and How They Work. London: Earthscan.

Conclusion
Of all the different functional areas, the fields of finance and accounting are perhaps the
least developed in terms of incorporating sustainability into their practice. By at least
identifying the problems with traditional practices, we hope to have stimulated the creative
thinking that will be required to solve them. There are helpful tools being developed to
measure, track and report sustainability performance, but the field is still in its infancy.
When you select metrics, be sure to include a fully sustainable target. This clarifies what
the abstract concept of sustainability really means to your organization and can spur out-
of-the-box thinking. Be sure also to link these metrics and reports to some form of
sustainability management system so that the results can be evaluated and acted upon. For
more information on sustainability management systems see the chapters for Senior
Management and Environmental Affairs.
Chapter_13.qxd 6/10/2009 4:38 PM Page 264

264 THE BUSINESS GUIDE TO SUSTAINABILITY

SCORE FINANCE AND ACCOUNTING

See page 33 for how to complete this assessment and page 36 for how to interpret your
score.

Finance

Practice Incubator Initiative Integrated Point

1 point 3 points 9 points

Financial Analysis: In addition to Use total cost of Make full life cycle
Use tools to provide traditional financial ownership (versus analysis available and
a more complete methods for first cost) and take responsibility for
assessment of determining return identify externalities all identifiable
options that take on investment, related to the life externalities when
sustainability into include an cycle of the product making major
account. assessment of or capital decisions; choose
risks and investment. discount rates that
intangible benefits don’t unfairly discount
when assessing the needs of future
options. generations.

Sustainability Produce an Include Publish a separate,

Reporting: Make internal report sustainability detailed and audited
available and use highlighting reporting as part of sustainability report.
qualitative/ accomplishments existing public
quantitative data on and areas for reports.
your progress improvement.
toward
sustainability.

Investments: Factor Employ negative Give preference to Only invest in

in sustainability screens for such investments that sustainability-related
when making criteria as demonstrate a investments.
investment tobacco, arms, commitment to
decisions (eg child labour, etc. sustainability
pension plans, practices.
stock purchases,
bonds).
Chapter_13.qxd 6/10/2009 4:38 PM Page 265

ACCOUNTING AND FINANCE 265

Accounting

Budgets: Modify Include Provide a method of Where significant

your systems so sustainability as one accounting for systemic barriers
that people are of the criteria that benefits that accrue exist that inhibit
encouraged to should be assessed to different budgets sustainability,
optimize the before money is (eg capital versus provide a way to
sustainability spent. operations/ return some of the
performance of the maintenance; savings to the
entire organization operations versus department(s) that
rather than their customer service indirectly created
own budgets. department). the savings.

Metrics: Develop a Develop a set of Develop a complete Regularly conduct

set of sustainability metrics to assess set of sustainability sustainability best-
metrics. the progress toward metrics for the practices studies
your sustainability organization and with other
projects and goals. report on them at organizations to
least annually. uncover
opportunities for
improvement.

Total

Average
Chapter_13.qxd 6/10/2009 4:38 PM Page 266
Appendix A.qxd 6/10/2009 4:38 PM Page 267

Appendix A
Sustainability Frameworks and Tools

There are a plethora of sustainability-related frameworks and tools. This has led to a lot of
‘my framework is better than yours’ arguments. It’s important to understand how they fit
into a hierarchy and which frameworks are more useful in certain situations. In this
appendix, we hope to untangle the different terms so that you can choose the frameworks
and tools that will be most appropriate in your situation.
To be sustainable, we must be able to operate in accordance with natural laws. We
don’t get to change the laws of thermodynamics or gravity. So any sustainability must take
these natural laws into account. The only framework that translates these natural laws into
rules for human society is The Natural Step framework. Some organizations use The

Frameworks, Principles and Tools

Natural
laws of
system Earth

Rules governing The Natural Step

human interaction
with the system
Agenda 21
Talloires Principles Earth Charter
Equator Sector General
Caux

Tools
Sector Analysis Measures Process

LEED LCA/LCC Footprint EMS

GRI

Figure A.1 Hierarchy of sustainability frameworks

Source: Adapted from the Five System Levels used by The Natural Step
Appendix A.qxd 6/10/2009 4:38 PM Page 268

268 THE BUSINESS GUIDE TO SUSTAINABILITY

Natural Step as their organizing structure while others have struggled with The Natural
Step and prefer to use another framing. However, in our view, The Natural Step system
conditions must be embedded in your sustainability framework in some fashion.
Otherwise, you are still only working on being, as McDonough would say, ‘less bad’,
ignoring the undeniable limits of nature.
Many of the existing frameworks for sustainability fall into the category of principles;
guidelines for how to become more sustainable. These include a number that have evolved
out of the United Nations Earth Summits, such as Agenda 21 and the Caux Roundtable
principles for business and government. Others are sector-specific, such as the Tailloires
Declaration for universities and the Equator Principles for financial institutions. While
these are useful, they often sound like motherhood-and-apple-pie platitudes and are
generally toothless if they are not married to The Natural Step in some way. They provide
more specific guidance about the areas to address but suffer from a lack of clear sustainable
end-points.
Then there are a host of different tools. Some, like LEED, are specific to an industry
sector. Some provide methods of analysis, such as life cycle costing and life cycle analysis.
Others are primarily useful for measurement; we put here the Ecological Footprint as well
as the Bellagio Principles. Finally, some provide a process for pursuing sustainability,
usually based on environmental management systems and ISO 14001.
Figure A.1 shows these different levels with a sampling of specific frameworks and
tools listed to the side. In some cases, the level we have assigned to a specific term was
arbitrary. For example, LEED could be considered a sector-specific set of principles, a
measurement system, or a sector-specific set of tools. Below, we provide an analysis of a
larger set of these frameworks and tools that are in common use.

Overarching principles

Framework/Tool Comments
The Three Es: This is based on the United This framework gives no guidance about what
Nations’ work regarding what is needed for to do but can help you organize your thinking.
sustainable development. The Three Es are Social equity is really only a part of the social
usually referred to as Economy, Environment aspect of sustainability; compare this with the
and social Equity. Triple Bottom Line, which has a broader
interpretation of the social element.
The Triple Bottom Line: Sometimes used This framing of the social component allows for
interchangeably with the Three Es but different the inclusion of other social issues such as
in subtle ways. Basically the same framework human health, governance, etc. Business for
as corporate social responsibility: often framed Social Responsibility is probably one of the
as Social, Economic and Environment or as best sources for this approach.
People, Planet and Profits.
Appendix A.qxd 6/10/2009 4:38 PM Page 269

APPENDIX A 269

Overarching principles

Framework/Tool Comments
The Natural Step Framework: This provides a Because the framework is derived from
planning framework in the form of four ‘system fundamental scientific principles, it has more
conditions’ or principles based on science that face validity than some of the other
guide decision-makers of an organization or frameworks. This framework does an excellent
governmental body systematically toward job of describing for a lay audience the
sustainability. For society to be sustainable nature environmental aspect of sustainability but it is
must not be subject to increasing concentrations often criticized for not adequately addressing
of substances from the Earth’s crust; it must not the other two ‘legs’ of sustainability, ie social
be subject to increasing concentrations of human- and economic elements. It can be used as an
made substances; its functions and diversity must overarching framework or the system
not be impoverished (displacement, over- conditions can be nested inside another
harvesting, etc.), and resources must be used framework. The ‘backcasting’ process provides
fairly and efficiently in order to meet basic human a process for using the framework, but this
needs globally. (See The Natural Step, process can be strengthened if it is embedded
www.naturalstep.org, and the Oregon Natural into an environmental management system.
Step Network, www.ortns.org.)
CERES Principles: Created in response to the CERES, and other sets of principles like it, are
Exxon Valdez disaster, CERES offers a code of arguably not sustainability frameworks because
conduct and a credo for organizations to adopt. they don’t overtly recognize the limits of nature.
The principles address issues such as energy
conservation, waste reduction and disposal, and
management commitment, www.ceres.org/.
Conservation Economy: Ecotrust has put Based on the three legs of sustainability. The
together a website that documents best web tool may be useful but it is not clear
practices for social, economic and whether Ecotrust is continuing to support this
environmental practices. They have identified framework after its creator left the organization.
‘patterns’ (eg certification, labelling) that have
application in many situations,
www.conservationeconomy.net.
Natural Capitalism: A book of the same title An awkward blend of an overarching set of
(by Hawken, Lovins and Lovins) lays out a set of principles and a set of tools.
principles for a sustainable economic system.
The main principles involve dramatically
improving the productivity of natural resources,
redesigning production around biological
models (biomimicry), rethinking business as a
service and reinvesting in natural capital.
(See the website for the book which identifies
the principles in detail,
www.naturalcapitalism.org/.)
Appendix A.qxd 6/10/2009 4:38 PM Page 270

270 THE BUSINESS GUIDE TO SUSTAINABILITY

Overarching principles

Framework/Tool Comments
Six Es: Trade unions in Europe are developing This includes more quality of work life issues
a working model that will support companies than other frameworks but suffers from the
and organizations that wish to change their lack of clear end-points.
operations on the basis of the goals set for
Agenda 21. This model is called 6E, which
stands for ecology, emissions, energy, ergonomics,
efficiency and economics. (For more information,
see www.tco-info.com/.)

