Corporate Sustainability: The stakes just got a whole lot higher

poker_chips_2Corporate sustainability didn’t become passé with this election: it became essential. We now know that government isn’t going to ride in and save us on climate change. Government isn’t going to focus on air quality or water quality or social and economic consequences of infrastructure projects.  Government isn’t going to set the standards or raise the bar.

For those of us in business, that means it’s on us. We have to set our own standards and drive our own accountability. And those outside business are going to turn to us as the change agents they can still hope to influence. They will raise their expectations and their pressure on us, whether as our investors or customers or communities or employees.

Like most of us, I didn’t see this election result coming. I was nervous but not prescient. A week before the US election, I spoke at an industry sustainability symposium. I posed two challenges to the group. With these election results, the stakes on those two challenges just got a whole lot higher.  What are those two challenges?

1. Focus on what really matters for your sector and company

This is a lot harder than it seems. There are scores of sustainability issues. The babble keeps getting louder.  There are some important signals, but the noise-to-signal ratio is bad and getting worse.

The highly-visible players in the reporting/ratings/rankings world make it harder, not easier, to focus. SASB, DJSI, SAM, GRI, CDP, FTSE4Good, ISO, SDGs: the alphabet soup is pretty thick.  Each wants to be the standard for standards, each wants your attention, each wants your time. Each comes from groups with their own strategies for visibility, credibility and influence.  There’s nothing wrong with them having their own strategies – but their strategies shouldn’t drive yours.

Are all these standards relevant? Probably. Are they indicative of issues you should be aware of? Yes. Are they required? No, but ignoring some of these can hurt you by getting your company on the wrong list; think of these as table stakes that may be necessary to play in the sustainability space, but not a bet that can pay off for you. Are they efficient? Absolutely not. Are they effective? Depends on who you are and what you’re trying to accomplish. Are they (as lawyers would say) dispositive, settling the debate over where you should focus? Absolutely not.

Instead of focusing on the standards, concentrate on the issues that are truly critical to the health and success of your business. For example, if your company is in the food/agriculture sector, you can’t ignore obesity and water. In the industry I addressed last week (railroads) there are some obvious issues like air quality and carbon/energy.  But there are other critical issues like “post peak coal,” life in a carbon-constrained world, resiliency (including the growing impacts of and narrowing window to prepare for sea level rise) and impacts on sustainable cities and communities. A good materiality process has to highlight those kinds of issues.

Once you’ve figured out what matters to your business:

  • Does your business acknowledge it?
  • Does your business have a plan to deal with it?
  • Are you really implementing your plan?
  • If so is it working?

Above all, as you go through this process, are you looking through the windshield or in the rear view mirror? Some of us are painfully aware of generational changes in our employees and what they value.  How many of us, in materiality, are looking at generational changes in our customers – let alone in our investors?

2. Decide what your personal role should be

Once you’ve figured out the issues that matter, there’s a second question: What is your role in helping your company understand and act on those issues? Is your role to enable? Apologize? Defer? Deflect? Explain? Inform? Improve? Influence? Challenge? Lead from below?

To look at the tough question of your role, you need to ask yourself honestly–

  • Not just who you talk to, but who listens to you?
  • What would be different if your job didn’t exist?
  • Do you help your company understand and face issues or avoid them?
  • Do you help your company learn and get better, or get by longer without having to change?
  • Do you get buy-in from senior management, or do you settle for acquiescence? Do you sell them on facing the tough issues, or only sell them what you know they’re already pre-disposed to accept?
  • How much do you manage performance, and how much perception? (Both are valid – but what’s the right mix of the two?)

Above all, what’s your legacy going to be from your time in your role?  It’s not just CEOs who get to – or have to – ask that question. One advantage of age is that I’ve been around long enough to see the consequences of my roles and actions.  What may seem like the distant future to you now will be your present and then your legacy all too soon. You can’t shape your legacy retroactively; you need to make those decisions now.

So what do you do?

I’m not proposing that corporate sustainability professionals commit career suicide. I am proposing that they:

  • Use materiality for real – to figure out “what matters”
  • Use materiality to drive action, not just communication
  • Use materiality to identify and engage key stakeholders
  • Make connections to the revenue stream, not just cost
  • Make connections to real business risk
  • Identify and recruit champions, often not your boss or even in your chain of command
  • Decide what you want your role to be. I can’t tell you what that role should be, but I can tell you it should be determined by design and not by default.

