Public concern about the state of the environment has risen to a high point, fueled in part by media coverage of climate change, energy use, air pollution
Public concern about the state of the environment has risen to a high point, fueled in part by media coverage of climate change, energy use, air pollution and other environmental issues. Topics that may have slipped under the radar a few years ago are now part of people's daily conversations about energy conservation, recycling and overall ìgreener livingî.
The ramifications for businesses are significant. Simply staying ahead of regulatory requirements, difficult as that may be, no longer is sufficient. In fact, according to a 2007 Roper Green Gauge survey, the majority of Americans believe that current federal and state laws aren't stringent enough to protect the environment. Furthermore, most of the respondents felt that corporations regularly shirk their stewardship responsibilities.1
Given this backdrop of mistrust, taking a defensive or secretive operating approach is risky. Companies that instead adopt a proactive and transparent strategy to communicate their environmental performance can gain significant brand value and reputation, win new business, enhance customer and employee loyalty, and maintain a strong social license to operate.
Transparency (maintaining openness and accountability in communicating company performance) is hard work, requiring both focus and resources. Yet the payoff can be substantial. Two examples of the positive benefits of active communications include good community relations and the ability to attract and retain highly skilled employees.
REDUCING THE PAIN OF PERMITTING
As is well known in the aggregate industry, it is arduous, time-consuming and expensive to obtain permits for new sites or facilities. Companies with a solid environmental track record often can leverage their strong performance to help build positive relationships with local community members and organizations. If you are known as a good neighbor and a responsible environmental steward, your reputation may translate into a smoother public comment period and shorter permitting process, saving time and potentially hundreds of thousands of dollars in lost revenue.
The important point to remember is that you need to communicate performance early, often and in good faith. Companies must truly listen to (and respond to) community concerns about environmental impacts, and not choose the short-term ìeasy outî of brushing off or ignoring seemingly irrelevant or uninformed opinions. A patient and ongoing approach to sharing information ó through direct conversations, town-hall meetings, site tours and external Web site information ó can help educate local residents and leaders, set realistic expectations for performance, and establish your company as a trusted and contributing member of the community.
WINNING THE WAR FOR TALENT
ìGreenî credentials also are becoming more important in recruiting and retaining the best employees. Newly minted MBAs and college graduates are showing significant interest in examining prospective employers' environmental records as part of their job-search process. Thirty-four percent of MBAs in a recent Hill and Knowlton study cite a company's environmental policy as an ìextremelyî or ìvery importantî criterion in weighing a job offer from that firm. One in five MBA graduates in the United States would turn down an ìattractiveî offer from a company with a poor environmental record.2 For any human-resources manager or company executive, these are important ó and perhaps startling ó findings.
Equally significant are gains related to the communication of environmental performance internally ó for example, through company intranet sites, executive speeches and internal newsletters. Companies that engage and tap into the passions of existing employees by sharing environmental policies, performance updates, and specific goals and targets often find a related rise in employee morale, loyalty and willingness to contribute to environmental success. This can form the basis for a ìstewardship culture,î in which employees are attuned to environmental performance and take the initiative to offer suggestions for improvement.
For example, Rio Tinto, a world leader in mining, communicates corporate social responsibility messages to 36,000 employees worldwide using a company-wide video magazine to inform, connect and engage its dispersed workforce.
Despite the benefits of transparent communications, it may seem a daunting task (especially to smaller companies) to begin to gather, consolidate and disclose detailed information concerning the measurement and management of environmental impacts. Yet, upon closer examination, you may find that much of this information already exists.
In addition to conducting an information review, a good place to start before launching any sort of communications campaign is to determine key stakeholder interests and concerns. Most companies already conduct employee surveys and customer satisfaction surveys; hold meetings with local communities related to siting and permitting issues; and have regular discussions with shareholders or other investors. These interactions can yield insights into the key environmental concerns of stakeholders, and any other topics that should be addressed through company communications.
GETTING IT RIGHT
You will need to plan your communications strategy carefully, so that it will be relevant, credible and responsive to stakeholder needs. Many of your stakeholders will be relatively sophisticated and will reject unsubstantiated claims or vague assurances as ìgreenwash,î a term for misleading the public about a company's environmental practices.
An easy and important first step is to disclose your environmental or corporate responsibility policy. Then, you can expand communications to include a background on general environmental objectives, supplemented by a concise set of quantitative goals and targets that stakeholders can track over time.
For certain environmental performance indicators, you may already have information available in the form of data reported to federal and state regulatory agencies. If so, you can easily repackage some of these statistics for external purposes. In other cases, you may need to establish and begin tracking and communicating new goals, targets and key performance indicators to address specific issues of concern.