Industry-specific frameworks

Framework/Tool Comments
Agenda 21: Created at the Rio Earth Summit Talks about what needs to happen but provides
through the UN, this lays out actions needed at a no accountability to make it happen.
national and international level to reach
sustainability.
UN Global Compact: Created by the UN to foster Puts forth ten principles for business in three
corporate citizenship, www.unglobalcompact.org. areas – labour standards, environment and
anti-corruption – in support of the Agenda 21
goals.
Talloires Declaration: A set of principles for Like CERES, provides no clear targets.
colleges and universities. Provides ten principles.
Signed by universities from all over the world.
Created by the University Leaders for a
Sustainable Future.
Equator Principles: Similar to Talloires but for Like CERES, provides no clear targets.
financial institutions.
Leadership for Energy and Environmental Used in the US and a number of other
Design (LEED): Provides a scoring system for countries, LEED does not define a fully
evaluating the sustainability of buildings. sustainable building but it is the intent of the
Certification is possible. See the World Green US Green Building Council to slowly raise the
Building Council (www.worldgbc.org) or the US bar as practices and technologies improve.
Green Building Council (www.usgbc.org).
Environmental Management System/ISO 14001: Can provide a process for managing your
International guidelines for environmental sustainability effort but by itself does not
management systems and their certification. provide sustainability targets. Can easily be
Most often used by manufacturing and, to a dovetailed with other frameworks.
lesser extent, government.
Appendix A.qxd 6/10/2009 4:38 PM Page 271

APPENDIX A 271

Industry-specific frameworks

Framework/Tool Comments
Smart Growth/New Urbanism: Provides guidelines Provides important guidance for the
for land use planning. development of liveable communities.
Hannover Principles: Developed by William The nine principles focus on the design of
McDonough Architects for EXPO 2000, held in ‘green’ buildings, or the ‘built environment’ and
Hannover, Germany. (For a complete listing of stress the interdependent relationship human
the principles, see www.virginia.edu/~arch/ society has with nature.
pub/hannover_list.html.)
Biomimicry: Using nature as inspiration for human Co-opted by Natural Capitalism as one of their
designs. (See the book by the same title by principles, this is also a practice unto itself.
Janine Benyus.) Most useful for research and
development.
Zero Waste: One approach to sustainability is to Can seem more tangible than some of the other
eliminate all forms of waste, turning our linear frameworks but people often interpret it as only
economy into a cyclical one, like nature’s, where dealing with solid waste.
waste from one process becomes input to
another. The Zero Waste Alliance has
assessments and services to help you implement
this approach. (See www.zerowaste.org or
the GrassRoots Recycling Network at
www.grrn.org.)
Industrial ecology: Designing manufacturing In Europe the focus has been on co-locating
systems so that the waste of one process is facilities (sometimes called eco-industrial
input to another. parks). This has been less successful in the
US. This concept pre-dates but is related to
Product Stewardship.
Green chemistry: Designing chemical An emerging practice with a lot of promise
processes to eliminate hazardous by-products for product development.
and improve the efficiency of the processes
themselves.
Product stewardship, Extended producer While many efforts here are end-of-life
responsibility, Extended product responsibility (ie taking back products at the end of their
(EPR): These three terms are roughly synonymous useful life), they necessarily deal with the
with subtle distinctions about who should bear entire life cycle.
responsibility. Preferred terms vary by country.
The concept is to make manufacturers
responsible for their products for their entire life
cycle, including end of life.
Appendix A.qxd 6/10/2009 4:38 PM Page 272

272 THE BUSINESS GUIDE TO SUSTAINABILITY

Measurement-related tools

Frameworks/Tools Comments
Global Reporting Initiative: Standards for Created by CERES. It is intended to provide
sustainability reports, www.globalreporting.org. consistency across organizations but to date
some organizations using it are finding it
difficult to implement.
Bellagio Principles: Provide criteria or guidelines Useful when creating metrics.
for the selection of metrics.
Genuine Progress Indicator: Gross National Useful for economists.
Product adjusted so that spending on ‘bad
things’ like prisons and environmental
clean-up are deducted.
Greenhouse Gas Protocol: A standardized Important to follow if you plan to trade
method of reporting climate impacts. carbon credits or make public claims about
reductions in greenhouse gases.
Life cycle assessment: A method of examining Can be overwhelming to do a thorough job.
the impacts of a product or decision over its
entire life cycle (from raw materials and
manufacture to transportation, use and disposal).
Life cycle costing: A method of examining the This is a smart financial practice that may
costs of financial decisions (eg construction of already be standard practice in your
buildings) over their lifetime (versus first cost). organization.
Ecological Footprint: If you put a bubble over your Interesting concept but can be overwhelming
city, it would quickly die because there would be to try to compute.
no place to get raw materials or dispose of
wastes. So the ecological footprint of our cities
is much bigger than the area within the city limits.
The Ecological Footprint approach shows you
how to estimate the land needed to sustain your
way of life. For example, the average American
needs 30 acres, the average Italian less than
half that. (For more information, see Wackernagel,
Mathis and William Rees (1996) Our Ecological
Footprint: Reducing Human Impact on the Earth.
BC, Canada: New Society Publishers or go to
www.rprogress.org/progsum/nip/ef/ef_main.html.
To calculate your household footprint, go to
www.rprogress.org/progsum/nip/ef/ef_household_
calculator.html.)
Appendix B.qxd 6/10/2009 4:38 PM Page 273

Appendix B
Certification Schemes

Agriculture: Food and Drug Administration (US, National Organic Program,

www.ams.usda.gov/nop/); Food Alliance (US, www.thefoodalliance.org/); Indocert (India,
and international, indocert.org); Naturland (Germany); Skal EKO-label (international). As
part of its NutriClean® programme, Scientific Certification Systems evaluates and certifies
fresh produce as being ‘pesticide residue free’ based on laboratory limits of detection as
determined by government-accepted limit-of-detection protocols.
Buildings: LEED (Leadership in Energy and Environmental Design; programmes in many
countries including the US, Canada, Taiwan, Mexico, India and Brazil. See
www.worldgbc.org, www.usgbc.org.); BREEAM (BRE Environmental Assessment
Method) in the UK.
Consumer products: Green Seal (US, www.greenseal.org); Environmental Choice
(Canada); Nordic Swan (northern Europe); Ecolabel (Europe); Eco Mark (Japan); Blue
Angel (Germany); Energy Star (US, www.energystar.gov/).
Fair trade: Transfair (US and Canada).
Fish: Marine Stewardship Council (international, www.msc.org/).
Hotels: Green Seal (US, www.greenseal.org).
Pest management: Mothers and Others (US); Scientific Certification Systems (Nutriclean,
international); Nature Conservancy (international); Rainforest Alliance (international).
Manufacturing and management systems: ISO 9000 (quality); ISO 14001
(environmental management systems (international, www.iso.org); Scientific Certification
Systems (international, www.scscertified.com).
Wood products: Forest Stewardship Council (international, www.fsc.org); Sustainable
Forest Initiative (US, www.aboutsfi.org); Smart Wood and Eco-OK programmes of the
Rainforest Alliance (international).
Eco-labels: For information about eco-labels used in the United States, go to
www.ecolabels.com.
Appendix B.qxd 6/10/2009 4:38 PM Page 274
Notes.qxd 6/10/2009 4:39 PM Page 275

