December 28, 2011

Like everyone, I have thoughts and wishes for 2012. Besides personal ones for me and my family, I have one I wish to share with you, my fellow environmental professionals. My wish for 2012 is that we go back to the way it was about a decade ago or so and live in a society that makes decisions based on facts and science rather than based on innuendo and to please those who yell the loudest or have the best lobbyists. Need an example. There are many. But just a few days ago I was watching a political discussion show and a “panel” of experts declared the EPA as “out of control” because of their new draft mercury rules, without speaking of what those rules were. They conveniently did not mention that the rule contains an analysis showing a net economic benefit to our country of hundreds of billions of dollars. Now, they can critique the analysis; that’s fine. But to criticize a rule just because it’s a rule and not its merits is what I am talking about.

We should make decisions for our society and our country based on the best science, and not worry so much about pleasing constituencies. Decisions should not be made based on short-term gains (for the next election cycle), but, instead, for the long-term benefits for the most people. Yes, in all decisions (i.e., new rules, allowing a project to move forward or not), some people or some businesses get hurt and some prosper. But if these decisions are transparent, based on science and not hearsay, and made for long-term benefits, then businesses and people have a chance to adjust positively to even those decisions that may initially have adverse impacts. In the last decade, so many societal decisions have been made (and even more delayed or avoided) based on pleasing a small (either loud or wealthy) constituency, and this should be ended.

And I hope that businesses, governments, and other institutions begin in 2012 to be more innovative and take more smart risks. I detect in these past few years (especially since our recession) organizations have hesitated to make logical, wise decisions. The status quo is easier than doing something new or different, even if likely to be beneficial. The fear of what may happen to decision makers because of a decision maybe failing to meet all goals is paralyzing growth in this country. I hope that organizations will stop blocking otherwise logical plans that are not quite perfect and use smart analysis to fix and improve a bad situation – if it happens. It is only with a changing approach like this that U.S. businesses can innovate, become more competitive, and save money at the same time; and governments, universities, etc. can better serve its stakeholders.

I’m hoping that in 2012 all science-based professionals, such as the readers of this blog, begin to get greater respect and recognition than the non-science educated people whose decisions affect our companies, country, and our careers.

Let me know your thoughts!

I hope you, your family, friends, and colleagues have a Happy, Healthy, and Prosperous 2012 from CCES. And I hope we can be part of the coming year for you, as well.

December 2011

The year-end holidays are a time for big meals, family, etc. But we should always keep the thanks in Thanksgiving, Christmas, New Years, etc. Here are some statistics to drive home the importance of sustainability and for the holidays. You probably heard the news story about a month ago that the Earth’s population has just reached the 7 billion mark. But there is another statistic that did not make the news even more sobering. According to the IPCC, of the 7 billion people a little over 1 billion live “like us”. That is, we eat 3 full meals a day, own our own car (and maybe more than 1 and a boat, too), have a roof over our heads where we can easily burn fuel or use electricity with a click of a button to control the temperature, go on vacation, and use many “things” to make life easier (i.e., TVs, smartphones, laptops, etc., etc.). And even if some of these billion plus people do not physically have all of these, it is only by choice. Yes, we in the U.S., Canada, Western/Central Europe, Japan, Australia, and parts of other countries are all high resource and energy users. This is not a guilt trip. We have been given this opportunity to have access to these. They are affordable, so we consume and use.

But this statistic leads to two important points. According to several demographers, the expected world population in 2050 – less than 40 years from now – is expected to be 9 billion. OK, what’s a couple of billion more mouths to feed, particularly if most will live on subsistence diets, will not own cars or climate-controlled homes, take vacations, etc.? But the kicker is that it is believed that by 2050 the number of people who will be “like us” will increase from a little over one billion to 3 billion! 2 billion additional people will live in bigger homes, drive cars, use laptops, refrigerators, clothes washers, TVs, smartphones, etc. This will occur mainly in the “BRIC” countries as they grow and people move to the middle class. We are already seeing many people in China giving up their bicycles and buying their first automobiles, where both the infrastructure (the roads) and the environment (the air) are not ready for this big increase in automobile usage. Therefore, sustainability is a must for us. How can we refuse these additional 2 billion people having seen how “we” live to live “like us”, too? But how can we provide the extra energy, water, and resources for all of these new items for these additional 2 billion people? We must redouble our efforts to be sustainable or our natural resources will be so scarce as to put us in another recession (or worse) or lead to war or protests.