GETTING IT DONE
When you are ready to develop a more formal environmental report, you can avoid reinventing the wheel by using established guidelines and processes. The Global Reporting Initiative (GRI) Sustainability Reporting Guidelines3 provide an extensive framework for environmental, social and governance reporting. The guidelines consist of 10 general reporting principles, a core set of performance indicators, and technical protocols that provide a standardized approach to measuring particular data points. The GRI Metals and Mining Sector Supplement lists additional indicators of particular significance to companies in the aggregate industries.
The GRI guidelines provide a standardized template for environmental, social and governance reporting. Shown here is a sample of core performance indicators specified by the GRI. (See chart on this page.)
Although the GRI guidelines are the de-facto international standard for sustainability reporting, their application is not limited to large multinational companies. You can adapt your use of the GRI guidelines to cover only those indicators and disclosures that are meaningful and relevant to your company and stakeholders.
Lafarge, Holcim, CEMEX, Vulcan Materials Co. and Hanson Building Materials America are among the many companies that have used the GRI Guidelines to develop their sustainability, environmental and corporate responsibility reports.4
A formal report is one of many vehicles you can use to reach your stakeholders. Indeed, you will likely find that a mix of communications materials ó including printed reports or brochures, online Web content, press releases, fact-sheets, one-on-one meetings and conversations with stakeholders, and executive presentations at industry events and conferences ó all should be employed to reach the widest audience.
It also is important to remember that not every stakeholder is a specialist in the language of the aggregate industry. In all communications, try to avoid using industry jargon, and consider using illustrations, charts, tables or diagrams to convey performance.
Companies that have a robust communications program in place have an easier time getting credit for their record of strong environmental performance. Indeed, many ìbest ofî lists, rankings and award programs have sprung up in the past few years to recognize the achievements of top-performing companies (and to single out laggards, as well).
Some rankings, such as the Fortune ìbest ofî lists, require you to submit information directly; others, such as corporate responsibility rankings established by research firms, may ask you to either respond to questionnaires or confirm data compiled from externally available information. If you already have materials available online or in print format, your company will be able to respond effectively and efficiently to multiple requests.
Another benefit of an established and credible communications strategy becomes apparent when a crisis arises. Stakeholders who have been reading your materials and engaging with your company may well extend ìthe benefit of the doubtî and reserve judgment until they can get more details about the situation at hand.
For example, Gap Inc. is well known for assiduously disclosing detailed information about its supply chain. In fact, the company was recently able to avert a major public-relations disaster regarding an incident of child labor at a supplier location, namely because of its credible track record of past reporting and swift operational and communications response to the incident.
Finally, communicating environmental performance to customers (both corporate and government accounts) can strengthen your customer relationships and help you win new business. Increasingly, RFPs (Request for Proposals) ask for descriptions of environmental policies and practices and may even require disclosure of specific performance indicators. Again, a company that has information compiled and ready to distribute can more readily respond to these requests.
COMMUNICATE PERFORMANCE FOR STRATEGIC ADVANTAGE
Intense competition ó for customers, for contracts, for employees ó means that any edge can make the difference between a profitable enterprise and a shuttered operation. Companies that regularly, effectively and transparently communicate their environmental performance to their stakeholders are capturing that edge, attracting and retaining skilled employees, winning new business, building brand value, and maintaining their social license to operate. By developing and implementing a proactive, comprehensive communications strategy, you are in fact investing in your company's long-term success.
Aleksandra Dobkowski-Joy is a principal at Framework:CR, a consulting firm that offers strategic communications counsel and implementation support primarily to FortuneÆ 500 companies. Framework:CR is an organizational stakeholder of the Global Reporting Initiative. For more information, visit http://www.frameworkcr.com.
The GRI Guidelines provide a standardized template for environmental, social and governance reporting. Below is a sample of core performance indicators specified by the GRI.
- Materials use
- Energy consumption
- Water withdrawal
- Impacts on biodiversity
- Greenhouse gases and other air emissions
Mining and Metals Sector Supplement indicators
- Incidents affecting communities
- Percentage of operations with closure plans
- Management of overburden, rock, tailings and sludges
The Global Environmental Management Initiative (GEMI) has developed a comprehensive tool that helps companies apply a strategic, stakeholder-based process to identify the environmental metrics most relevant to their business.
The GEMI Metrics Navigator is available for download at http://www.gemi.org/metricsnavigator
GfK Roper Green Gauge Study surveyed 2,000 U.S. adults (18 and older) via an online consumer panel conducted in 2007. GfK Roper Consulting is a division of GfK Custom Research North America.
Survey conducted by Penn, Schoen & Berland Associates for Hill & Knowlton. Interviews were carried out in 2007, with 527 current MBA students at 12 top-ranked international business schools in the United States, Europe and Asia. http://www.hillandknowlton.com/index/news/press_releases/79
Reports can be downloaded at http://www.corporateregister.org