Notes

Chapter 1 – Sustainability as a strategic issue

1 www.toyota.eu/04_environment/08_sustainability_report/index.aspx, accessed 8 May 2009.
2 Blue, L. (2007) ‘Cash Cow’, Time Magazine, 12 December, www.time.com/time/magazine/
article/0,9171,1693774,00.html, accessed 8 May 2009.
3 Pernick, R. and Wilder, C. (2007) The Clean Tech Revolution: The Next Big Growth and
Investment Opportunity, New York: Harper-Collins, pp261–262.
4 www.sustainablelifemedia.com/content/story/climate/execs_expect_climate_regulation_
within_five_years, accessed 8 May 2009.
5 Hammond, A. and Prahalad, C. K. (2004) ‘Selling to the Poor’, Foreign Policy, May/June,
http://pubs.wri.org/sellingtopoor-pub-3990.html, accessed December 2005.
6 Mattioli, D. (2007) ‘How Going Green Draws Talent, Cuts Costs’, Wall Street Journal, 13
November, pB10. http://online.wsj.com/article/SB119492843191791132.html, accessed 8
May 2009.
7 AtKisson, A. (1999) Believing Cassandra: An Optimist Looks at a Pessimist’s World, White River
Junction, VT: Chelsea Green Publishing, p24.
8 Baue, W. (2006) ‘Some Applaud Rise in Sustainability Reporting, Others Say it Masks
Corporate Un-Sustainability’, 11 July, www.socialfunds.com/news/print.cgi?sfArticleId=2054,
accessed 8 May 2009.
9 Brewster, K. (2008) ‘Climate Change Forces Car Manufacturing Rethink’, ABC Victoria, 18
January, www.abc.net.au/news/stories/2008/01/18/2141215.htm?site=victoria, accessed 8 May
2009.
10 Environmentalist Adam Werbach once called Wal-Mart a ‘virus’. Now he works for them. Turner,
C. (2008) ‘If You Can’t Beat ’Em ...’, GlobeandMail.com, 15 March, www.theglobeandmail.com/
servlet/story/LAC.20080315.TURNER15//TPStory/Environment, accessed 8 May 2009.
11 ‘The Millennium Poll on Corporate Social Responsibility’, executive briefing by Environics
International and Prince of Wales Business Leaders Forum and the Conference Board (1999),
www.environicsinternational.com/news_archives/MPExecBrief.pdf, accessed 2005.
12 Friedman, T. (2002) Longitudes and Attitudes: Exploring the World After September 11, New York:
Farrar Straus Giroux.
13 Auster, B. B. (1998) ‘Enviro-Intelligence: The CIA Goes Green’, US News & World Report,
Vol 124, No 10, 16 March, p34.
Notes.qxd 6/10/2009 4:39 PM Page 276

276 THE BUSINESS GUIDE TO SUSTAINABILITY

14 For more on this topic, see Heinberg, R. (2003) The Party’s Over, New Society Publishers;
Appenzeller, T. (2004) ‘The End of Cheap Oil’, National Geographic, June, http://ngm.national
geographic.com/ngm/0406/feature5/, accessed 8 May 2009; or google ‘Hubbert’s Curve’.
15 Reuters (2007) ‘$1 Trillion Green Market Seen by 2030’, Environmental News Network, 19
October, www.enn.com/business/article/23958, accessed 8 May 2009.
16 DesignTex data from the BuildingGreen website, www.buildinggreen.com/auth/article.
cfm?fileName=040607a.xml, accessed November 2005.
17 Carey, J. (2004) ‘Global Warming: Why Business Is Taking it so Seriously’, BusinessWeek, 16
August, p62.
18 Nattrass, B. and Altomare, M. (1999) The Natural Step for Business, Gabriola Island, BC: New
Society Publishers, pp87–88.
19 www.mtn.org/iasa/tgmaxneef.html, accessed October 2005.

Chapter 3 – Services
1 Crowther, Y. (2004) ‘Coffee Talk: Supplier Guidelines at Starbucks’, Sustainability RADAR,
April/May, www.greenbiz.com/news/reviews_third.cfm?NewsID=26691, accessed 8 May 2009.
2 Ashforth Pacific Case Study from the Oregon Natural Step Network Tool Kit, p2.
3 Norm Thompson – An Oregon Natural Step Network Case Study, www.ortns.org.
4 Mellon, M. and Fondriest S. (2001) ‘Hogging It!’, Nucleus, Spring, 1 March, pp1–3,
www.ucsusa.org/food/0antibiotic.html.
5 Norm Thompson – An Oregon Natural Step Network Case Study, www.ortns.org.
6 Hart, S. L. and Milstein, M. B. (1999) ‘Global Sustainability and Creative Destruction of
Industries’, MIT Sloan Management Review, Fall, Vol 41, No 1, pp23–33.
7 Desmarais, M. (2001) ‘Prahalad says India can Lead by Marketing to the Poor’, IndUS Business
Journal, 1 December, www.indusbusinessjournal.com/news/2001/12/01/Community/Prahalad.
Says.India.Can.Lead.By.Marketing.To.The.Poor-166748.shtml.
8 Anon (2008) ‘IBM, TNT, Chipotle Named 2008 “Green Pioneers”’, Sustainable Life Media, 18
July, www.sustainablelifemedia.com/content/story/strategy/ibm_tnt_chipotle_named_2008_
green_pioneers, accessed 8 May 2009.

Chapter 4 – Sustainability in manufacturing

1 Weise, E. and Szabo, L. (2007) ‘“Everywhere Chemicals” in Plastics Alarm Parents’, USA Today,
30 October, www.usatoday.com/news/health/2007-10-30-plastics-cover_N.htm, accessed 8
May 2009.
2 Paine, L. S. (2003) Value Shift: Why Companies Must Merge Social and Financial Imperatives to
Achieve Superior Performance, New York: McGraw-Hill, p21.
3 www.greenbiz.com/news/news_third.cfm?NewsID=26607, accessed 8 May 2009.
4 Nicholls, M. (November, 2002) ‘Executives Could Lose Climate Change Insurance Coverage’,
www.tufts.edu/as/wright_center/iecws/news/environmental_finance.pdf, accessed 8 May 2009.
Notes.qxd 6/10/2009 4:39 PM Page 277

NOTES 277

5 Asmus, P. (2005) ‘Protecting Brand Value: How (and Why) the World’s Most Valuable Brand is
Building a Corporate Citizenship Pyramid’, Green at Work Magazine, July/August, p12.
6 http://blog.oregonlive.com/business/2008/01/green_colors_new_air_jordan.html, accessed 8
May 2009.
7 Bonda, P. and Sosnowchik, K. (2004) ‘Sustainability from Within’, Green at Work Magazine,
March/April, p24.
8 Wikipedia http://en.wikipedia.org/wiki/Product_Lifecycle_Management, accessed 8 May 2009.
9 Jusko, J. (2008) ‘PLM’s Natural Evolution’, Industry Week, 1 August, www.industryweek.com/
readarticle.aspx?articleid=16812, accessed 8 May 2009.
10 McDonough, W. (April 1999) ‘The Next Industrial Revolution’, www.consciouschoice.com/
1999/cc1204/nextindustrialrev.html, accessed December 2005; McDonough, W. and Braungart, M.
(2001) ‘The Next Industrial Revolution’ (video), Stevenson, MD: Earthome Productions.
11 TRI reports are available from the EPA website; the address for the 2001 report is www.epa.gov/
tri/tridata/tri01/index.htm, accessed 8 May 2009.
12 US EPA, ‘1997 Alternative Synthetic Pathways Award’, www.epa.gov/greenchemistry/aspa97
.html, accessed December 2005.
13 Moran, S. (2008) ‘A Turn to Alternative Chemicals’, The New York Times, 26 March,
www.nytimes.com/2008/03/26/business/businessspecial2/26chemical.html?_r=1&oref=slogin,
accessed 8 May 2009.
14 Romm, J. J. (1999) Cool Companies: How the Best Businesses Boost Profits and Productivity by
Cutting Greenhouse Gas Emissions, Washington, DC: Island Press, p164.
15 Oregon Natural Step Case Study, www.ortns.org.
16 Bayon, Ricardo, Hawn, Amanda and Hamilton, Katherine (2007) Voluntary Carbon Markets:
An International Business Guide to What They Are and How They Work, London: Earthscan, p54.
17 Kopczak, L. R. and Johnson, M. E. (2003) ‘The Supply-Chain Management Effect’, MIT Sloan
Management Review, Spring, Vol 44, No 3, pp27–34.
18 ‘Suppliers’ Perspectives on Greening the Supply Chain’, Business for Social Responsibility,
www.bsr.org.
19 Clifford, M., Tashiro, H. and Natarajan, A. (2003) ‘The Race to Save a Rainforest’,
BusinessWeek, 24 November, pp125–6.
20 Oregon Natural Step Network Case Study under Resources, www.ortns.org.
21 Ayres, R. U. (1989) ‘Industrial Metabolism: Technology and Environment’, in Ausubel, J. and
Sladovich, H. (eds.) Technology and Environment, Washington, DC: National Academy Press.
22 This and other case studies are available at www.zerowaste.org/publications.htm.
23 Wilson, D. (2001) Fateful Harvest: The True Story of a Small Town, a Global Industry, and a Toxic
Secret, New York: Harper Collins.
24 ENDS Europe Daily (2008) ‘Overhaul of EU waste management rules approved’, 17 June,
viewed via World Business Council on Sustainable Development, www.wbcsd.org/plugins/
DocSearch/details.asp?type=DocDet&ObjectId=MzA0MTE, accessed 8 May 2009.
25 Hitchcock, D. and Chalfan, L. (2002) Approaching Zero Waste, Portland, OR: AXIS
Performance Advisors, p26.
26 www.nec.co.jp/eco/en/annual2005/02/2-3.html, accessed 9 May 2009.
Notes.qxd 6/10/2009 4:39 PM Page 278