All this was hard before the election results.  In the political climate after the election, it’s that much harder – and more essential. In the US, government is not going to solve key sustainability issues.  It may not even acknowledge them. If you work in business, if you work in sustainability, and if you think the issues you’re working on (like climate change) really matter, then you don’t have much choice.  The time to focus on what matters and on your role is now.

[Opinions in this blog are solely those of Scott Nadler and do not necessarily represent views of Nadler Strategy’s clients or partners, or those cited in the post. To share this blog, see additional posts on Scott’s blog or subscribe please go to nadlerstrategy.com.]

Mylan, EpiPen and the Fog of CSR

Mylan has received plenty of attention lately for the decision to dramatically increase pricing for the life-saving EpiPen.  The intense debate about this decision points to a broader problem: the fog that surrounds Corporate Social Responsibility (CSR) and its many definitions, levels and claims.  This fog can obscure efforts to improve how business functions.  Mylan is an interesting case study.FogRoad

Mylan and CSR

Mylan’s CEO Heather Bresch defended the EpiPen price increases, blaming the healthcare system and saying “The system incentivizes higher prices.” She offered her view of stakeholder concerns a year ago when attacked for financial moves: “I try to look at it from the perspective of I should be flattered that so many people are trying to tear us down.”

Wouldn’t it be great if a pharma giant like Mylan were headed by a CEO who cared about CSR?  Someone who might say:

“…[W]e put people and patients first, trusting that profits will follow. This philosophy, which we call Doing good and doing well, reflects our belief that [our company] is not just a company, we’re a cause. … we weigh every decision we make with the utmost care, asking ourselves how it might affect all of our stakeholders, including patients, customers, employees, communities, vendors, creditors and investors.”

Oh, wait. Mylan’s CEO did say that.  That’s a quote from the CEO message at the front of  Mylan’s 2015 social responsibility report “which is designed to acquaint you with our many CSR accomplishments to date.” The report goes on to say: “Our shared belief in Doing good and doing well is based on our values, which we express every day through our actions.”

Reviewing Mylan’s CSR report and Mylan’s actions “every day” on EpiPen pricing may produce cognitive dissonance.  Something doesn’t connect.

The Fog of CSR

This disconnect could be just the frequent CSR gap between “what we say” and “what we do”.  That’s not uncommon.  Too much CSR reporting is still flat-out greenwash.

The Mylan disconnect might be something deeper: Mylan may interpret CSR differently than do some of its stakeholders (like patients).  That’s disturbing but not surprising.  CSR has become an esoteric topic, filled with systems, standards, guidelines, goals, and acronyms.  There is an entire industry of folks who set CSR expectations, write reports about meeting those expectations, and evaluate reports to see if they met those expectations.  It’s all too easy to separate all that CSR stuff from what companies actually do in their day-to-day business.

(To make matters worse, “CSR” is just one label.  There is huge confusion around CSR versus “Global Citizenship”, “Sustainability”, “Sustainable Development” and a plethora of other terms. That babel only adds to the fog.  Anyone using those terms should examine them carefully, and consider whether they are using those terms as tools for clarity or as weapons to keep up the fog level.)

Of course, some companies do very good things.  Some of them go to great lengths to show how those actions fulfill their responsibility as companies, and meet public expectations.

For some companies, though, CSR is just a cost of doing business, something you have to salute and spend some time and money acknowledging.  And for some companies, CSR seems to be a menu, from which they can pull out the parts they like and ignore the rest.

Cutting through the CSR Fog

In practice, CSR is a hierarchy of behavior, not a menu.  In working with a wide range of companies on CSR, I’ve seen five levels of what we actually expect from a socially responsible corporation. There is a clear hierarchy among these, starting with the most basic expectations at the bottom.  Interestingly, the first three are just corporate versions of “personal social responsibility”: we would expect them of our neighbors.  The last two are uniquely corporate.

