What are the implications when an organization forms solely to research and analyze sustainable investments? It means that institutional investors are requiring corporations to present sustainability performance data in their corporate responsibility reporting. If you haven’t already heard of the organization, meet the Sustainable Investment Research Analysts Network (SIRAN), which has just issued a report on the corporate responsibility initiatives of the S&P 100 companies.
According to the report, more than half of the U.S.’s largest publicly traded companies now report on their sustainability efforts. Over a third integrate elements of the Global Reporting Initiative (GRI) sustainability reporting guidelines. The GRI guidelines establish a standard for what should be in a sustainability report. Clearly this group puts pressure on the rest of the S&P 400 to “belly up to the bar.”
To me, the existence of a group like this demonstrates the extent to which sustainability initiatives have graduated out of Environmental Health and Safety departments into the corporate boardroom. Companies are being watched for their efforts to become sustainable and judged based on publishing real metrics, not glossy photos.
Out of the 100 companies:
- 86 have corporate sustainability sites, a 48 percent increase from 2005
- 49 produced a sustainability report in 2007, up 26 percent from 2005
- 41 incorporate GRI standards, a 71 percent increase from 2005
- 34 include a GRI Index in their report, up 70 percent from 2005
The SIRAN study says a sustainability report must include data covering three or more areas of corporate responsibility performance or execution on corporate governance initiatives.
What does this mean? It means your organization’s EHS data needs to be defensible in front of an industry analyst if it courts both institutional and individual investors.
Tags: corporate governance corporate responsibility ehs global reporting initiative gri siran sustainability sustainable investment research analysts network
July 23rd, 2008
As we enter Q3 2008, the cable news channels are spouting their gloom-and-doom predictions, and the market is volatile. The price of oil’s up one day and down the next and everyone’s looking at their budgets. At the same time, a slew of new sustainability initiatives and regulations are inviting the enterprise to take a look at everything from supply chain to manufacturing to packaging.
The advantage of my age is that this isn’t my first business cycle rodeo. I have been here before. Watching the signs in the economy, I remember how we managed ESS through the last cycle, and how much we have learned about focus, about operational excellence and customer loyalty. Fortunately, we emerged from that downturn as a market leader, and we are going to continue our global growth and bring our customers with us. We are agile, and we pride ourselves on our quick response.
This time around, we find ourselves relatively rich in resources, especially people, to help us focus on our market leadership goals. We are doing what we encourage our customers to do: greening our company, monitoring and measuring our energy use and challenging ourselves to model the behavior we like to see in others. We will lower our own carbon footprint, question our expenditures for items like inter-office travel (could we do this with a videoconference?) and use the cost savings generated from being a sustainable company to help us maintain our industry lead.
For you, our customers, this is a time to focus on the operational efficiencies that can be gained from uniting silos of information into integrated platforms that give the executive team accurate information to make decisions in response to quick changes in the business environment. We have an aggressive product road map to help you do this, including mobile platforms. We are integrating all our offerings so they will gather data from the local to the global, presenting it as actionable information in reports that will be used for corporate governance.
Essential Suite 7.1 is really an enterprise sustainability platform, and we’re moving it further in that direction, integrating new features constantly and taking our lead from you, the customers we serve. As always, we are watching the regulatory changes, such as REACH, that impact you, and developing tools to help you not only deal with them, but turn them to your advantage.
We’ve had some big, important sales wins in Q2, but they don’t make us overconfident. Rather, they humble us. You have put your trust in us and we are going to keep earning your trust every day.
Tags: budgets essential suite oil operational excellence reach supply chain sustainability
July 17th, 2008
The biggest challenge in the new global regulatory environment created by REACH will be informational, according to Marc Dillon our Senior Product Manager. In order to be in compliance, chemical manufacturers will need to have all their information readily available in a single location that is auditable and verifiable.
The first step in managing this aspect of the challenge is to simply identify what information is actually needed. We suggest working with stakeholders in the organization to identify sources of information, gather up that data, evaluate the completeness and then try to fill in any existing holes. But maintaining and managing all this information can create its own set of challenges unless you know what to do with it.
Dillon recommends storing the information in a single database that allows users to query the information in multiple ways, view the information and then create the necessary reports. For example, with REACH you need to have information available for submission to the European Chemical Agency’s (Helsinki) IUCLID-5 application (this is the International Uniform Chemical Information Database, which serves as a common format to submit pre-registrations and registrations).
Our Essential Suite™ lets users export information out of their own database and put it into a format that is accepted by IUCLID-5. This is a time and, more importantly, error saver compared to the alternative of going to the agency’s website and filling out forms manually. But you wouldn’t want to buy something for a single use, and we’ve been careful to design Essential Suite so the information it collects can be used in many ways.