278 THE BUSINESS GUIDE TO SUSTAINABILITY

Chapter 5 – Sustainability in government

1 Sachs, Jeffrey (2008) Common Wealth: Economics for a Crowded Planet, New York, NY: Penguin
Press, p285.
2 Roseland, Mark (1998) Toward Sustainable Communities, Gabriola Island: New Society
Publishers, pp211–212.
3 Kay, J. (1998) Asphalt Nation: How the Automobile Took Over America and How We Can Take It
Back, University of California Press. For a review, go to www.walkbikenashville.org/Documents/
jnreview.pdf, accessed 9 May 2009.
4 Myers, N. and Kent, J. (2001) Perverse Subsidies: How Tax Dollars Can Undercut the Environment
and the Economy, Washington, DC: Island Press.
5 Roseland, Mark (1998) Toward Sustainable Communities, Gabriola Island: New Society
Publishers, p45.
6 GreenBiz.com (2003) ‘Green Building Investments Yield High Returns, says Study’, 28
October, www.greenbiz.com/news/news_third.cfm?NewsID=25830&CFID=1079143&
CFTOKEN=50038365, accessed 9 May 2009.
7 Jones, Carolyn (2007) ‘Berkeley Going Solar – City Pays Up Front, Recoups over 20 year’, San
Francisco Chronicle, 26 October, www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2007/10/26/
MNAIT0DQO.DTL, accessed 9 May 2009.
8 Natural Capitalism Solutions (2007) Climate Protection Manual for Cities, Eldorado Springs,
CO: Natural Capitalism Solutions, p32.
9 Roosevelt, Margo (2007) ‘New Study Says Planning Compact, Mixed-Use Communities
Instead of Suburbs Would Help Save the Planet’, Los Angeles Times, 21 September.
10 Whittington, J. (2004) ‘China Facing Environmental Crisis’, BBC Beijing, 23 September.
11 ‘Creating a Framework for Integrated Resource Management in Heidelberg, Germany’,
www3.iclei.org/localstrategies/summary/Heidelberg.html, accessed 9 May 2009.
12 www.sustainable.doe.gov/freshstart/case/soldiers.htm, accessed December 2005.
13 Brown, L. (2001) Eco-Economy: Building an Economy for the Earth, WW Norton Company,
p195.
14 Roseland, Mark (1998) Toward Sustainable Communities, Gabriola Island: New Society
Publishers, p117.
15 Daily, G. (ed.) (1997) Nature’s Services: Societal Dependence on Natural Ecosystems, Washington,
DC: Island Press.
16 Daily, G. and Ellison, K. (2002) The New Economy of Nature: The Quest to Make Conservation
Profitable, Washington, DC: Island Press, p1.
17 Vincent, Donovan (2007) ‘Soaring Pollution Linked to Cancer and Asthma and Costs City
Billions, Medical Officer Finds’, 3 November, www.thestar.com/News/article/273199, accessed
9 May 2009.
18 International Herald Tribune – Asia-Pacific Edition (23 February 2007) http://www.iht.com/
articles/2007/02/23/news/bangkok.php, accessed 24 February 2007.
19 Special Report (2003) ‘Asia’s Future’, Business Week, 27 October, p58.
20 Heal, G. (2000) Nature and the Marketplace: Capturing the Value of Ecosystem Services,
Washington, DC: Island Press, pp156–157.
Notes.qxd 6/10/2009 4:39 PM Page 279

NOTES 279

21 ‘Economic Incentives and P2’, Pollution Prevention Northwest, Seattle, WA: The Pollution
Prevention Resource Center, Fall 2004, www.pprc.org/pubs/newsletter/index.cfm, accessed 9
May 2009.
22 Bennhold, Katrin (2007) ‘France and Britain Ready to Lay Out Eco-Friendly Tax Cuts’,
International Herald Tribune, 1 November, www.iht.com/articles/2007/11/01/business/
france.php, accessed 2 November 2007.
23 Peet, J. (2003) ‘Priceless: A Survey of Water’, The Economist, 19 July, www.economist.com/
surveys/showsurvey.cfm?issue=20030719, accessed 9 May 2009.
24 Heal, G. (2000) Nature and the Marketplace: Capturing the Value of Ecosystem Services,
Washington, DC: Island Press.
25 Daly, H. E. (1996) Beyond Growth: The Economics of Sustainable Development, Boston: Beacon
Press.
26 Heal, G. (2000) Nature and the Marketplace: Capturing the Value of Ecosystem Services,
Washington, DC: Island Press, p188.
27 ‘Getting More Power Out of Using Less’ (23 October 2007) http://marketplace.publicradio.org/
display/web/2007/10/23/power_conservation/, accessed 9 May 2009.
28 Jones, V. and Wyskida, B. (2007) ‘Green-Collar Jobs for Urban America’, Yes Magazine, 22
November, www.yesmagazine.org/article.asp?ID=1551, accessed 9 May 2009.
29 Eisler, Riane (2007) The Real Wealth of Nations: Creating Caring Economics, San Francisco:
Berrett-Koehler, p57.
30 Eisler, Riane (2007) The Real Wealth of Nations: Creating Caring Economics, San Francisco:
Berrett-Koehler pp65–66.
31 Harrabin, R. (2008) ‘Living in a World Without Waste: The Japanese Island where the Rubbish
Collectors Never Come’, BBC News, 11 July, http://news.bbc.co.uk/go/pr/fr/-/2/hi/science/
nature/7502071.stm, accessed 9 May 2009.
32 George, C. (interviewer) (2005) ‘Civic Engagement – With Robert Putnam and Steven
Johnson’, Oregon Public Broadcasting – Oregon Territory, 30 September.
33 Eisenberg, E. (1998) The Ecology of Eden, New York: Alfred A. Knopf, p356.
34 Meyer, A. (2004) ‘Local Responses to a Global Problem’, Catalyst, Spring, p20.
35 Alliance for Global Sustainability, www.esc.u-tokyo.ac.jp/ags/outline-e.htm, accessed December
2005.
36 Gates, J. (1998) The Ownership Solution: Toward a Shared Capitalism for the 21st Century,
Reading, MA: Addison-Wesley.
37 http://216.239.53.104/custom?q=cache:cog7q_IhqZoJ:www.calpers-governance.org/
principles/global/globalvoting.pdf+public+employee+retirement+social+responsibility&hl=en&
ie=UTF-8, accessed December 2005.

Chapter 6 – Senior management

1 ‘Leadership, Responsibility and Growth in Uncertain Times’, PricewaterhouseCoopers, www
.pwcglobal.com/gx/eng/ins-sol/survey-rep/ceo6/pwc_6_ceo_survey.pdf, accessed November 2005.
Notes.qxd 6/10/2009 4:39 PM Page 280

280 THE BUSINESS GUIDE TO SUSTAINABILITY

2 Guenster, N., Derwall, J., Bauer, R. and Koedijk, K. (2005) ‘The Economic Value of Corporate
Eco-Efficiency’, 25 July 2005, paper presented to the Academy of Management Conference,
reprint available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=657628.
3 ‘Doing Good: Business and the Sustainability Challenge’, The Economist (Intelligence Unit –
special section), February.
4 www.sustainablelifemedia.com/content/story/strategy/bofa_creates_environmental_
banking_group, accessed 9 May 2009.
5 Sustainable Life Media, www.sustainablelifemedia.com/products/story/mcdonalds_focuses_on_
sustainable_food_sourcing, accessed 9 May 2009.
6 Collins, J. and Porras, J. (1994) Built to Last: Successful Habits of Visionary Companies, New York:
Harper Business.
7 Magretta, J. (1997) ‘Growth Through Global Sustainability: An Interview with Monsanto’s
CEO Robert B. Shapiro’, Harvard Business Review, January, p79, reprint #97110.
8 Hall, J. and Vrendenburg, H. (2003) ‘The Challenges of Innovating for Sustainable
Development’, MIT Sloan Management Review, Fall, Vol 45, No 1, pp61–8.
9 Grow, B., Hamm, S. and Lee, L. (2005), ‘The Debate Over Doing Good’, BusinessWeek, 15
August, p76.
10 Barbaro, M. and Barringer, F. (2005) ‘Wal-Mart to Seek Savings in Energy’, New York Times, 25
October, www.nytimes.com/2005/10/25/business/25walmart.html, accessed 9 May 2009.
11 ‘Wal-Mart to Toughen Overseas Standards’, Forbes, 20 October 2005, www.forbes.com/
associatedpress/feeds/ap/2005/10/20/ap2290130.html, accessed December 2005.
12 Spivak, C. (2007) ‘Investors Take Aim at Plastic Products: Corporations Under Fire From
Within About Chemical Use’, Milwaukee Journal Sentinel, 9 December, www.jsonline.com/
story/index.aspx?id=694805, accessed 11 December 2007.
13 Baue, W. (2006) ‘Some Applaud Rise in Sustainability Reporting, Others Say It Masks
Corporate Un-Sustainability’, 11 July, www.socialfunds.com/news/print.cgi?sfArticleId=2054,
accessed 8 May 2009.
14 Hitchcock, D. (2001) ‘Greening the Supply Chain’, Sustainability Series™, Portland, Oregon:
AXIS Performance Advisors, p15, www.axisperformance.com/publications.html.
15 Esty, Daniel and Winston, Andrew (2006) Green to Gold: How Smart Companies Use Environmental
Strategy to Innovate, Create Value and Build Competitive Advantage, New Haven: Yale Press.
16 Estes, R. (1996) Tyranny of the Bottom Line: Why Corporations Make Good People Do Bad Things,
San Francisco: Berrett-Koehler Publishers, Inc.