And, how does that initial statistic relate to the holidays? If you are reading this article, you are most likely in the one billion out of 7 who live a high energy lifestyle. No matter what may be troubling you (and I am sure that it’s legit), always be thankful that you have access to 3 full meals a day, a comfortable home, means of transportation, access to the Internet, TV, and gadgets galore, etc. Be thankful that you are not part of the 85% of the world’s population that do not have access or cannot afford all of these pleasures.

Happy Holidays to you and your family from CCES.

December 13, 2011

The majority of the corporate sector has not jumped on the bandwagon to go “green”, despite the evidence that doing so has many direct positive financial benefits. A major reason, I believe, is that the decision makers (CEOs, CFOs, etc.) are older and do not have a comfort level about sustainability. They did not learn about it in their MBA or other programs. That’s changing as nearly every MBA program now offers courses on sustainability in business. Decision makers tend to be conservative and do not want to risk possible negative impacts on a company’s bottom line and/or reputation. So they sit and wait to see how others have done with their programs. Below are some concerns corporate executives have expressed, and potential ways to overcome them.

Other articles have demonstrated significant reductions in expenses achieved by reducing one’s energy usage, a major part of a green program, money that goes directly into corporate profits. While CFOs acknowledge this, these types of efforts are generally not recognized by the press. While a newspaper often publishes articles showing how profits or sales of a company rose or dropped significantly, when was the last time an article was published about the decrease in energy usage or even in expenses? Lesson: Determine ways to positively reinforce energy gains for the decision makers.

Public perception also plays a role in corporate thinking. In a 2010 study by Harris Interactive, only 16% of American consumers said they believe most or all businesses are committed to ‘going green’ and there is high suspicion of company claims of success. This attitude perhaps resulted in another result of the poll: 71% of executives surveyed stated that they were hesitant to invest in a green program because of “consumers’ unwillingness to pay a premium for green products or services.” While consumers tell pollsters they are concerned about the environment and are willing to pay more for a “greener” product, results at the store level say otherwise. Therefore, “green” is really a secondary concern to shoppers behind performance and convenience of product usage. Lesson: Make sure that “green” products retain all of the advantages of conventional ones and say so on its label and literature.

There is also a general distrust of companies and their marketing claims, and that extends to “green” claims. This may cause companies to hold back on communicating real sustainability achievements for fear of a backlash. Lesson: Be transparent and complete in your communications; make sure there are “takeaways” (i.e., the proper metrics, such as GHG reductions); communicate by all avenues possible (social media) to different audiences; give credit to others; do not overdo the impacts of your efforts.

CCES experts can help you develop the most cost-effective sustainability strategic options; catalog these efforts to best frame and express your sustainability successes through the proper metrics; and to communicate them in diverse ways to different audiences for you to get the maximum gain for your executives and stakeholders.

December 6, 2011

Many companies are beginning some sort of sustainability program, recognizing its financial benefits. While many companies are instituting programs, many do not realize the importance of developing metrics and properly communicating progress. What type of data needs to be collected? Should sustainability be communicated at all or should it be delayed until after most goals are achieved? Many companies, big and small, wrestle with this problem. Overall, it is best to develop some form of communication, to demonstrate goals and progress, whether it is a formal Corporate Sustainability Report (CSR) or a few paragraphs in the corporate newsletter or website. Such a report is an opportunity to communicate your program’s existence to diverse stakeholders and others who have an interest to engender further support.