  1. Don’t be a jerk. Don’t unnecessarily harm people, animals, the environment, even if there’s no law against it. Think of this as the “don’t be a bad neighbor” level: cut your lawn, don’t leave trash out in the yard, don’t start using loud lawn equipment when the neighbors have the kids’ birthday party, don’t take up every parking spot on the block, don’t shout offensive comments or names at people walking past your house, and promptly shovel your own walk when it snows. Don’t expect to get any credit for performing at this level. If you don’t perform, though, don’t be surprised if the neighbors are critical of anything else you do.
  2. Don’t break the law. Laws are supposed to apply to everybody. Don’t speed in the school zone, don’t shoot out your neighbor’s windows.  Again, don’t expect a whole lot of credit for fulfilling this expectation.
  3. Do your part. Actively be a good neighbor. Help mow the elderly neighbor’s lawn or shovel their walk when it snows. Volunteer at your school. Donate food to the local food pantry. This offers the chance to get credit for your actions, without actually having to change how you live (or do business) day-to-day.  This is the level of CSR many companies are happiest to focus on.
  4. Do what the law fails to do. We ask business to do what we can’t get government to do. Climate change is the clearest example: it is a classic public policy challenge, which should have been met by public action years ago (carbon tax, cap and trade, regulation, whatever). Business doesn’t want to be in the business of filling this public policy gap. Many businesses would prefer to see a public policy solution that creates clear expectations and a level playing field.  Business could then do what it does best: figure out how to make money in that new reality, by cutting carbon or investing or innovating. Instead, business has to guess where the bar “should” be, risk incurring costs that more recalcitrant competitors don’t face, and incur the wrath of investors who question why business is acting on what is really “Government Social Responsibility”.
  5. Do what the law can’t do.   Innovate. Invent the new technology that reduces carbon. Develop the approach that feeds more people. Raise the bar and challenge your competitors to follow you.  Drive your business by seeing CSR issues as strategic opportunities.

It’s all CSR?

The problem is that all of this is called “CSR”.

Arguably, Mylan may be doing great things in level 3, but missing (or ignoring) what it is doing with EpiPen pricing in level 1. If you’re not getting the basics right, don’t expect people to be impressed by anything else.

No company has to agree with this CSR hierarchy.  But every company should take a serious look at what it has bundled in its CSR portfolio, what terms it’s using (CSR versus Sustainability et al), what it claims in its CSR report, and what it’s doing in its business day-to-day.  At the very least, that might help burn off some of the fog and let in some clarity within the business.

[Full disclosure: I did a small bit of consulting work with Mylan on CSR approximately 5 years ago.  Nothing in this post reflects any confidential information or insight from that engagement.

Opinions in this blog are solely those of Scott Nadler and do not necessarily represent views of Nadler Strategy’s clients or partners, or those cited in the post. To share this blog, see additional posts on Scott’s blog or subscribe please go to nadlerstrategy.com.]

Mixed Greens: Green Giants, Green Shoots, Green Lions and Green Whisperers

Two different views of corporate sustainability collided in my inbox last week.

One email said that Freya Williams will speak at the US BCSD/WBCSD/Yale meeting next month. Freya Williams’ Green Giants book argues persuasively that business sustainability and business strategy have to be one and the same, not two competing directions.  She details seven businesses which have created great “win-win” outcomes, companies growing their business by integrating sustainability issues into core business strategy. She offers great examples and lessons, describing these leaders’ “epiphanies” and how those translated into business strategy and process.

A second email came from a friend and former client who now works for a regional service company nearing $1b in annual revenue. The email said:

I am trying to locate an article … directed at the executive level, indicating why they should care about sustainability.  This should probably be old news but in [this] sector that is where we are.  We use a lot of water but are recycling and the conversation about climate change doesn’t have a day-to-day impact (at least not yet)…. [T]he Harvard Business stuff and other articles would almost certainly leave our executives shaking their heads.

That friend is a Green Whisperer, helping to nudge business leaders toward awareness and progress.  That company’s leaders are unlikely to be Green Giants in any foreseeable future.  They are not likely to make game-changing transformational leaps requiring career-threatening courage, unyielding commitment and contrarian tendencies (characteristics Williams cites).

Green Giants are great exceptions but not the norm.  Let’s use reporting as an example.  I certainly don’t think reporting is the definition of sustainability progress but it is an indicator of effort.  Freya Williams points out that “95 percent of the largest 250 companies in the world now [produce] a sustainability report,” but:

Beyond that group, though, the news is less good. First-generation sustainability reporting— the process of reporting on employee turnover, energy, greenhouse gases, lost-time injury rate, payroll, waste, and water is still limited to just 3 percent of the world’s largest 3,972 listed companies and 0.04 percent of the world’s small listed companies.

Thyme_and_Goat_Cheese_Tart_With_Mixed_Tender_Greens_in_Champagne_VinaigretteThe reality of corporate sustainability is that we have to have a lot of different types of “greens”.  We certainly need the leaders, the disrupters, the Green Giants. Let’s recognize, applaud and learn from them. We also need the Green Whisperers. They are not blessed with Green Giants as bosses. They toil in the trenches, trying to move the majority of companies in the right direction.  They deal with the hard truth that epiphany is not an easily-reproducible management process.