Chapter 7 – Facilities
1 Kats, G. (2004) ‘Are Green Buildings Cost-Effective?’ Green at Work Magazine, May/June,
www.greenatworkmag.com/gwsubaccess/04mayjun/ss_green.html, accessed 9 May 2009.
2 Natural Capitalism Solutions (2007) Climate Protection Manual for Cities, Eldorado Springs,
CO: Natural Capitalism Solutions, p33.
3 Stiffler, L. (2007) ‘If House Has to Go, At Least It Can Go “Green” – Piece by Piece’, Seattle PI,
http://seattlepi.nwsource.com/local/328290_decon20.html?source=mypi, accessed 9 May 2009.
4 Garris, L. (2004) ‘The Deliberation on Daylighting: What You Really Need to Know to Make
an Informed Decision’, Buildings, April, www.buildings.com/Articles/detail.asp?ArticleID=1827.
Notes.qxd 6/10/2009 4:39 PM Page 281

NOTES 281

5 Van der Ryn, S. and Cowan, S. (1996) Ecological Design, Washington, DC: Island Press.
6 ‘Building Commissioning’ (brochure), Oregon Office of Energy, November 1998.

Chapter 8 – Human resources

1 Mattioli, D. (2007) ‘How Going Green Draws Talent, Cuts Costs’, Wall Street Journal, 13
November, pB10. http://online.wsj.com/article/SB119492843191791132.html, accessed 8
May 2009.
2 ‘Is the “Green” Movement in the Workplace Fact or Fiction?’ 17 April 2008, www.adeccousa
. c o m / A b o u t Us / Pa g e s / Ne w s C o n t e n t . a s p x ? w e b i d = a 9 b 9 d a c 5 - 6 c 0 8 - 4 f a 9 - 9 e 0 1 -
2724e59af745&pageid=84dc9ddc-3051-4db4-8870-3130e5027e71&redirectpage=%2F
AboutUs%2FPages%2FNewsContent.aspx%3Fwebid%3Da9b9dac5-6c08-4fa9-9e01-2724e59
af745%26pageid%3D84dc9ddc-3051-4db4-8870-3130e5027e71, accessed 9 May 2009.
3 Sustainable Life Media (2008) ‘Green-Building Retrofits Make for Happier Workers, Report
Finds’, 15 May, www.sustainablelifemedia.com/content/story/strategy/green_building_
retrofits_make_for_happier_workers, accessed 9 May 2009
4 Schein, E. (2004) Leadership and Organizational Culture: A Dynamic View, San Francisco: Jossey Bass.
5 Diamond, J. (2005) Collapse: How Societies Choose to Fail or Succeed, New York: Viking, p450.
6 Romm, J. J. (1999) Cool Companies: How the Best Businesses Boost Profits and Productivity by
Cutting Greenhouse Gases, Washington, DC: Island Press, pp164–165.
7 Way, M. and Rendlen, B. (2007) ‘Walking the Talk at Swiss Re’, Harvard Business Review,
October, Vol 85, No 10, pp42–42.
8 Eisler, Riane (2007) The Real Wealth of Nations: Creating Caring Economics, San Francisco:
Berrett-Koehler, pp47–8.

Chapter 9 – Purchasing
1 Ayres, R. U. (1989) ‘Industrial Metabolism: Technology and Environment’ in Ausubel, J. and
Sladovich, H. (eds.)Technology and Environment, Washington, DC: National Academy Press.
2 Christopher, M. and Peck, H. (2004) ‘Supply Chains Are Becoming More Vulnerable to
External Disruptions’, Logistics Europe, February, www.som.cranfield.ac.uk/som/dinamic-
content/ research/lscm/downloads/LogisticsEurope.pdf, accessed 9 May 2009.
3 US EPA (2002) ‘State and Local Government Pioneers’, www.epa.gov/oppt/epp, accessed 9 May
2009.
4 San Francisco Chronicle, 18 June 2005, http://sfgate.com/cgi-bin/article.cgi?file=/c/a/2005/06/
18/BAGAFDAM801.DTL, accessed 9 May 2009.
5 Adapted from Hitchcock, D. (2001) ‘Greening the Supply Chain’, Sustainability Series™,
Portland, Oregon: AXIS Performance Advisors, www.axisperformance.com/publications.html.
6 Hitchcock, D. (2001) ‘Greening the Supply Chain’, Sustainability Series™, Portland, Oregon:
AXIS Performance Advisors, www.axisperformance.com/publications.html.
7 US EPA (2002) ‘State and Local Government Pioneers’, www.epa.gov/oppt/epp.
8 NEEA (1998) ‘New Washer Propels Past Market Barriers’, December, http://www.nwenergy
.org/publications/archives/report/98_dec/rp_9812_3.html/?searchterm=gathered.
Notes.qxd 6/10/2009 4:39 PM Page 282

282 THE BUSINESS GUIDE TO SUSTAINABILITY

9 Laughlin, J. and Fleming, R. (2003) ‘Opportunity Grows for Organic Cotton Market’, LOHAS
Journal, October, www.organicconsumers.org/clothes/cotton101503.cfm, accessed 9 May 2009.
10 Hitchcock, D. (2001) ‘Greening the Supply Chain’, Sustainability Series™, Portland, Oregon:
AXIS Performance Advisors, www.axisperformance.com/publications.html.

Chapter 10 – Information technology

1 The Climate Group (2008) SMART 2020: Enabling the Low Carbon Economy in the Information
Age, A report by The Climate Group on behalf of the Global eSustainability Initiative (GeSI).
2 Brigden, K., Labunska, I., Santillo, D. and Walters, A. (2007) Cutting Edge Contamination: A
Study of Environmental Pollution During the Manufacture of Electronic Products, Amsterdam:
Greenpeace International.
3 Carroll, Chris (2008) ‘High-Tech Trash’, National Geographic, July, http://ngm.national
geographic.com/2008/01/high-tech-trash/carroll-text/2, accessed 11 May 2009.
4 International Food Policy Research Institute (2000) ‘Bridging the Digital Divide’, News & Views,
September, www.ifpri.org/2020/NEWSLET/nv_0900/nv0900a.htm, accessed 11 May 2009.
5 Greengard, Samuel (2007) ‘Cool, Green Glow: States Warm to IT Initiatives that both Improve
Operations and Help Meet Energy Efficiency Mandates’, Statetechmag, 23 July,
http://statetechmag.com/index2.php?option=com.
6 Green Electronics Council (2007) ‘Environmental Benefits of 2007 EPEAT Purchasing: Green
IT Procurement System’s Success Drives Major Environmental Benefits’, www.epeat.net,
accessed 11 May 2009.
7 Washburn, Doug (2008) ‘Afraid of the Dark? Start by Turning “IT” Off with Targeted User
Groups’, Sustainable Life Media, 11 June, www.sustainablelifemedia.com/files/webform/
documents/greenIT06112008.htm, accessed 11 May 2009.
8 Bill Boland, personal correspondence with authors, 14 October 2008.
9 King, Rachel (2007) ‘Averting the IT Crunch’, BusinessWeek, May, www.businessweek.com/
technology/content/may2007/tc20070514_003603_page_3.htm, accessed 11 May 2009.
10 King, Rachel (2007) ‘Averting the IT Crunch’, BusinessWeek, May, www.businessweek.com/
technology/content/may2007/tc20070514_003603_page_3.htm, accessed 11 May 2009.
11 King, Rachel (2007) ‘Averting the IT Crunch’, BusinessWeek, May, www.businessweek.com/
technology/content/may2007/tc20070514_003603_page_3.htm, accessed 11 May 2009.
12 Connor, Deni (2007) ‘Five easy, low-cost ways to save power in your data center’, IT World,
11 October, http://itworld.com/071011saveenergy.
13 King, Rachel (2007) ‘Averting the IT Crunch’, BusinessWeek, May, www.businessweek.com/
technology/content/may2007/tc20070514_003603_page_3.htm, accessed 11 May 2009.
14 Connor, Deni (2007) ‘Five easy, low-cost ways to save power in your data center’, IT World,
11 October, http://itworld.com/071011saveenergy.
15 Hoover, J. N. (2008) ‘McKinsey: Measure Data Center Efficiency Like Car Fuel Efficiency’,
InformationWeek, 30 April, www.informationweek.com/news/hardware/data_centers/show
Article.jhtml?articleID=207403651, accessed 11 May 2009.
16 King, Rachel (2007) ‘Averting the IT Crunch’, BusinessWeek, May, www.businessweek.com/
technology/content/may2007/tc20070514_003603_page_3.htm, accessed 11 May 2009.
Notes.qxd 6/10/2009 4:39 PM Page 283

