Sustainability... Where Do We Start?
by Wendy Schlett
Sustainability is a business model that has taken more prominence in the business world recently. Investors like Larry Fink at BlackRock have identified sustainability as a “new standard for investing” to manage and minimize business risk. There has been a lot of buzz around defining, structuring, and organizing this new business model. At Foresight, we have been asked by many CEO, CFOs, and Vice Presidents of Sales, “Where do we start?”
Step 1: Identify Where You Are
When we receive a new engagement with a company beginning this journey, we start by asking some key departments to come to the table. Sustainability focuses on three pillars: Environmental, Social, and Governance or ESG, as many are now describing it in the investment world. So gather the four key people that manage the following tasks within your organization: Human Resources, Accounting, Health & Safety, and Environmental. While many other people in an organization may be pulled in from time to time to help drive and re-organize sustainability efforts, these four positions oversee core areas of reporting.
The most accessible place to begin is by identifying social and environmental metrics you are already generating for other reporting purposes in the US. You will be surprised how much sustainability data you already have collected through other requirements and standards. The first step is to isolate valuable data your various departments manage to see how these efforts can serve your sustainability goals.
Gather Social & Governance Metrics
For the human resources department, we ask them to pull information from the company's philanthropic and community outreach efforts. We collect and organize the data into a simple spreadsheet to see how much the organization contributes to the local community. How many employees engage in community outreach efforts yearly? If possible, pull year-over-year data and provide additional notes, context, feedback, and outcomes. This will help an organization tell a story about why these community events were important to your organization.
Next, in the United States, if you are an organization with more than 50 employees, an Equal Employment Opportunity (EEO) Report is submitted to the federal government annually by Human Resources. Again, tap this individual or department to pull together the past three years of EEO reports and organize them in a similar spreadsheet to compare against local demographic information. This information can begin to tell your company's story around diversity. This baseline data can drive future changes.
We can now move into conversations with individuals or departments around health and safety. Two key pieces of data come from this department. The first is an annual report to the Occupational Health and Safety Administration (OSHA) in the United States. This report is called an OSHA 300A log. From this log, a company can calculate injury rates based on the number of injuries a company reported to the federal government and compare them to industry average data generated by the U.S. Bureau of Labor and Statistics. Injury rates are a metric developed annually, readily available, and can be used to describe how well a company values its employees.
The second piece of data is training information. Health and Safety training is required to be documented in the United States. This data can be again organized on spreadsheets to demonstrate how often and how many employees are trained regularly on health and safety measures.
Quantify Environmental Metrics
Environmental data may feel more familiar. Here, we recommend working with both Accounting and someone responsible for Facilities or Environmental efforts within your organization. Accounting is essential as they pay the bills for energy, water, and waste, while the head of Facilities has vendor information. Begin organizing environmental data into a spreadsheet to document how much energy, water, and waste are consumed or generated in a year. Three years of metrics will prepare a company to calculate baselines, Greenhouse Gas Emissions, identifying ways to reduce consumption over time. With these numbers in hand, you can begin to strategize improvements.
We believe that you can’t manage what you don't measure. By having the foundational metrics described above available, you will be on your way to beginning your sustainability journey. Knowing what information you have allows you to evaluate the data you still need to collect to fill in the gaps. Remember, sustainability is a journey, not a destination. The first step is identifying where you are.
At Foresight, we know embracing new business paradigms such as sustainability and ESG is not easy. We also know it is by no means impossible to achieve with the right tools and support. Check out our business guides on Utility Data Collection to look at how we can assist in the collection and management of sustainability metrics.