We also need Green Lions, who take the lead and charge ahead, leading from the middle.  GM’s John Bradburn is a great example, leading his company’s zero waste effort, driving innovation and material reuse and cost savings all at once.

And we need to nurture the Green Shoots, the game-changing ideas that may take years of hard work, nurturing and perseverance before they start to sprout.  The US BCSD’s Materials Marketplace is a great example. After more than a decade of small experiments in making the circular economy real, the Materials Marketplace is now sprouting in Austin and other locations around the US and winning international attention.

We’re bringing a lot of these different greens together in one big salad bowl, a hands-on session in New Haven next month (June 14-15 2016). We’ll have the perspectives of Green Giants and Green Lions, Green Whisperers and Green Shoots.  We’ll see what they can learn from each other, and what they can create together.  Come join us there, and see what you can get from – and add to – the mix.

[Opinions on this site are solely those of Scott Nadler and do not necessarily represent views of Nadler Strategy’s clients or partners, or those cited in blogs. To share this post, see additional posts on Scott’s blog or subscribe please go to nadlerstrategy.com.]

Sea Level Rise: We know now what we’ll wish we knew then

I’ve spent 40 years working on investment and disinvestment decisions, both in the public and private sectors. I’ve worked with railroads, ports, transit lines, and thousands of business location decisions. All too often I’ve looked back at my past decisions and said: “I wish I knew then what I know now.”

IMG_0063With sea level rise (SLR), we do know “then”.  It’s a natural disaster in slow motion.  It’s like a bad disaster movie: the avalanche or crashing oil trucks are heading our way and we can’t stop them. Sea level rise, though, is in slow motion. With this disaster, we have time to prepare.  But we have to actually decide to do something about it now.

I thought I had a fairly sophisticated understanding of sustainability related issues.  Then I heard John Englander talk about climate-enhanced Sea Level Rise (SLR).  He made a compelling case that no matter how much progress we make on climate change, some of the damage is already done. Faster sea level rise is inevitable and sooner than I thought.  Englander and other scientists predict that we could have a  foot of global average sea level rise by 2050, possibly more.  (And the awareness of sea level rise and its impacts is growing each week.) John’s observation was that very few businesses, cities or individuals are facing up to this prospect.

After hearing John speak, I did my due diligence. I read his writing.  I read the reviews and commentaries. I tracked him down and talked with him intensely.  I had a respected friend with a strong background in marine sciences vet the science.  I learned some things:

  • A lot of impacts are going to be felt much sooner than I’d realized. As we saw with Hurricane Sandy, a few inches can make the difference between a near miss and devastated infrastructure.
  • A lot of impacts are going to be felt more broadly than I’d realized. SLR is not just a concern for the usual suspects like people living in south Florida or working in low-lying harbors. Consequences may be felt physically in upriver inland locations like Sacramento. Commercial or personal consequences may be felt anywhere if you do business with or ship through a vulnerable area – and almost all shipping goes through those areas.  Not to mention airports – ever come in for a landing over water and hold your breath waiting for land to appear under the wings before you felt contact (think Logan, Laguardia…)?

Some people and businesses are acting on these insights, but not many.  Interestingly, those who are acting don’t advertise: if you’re seeking business advantage by moving ahead of the crowd, why tip everyone else off? Overall, though, as businesses decide whether (or where) to buy or construct a facility that should last 20 or 30 years, most are not yet considering whether that facility will be viable – or dry – in that time frame.

Test yourself on this. If you have a responsibility for investment or disinvestment in assets, the question is: why aren’t you motivated? Do you know what your exposure, risks and unrealized opportunities from SLR may be? If you have a fiduciary responsibility for a company, a real estate portfolio, an investment portfolio, have you done your due diligence?  If you deal with strategy decisions or capital investment for a railroad, a utility, a municipality, have you done your due diligence? If you are an insurer or reinsurer of any of the above, have you done your due diligence? If you compile your company’s reports to investors and the SEC, have you done your due diligence?

If the answer is no, you’re not unusual. As a species, we’re real good at acting when things are “urgent to finish”.  We’re motivated by deadlines.  We’re much worse when things are “urgent to start”.  If a task takes a week and the deadline is next week, no worries: we’ll get it done.  If a deadline is three weeks away but it’s going to take 5 weeks to get the job done, it’s even more urgent to start.  But we don’t get too motivated by that.  And if the deadline is measured in years, it’s still being debated, and it’s intimidating in its enormity, all the more likely we won’t focus now.