The advantage of a multiple-use system like Essential Suite, says Dillon, is that the information is available and can be accessed for other needs as well. The same system and information can be used to do things like generate labels and manage MSDS for chemicals that are stored and tracked in the system in order to comply with product stewardship initiatives.
Aside from the obvious benefit of serving as a data repository, Essential Suite can be used for multiple EH&S needs such as crisis management, risk management and compliance because the required information for associated reports is simply an output of the system.
REACH and other product stewardship initiatives are creating challenges related to what one expert refers to as the “communications circle,” or information sharing between external and internal business partners.
We regard REACH as a compliance issue; but it’s just as important to recognize that it is a supply chain issue. The entire supply chain is affected by REACH and everyone in that supply chain has to be in the know and in compliance for it to work. This is another case in which the information you have collected once, can be managed and output again.
Tags: chemicals compliance iuclid 5 msds product stewardship reach supply chain
July 8th, 2008
Effective this month, Australia has a new National Greenhouse and Energy Reporting System that’s designed to monitor the emissions that cause climate change. Australian businesses that exceed greenhouse gases (GHG) limits will be required to monitor, measure and report emissions data to the government by 2009.
It’s the first step of Australia’s emissions trading program, which requires robust and comparable information –much of which is already demanded by the public.
Katie Lahey, chief executive of the Business Council of Australia, wrote last October in “The Age” newspaper, “…businesses cannot afford to sit back and wait for trading to formally start before addressing the implications of the new requirement on their strategies and operations. It’s a fundamental long-term transition from a high-emissions to a low-emissions world economy.”
This year, Australia will quantify emissions produced by large corporations. Businesses that emit more than 125 kilotons of greenhouse gases or consume or produce more than 500 trillion joules of energy will be required to collect data to meet annual reporting requirements.
Individual facilities that emit more than 25 kilotons of greenhouse gases, or use or produce 100 trillion joules of energy will also need to collect and report data. Twenty-five kilotons of greenhouse gas emissions is the equivalent of the annual emissions of more than 6,200 cars; 100 trillion joules equates to the annual energy use of about 1,900 households.
While the National Greenhouse and Energy Reporting Act takes effect this month, businesses will have until August 31, 2009 to register and until October 31, 2009 to submit their first annual greenhouse and energy report.
Most Australian corporations already report their GHG information because of increasing pressure from stakeholders, but the new program will standardize what is monitored and measured.
A rapidly growing number of jurisdictions worldwide are adopting new standards for GHG reporting that require robust information management. The ESS GHG/Carbon Management Solution is designed to help businesses comply with regulations in Australia and most other countries worldwide. Whether your organization is conducting internal baseline calculations or complying with laws that require greater levels of transparency and accountability, integrated information management systems are a necessary component of a corporate carbon management plan.
Tags: australia emissions trading ghg greenhouse gas emissions national greenhouse and energy reporting act
July 2nd, 2008
SMART 2020: Enabling the low carbon economy in the information age, a new report published by the Global e-Sustainability Initiative (GeSi) and The Climate Group indicates that the technology industry’s unique ability to provide tools to monitor and maximize energy efficiency both inside and outside of its own sector could cut carbon emissions by up to five times the amount generated by its own carbon footprint.
SMART 2020, the world’s first comprehensive global study of the Information and Communication Technology (ICT), shows that information management is key to enabling organizations to reduce emissions. Global management consultants McKinsey & Company independently conducted the report’s supporting analysis
Transforming the way people and businesses use technology could reduce annual man-made global emissions by 15 percent by 2020 and deliver energy efficiency savings to global businesses of more than 500 billion euros (nearly $800 million USD), according to the report. This represents a reduction of 7.8 billion metric tons of carbon dioxide equivalent released into the environment by 2020 – an amount greater than the current annual emissions of either the U.S. or China.
Although tele-working, video-conferencing, e-paper and e-commerce are increasingly commonplace, the report notes that replacing physical products and services with the virtual equivalents is only a small part (approximately 6 percent) of the estimated low-carbon benefits the ICT sector can deliver. Far greater opportunities for emissions savings can be generated when organizations and industries implement a technology infrastructure to address carbon reporting and management.
The report cites four major opportunities where the use of information technology can make further transformational cuts in global emissions. These exist globally within smart building design and use, smart logistics, smart electricity grids and smart industrial motor systems.
I may have said this too many times lately, but it’s still true: we can’t reduce GHG emissions until everyone uses the right platform to measure and monitor them.
