Integrated Reporting Framework

July 11th, 2014

integrated reporting

Source: The Guardian

The release of the International Integrated Reporting Framework by the International Integrated Reporting Council (IIRC) is intended to make a tangible contribution to building a stronger, more financially stable economy, and a more sustainable planet. Development of the Framework has been a collaborative, market-led activity and is the result of extensive global consultation and market testing in more than 25 countries.

At the heart of integrated reporting are six tenets of better reporting which, when adopted, will create a multiplier effect in terms of the benefits to businesses, investors and society. These six straightforward ideas are:

  1. Communication about value creation: understanding and articulating the resources and relationships used by a business – what the Framework refers to as “capitals” – that are critical to the creation of value over time. Research shows us that only around one fifth of the value of a business today can be accounted for through the financial statements, as intangible factors such as intellectual and human capital make up a greater proportion of a business’ value proposition.
  2. Concise and clear communication: a laser-like focus on clarity, readability and conciseness.
  3. Articulation of strategy: research conducted by a major accountancy firm revealed recently that an increasing number of businesses are explaining their strategy, but this is not reflected throughout the reporting process. A clearer articulation of the strategy, and how risk management and performance indicators flow from it, is key to understanding more about the business, increasing business performance, and gaining a longer-term commitment from providers of financial capital.
  4. Connectivity of information: the recognition of the interconnectedness of different parts of the business, the dependencies between factors that affect the ability to create value over time, and a breaking down of silos to achieve greater efficiency and reduce duplication in the reporting process.
  5. Future orientation: so much of today’s corporate reporting is historic, when what investors need to know are the steps being taken by the business to enhance future value in a sustainable way. Is the business model being pursued sustainable over time? Integrated reporting encourages a greater mix between essential historical financial information, and more future-oriented information, which provides a qualitative assessment of the risks being managed and the opportunities being explored.
  6. Understanding the external environment: businesses do not exist or operate in a vacuum. The rise of the power, economic, social and environmental impact of the corporation has been one of the major transformations of the last half century – around half of the largest economic entities in the world today are businesses rather than countries. The external environment impacts on a business’ ability to create value and should be reflected in its reporting.

As an increasing number of businesses are voluntarily adopting integrated reporting, and reaping the transformative benefits of a more cohesive, efficient and valuable reporting process, there is an established pathway towards a reporting system focused on the concise communication about value over time…

To read the whole article click here.

Categories: Sustainability

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Tips for Building a Business Case for Sustainability

June 20th, 2014

By: Tiffany Richmond

I stumbled across this article on the Sustainability Learning Center website that I thought was great summary of items companies should focus on when building the business case for sustainability. Here’s a summary of the article’s key points.

Tips on building a business case for sustainability:

  1. Meet your team “where they are”. If they are focused on financial results, talk cost savings and market growth. If they are worried about reputational risk – talk about risk management and stakeholder engagement. Sustainability and Corporate Social Responsibility are holistic. Present it in a way that “talks” to your audience. Piggyback on existing initiatives. The other pieces can come later.
  2. Get the right team engaged. If you can’t get senior management engaged, this isn’t going to work. Influence the influencers. Find a champion that is connected to the right people. Sometimes the key influencers might be competitors or senior management in another company.
  3. Understand stakeholder expectations. Where are your customers, staff and suppliers on sustainability and corporate social responsibility? This will help you make your case.
  4. Align the business case for sustainability with your overall strategy. Show how it fits with your new product, innovation, quality and customer service strategy.
  5. Consider customizing the business case for different business units. Manufacturing may be interested in the savings from eco-efficiencies but sales and marketing may be interested in how it meets customer needs.
  6. Tackle the “low hanging fruit” and demonstrate early wins. Companies have typically found millions of dollars in savings in the first few years. Some with a simple return on investment of only a few months.
  7. Choose meaningful measures and targets. What gets measured gets done so choose metrics that are aligned with your company’s KPIs and let you track the business benefits of your plan.
  8. Don’t forget the ‘how’ when you talk about the ‘why’. A business case and a plan are beautiful things but without implementation they are just squiggles on bits of paper. Make sure you know how you are going to implement the plan and line up support and resources to do so. This includes: people, their time, incentives, training and resources as well as the appropriate tools, IT and infrastructure.
  9. Include a communications strategy in your business plan. Include elements that connect to the “thinking, feeling, willing, social self”. Make sure the program is authentically meaningful and aligns with the values of your employees.