And these aren’t easy times for a business to look ahead. CEOs face a lousy macro-economic situation (and maybe macro-political too). With a tough economy and a scary election, they understandably may feel that they have enough on their plate.  If I were a CEO, I might be afraid that the sky will fall before the ocean will rise.

Intriguingly, though, there are ways to start acting now, to start doing now what we’ll wish we did before “then”. There are opportunities to spend capital more wisely.  There are opportunities to invest in options now, acquiring property or property rights on less vulnerable locations before the market prices those up.  There are opportunities to shift investment out of more vulnerable locations and activities – before the market begins to discount their value.  There may even be opportunities to spend less, by realizing that the useful life of some SLR-impacted facilities may be shorter than we think.

That’s why I decided to join with John and see if we could help businesses and industries get on with it and act.

The good news is, we know now what we’ll wish we acted on then.  There’s time to act.  But it is increasingly urgent to start.

[Unconventional disclosure: Normally bloggers disclose their financial interest in a topic so you can think about whether it influenced their views.  This time, it’s the other way around: my views on the topic led me to create a financial interest by starting to work with Rising Seas Group.]

[Opinions on this site are solely those of Scott Nadler and do not necessarily represent views of Nadler Strategy’s clients or partners. To share this post, see additional posts on Scott’s blog or subscribe please go to nadlerstrategy.com.]

New home: Nadler Strategy LLC

Dec 2015 LogoI am pleased to announce that my full-time professional home is now Nadler Strategy LLC.

A few years ago, I viewed this possibility with fear and dread.  The idea of “going out on my own” after turning 60 seemed daunting, if not outright crazy.

A great friend helped me focus on what I feared: the risk of no corporate employer, and the loneliness of truly being alone professionally. He helped me look at the opportunities instead of the fears. By managing my projects and platforms as a portfolio, I could reduce the risk substantially.  With the chance to work more flexibly and choose my projects, I could become more closely connected with great colleagues, both old and new.

Now, this is something I’m approaching with excitement. With the turning of the year, I wrapped up a great 20-year run with ERM.  I launched this stage almost a year ago, when I began to work from multiple platforms. Much of 2015 was spent testing, learning and developing new approaches and connections. I found a number of intriguing opportunities beyond the corporate consulting model.  I found I was better connected and less alone than before.

It’s now time to move into that world full-time. I’m looking forward to offering strategy, sustainability, facilitation and coaching services through the Nadler Strategy platform.

I will continue to work from other platforms as well:

Other opportunities and collaborations are taking shape.  I’ll explore those in future blogs and as they ripen. Until then, please feel free to follow me on Twitter or Facebook or visit my web site.

Best wishes for a happy healthy and productive new year.

[Opinions on this site are solely those of Scott Nadler and do not necessarily represent views of Nadler Strategy’s clients or partners. To share this post, see additional posts on Scott’s blog or subscribe please go to nadlerstrategy.com.]

Corporate roles, personal journeys

I recently brought together seven colleagues for a ‘Micro Forum’ in Chicago, IL to share their strategic and organizational perspectives. It became a vivid reminder of the very human side of our work relationships.

All the participants were VP-level leaders in corporate environment, safety, sustainability and/or energy functions. They came from a wide range of companies and sectors from transportation to health care and technology to household-name consumer products. They shared many of the same strategic and organizational challenges. Behind those, though, they each had very unique personal journeys.

For seven people in roughly the same roles, the range of their stories was fascinating. Some were lifers, with their whole career in one company. Others were in their third or fourth or fifth company – in one case, just within the last five years. Some had spent their whole career in the same function but with different companies, while others had been in multiple functions in one company.

They were at very different stages of their careers. Some were nearing the final lap. When asked what they hoped their personal story would be three years from now, some were hoping to be gone from their companies, retired – but they still had things to accomplish before going. Others had one last big initiative – or promotion – in their sights before retiring. Their journeys over the next few years involve choices about timing, negotiating exits (if they expected to have any say in it), geography and what to do next.

Others were entering the prime of their careers. They faced choices about balance: balancing families and work, balancing the ambitions to move up (which might mean leaving their functional area) with the ambition to do more within their function (which might limit promotions).