The report does not have to be lengthy or complex. In fact, small may be better as it has a better chance to get read. Know who your audience is. Who will read the report and what do they care about? Will it be employees, management, customers, business partners? What are they looking for? What are their expectations? Therefore, don’t just write down some goals and background, but do some planning to identify the issues of importance to meet their expectations.

The most important take-away for a reader of a CSR report is data for that is what people will remember. While you may have implemented some good new projects (upgrading your HVAC system, lighting, new windows, etc.), merely describing these does not impress; people will shrug their shoulders. What does resonate with most audiences is data, goals and achievements. So your CSR or few paragraphs should include how many tons of GHGs were reduced (or percentage) and the equivalent of how many trees were planted or cars taken off the road. This is what will impact your readers. Also, talk about the future and goals (i.e., “we’re ahead of pace to meet our goals”). Don’t forget to mention the sustainability team and give credit in print, from upper management support to those in the field.

Now, the next challenge is to get your CSR or section of a broader report read. Use communication tools, like your company’s website and social media to get your message across of your program’s progress, particularly to customers, employees, investors, and other interested parties in the specific places they read, such as in specific Linkedin Groups, in the sustainability, financial, and manufacturing areas.

CCES technical experts can help you not only plan the steps of a sustainability program, but can also develop the necessary data to give it meaning. We can also assist in helping you write your CSR report or other communication.

November 22, 2011

Thanksgiving and the year-end holidays are a time for big meals, family, etc. But we should always keep the thanks in Thanksgiving. Here are some statistics to drive home the importance of sustainability and for Thanksgiving. You probably heard the news story about a month ago that the Earth’s population has just reached the 7 billion mark. But there is another statistic that did not make the news even more sobering. According to the IPCC, of the 7 billion people a little over 1 billion live “like us”. That is, we eat 3 full meals a day, own our own car (and maybe more than 1 and a boat, too), have a roof over our heads where we can easily burn fuel or use electricity with a click of a button to control the temperature, go on vacation, and use many “things” to make life easier (i.e., TVs, smartphones, laptops, etc., etc.). And even if some of these billion plus people do not physically have all of these, it is only by choice. Yes, we in the U.S., Canada, Western and Central Europe, Japan, Australia, and parts of other countries are all high resource and energy users. This is not a guilt trip. We have been given this opportunity to have access to these. They are affordable, so we consume and use.

But this statistic leads to two important points. According to several demographers, the expected world population in 2050 – less than 40 years from now – is expected to be 9 billion. OK, what’s a couple of billion more mouths to feed, particularly if most will live on subsistence diets, will not own cars or climate-controlled homes, take vacations, etc.? But the kicker is that it is believed that by 2050 the number of people who will be “like us” will increase from a little over one billion to 3 billion! 2 billion additional people will live in bigger homes, drive cars, use laptops, refrigerators, clothes washers, TVs, smartphones, etc. This will occur mainly in the “BRIC” countries as they grow and people move to the middle class. We are already seeing many people in China giving up their bicycles and buying their first automobiles, where both the infrastructure (the roads) and the environment (the air) are not ready for this big increase in automobile usage. Therefore, sustainability is a must for us. How can we refuse these additional 2 billion people having seen how “we” live to live “like us”, too? But how can we provide the extra energy, water, and resources for all of these new items for these additional 2 billion people? We must redouble our efforts to be sustainable or our natural resources will be so scarce as to put us in another recession (or worse) or lead to war or protests.

And, how does that initial statistic relate to Thanksgiving? If you are reading this article, you are most likely in the one billion out of 7 who live a high energy lifestyle. No matter what may be troubling you (and I am sure that it’s legit), always be thankful that you have access to 3 full meals a day, a comfortable home, means of transportation, access to the Internet, TV, and gadgets galore, etc. Be thankful that you are not part of the 85% of the world’s population that do not have access or cannot afford all of these pleasures.

Happy Holidays to you and your family from CCES.

