By Nate Van Beilen, a student in the new Master of Science in Sustainability Management Program at the University of Toronto.
When looking at CSR reports we often ask ourselves, “Just how sustainable is this corporation?” or “How do I know if this company is taking sustainability seriously or just complying with reporting standards?”
Sustainability reporting is an important communication and disclosure tool for companies who wish to share their efforts with stakeholders. But how do we know a great sustainability report when we see one? In my opinion, a truly great report can only occur when a company has a clear vision and a supporting culture that drives sustainable thinking into every aspect of its company.
How do we know a great sustainability report when we see one?
As a student in the Master of Science in Sustainability Management (MScSM) Program at the University of Toronto, I am working to fulfill my summer internship requirement at The Works Design Communications. Each day I spend hours analyzing sustainability reports as part of a research project to determine the best practices and upcoming trends in sustainability reporting.
As I plough through the reports I have become quite proficient at identifying the leaders from the laggards. Sometimes it can be quite frustrating and I find myself shaking my head at some of the claims that companies make with almost no verifiable data to back them up. But every so often, my hope for a sustainable future is restored by a few great leaders whose sustainability strategies leave me inspired.
What’s Special About the Leaders?
What separates simply acceptable reports (ones that comply with standards) from those that go above and beyond? 3 words: Vision, Culture and Leadership. It all starts with companies that clearly see the business imperative of restructuring the foundation of their business model to reflect our changing ecological and social reality.
…new ideas are welcomed with open minds…
A progressive business model looks to reduce long term risks while ensuring an agile and resilient workforce and supply chain. Progressive companies do this by challenging themselves, based on scientific and cultural megatrends, to outmaneuver their competitors. But being an early mover also has its risks, and sometimes this means that leading companies will invest in strategies whose efficacy may still be several years away. A key difference in this way of doing business is that new ideas are welcomed with open minds rather than scoffed at or denigrated by those who tend to look backwards for their inspiration. Three companies that are showing how sustainable thinking is turning out to be well worth the investment are: Novelis, Dell, and Veolia.
Novelis is a shining example of a company that has actively changed its business model to embrace sustainable trends. Novelis is an aluminum company that uses 50% of its material inputs from recycled aluminum sources and by 2020 it aims to increase that number to 80%. Aluminum is lightweight, strong, and infinitely recyclable, making it an ideal material for products being manufactured by companies that are striving to be part of the emerging sustainable economy.
…a shining example of a company that has actively changed its business model…
Novelis has built partnerships that help to advance post-consumer recycling, scrap collection infrastructure, consumer product design, and recycling policies. These partnerships are much more than charitable – they are strategic alliances that create shared value for Novelis and its network of stakeholders including governments, customers/manufacturers, environment and society. Novelis and each stakeholder benefits in the following ways:
- Novelis benefits from wider access to secondary aluminum materials.
- Governments benefit from diverting more materials away from landfills.
- Customers/Manufacturers benefit from a reduced carbon footprint in their supply chain.
- The Environment benefits because recycled aluminum uses just 5% of the energy it takes to produce primary aluminum
- Society benefits because Novelis is doing its part to reduce it’s effect on climate change
Dell supports greater sustainability at a core level as evidenced by it’s evolving product line and supply chain. Dell has invested heavily in energy efficient technology and has reduced the energy intensity of their products by 43% in just 5 years. Today, 90% of its product line qualifies for the ENERGY STAR standard.
Alternative and recyclable material in products and packaging, combined with better design for end of life reuse and recycling are becoming more common. Dell buys packaging materials from a company called Ecovative which actually grows packing. Ecovative places agricultural wastes like wheat chaff or rice hulls into a mold and injects it with a fast growing fungi called mycelium. This packaging is completely compostable and is currently at price parity with Styrofoam.
Dell buys packaging materials from a company called Ecovative which actually grows packing.
Dell’s computers are now designed to be easily repairable and dismantled for low cost material recovery. In fact, Dell operates the world’s largest technology recycling program with services in 83 countries and territories contribute millions of pounds of inputs for Dell’s new products.
Dell has set numerous measurable goals for 2020 – this keeps it focused on its goal of a more sustainable future.
Veolia focuses on providing solutions for recycling, energy production, and waste water treatment and when possible, finding markets for those discarded waste products so that they become a profitable value stream. Some of these solutions are relatively well known such as converting waste cooking oil into biofuels but others demonstrate incredible innovation.
Veolia preserves natural resources by optimizing resource productivity in a closed loop system.
One example is turning wastewater into bioplastics by removing volatile fatty acids from sludge, and mixing it with bacteria that digest and convert the compounds into biopolymers, a type plastic that is biodegradable and useful for medical applications. Veolia also converts organic waste into fertilizer, heat, and electricity. One of their facilities in France converts 25,000 tons of organic waste into 3.5 million cubic meters of biogas, and 7,000 tons of fertilizer each year. The facility also generates 8,000 MWh of electricity and saves 2,000 tons of carbon emissions. The work Veolia does preserves natural resources by optimizing resource productivity in a closed loop system, and creates new revenue streams. Veolia is another example of what leadership looks like in the era of sustainability.
The Best Sustainability Reports Require a Fundamental Shift in Thinking
Even if your company follows all the reporting best practices, integrates the latest trends, and pays a design studio to make your report beautiful, it does not guarantee that your report will stand out. The best sustainability reports consistently emerge from companies that have done the heavy lifting.
Sustainability reports that shine go beyond reporting standards like GRI and CDP. They highlight new business models that plan for an uncertain future in the face of environmental and social challenges, while stretching the company beyond the limitations of technology, regulatory shortfalls and rigid attitudes about what success should look like. With this foundation in place, a company can truly delve into the megatrends on the horizon and deduce which new business strategies will be the most successful.
…look for clues regarding vision culture and leadership…
Novelis, Dell and Veolia are by no means perfect, in fact, they have a long way to go. But I would call them leaders because they have clearly embraced change. Each of these companies, in their own way, demonstrates a clear vision with an innovative culture around sustainability. So the next time you pick up a sustainability report, read the words carefully and look for clues regarding vision, culture and leadership – this will be your best indicator as to whether the company will be a leader in the era of sustainability.
To learn more about the U of T Sustainability Management Program as either a student or an industry partner – click here.
Nate Van Beilen is a student in the University of Toronto’s new Master of Science in Sustainability Management Program
KEYWORDS: Reports, Toronto Sustainability Speaker Series (TSSS), CDP, csr reporting, Dell, GRI, Leadership, Master of Science in Sustainability Management Program, Novelis, sustainability reporting, Veolia