NOTES 283

17 Hill, David (2007) ‘Storage Tip: Increase Energy Efficiency of Stored Data’, Statetechmag, 9
April, www.storage.itworld.com.
18 Crane, Matt (2008) ‘IT leaders share green-tech predictions for 2008’, 2 January, www.techworld
.com/green-it/features/index.cfm?featureid=3909.
19 Climate Savers Smart Computing, www.climatesaverscomputing.org, accessed 11 May 2009.
20 WebWire (2007) ‘Conferencing Helps Reduce BT’s Carbon Footprint’, WebWire, 22 May,
www.webwire.com/ViewPressRel.asp?aId=37182, accessed 11 May 2009.
21 Sustainable Life Media (2008) ‘Sun’s Open Work Program Saves Energy, Time, and Money’, 17
June, www.sustainablelifemedia.com/content/story/strategy/suns_open_work_program_saves_
energy_time_and_money, accessed 11 May 2009.
22 Friend, Gil (2008) ‘IT & Sustainability: The Good News’, The Sustainable Enterprise Report,
Vancouver, BC: Kyoto Planet Publishing.
23 Crane, Matt (2008) ‘IT leaders share green-tech predictions for 2008’, 2 January, www.techworld
.com/green-it/features/index.cfm?featureid=3909.
24 Walsh, Katherine (2007) ‘Environmental Consciousness: Can IT Make your Company Green?’,
CIO Magazine, May; Walsh, Katherine (2007) ‘Five Ways to Find Data Center Energy Savings’,
CIO Magazine, 6 August, www.cio.com/article/128201/Five_Ways_to_Find_Data_Center
_Energy_Savings, accessed 11 May 2009.
25 Rooney, Brian (2007) ‘UPS figures out the “right way” to save money, time and gas’, ABC News,
4 April, http://abcnews.go.com/wnt/story?id=3005890.
26 Sustainable Life Media (2008) ‘Enterprise Rent-A-Car Touts Green Benefits of IT’, 1 July,
www.sustainablelifemedia.com/content/story/climate/enterprise_touts_green_benefits_of_it_
upgrade, accessed 11 May 2009.
27 Walsh, Katherine (2007) ‘Environmental Consciousness: Can IT Make your Company Green?’,
CIO Magazine, May; Walsh, Katherine (2007) ‘Five Ways to Find Data Center Energy Savings’,
CIO Magazine, 6 August, www.cio.com/article/128201/Five_Ways_to_Find_Data_Center_
Energy_Savings, accessed 11 May 2009.

Chapter 11 – Environmental affairs

1 Speth, J. G. (2004) Red Sky at Morning: America and the Crisis on the Global Environment, New
Haven, CT: Yale University Press, p190.
2 US EPA ‘1997 Alternative Synthetic Pathways Award’, www.epa.gov/greenchemistry/aspa97
.html, accessed December 2005.

Chapter 12 – Marketing
1 Asmus, P. (2005) ‘Protecting Brand Value: How (and Why) the World’s Most Valuable Brand is
Building a Corporate Citizenship Pyramid’, Green at Work Magazine, July/August, p16.
2 Hitchcock, D. (2004) ‘Gerding/Edlen Development, LLC: A Natural Step Case Study’, January,
www.thenaturalstep.org/en/usa/gerdingedlen-development-company-llc-portland-oregon-usa,
accessed 10 May 2009.
Notes.qxd 6/10/2009 4:39 PM Page 284

284 THE BUSINESS GUIDE TO SUSTAINABILITY

3 Speer, T. L. (1997) ‘Growing in the Green Market – Marketing Environmentally Friendly

Products’, American Demographics, August, www.findarticles.com/p/articles/mi_m4021/
is_n8_v19/ai_19657797, accessed 10 May 2009.
4 Sustainable Life Media (2008), ‘Consumers to Marketers: Don’t Call Us “Green”’,
www.sustainablelifemedia.com/content/story/brands/dont_call_conscious_consumers_green,
accessed 10 May 2009.
5 ‘IKEA: A Natural Step Case Study’, www.naturalstep.org/en/usa/ikea, accessed 10 May 2009.
6 ‘The Good Consumer: Buying Ethical Is Not as Straightforward as It Seems’, The Economist, 17
January 2008, www.economist.com/surveys/displaystory.cfm?story_id=10491144, accessed 10
May 2009.
7 ‘Green Marketing’, www.greenmarketing.com/Green_Marketing_Book/Chapter02.html,
accessed 10 May 2009.
8 Willard, B. (2005) ‘Five Signs that Sustainability’s Tipping Point Is Close’, Green at Work
Magazine, July/August, p32.
9 Rubin, H. (2001) ‘The Perfect Vision of Dr V’, FastCompany, February, p146.
10 Hollender, J. (2004) What Matters Most: How a Small Group of Pioneers Is Teaching Social
Responsibility to Big Business, and Why Big Business Is Listening, New York: Basic Books.
11 Pernick, R. and Wilder, C. (2007) The Clean Tech Revolution: The Next Big Growth and
Investment Opportunity, New York: Harper-Collins, p72.
12 Artz, N. and Cooke, P. (2005), ‘Coming Full Circle: Internal Marketers Learn Commitment
Techniques from Social Marketers’, Competition Forum, Vol 3, No 2, pp414–418.
13 Rebernek, K. (2007) ‘Secrets of High-Impact Sustainability Reporting’, www.sustainablelifemedia
.com/files/webform/documents/ecoadvantagestrategies11052007.htm, accessed 10 May 2009.

Chapter 13 – Accounting and Finance

1 Baue, W. (2005) ‘KPMG Finds More than Half of Fortune 250 Issuing Standalone
Sustainability Reports, by William Baue’, Sustainability Investment News, 22 June,
www.socialfunds.com/news/article.cgi/1742.html, accessed 10 May 2009.
2 Kennedy, R. F., Jr (2004) Crimes against Nature, New York: Harper Collins, p190.
3 Schapiro, M. (2007) Exposed: The Toxic Chemistry of Everyday Products. Who’s at Risk and What’s
at Stake for American Power, White River, VT: Chelsea Green, pp111–112.
4 Hitchcock, D. (2005) ‘The Collins Companies: Having your Forests and Cutting Them Too’,
an unpublished case study written for Oregon Economic and Community Development
Department, 2005.
5 Heal, G. M. (1996) ‘Interpreting Sustainability’, Working Paper, Columbia Business School, pp7–8.
6 Greiner, T. (2001) ‘Indicators of Sustainable Production: A Case Study on Measuring Sustainability
at Stonyfield Farms’, Ann Arbor, MI: Lowell Center for Sustainable Production, Spring.
7 Brachfeld, D. et al (2001) ‘Life Cycle Assessment of the Stonyfield Product Delivery System’,
Ann Arbor, MI: University of Michigan, 5 April.
8 Bare, Jane and Thomas Gloria (2006) ‘Critical Analysis of the Mathematical Relationships and
Comprehensiveness of Life Cycle Impact Assessment Approaches’, US Environmental
Protection Agency, National Risk Management Research Laboratory.
Index.qxd 6/10/2009 4:38 PM Page 285

Index

ABC see activity-based costing Bellagio Principles 272

ABC Home Furnishings 233 Ben & Jerry’s 192
Abottsford, British Columbia 99 Better by Design 69
AccountAbility 1000 247 BHC company 66, 222
accounting and finance Bhopal, Union Carbide disaster 13
decision-making tools 256–263 biomimicry 68–69, 271
metrics frameworks 251–255 black lists, chemicals 64–65, 183
sustainability issues 245–250 Body Shop 134, 149
sustainability strategies 250–263 Bon Appétit 46–47
accounting system, problems of 249–250 BP 7, 56, 70–71, 228, 240
Accounts Modernisation Directive 247 brainstorming 260
activity-based costing (ABC) 256–257 break room, offices 45–46
AES Corporation 134 British Standards organization 247
Agenda 21 270 BT (British Telecom) 211
American Express 238 bubble diagram of sustainability 20–22
Amul, India 4–5 budgeting 145
Anderson, Ray 25, 133 buildings
Anderson, Susan 101 commissioning 159–160
Aravind Eye Clinic, India 4, 50, 135, 234 construction waste 159
Ashforth Pacific 43, 48 costs of 257–258
aspects and impacts analysis 220 deconstruction and recycling 155
Aspen Skiing Company 17 energy management 160
Atlanta, Georgia 96–97 green practices 91, 155–159
audit lighting 156–157
purchasing 161, 193–195 materials 157–158
waste 193–195 mechanical systems 158–159
Austin Energy 235 site selection 157
automobile industry, transformation 12 sustainability issues 153–154
Aveda 60–61 waste management 161–162
award programmes 32, 116 Burgerville 47
AXIS Performance Advisors 45, 113 business systems, alignment 144–145

backcasting 136–137 C&A Floorcoverings 17, 55–56

Bag, Borrow and Steal 228 Carbon Disclosure Project 146
Bangkok 98 carbon trading 246
Bank of America 129 cause-related marketing 238
Barclays 48 CERES see Coalition for Environmentally Responsible
Barr Casting 7 Economies
Basic Browns, market segment 235 certification schemes 32, 184, 239, 273
Index.qxd 6/10/2009 4:38 PM Page 286