November 1, 2011
More and more corporate upper management understands the picture that in these tough financial times, going “green” or being more sustainable is not an idealistic statement of millionaires or old hippies, but is smart business and engineering management. While technology can help reduce one’s energy use, water use, and waste generation, etc., ultimately for such a program to sustain long-term benefits for the company, its employees have to cooperate and make it a part of their everyday lives to work with these technologies. How can companies get employees and other stake-holders to keep their interest up in a sustainability program in the long term? There is no one answer to this question, but here are 3 possible strategies to engender cooperation.
1. Keep it Simple. The biggest source of opposition to such a program even among people sympathetic to its goals for the company and the Earth is that it involves more work. People feel overwhelmed at work more and more, that they are doing more with less support. And, of course, there is more and more involvement in home duties, as well. A company begins a well-intentioned “green” program and workers think that there will be more things they have to do (and paperwork to fill out) as part of their duties. So make it easy. At least start up with items that involve no work at all, such as installing motion sensors to turn off their lights or easily programmable thermostats (through a Smart Phone) for individual comfort. Minimize paperwork to prove compliance.
2. Make It Fulfilling. People, in general, get excited at the start of a new, interesting program like a “green” or energy-saving program, but lose that fresh feel for it in time. How can one maintain enthusiasm for (and compliance with) such a program? A good way is to develop a regular internal “newsletter” of some type to chart the progress of your program. Let employees know just how the company is benefiting from the “green” program – how much lower the carbon footprint is, how much less waste has to be disposed, etc. And, most important, how much money the company has saved by these initiatives. Perhaps the company can put back some portion of the money saved and return it to the employees in terms of a party or in a gift (i.e., provide each a free CFL or a free energy saving tips) to take home. Another idea is to set up on an Intranet site a forum for employees to ask questions, receive answers, and share experiences.
3. Reward and Punishment. Professionals say it works for mice and for children, so why not for adults, too. Some companies have included individual behavior as a goal on employee’s annual review and will get increased bonuses and other benefits from meeting these goals. It is critical, of course, to be very clear on what the goals are to be met and give the employees full direction on how to achieve these goals.
CCES can help your company prepare a smart, sustainability program with maximum financial benefits and engenders cooperation from your employees and stakeholders.

Oct. 17, 2011

More and more U.S. organizations see the financial advantages of setting and attempting to meet sustainability goals. However, many others are still waiting for the “right time” to start such a project. Some consider sustainability a risk, a venture into the unknown, which, of course, fosters avoidance. However, a solid body of U.S. and global companies has developed successful sustainability programs, setting and meeting strategic goals. Information about such programs are now posted in various registries, and, therefore, lessons can begin to be learned about how to overcome potential program barriers and what the most cost-effective successes were. This article summarizes a recent detailed survey of executives involved in sustainability programs.

A White Paper published by Tririga in July 2011 (http://www.tririga.com/information-center/whitepaper-view/sustainability-chasm-strategies/index.html) summarizes a survey of 130 executives from large companies and public service organizations, most of which have at least initiated a formal sustainability program. The survey found that the following activities were the focus of organizations that have achieved their sustainability goals:
• 91% improved facility energy efficiency
• 77% improved equipment and operations servicing and maintenance, and
• 75% improved space utilization (i.e. space optimization)

Energy savings, as discussed in earlier Environmental News for YouTM, is the most successful strategy given unit energy prices at record levels (cost per kwh electricity or per gallon of oil). Planned, site-specific energy audits followed by implementation of reasonable findings are virtually guaranteed to pay for themselves and more. Plus it’s an effective way of reducing greenhouse gas (GHG) emissions, the most common (but not the only) measurement for sustainability. 40-50% reductions in energy use (and the concurrent reduction in energy expenses) within 5 years of beginning the process was shown to be typical and fairly consistent across type (office building, retail, etc.) and U.S. region (arid vs. wet, cold vs. warm). Remember the power of energy savings from a business point of view. Saving energy expenditures is money “in the bank”, directly raising profits. The alternative way to raise profits, increasing sales or revenues, takes quite an investment (sales staff, ads, etc.), is not guaranteed, and can change from year to year. Energy savings stay consistent and grow (as unit costs grow) in the future.