Tags: carbon emissions gesi global e sustainability initiative ict McKinsey Company smart 2020 the climate group
July 1st, 2008
In the race to put metrics around enterprise sustainability initiatives, there is now a published study that grades California public companies on their sustainability reporting. In this report, our client Chevron got an A+, while a leading IT company got an F. It’s not about what you say you are doing — this study grades how you are REPORTING what you are doing. The PDF of the report is available for download. The Roberts Environmental Center of Claremont McKenna College of Claremont, California, conducted the study and concluded that many companies do not adequately report their sustainability efforts on their websites.
This is a move to promote greater transparency in EHS and CSR reporting, much as Sarbanes-Oxley requirements encourage greater transparency in financial reporting.
On the environmental side, the most frequent reporting subject is accountability and the most frequently reported environmental performance topic is energy usage. Many companies have posted their intent to be accountable for executing on their sustainability goals. The one objective where they seem to have made the most progress is energy efficiency. Companies are reporting energy savings that are clear and measurable.
The Roberts Environmental Center rates sustainability reports on the basis of intent (based on a discussion of a topic and an example of an initiative undertaken on a reported topic); reporting (transparency in public discussion of the issues); and performance (measured by meeting industry standards, external awards or achievement of numerical goals).
We are moving in the direction of greater transparency and greater inspection of sustainability efforts, which can only be proven by better data. How is your organization’s data? Why not share in the comments section what your company is doing and how you are measuring your efforts.
Tags: csr reporting environmental roberts environmental center sustainability reporting
June 27th, 2008
New international product laws and regulations are impacting nearly all industry sectors. According to a report recently published by Ernst & Young, regulatory compliance risk is the greatest strategic challenge facing global businesses in 2008. “The continually escalating burden, as well as ever more complex compliance challenges, means this is still the biggest business risk to be addressed.” The report went on to say that “as companies become more and more global, compliance becomes an even greater challenge, forcing them to manage diverse regulations in different markets. Industrial groups have speculated that by 2010, more than 75% of all electronic products will be sold in countries with legislation similar to the European Union (EU) Directives.”
Recent international environmental laws and regulations require comprehensive product requirements and chemical substance registrations designed to restrict the toxic effects of chemicals in products during one or more phases of the products’ life cycle. The most comprehensive regulations are referred to as “directives,” and have been adopted by the EU. It’s not just EU driving this trend. Similar environmental regulations are being adopted around the world, including China, Taiwan, Korea, Japan, Central and South America, as well as several Canadian provinces, and U.S. states.
Noncompliance is really not an option for companies selling their products internationally. Companies that fail to comply with such directives may not be able to sell their products in the EU and other countries. Market pressures like this now require companies to manage the health and environmental impacts across their products’ life cycles.
Three of the most important new EU regulations are the Waste Electrical and Electronic Equipment Directive (WEEE), the restriction of the use of certain hazardous substances in electrical and electronic equipment, or RoHS and the Registration, Evaluation, Authorisation and Restriction of Chemical substances (REACH).
WEEE requires producers of electrical and electronic equipment to register, arrange and pay for a product’s end-of-life collection and recycling. WEEE shifts responsibility from governments and the key enforcing authority to the manufacturers themselves.
RoHS requires manufacturers to restrict the use of certain metals and chemicals beyond a specified concentration value in electrical equipment. These substances have historically been critical components in the production of electronic products.
As I’ve mentioned in earlier posts, REACH impacts nearly all chemical manufacturers. The directive requires companies to identify and manage risks from chemical substances and provide safety information to all downstream users. Specifically, REACH requires every importer or producer of more than 1 metric ton of a chemical substance to register the substance and provide detailed information on the risks, hazards, uses and end-of-life characteristics.
As supply chains continue to become more global, these directives will have a significant impact on companies, their production processes and their ability to compete globally. For example, the U.S. electronics and automotive industries have spent millions of dollars complying with the WEEE and RoHS requirements since 2002, and more recently, U.S. chemical manufacturers, pharmaceutical companies and other manufacturers are working toward achieving compliance with other directives such as REACH.
To insure successful compliance with these directives, organizations need to take a proactive approach. This starts with developing a sound strategy, a regulatory road map and incorporation of information management systems to collect the required data, organize it and enable reporting both internally and externally. We are working hard at ESS to insure our software makes this effort easier, faster, more reliable and reduces the costs of compliance.
Tags: chemical substances ernst young eu regulations product stewardship reach rohs weee
June 25th, 2008
Deere & Company is one of a growing number of companies that have announced plans to reduce their total global greenhouse gas emissions by a specific number — in this case 25 percent per dollar of revenue from 2005 to 2014. The company has committed to the reduction goal in conjunction with its participation in the U.S. Environmental Protection Agency’s (EPA) Climate Leaders program, which Deere joined in 2007.