286 THE BUSINESS GUIDE TO SUSTAINABILITY

CH2M Hill 219, 261 preserves 102

change agents public transport 5–6, 96, 119
role of 25–28 urban planning 94–95
strategies 28–33 customers, relations with 57–58, 230–231, 233
Changemakers Competition Award programme 50
checklists, for sustainable choices 190–191 Daly, Herman 105–106
chemical management systems 220–221 data centres, energy use 207–209
chemicals daylighting 156–157
green chemistry 65–66, 222, 271 decision-making tools 260–263
grey lists and black lists 64–65, 183 deconstruction, green buildings 155
inventories 162–163, 220–221 dematerialization of organizational operations
substitution 221–222 209–212
China demographics, marketing 231, 233–234
environmental damage 9, 58, 83 Denmark 93, 114, 157
industrial ecology 93 Deschutes Brewery 158
pollution 16, 98 design for environment (DfE) 59–61
Chiquita Banana 148 DesignTex 17, 65
Cisco 212 digital divide 205
Clark County, Washington 176 discounting 249
cleaning services 162–163, 187 discussion groups 29
clean-tech 10, 17, 55 Doubletree Hotel, Oregon 47
climate change, insurance industry impacts 40, Dow 70, 175, 199, 213
48–49, 58 DuPont 17–18, 66, 68, 103
Coalition for Environmentally Responsible Economies
(CERES) 138, 246, 269 Eastgate complex, Zimbabwe 158
Coates Kokes 229 Ecobalance 258
Coca-Cola 58, 135, 228 ecological footprint 99, 272
Collins Companies 75, 139, 142–143, 159, 248 economy, healthy 19
commons, protecting 86, 97–99 education 118
community, as part of whole system 92–93 EH&S see environment, health and safety
community-based social marketing 236–238 Electronic Products Environmental Assessment Tool
commuting 163–164, 176–177 (EPEAT) 78, 205–206
computers emerging opportunities, service organizations 41–42,
energy consumption 206–209 49–50
environmental impacts 204 employees
Congo, coltan mining 16 attracting and retaining 5
Conservation Economy 269 benefits to 179
contracts 187–188 influencing behaviour of 173–178
cooling systems, IT equipment 207–208 endangered species 100
corporate responsibility report 245 energy consumption, information technology 204,
costs 206–209
activity-based costing (ABC) 256–257 energy efficiency
externalities 246, 262–263 building design 154
life cycle costing (LCC) 62–64, 192–193, building operation 160
256–258 government agencies 89–90
sustainable products 199, 234 manufacturing sector 69–71
Curitiba, Brazil monitoring 212–213
community responsibility 110–111 service organizations 42–43
Index.qxd 6/10/2009 4:38 PM Page 287

INDEX 287

energy savings 56 funding sources, government agencies 92

energy supply future, government role 87–88, 112–120
green 190
problems 7, 16 Gates, Jeff 119–120
Enterprise 213 General Electric 7
entrepreneurship, social 134–136 General Motors 12, 73, 229
environment genetically modified organisms 130
design for environment (DfE) 59–61 Genuine Progress Indicator 272
global issues 15 Geopolity scenario 133
healthy 20 Gerding/Edlen 5, 47–48, 71, 228–229
environmental impacts, IT equipment 204 Germany, eco-budgeting 93
environmentally preferable purchasing (EPP) policies Global Action Plan 29
185–186 Global Citizenship 360 (GC360) 247
environmental management systems 145, 219–220, Global Reporting Initiative 147, 246–247, 272
252–253 goals, creation of 115–116
environmental performance 247–248 Golden Carrot programme 115, 240–241
environment, health and safety (EH&S) government agencies
sustainability issues 217–219 future policies 87–88, 112–120
sustainability strategies 219–223 infrastructure and security provision 85–86,
Epson 56, 76, 161 93–97
Equator Principles 270 level playing field 86, 104–109
Ericsson 184 protecting the commons 86, 97–99
European Academy of Business in Society 247 protecting the needy 86–87, 109–111
European Federation of Accountants (FEE) 247 spending revenue wisely 85, 89–93
European Union (EU) sustainability issues 84–88
government role 83–84 sustainability role 83–84
producer responsibility 77–78 sustainability strategies 89–121
regulations 57, 103 Grassroots Recycling Network 76, 90
extended producer responsibility (EPR) Greenbacks, market segment 233
76–79, 271 green building practices 91, 155–159
externalities 246, 262–263 green chemistry 65–66, 222, 271
Exxon Valdez 7, 13 Green Electronics Council 78, 205–206
greenhouse gases 69–71, 100, 117, 294
facilities managers Greenhouse Gas Protocol 248, 272
cleaning and landscaping services 162–163 green marketing 230–231
efficient building operation 159–160 Greenpeace 8, 57
high-performance building design 155–159 green power 190
sustainability issues 153–154 Green Seal 73
sustainability strategies 154–164 green taxes 100, 105
transportation management 163–164 green teams 30
waste management 161–162 greenwashing 8, 229
finance see accounting and finance grey lists, chemicals 64–65
first-mover advantage 228 gross domestic product (GDP) 105–106
Food Alliance 73 Grousers, market segment 233
Forest Stewardship Council 32, 41, 74, 231
Fort Lewis Army Base, Washington State 219–220 Hannover Principles 271
Forum for the Future 247 hazardous materials, reducing 56–57
FROG (First Raise Our Growth) scenario 133 health concerns 15–16
Index.qxd 6/10/2009 4:38 PM Page 288

288 THE BUSINESS GUIDE TO SUSTAINABILITY

health and safety see environment, health and safety job descriptions 173–174
(EH&S) Johnson and Johnson 71
heating, ventilation and air conditioning (HVAC) just-in-time manufacturing 184
43, 154, 158
Herman Miller 142, 213 Kalundborg, Denmark 93, 157
Hewlett-Packard 60, 76, 161, 206–207, kenaf 45
234–235, 240 Kyoto Protocol 56, 70–71, 112, 117
Highwater Research 248
Home Depot 41, 74, 134, 228, 231 labelling schemes 117, 239
Honda 132, 229 landfill
Hot Lips Pizza 5, 17, 230 construction waste 155, 159
housing, provision of 111 IT equipment 204
human resources reducing 3–4, 56, 75–76, 161
sustainability issues 167–170 landscaping services 162–163, 187
sustainability strategies 170–179 layout, IT equipment 208
sustainable behaviour models 178–179 LCA see life cycle assessment
hunger, combating 111 LCC see life cycle costing
hybrid cars 229–230 Leadership in Energy and Environmental Design
(LEED) 32, 74, 101, 140, 155, 270
IKEA 233 LEED see Leadership in Energy and Environmental
implementation strategy 140–144, 172–173 Design
incentives 100–101, 115, 190–191, 262–263 legal risks 7–8
India, emerging opportunities 49–50, 234 lending, of products 228
individuals, sustainability support 32 level playing field, government agencies 86, 104–109
industrial ecology 93, 157, 271 Levi Strauss 238
information, visibility 117 life cycle assessment (LCA) 61–62, 192, 196, 256,
information overload 203–204 258–259, 272
information technology life cycle costing (LCC) 62–64, 192–193,
energy consumption 204, 206–209 256–258, 272
equipment purchases 205–206 lighting systems 156–157
sustainability issues 203–205 Liz Claiborne 238
sustainability strategies 205–213 LOHAS (Lifestyle of Health and Sustainability) 234
sustainable product design 213 Luper Brothers 175
infrastructure, government policy 85–86, 93–97
innovations 4, 55–56, 234–235 McDonald’s 5, 40–41, 47, 129, 135
insurance Malcolm Baldrige National Quality Award 116
climate change impacts 40, 48–49, 58 manufacturing sector
cost reduction 5 biomimicry 68–69
Interface 25, 68, 133, 161, 228 converting products to services 66–68
ISO 14000 32, 73, 270 design for environment (DfE) 59–61
IT see information technology energy efficiency 69–71
Ithaca, New York, currency 120 green chemistry 65–66
greenhouse gases 69–71
Japan grey lists and black lists 64–65
energy use 112 life cycle assessment (LCA) 61–62
Environmental Accounting Guidelines 248 life cycle costing (LCC) 62–64
Jazz scenario 133 operations 69–79
Job Alike Groups (JAGs) 175 producer responsibility 76–79
Index.qxd 6/10/2009 4:38 PM Page 289