As the numbers above show, many companies have found success and benefits from improved facility maintenance planning and implementation of improved processes. This includes preventative maintenance. A previous Tririga study determined that a well-maintained preventive maintenance program pays for itself and more resulting in a ROI of 545% compared to performing no preventive maintenance. Executives cited that such a program reduces: the number of expensive “emergency” repairs; the number of expensive capital purchases; and both energy consumption and maintenance labor staff needed. For some companies, part of this investment in improved facility maintenance is continuous commissioning. Although not required, many large, new processes and buildings undergo commissioning by a specialized firm to ensure that it has been built to spec and that the equipment and operations are functioning optimally and as designed. Deviations affecting performance sometimes happen during construction. There is also a segment of commissioning which focuses on maintenance of equipment and operations, including continuous commissioning and review after operation begins. The survey showed that those that implemented continuous commissioning had it pay for itself and more. Besides these direct savings, improved facility maintenance lowers risk and better ensures that production and other goals are more likely to be met, pleasing those in the C Suite.

The other area in the survey which many executives reported success in and benefits for implementing is space optimization. Space reduction offers an opportunity for organizations to reduce expenses, such as rent, energy, water and maintenance labor, as well as reducing environmental impact. Especially with downsizing, more facilities have an excess of space for its needs. Companies that implemented optimization strategies for space, such as combining functions, putting related operations and groups near each other, and encouragement of staff to work from home, all were shown to result in direct cost savings. This either frees up space for other, new functions and ventures or to no longer lease. Freeing up space also means not heating or lighting it, reducing energy, resources usage (and expenses) even compared to “green” space.

Get more useful information in our blog: www.CCESworld.com/blog
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This Environmental News for You is meant to provide background on sustainability programs performed by other organizations. CCES experts can help you in the technical aspects of how you can benefit and how to get started with and see benefits from your sustainability program.

October 3, 2011

Sustainability is all the rage as many significantly-sized companies are evaluating it and seeing how it can fit into company plans and maximize economic benefits. We in the environmental community believe that sustainability programs almost always deliver a good return on investment (ROI) because of the economic benefits of reducing waste, water, energy use, etc. However, some C-Suite executives claim that sustainability projects do not have an acceptable ROI. Why the disconnect over the same numbers? How can the CFO’s ROI calculations be more severe than those of the EH&S Director?

Remember that ROI is a ratio of returns of a project over its total invested cost. An ROI may not appear good because the project’s total cost is made early, while the benefits, the time it takes to recover the money before the return is made, may be years in the future. Some companies’ ROI calculations take timing (such as different worths of current and future money) more strongly into consideration. This can be countered by emphasizing the long-term gains that will continue well into the future, once the effort or technology is in place, it will not be pulled out and savings will continue. In fact, in the energy and water realms, savings should increase as unit costs are expected to rise sharply for these commodities in the farer future.

Another disconnect is that sustainable projects produce indirect monetary returns, such as fewer compliance fines, enhanced consumer feelings toward the company, improved employee health and productivity, and reduced employee turnover. How do these real factors get quantified in a traditional ROI calculation? In confronting a “cold” calculation from a CFO, these hard-to-estimate, but real benefits should be brought up.

Some companies take risk into consideration when calculating ROI. If the strategies and technologies necessary for a sustainability project are considered unproven, then this may be factored into the calculations negatively. You can point out that sustainability is really “smart” projects and usage of resources which at various times have been scarce and expensive. Let the C-Suiters know that the company has likely already done many “smart” projects in the past to optimize resource usage. This is nothing new.

The same thing goes with the benefits of a sustainability program. Sustainability projects that reduce business risk (i.e., improve access to diversified sources of energy and water, reduce impacts of climate change-related actions, such as severe storms, etc.) should be recognized and credited for raising the potential ROI.