Climate Leaders is a voluntary industry-government partnership that works with companies to develop long-term comprehensive climate change strategies. Participants set a corporate-wide greenhouse gas emissions reduction goal and annually report their progress to EPA. Through program participation, companies create a credible record of their accomplishments, reduce their impact on the global environment and identify themselves as corporate climate leaders.
Becoming a corporate climate leader can’t be easy for companies in industries such as oil, energy and equipment because direct greenhouse gas emissions are generated from both plant operations and from the final product. Monitoring and collecting data across the organization as well as tabulating and benchmarking against publicly stated goals requires an enormous amount of data integration and reporting capability.
We have been seeing this trend across the enterprise lately, in all industries, as corporate social responsibility becomes a matter of setting and reaching sustainability goals that are expressed in numbers and percentages. Moreover, we’re seeing a need to allow this kind of data aggregation and reporting from mobile platforms as well as from desktop PCs. As a result, we have set out a product roadmap that meets these needs for our customers more completely and fully than any of our competitors. Fortunately, we have the talent on our team to get this done!
Tags: climate leaders deere & company epa ghg greenhouse gas emissions
June 19th, 2008
Be careful with uncontrolled use of spreadsheets to track and manipulate corporate data. Spreadsheets can become a huge problem for companies that have regulatory reporting requirements or planning requirements, according to a KMPG study. The study concluded that the basis for as many as 95 percent of financial models were flawed. Spreadsheets that collect and manipulate data were deemed inadequate to save companies from corporate risks associated with data quality.
I just finished reading an article in Information Age about analysts at market intelligence company, The Data Warehousing Institute (TDWI), which in 2007 set out to investigate the uncontrolled use of spreadsheets by end-users when undertaking data analysis tasks.
The findings make for sobering reading: of the 200 companies surveyed, including companies of all sizes and from a wide range of industry sectors, 90 percent reported that they were living with the problem of so-called spreadmarts. Spreadmarts are shadow data systems that extract, transform and format data and publish reports.
If you have EHS reporting requirements or if your CSR reporting goals will be measured, you can’t afford to have data aggregated from separate PCs across the enterprise. You must have an integrated platform to collect, analyze and report out uniform data.
In case I haven’t alerted you sufficiently, the article highlights the experience of a major U.S. utility that hiked consumer gas prices by between $200 million and $1 billion due to a mistake in a spreadsheet file. In another example cited in the article, a U.S. mortgage company was forced to write down $2.4 billion in mortgages due to a change control error in a spreadsheet. Spreadsheets over 200 lines long are almost guaranteed to be flawed.
Companies continue to allow employees to take corporate data out of their primary systems, massage it and write it back to a core transactional system because it is very hard to stop that process. We are trying to alert the key decision makers worldwide about the risks associated with inconsistent and poorly manipulated data and encourage the use of an integrated data collection and management platform to reduce the associated complexities, costs and risks.
Tags: csr reporting data quality risks ehs reporting information age kmpg spreadsheets
June 16th, 2008
As a result of ESS’ continued expansion and the growth in global adoption of our sustainability software platforms, ESS has hired Scott Lockhart as Chief Operating Officer. Scott will be responsible for executive oversight of ESS operations, as well as a member of our executive strategy council.
Scott has 15 years of experience in leveraging enterprise software for asset optimization, EHS and compliance with clients representing a variety of vertical industries, including oil and gas, electric utilities, chemicals, aviation, metals and pulp industries.
Scott comes to us from his previous position as Vice President and Executive Board Member of Data Systems & Solutions (DS&S), a division of Rolls Royce. He was focused on enterprise asset management and optimization, equipment health monitoring, process safety and compliance. In addition to business management and growth objectives on DS&S’ executive board, Scott was responsible for the operations, services and software groups. His previous experience also includes key leadership roles at Trinity Consultants and SAIC.
I have known Scott for many years and admired his proactive approach and success in connecting the dots between environmental, health & safety (EHS) and crisis management software and asset management and optimization information systems (EAM) to enhance enterprise-wide business performance and operational excellence. We both strongly believe that by more closely integrating these key information systems, organizations can identify and ensure common data work together to drive improved levels of EHS compliance while increasing reliability and performance of assets. This translates to increased availability of critical assets to improve both compliance and profitability. Reducing complexity and risk that is associated with disparate data silos within EHS and EAM information systems also ensures higher quality data is delivered to the other sources throughout the enterprise that rely on that information.
I am very excited to have Scott on board and look forward to his contribution toward our future growth and success.
Tags: chief operating officer compliance coo eam ehs enterprise software ess scott lockhart
June 9th, 2008
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