They opened up to each other. Some had only met over dinner the night before. Others only met when they walked into the conference room at 8:30 that morning. By 10:30 they were sharing. By noon they were asking each other for advice.

I had the great opportunity to sit and listen. Several things jumped out at me:

  • How committed they are. Despite setbacks and frustrations, all deeply care about helping their companies do better at protecting their people, communities and the environment. All are genuinely proud of their accomplishments. None of them sit in the C-suite, but they are leaders, truly leading from below.
  • How valuable this was. “Peer-to-peer” isn’t just a technology file-sharing geek term, it’s an important human concept. These can be lonely roles. The participants quickly realized they were sitting with genuine, smart, trustworthy peers. There was a clear sense of relief in the room, as people opened up, asked for help with real problems and offered support.
  • How hard it is to be proactive about your career. These bright, realistic people spend a lot more time planning for their companies and programs than for their own careers. They know they need to be prepared for what may come, both opportunities and disappointments. Those in mid-career know that no jobs (or even companies, these days) are secure. Those late in their career know that windows may be closing and options may be narrowing. Yet they struggle to find the time and mental space to create the options they want rather than waiting to react to what happens.

Most importantly, I was reminded that everyone we deal with has their own personal journey behind their organizational role. It’s all too easy to fall into dealing with them solely in terms of their roles, without understanding (or caring or helping) with their personal journeys. I convened a bunch of corporate officials. I spent valuable, affirming time with a room full of people. That was a healthy reminder, especially this time of year.

[Scott Nadler is a Senior Partner at ERM and Program Director at US BCSD. Opinions on this site are solely those of Scott Nadler and do not necessarily represent views of those quoted or cited, ERM or its partners or clients, or US BCSD, its members or partners. To share this post, see additional posts on my blog or subscribe please go to snadler.com. I also invite you to follow me on Facebook or Twitter.]

Making connections, missing connections

Coming back from a meeting in New Haven last weekend, I spent several fun-filled hours at O’Hare trying to make my connection. At different times, we had a plane. We had a gate. We had a crew. We had fuel. But it took two hours of delays (and multiple gate changes) to get them all together, along with the passengers, before we finally took off.

The airline hadn’t run out of planes. Or gates. Or fuel – they didn’t go drilling for oil and then refine it; they just finally got the right truck to the right plane at the right gate. The problem was connections: the airline (and airport) making their connections so we could make our connections.

That was the same message I took away from the New Haven meeting, a unique collaboration of the US Business Council for Sustainable Development (US BCSD), the World Business Council for Sustainable Development (WBCSD) and the Center for Business and the Environment at Yale (CBEY). The meeting was about “Collaborating to Achieve Scale” in business and sustainability. Over 100 leaders from business, NGOs, academia and government had intense discussions around substantive issues like water, coastal wetlands, materials and the circular economy, climate-smart agriculture and forestry.

In session after session, the theme of making and missing connections came through. We are not short of challenges, obviously, but we’re not short of technology, ideas, data, enthusiasm or even capital either. What we’re all still learning to do is to connect them up so that the solutions can really take off.

In some areas, there is real progress. The Materials Marketplace platform is designed specifically to make connections, in this case between businesses with waste streams and businesses who can use those wastes as feedstock. The Water Synergy Projects are designed to connect entities who use water, those who depend on it, those who regulate it, all within a cohesive geographic area. Sustainable Forestry is bringing together partners from up and down the value chain. Energy Efficiency in Buildings is moving into a second phase, focusing on more replicability to achieve scale. Emerging projects like Climate Smart Agriculture are all about making the right connections across multiple industry sectors as well as government and NGOs.

In those and other areas, there’s still a lot to do. Finance is a particular challenge. The people with capital to invest, the people with capital already at risk, and the people impacted by both problems and solutions are just beginning to find ways to connect. And we’re learning that in some cases, we may be chasing the wrong people, trying to connect with sectors that may not be ready to participate in solutions yet. So there are delays and missed connections and frustrations.

There’s a lot to harvest and share, both about content areas and around cross-cutting issues of finance, technology, communications and policy. But above all, great platforms like last week’s meeting provide real hope about making more of the right connections.

Scott Nadler is a Senior Partner at ERM and Program Director at US BCSD. Opinions on this site are solely those of Scott Nadler and do not necessarily represent views of those quoted or cited, ERM or its partners or clients, or US BCSD, its members or partners.

To share this post, see additional posts on Scott’s blog or subscribe please go to snadler.com. I also invite you to follow me on Facebook or Twitter.