CCES experts can help your company develop smart strategies for a sustainability program and for projects that maximize your company’s financial benefits and acceptance.

People say we should ignore polls; the country should make decisions based on pure science or pure economics. But the reality is that governments and companies take their cues from public opinion, want to be seen on the “right” side and certainly not in the forefront of something divisive, even if is beneficial. Several studies show a “green gap” between what people tell pollsters about living sustainably and actually doing it. Americans say they want to live sustainably and are willing to pay a premium to do so. But purchase behavior at the store is different. Price and value, not sustainability, rule.

A comprehensive survey by Ogilvy & Mather showed 4 categories of Americans:

• 16% “super greens”, who actually make decisions based on sustainability norms

• 33% “upper middle greens”, who make some decisions based on sustainability

• 33% “lower middle greens”, informed, but make most decisions based on cost

• 18% “green rejectors”.

The problem with the green movement, according to Ogilvy Earth study is that it is too polarized and is trying to counter the green rejectors who are too idealistic to change. The green movement will grow by swaying much of the 33% lower middle greens to be upper middle greens and the 33% upper middle greens to become super greens.
What makes people become more “green”? Two factors: guilt and social costs. If green becomes the norm, people will follow, as they want to show off as “correct” on the issue.

Therefore, to market “green” products better, Ogilvy Earth concluded their research by recommending the 3 P’s: Personal, Plausible, Positive.

• Get away from the “green” tag. Surveys showed that many people perceive that a brand marketed in a highly “green” way is only for the wealthy elite or old hippies, and not for them. Make the product normal and do not scream in big bold letters how green it is. Make prominent that it is a good product that also happens to be good for the environment, if mentioned at all.

• Make it normal. … to be sustainable. Make it personal. On energy bills, there is often a bar graph showing how much electricity you used that month, the same month the year before, and what the “typical” household uses. Surveys show this is very effective in getting people to reduce their electricity usage – that it’s personal and that others use less. Try to do something similar in your messaging.

• Eliminate the “sustainability” tax. Walmart saw that Twinkies were cheaper than apples. How can positive social behavior (eating healthier) succeed when the healthy alternative, already perceived as less satisfying, is also more costly? Walmart made them equal. “Green” cleaning products are perceived as not as effective as conventional ones and more costly. Don’t “tax” virtuous products.

• Bribe shamelessly and punish wisely. Give prizes, rewards for being green. As for “punishment”, one major gym chain charges its members more if they use the gym less than frequent users, hoping to encourage greater use, increasing the chance of renewal. Can something similar happen with “green” products?

• Don’t stop innovating and educating. Introduce new products and designs and educate consumers. Some seek this. For others (lower middle), an innovation may hit home and get them to try things they would not earlier.

• Package normally. Just because a product is “green”, it does not have to be packaged in burlap and colored green. It can still be packaged as stylishly as a non-green product. “Showing” green is outside the norm, which you do not want.

• Hedonism over altruism. Change is more likely occur if glamorous. An example is “organic chocolate”. While this may repel some, this can appealing to people’s strong desires, while assuaging some guilt. Toyota and Ford have marketed their hybrid and electric cars through standard means that it is a good, reliable car with the fact that it pollutes less and saves gasoline costs as a sidelight.

Business Attitudes

According to the Ogilvy Earth studies, businesses are reluctant to go green for a major reason. Managers and the business itself are reluctant to change anything (put their “necks” on the line) for something out of the mainstream without a virtual guarantee of success or major benefit to the company. The company is concerned that either the green efforts will not be appreciated because few people are interested or people will be skeptical about green claims and believe it is greenwashing. It is easier to do nothing.

Present facts of the business benefits of going green to counter worries. The key is not to sell ideology (save the Earth), but instead have a company do good because it will be good for careers and the business. As they get used to the good acts, more will come.

Get more useful information in our blog:

www.CCESworld.com/blog
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This Environmental News for You is meant to provide background on green attitudes. CCES experts can help you in the technical aspects of your sustainability or “green” program.

