Wednesday, February 27, 2013

GACSO - a forum for Sustainability Professionals

At last week’s meeting hosted by DWF in Manchester Alan Knight, sustainability director at  Business in the Community (BITC) and a founder member of GACSO, the global association for corporate sustainability officers, explained more about the organisation. This is not a body where suppliers come to pitch to sustainable professionals. It exists to allow professionals to meet, compare notes and share best practice. 

The vision of GACSO is that sustainability should be at the heart of corporate strategy. 

Sustainability professionals will guide organisations on the megatrends which shape every business. There is potential synergy between GACSO and organisations such as the Institute of Environmental Management and Assessment (IEMA) but they are essentially different. GACSO takes an overview broader than just environment. Its mission is to address the challenge of 9 billion people in the world in 2050. How can these 9 billion people have a good quality of life on our planet when we are already exploiting it at a rate which will need three planets to sustain? Nine billion people will need more materials, more food, more energy, more water and create more waste. No one has faced such a challenge before and there are no guaranteed answers, just big questions. An important question is where the people will come from to take the role of sustainability officer. The business schools may meet the demand in due course but it is still not clear what skills and competencies these people will need. Universities are already seeking relationships with GACSO in order to develop the concept of the corporate sustainability professional.

Arguably sustainability officers, supported by a team, should operate at board level and have a full understanding of finance, governance, carbon management, health and safety and supply chain issues. At the moment, because the notion of sustainability is still ill-defined, the wrong people are often appointed as sustainability officers and are frequently appointed at the wrong level or in the wrong department. 

Corporate sustainability offices are pioneers. They will be reporting to somebody who has never done their job and they themselves will be leading people whose jobs they have never done either. Compare this with a finance or engineering professional who will start at the  detail level and work through a range of roles before becoming a director. 

GACSO is an organisation of professionals and membership therefore is individual not corporate. It plans to hold regional meetings throughout the country - a safe space for professionals to talk about their job. See for more information.

Tuesday, February 26, 2013

Enough is Enough

Last month I attended the launch of Enough is Enough by Dietz and O'Neill, founding members of CASSE, the Centre for the Advancement of the Steady-State Economy. 

Everyone should read this book. The authors quote Kenneth Boulding, “Anyone who believes exponential growth can go on forever is either a madman or an economist,” and go on to explain in detail why this is true. Of course this story has been told many times before, in An Inconvenient Truth and The Age of Stupid among many others. An Inconvenient Truth tucked its recommendations for action away among the closing credits while The Age of Stupid was a festival of hand-wringing over what went wrong. Where Enough is Enough scores is that after describing the present situation it constantly asks “What could we do differently?” and “Where do we go from here?” Most of the answers are very sensible, although I do take issue with their idea of lowering productivity to provide more jobs. Why not increase productivity and provide more leisure? But that’s a debate for another time.

The key issue, of course, is to get enough people to realise that we need fundamental change and to support that change. Maybe we’ll get to that tipping point, but the problem is that too many people have too much to lose if they step away from the present system.

The book is full of cartoons and many of them cheapen its image. They give the impression that the cause of all the world’s problems is cynical and corrupt capitalists. It isn’t nearly as simple as that. There are signs that some business leaders are beginning to get the message, and pitting one section of the community against another is not only no solution, it’s a waste of the very limited time we have to get things under control. 

There’s much to be done. Enough is Enough is a useful route map.

Monday, February 25, 2013

Sustainable Real Estate

At a recent meeting of GACSO - the Global Association of Corporate Sustainability Officers - Lynn Cook, Real Estate Associate at DWF, explained how legislation is driving sustainability in the property sector. The key legislation is the Energy Act 2011. This comes into effect in 2018 and provides that any property with less than an E rating may not be let. 25% of offices are currently below this efficiency rating (and 45% are currently below D).

The legislation applies to existing leases, not just renewals or new leases. Landlords will find pressure from mortgage lenders and in turn will put pressure on rents in order to recover the costs of improvements. There may be some help from the Green Deal, launched in January. This is a scheme based on the “pay as you save” principle. Loans are advanced for the cost of approved energy-saving work and repayments are recovered via the electricity bill. The Golden Rule is that energy savings should be greater than or equal to the repayments. So far uptake of the scheme has been slow. The problem for the commercial sector is that the landlord’s and the tenant’s interests are not necessarily aligned. The landlord makes the improvements but the tenant is often the bill-payer.

The government is still supporting renewable energy. The feed-in tariff (FIT) for solar energy is still a good deal, even after the government’s backtracking on the rate of subsidy, which sent a number of solar installers to the wall. The Renewable Heat Incentive, covering biomass, heat pumps and solar thermal, has been much more carefully thought through and will now make these systems cost-effective in many more situations.

Now is the time for landlords to survey their current stock and determine what needs to be done to bring it up to E or above. Or maybe just to dispose of it. Introducing so-called “green leases” putting more of the obligation for energy efficiency on the tenant, is another way of reducing the landlord’s burden.

For the future, it is difficult to tell whether efficient buildings will have an enhanced capital value - or whether leaky buildings will plummet in value as 2018 approaches. Maybe there will be a mad refurbishment panic at the end of 2017. The government is not expected to move from the 2018 deadline. After the FIT disaster it is much more organised.

Friday, February 22, 2013

Sustainability At Law

DWF, the business law firm, hosted a meeting on behalf of GACSO, the Global Association of Corporate Sustainability Officers in Manchester yesterday. Here’s what I learnt.

Ty Jones, Head of Value and Sustainability opened by explaining how sustainability affects a legal practice.

Sustainability is now part of the business plan and is far more than window dressing. It’s a platform for delivering outstanding results and a clear differentiator when every legal practice is trying to promote itself as a deliverer of excellence. The drive to sustainability is led by stakeholder expectations. No client wants to be associated with a supplier with a bad reputation, and vice versa. The question is whether the professional firm is a value limiter or a value creator. The value limiter concentrates on business as usual to the exclusion of all else. The value creator is a thought leader, a strategic thinker and will challenge clients. For credibility, there must come a point where the firm will refuse to do business with clients that are recklessly unsustainable. Even so, the firm will not hold clients to standards that it cannot meet itself. The firm as value creator will add value by challenging clients and thus will limit its clients to the best clients. Equally it will attract and retain the best professional partners to work in the firm.
Until two years ago DWF had no Environmental Management System (EMS). Now it has ISO 14001, as expected by its clients. Clients putting work out to tender are going far beyond asking whether there is an environmental policy. Now they ask for details of the EMS and want to know how it can add value to their own sustainability objectives. Some clients can have rigorous sustainability standards and yet demand less than sustainable service from their lawyers. An example is insisting on face-to-face meetings at remote locations, when the same result could be achieved with a conference call .
It’s important to influence the supply chain as far as a relatively small organisation such as DWF can. The firm has therefore established structured supply partnerships including benchmarks, quarterly reviews and regular discussions.
Employee engagement is important from the moment of induction into the firm. Many people don’t realise that sustainability goes far wider than environmental issues. They also don’t realise that actions with a sustainability consequence – use of materials, use of energy, disposal of waste – also have a financial consequence. Smart use of technology, not just using technology in an unplanned way, can make people’s working lives more sustainable. The recent acquisition of Cobbetts by DWF, involving the absorption of 500 people into existing premises, demonstrated exactly how this can work.

Sustainability is firmly embedded in the DWF business plan.

Later in the session Lynne Cook of DWF spoke about sustainability and real estate and Alan Knight of BITC explained the background and objectives of GACSO. More on this in a later blog.