The better-than-Circular Economy: The Spiraling Economy

The circular economy is all the rage. It’s a great concept that’s been evolving for years. It even got a shout-out last week in the Pope’s encyclical letter on climate change and the environment, which noted the need for “a circular model of production capable of preserving resources for present and future generations.”

Ironically, the powerful “circular economy” label obscures one of the most crucial potential benefits of the concept: you don’t have to end up back where you started.

From an environmental perspective, a circle is a powerful metaphor: a closed loop, in which resources are not spewed out as waste or pollution, and new resources don’t need to be dragged in. The notion that one company’s waste can be another’s feedstock is hard to argue with. It’s a great way to reduce waste, and hopefully energy, toxics and water use as well.

From an economic perspective, though, a closed loop is a stagnant mess, unlikely to survive for long. And from a social perspective, a closed loop is a disaster, a fixed-sum game which creates only the dismal choices of either retaining locked-in inequities between the rich and poor, or seeing disruptive redistribution of that fixed sum.

Fortunately, the circular economy is really a misnomer – a great concept “brand” but inaccurate. Much of the work on circular economy shows the potential to generate more economic value and growth without increasing environmental burden (hopefully even reducing environmental burden). Reuse is spawning innovation in both materials and design. More value is generated from a given unit of mass.

From an environmental perspective, the flow is circular. From an economic and potentially social perspective, the flow is upward. The result? You have a spiral, not a circle. Each time you close the loop, the accumulated net value has gone up.

That’s what we really want: an upward spiral, where each environmental cycle creates more value.

How do you create a spiraling economy? By encouraging:

  • Efficient markets that can quickly match generators of “available materials” (formerly known as waste) and potential productive users of those materials
  • Broader markets that can draw in a much wider range of both generators and users, creating more opportunities for higher-value reuse, even when partners are physically distant
  • Colocation of generators and users, creating both environmental and economic leverage through reduced transportation and increased local economic multiplier effects

That all takes hard work. Fortunately, a lot of people are doing that hard work. It’s happening at the local level, in projects like the Austin Materials Marketplace and ROC Detroit. It’s being scaled up to the national level through the National Materials Marketplace jointly sponsored by the US Business Council for Sustainable Development (US BCSD), the World Business Council for Sustainable Development (WBCSD) and the Corporate Eco Forum.

Want to know more, share what you know, catch up with latest and help figure out next steps? Join the US BCSD, WBCSD and the Yale Center for Business and the Environment for a unique working meeting in New Haven July 16-17.

[Scott Nadler is a Senior Partner at ERM and Program Director at US BCSD. To share this post, see additional posts on Scott’s blog or subscribe please go to snadler.com. Opinions on this site are solely those of Scott Nadler and do not necessarily represent views of those quoted or cited, ERM or its partners or clients, or US BCSD, its members or partners.]

The Pit and the Pendulum: EHS&S and Productivity

Some EHS and sustainability leaders feel like characters in an Edgar Allan Poe story. That’s never a good sign, especially when the story is “The Pit and the Pendulum.”

Management guru Edgar Allan Poe

Management guru Edgar Allan Poe

In the story, the protagonist is stuck in a bad place. He is in a dungeon, trapped between falling into a deep, dark pit, never to be heard from again; or lying still as a sharp pendulum blade swings slowly back and forth, inexorably moving closer to cutting into him, deeper and deeper.

For EHS&S leaders, the pit is organizational oblivion, with CEOs saying “no news is good news” and hoping never to be reminded that you and your program exist. The pendulum is the oscillation of corporate strategy and organization. It swings from centralization last time to decentralization this time, and back again. Or from growth to contraction. Or from geographic to functional organization. Merging or splitting up. Back and forth, back and forth. Whichever direction it’s swinging now, you can bet it will swing back again later. And each time, the blade cuts lower.

Like Poe’s protagonist, EHS&S leaders desperately hope there’s a way out and that the story gets better. In the Poe story [spoiler alert!], the cavalry rides in to save the day, literally. In corporate reality, there is no cavalry. But there is a ladder to climb out.