July 2011

You are aware of the business arguments for establishing a sustainability or “green” program (see last month’s newsletter!) and are seriously considering or have begun such a program. It is therefore important to plan the proper metrics of your program in order to demonstrate success so that all stakeholders understand your benefits and achievements, be able to compare your program to others, and avoid any accusation of “greenwashing”. You need to feel sure about standards that certify your success. This article discusses the proper approach to successful metrics and several rating systems.

The first concern is your immediate goals. It is important to focus on one or two matters so you can show early progress. Given its high cost, energy and therefore greenhouse gas (GHG) emission reductions are most popular. Water conservation is critical in certain locations and also a good metric. Waste reduction or recycling is another. In any case, focus on developing a baseline that estimates accurately the parameter in question. One can normalize data using production parameters (tons GHG per square foot of space or per unit of product or per revenue) for better comparisons.

Whatever changes you implement for your program, be sure to correlate these to changes in the metric in question. So if you performed projects that have improved your energy efficiency, be sure to determine the energy parameter reduced (Kwh of electricity or gallons of fuel) and convert that using the proper published emission factor to tons of GHG emissions reduced. Of course, it’s also helpful to correlate this to money savings. Remember that stakeholders often care more about the summary metrics of GHG emissions reduced rather than the details of your energy efficiency strategies.

As your sustainability program grows and successes achieved, develop reports to show how successful your efforts have been and will be in the future. You should develop a written and online Sustainability reports to show progress, often in pie charts or graphs.

As your program matures, you may be asked or want to provide data to an ever growing number of sustainability indices to publicize your achievements There is a huge number of such sustainability rating systems. According to SustainAbility, there are over 100 rating systems, 80% of which started in the last decade. Some are part of mainstream organizations (i.e., Walmart’s Sustainability Index; Newsweek’s “Green Rankings”); others are its own specific entity (i.e., Carbon Disclosure Project (CDP); Climate Counts’s “Company Scorecard”). Some systems are specific to one area (i.e., carbon), while others treat sustainability as a broad issue. Sustainability ratings are being used by a growing number of investors, consumers, the press, etc. to judge companies.

Typically, these rating systems request specific information from target companies. For example, CDP sends an annual questionnaire to all S&P 500 firms. Other rating systems only review publicly-available documents about a company. Some do both. With a company potentially receiving dozens of such requests of different complexities each year, it is easy to not respond. An estimated 2/3 of indices rate non-respondent companies. How does a company choose which to cooperate with and which not?

It is important to research any rating system that may rate your company and you wish to provide information for. Here are 3 major criteria. First, does it have high credibility? Is it well read and respected? As discussed above, many well known organizations with large readerships provide sustainability ratings, such as Newsweek and Bloomberg. This guarantees name recognition and readership. Others, though less known, have strong sponsorship to ensure respect (i.e., CDP). Research into how many people read these indices and how often they are cited in reports can address this first criterion.

A second criterion is credibility. Are the ratings believable based on publicly-available documents which may lack true context? Or are ratings not posted for a company that does not supply data? For example, in the CDP, companies that do not return their questionnaire are not rated, but pointed out as a non-responder. Related to this is the thoroughness of the data sources. Is proper data reviewed before being evaluated? A credible rating system is thorough in its data evaluation.

A third criterion is transparency. Does the rating system publish in detail its evaluation methodology? This is critical to know how different companies are evaluated in terms of sustainability achievements and policy. A rating system without an overt methodology may change from year to year. Also, a transparent methodology saves you time in gathering and submitting data in a knowledgeable and professional manner.

Get more useful information in our blog: www.CCESworld.com/blog
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This Environmental News for You is meant to provide background on ways to maximize your “green” benefits. CCES experts can help you develop the metrics of your sustainability program and a system for collecting data, saving you much time and better ensuring success. We can also assist you in addressing and preparing appropriate questionnaires for sustainability indices.