INDEX 289

product certification 73–75 harassment by 57

product design 59–69 partnerships with 147–148, 189, 199
supply chain management 71–73 stakeholder management 134
sustainability issues 55–58 non-profit organizations 192
sustainability strategies 59–79 Norm Thompson 46, 48, 141, 147–148, 174,
zero waste 75–76 190–191, 199
Marine Stewardship Council 32 Northwest Earth Institute 29
marketing Northwest Energy Efficiency Alliance 195
cause-related marketing 238 Northwest Natural 48
community-based social marketing 236–238
green marketing 230–231 Oakland, California 109–110, 116
influence of 227–230 offices
sustainability issues 230–236 break room 45–46
sustainability strategies 236–241 equipment 43–44, 205–206
markets paper products 44–45, 210–211
closed 8 virtual 211
new 4–5 OKI Semiconductor plant 5
targeted products 195–196 operational planning 145
market segments 233–235 operations, manufacturing sector 69–79
market transformation 240–241 opportunities, equal 118–120
Massachusetts Institute of Technology (MIT) Oregon
118, 134, 235 Department of Administrative Services 112, 142
Mattel 7, 57 Department of Corrections 89–90, 260
Mazda 177 Oregon Museum of Science and Industry (OMSI)
Melbourne Principles 84–85 142–143, 172, 193–194, 252
metrics frameworks 251–255 organizational change 13–14
Millennium Poll 14 organizational operations
mission statement 253–255 dematerialization 209–212
Monsanto 130 efficient 212–213
Montreal Protocol 102–103 negative impacts 246
Munich Re 48, 138 organizations, sustainable 10–12, 20–22
orientation and training 145, 173–174
NACHI Technology 73 ownership 119–120
Natural Capital Center, Portland 155, 159 OZOCar 4
Natural Capitalism 269
natural resources paper products, offices 44–45, 210–211
accounting methods 248 Paper Working Group 47
depletion 12, 14–15 parking spaces 163, 177
long-term impacts 249 pay systems 174–175
Natural Step framework 20, 46, 99, 136–137, 140, peak oil 12
252–253, 267–269 pension funds 120
NEC 79 performance reviews, employees 145, 174–175
needy, protection of 86–87, 109–111 perverse subsidies 107–109
Neil Kelly Company 75 Pfizer 66
NGOs see non-governmental organizations Philips 56–58, 60, 141, 184, 235
Nike 8, 57, 59–60, 184, 195–196, 199, 230 piping 158–159
Nokia 184, 240 Pitney Bowes 149
non-governmental organizations (NGOs) political instability 16
Index.qxd 6/10/2009 4:38 PM Page 290

290 THE BUSINESS GUIDE TO SUSTAINABILITY

pollution projects 193–199

IT equipment 204 sustainability issues 183–184
liability for 6–7 sustainability strategies 185–199
pollution prevention professionals 217–223
polyvinyl chloride (PVC) 8, 64 quality of life, improving 5–6
Portland, Oregon Quantec 144, 164
electricity supply 112–113
green building policy 101 Rainforest Alliance 74
greenhouse gas emissions 117 REACH see Registration, Evaluation and Authorisation
IT equipment 205 of Chemicals (REACH) Directive
liveability 96–97 recycling, building materials 155
Port 222 red tape 90–91
social capital 113–114 Registration, Evaluation and Authorisation of
Portland State University 17, 144, 154, 157, 163, Chemicals (REACH) Directive 57, 103, 229
177, 187–188, 195 regulations 4, 58, 103
Prahalad, C. K. 49–50, 234 Rejuvenation 174
precautionary principle 102–103 request for proposal (RFP) 112–113, 186–187
preserves, creation of 102 research
printing, office equipment 45 incentives 115
Prison Pet Partnership Program 41, 192 sustainable alternatives 196–199
privatization 101–102, 104–105 RE Store 155
producer responsibility 76–79, 271 Restriction of Hazardous Substances (RoHS) Directive
product certification 73–75 57, 103, 205, 229
product design 59–69, 213 retirement benefits 178
product life cycle management 64, 108, 192–193 reward programmes, employees 175–176
product reliability 56 ripple effect, service organizations 39–40, 46–48
products risk reduction 5, 248–249
public image 8, 228 Rohner 65
sustainable alternatives 196–199 RoHS see Restriction of Hazardous Substances (RoHS)
targeted 195–196 Directive
product stewardship 76–79, 108, 271 Roper Green Gauge 233
Progressive Investment Management 43, 45, 177 Roseland, Mark 84
project teams 31
public goods, reclaiming 101–102 SA8000 247
public image San Francisco, purchasing policies 185
negative 7, 46, 57, 229–230 Santa Monica, California 17, 99
positive 5 SAS 178
of product 8, 228 Scandic Hotels 18, 228
public relations scenario planning 133
sustainability issues 230–236 SD Solutions 261
sustainability role 227–230 SEAAR (Social and Ethical Accounting, Auditing and
sustainability strategies 236–241 Reporting) 247
public transport 96–97 security, government role 94
purchasing senior management
audit 161, 193–195 business system alignment 144–145
government policies 112–113 implementation strategy 140–144
IT equipment 205–206 involvement of 170–172
practices 185–193 sustainability issues 127–131
Index.qxd 6/10/2009 4:38 PM Page 291

INDEX 291

sustainability strategies 131–149 risks of 8

terms and frameworks 138–140 as strategic issue 12–18
threats, opportunities and constraints 132–137 threats of not pursuing 6–8
SERA Architects 46, 160, 176 sustainability coordinators 30–33, 142
service contracts 187–188 sustainability frameworks 139–140, 267–272
service organizations sustainability management systems 32, 252–253
emerging opportunities 41–42, 49–50 sustainability ratings 261–262
ripple effect 39–40, 46–48 sustainability reports 147, 239–240, 245
strategic threats 40–41, 48–49 SustainableBusiness.com 50
sustainability issues 39–42 Sustainable Forest Initiative 74
sustainability strategies 42–46 Swiss Re 5, 40, 48–49, 58, 138, 176–177
technology use 43–44 SWOT analysis 132
shares, ownership 119–120
Shell 57 Talloires Declaration 270
ShoreBank Pacific 4, 46, 252 targets 220
sick building syndrome 154 task forces 31, 142–143
Simplot 31 taxation
Six Es 270 government spending 85, 89–93
smart growth 5, 17, 271 green taxes 100, 105
social capital 113–114 technology, office equipment 43–44
social entrepreneurship 134–136 teleconferencing 211
social marketing 236–238 termites 158
social performance 247–248 terms, alternative 138–139
social responsibility 41, 192 terrorism, causes of 16
social trends 12 threats, opportunities and constraints, senior
society, healthy 19 management 132–137
Soldiers Grove, Wisconsin 95 Three Es (Economy, Environment and social Equity)
Sony, Playstations 8, 57, 64, 183, 229 252, 268
Sprouts, market segment 233 TIAX 211
stakeholder involvement 145–149, 239 Timberland 213
stakeholder management 134 timing, sustainability marketing 231–232
standing teams 143 tool lending libraries 228
Staples 47 Toronto, pollution 98
Starbucks 41, 148, 189–190, 199, 230, 238, 240 Toyota 3, 4, 10, 229–230
steering committees 30–31, 142, 172 Prius 6, 59, 144, 230, 232
Stonyfield Farms 253, 258 ‘tragedy of the commons’ 86
strategic planning 132–133, 144 training 145, 174
strategic threats 40–41 transparency 145–149
subsidies 107–109 transportation
Sumalindo Lestari Jaya 74 facilities management 163–164
Sun Microsystems 207, 211 public transport 96–97
supply chain management 64–65, 71–73, 184, reduction programmes 176–177
188–190 trends, global 12
support, demonstration of 143–144 TriMet 43, 160, 186, 251–252
sustainability triple bottom line 9, 140, 252, 254, 268
benefits of 3–6, 17–18, 179 True Blue Greens, market segment 233
change agents 25–33 Tufts University, Massachusetts 160
definitions 10–12, 18–20 tuna, dolphin-friendly 235
Index.qxd 6/10/2009 4:38 PM Page 292

292 THE BUSINESS GUIDE TO SUSTAINABILITY

UN Global Compact 270 management 161–162

Unilever 50, 234 reduction 3–4, 56, 75–79, 90
United States (US) Waste Electrical and Electronic Equipment (WEEE)
costs of economic growth 9–10 Directive 77, 103, 205
government sustainability role 83, 86–87 water, costs of 101
producer responsibility 78 WEEE see Waste Electrical and Electronic Equipment
UPS 18, 213, 232 weighted criteria charts 196–198, 260–261
urban areas, design of 94–95 Wells Fargo Bank 208
‘Westoxification’ 16
values, statement of 253–255 Whistler, British Columbia 112
virtual offices 211 Willamette Partnership 262–263
vision statement 219 wood products, certification 73–75, 231
work/life balance 178
Wal-Mart 13, 46, 145, 174, 227, 229 worm bin 45–46
Washington Department of Ecology 175
Washington Park Zoo, Oregon 43, 144 Xerox 78–79, 161
waste
audit 193–195 Yost Gruba Hall 196
costs of 154
IT equipment 204 zero waste 3–4, 75–76, 90, 271