The ladder shows up when you shine some light into the dungeon. When you look across multiple companies and sectors and see the same phenomenon, a few things become clearer:

  • It’s not personal. You actually have a lot of company down there. Look around. Many of your peers in other companies are in the same place. Perhaps more importantly, many of your business and functional colleagues are also down there with you.
  • It’s not random. There are real things going on in the national and global economy which are driving this situation. As I wrote in an article this week, we are in the Era of Productivity. Investor pressures to preserve earnings and deliver growth are colliding with soft markets, collapsing prices and geopolitical uncertainties. Boards and CEOs are focusing on hard-core productivity: how to squeeze more value from every resource (capital, equipment, people) – or how to reduce the resources needed to produce each unit of value.
  • It’s depressing. Almost as depressing as this blog. Especially for EHS&S veterans who finally thought they were getting real traction with sustainability, it’s wearying. The economy may be out of the recession, but the profession is still in clinical recession: not as deep or prolonged as clinical depression, but still a barrier to seeing if there are ways out.
  • There is a way out. EHS&S can become a driver of productivity, not just a victim. Many EHS processes and systems are artifacts of earlier great ideas, but have grown stale, bureaucratic and cumbersome. They may no longer be fit-for-purpose. They may be ripe for re-engineering and streamlining. And sustainability? That’s all about productivity, getting more value out of every resource (think carbon, water, circular economy) or reducing the amount of resources needed to produce value.

This Era of Productivity is the fourth wave we’ve lived through in the corporate environmental space in the US. The prior waves have receded but not vanished. Critical elements of the prior waves (regulation, accountability and sustainability) are still there, important parts of corporate programs. But the growing wave of C-suite attention is on productivity.

The_Pit_and_the_Pendulum_(1961_film)_posterClimbing the productivity ladder isn’t easy, and there isn’t any fall protection to reduce the risks. But climbing sure beats waiting for the pendulum blade.

[Scott Nadler is a Senior Partner at ERM and Program Director at US BCSD. To share this post, see additional posts on Scott’s blog or subscribe please go to snadler.com. Opinions on this site are solely those of Scott Nadler and do not necessarily represent views of those quoted or cited, ERM or its partners or clients, or US BCSD, its members or partners.]

Sustainable Platforms: Launching the next stage

Welcome to our new world of multiple platforms. One professional platform no longer needs to fill every need.

Many of us working in sustainability at this stage (I’m 60) find ourselves with lots of experience and interests – more than fit in any one role. My friend Chuck Bennett and sustainability recruiter Ellen Weinreb explored this challenge well in two articles last fall talking with a half-dozen of us “sustainability veterans”, including tips for “sustainability veterans who won’t quit”. There are other things we want to do professionally. At this point in our lives, we don’t want to delay getting on with them. I’ve gotten a lot of signals in my personal life recently that have reminded me forcefully not to put this off.

US BCSD logoSo effective today, I have a new platform. I am Program Director (part time) with the US Business Council for Sustainable Development. US BCSD is “an action-oriented and member-led nonprofit business association that harnesses the power of collaborative projects, platforms and partnerships to develop, deploy and scale solutions to ecosystems, energy, materials and water challenges.“

Oversize logoBut today I am also delighted to remain a Partner at ERM, a leading global provider of environmental, health, safety, risk and sustainability services. In fact, that remains my day job and my main platform. I will continue to provide corporate clients with help in strategy and management for environment, health and safety (EHS); and in linking sustainability issues more closely and effectively with their business. I look forward to continuing to serve my clients there.

And today I continue a lively conversation with a number of close friends and respected colleagues working in academia, in the investment community, and elsewhere using private means to achieve public ends. They are creating fascinating and hopefully sustainable platforms like Gastameco and its “innovative projects in the field of social housing” such as its We Crociferi development; or Co-Creation Ventures and its Stock Pot Malden “culinary incubator and commercial kitchen”.

I want this next stage to be the culmination of my professional life, not an epilog. For 40 years I’ve worked in the public-private frontier, in one way or another. For 40 years, I’ve helped drive change, hopefully in productive and constructive ways. For 40 years, I’ve worked in different aspects of strategy and management, economic development, and sustainability. Now, I want to pick and choose more of how I work on those issues. I want to apply everything I’ve learned. I want to keep learning.

In the long run, will this strategy of multiple platforms help drive more progress in sustainability? Will this mix of multiple platforms prove sustainable, personally and professionally?

I invite you to learn with me, by following these organizations, or following my journey on this blog or on Twitter.

[Scott Nadler is a Senior Partner at ERM and Program Director at US BCSD. To share this post, see additional posts on Scott’s blog or subscribe please go to snadler.com. Opinions on this site are solely those of Scott Nadler and do not necessarily represent views of those quoted or cited, ERM or its partners or clients, or US BCSD, its members or partners.]