Source article link.

Tiffany Richmond has over five years of experience as a marketing professional and is responsible for marketing strategies at Energy Advantage Inc.

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What Is The Business Case For Sustainability?

May 8th, 2014

Source: Verdanix

The recently published book by Andrew Winston, The Big Pivot, provides an easy-to-read summary of the current state of corporate sustainability strategies, mostly in consumer markets. For those in the field, the example firms will be all too familiar: BT, Interface, Nike, Patagonia, PUMA, Seventh Generation, Unilever, etc. They constantly pop up in the media due to their innovative sustainability strategies and significant corporate communications spending. However, the real problem is that we are fishing in a small pond of success stories.

The author also rightly laments the lack of Fortune 500 executives who understand what sustainability means for their business. In answer to the question, “What is the business case for sustainability?”, he quotes Ray Anderson, the inspirational founder of Interface: “What’s the business case for ending life on earth!?”

The problem is not with the answer; the problem is with the question. Instead of asking, “What is the business case for sustainability?”, we should ask, “Does including sustainability risks and opportunities in our firm’s strategy improve competitive advantage? If so, how? If not, why not?” Sustainability is a set of beliefs – inputs to strategic thinking – not a stand-alone investment project that can be measured with Net Present Value, Return On Investment and Internal Rate of Return.

As Winston points out, the key factor in firms moving ahead with strategic sustainability programmes is whether the corporate culture incorporates sustainability into its underlying assumptions and beliefs. A published sustainability report is what the firm says, not what the executives believe. Implementing energy efficiency initiatives is what the firm does, not what the employees believe. Even if the CEO’s beliefs incorporate expectations about climate change risks, water scarcity, suppliers’ worker safety policies and digital transparency, it can take years for the rest of the organization to develop similar beliefs. A corporation can only make the ‘big pivot’ by ensuring employees believe in sustainability.

That’s why European and Japanese firms tend to be further ahead than their US counterparts in integrating sustainability into their strategy and business operations. Market penetration of GRI reporting among European firms is many years ahead of comparable US firms. Faced with high population densities and limited natural resources, people in Europe and Japan believe that resource scarcity is an issue that needs to be addressed. With dwindling supplies of oil and natural gas, they see the need for renewable energy and electric vehicles. To insert sustainability into the beliefs of their workforce, US firms need to reframe beliefs about the country’s boundless natural resources. A good place to start is using hard data to assess whether sustainability risks and opportunities impact competitive advantage.

To read the source article click here.

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Energy Efficiency: Understanding Audits, Assessments, and Retro-Commissioning

April 10th, 2014

Source: EnergySmart

If you’re responsible for a facility’s energy budget, you probably hear frequent claims from various sources about how you can save 10 or 15% on your bills through an energy audit, energy assessment, or retro-commissioning. But if you’re like many energy-decision-makers, you may not fully understand what each of these things entails, and why one might be better for your organization than another.

Navigating the sea of available options to get your facility on the course to energy efficiency doesn’t have to seem like you’re sailing through the Bermuda Triangle. This article lifts the fog on energy audits, energy assessments, and retro-commissioning, and offers four steps to help you figure out which approach to energy efficiency might be best for you.

1) Start with the basics: know where your energy is going.

You can’t manage what you don’t measure. That’s why investing in any effort to improve energy efficiency starts with getting visibility into your operation: keeping track of utility bills, and monitoring energy consumption and costs over time. Consider benchmarking your facility’s energy costs against similar buildings. Benchmarking is a great way to figure out which sites might have the best opportunity for improvements.

2) Understand the different approaches to deep energy savings.

Once you’ve accessed and begun to analyze your energy data, and perhaps even picked the low-hanging fruit of quick energy efficiency project fixes or upgrades, it’s time to dig deeper into your facilities to maximize energy efficiency and unlock the real value of your investment through deeper processes like an energy audit, retro-commissioning, or an energy assessment.

It’s important to note that these approaches aren’t mutually exclusive: what’s best for your facility right now depends on your needs as an organization. Read on to understand these approaches and determine which one might best benefit your organization.

Need #1: “I want a report of prioritized, actionable recommendations I can implement at my facilities.”

Approach: Audits

Let’s start with audits. By definition, energy audits are designed to give building managers a sense of all available opportunities to reduce energy waste, to the tune of anywhere from 10-40% savings on your energy bill. In a traditional energy audit, an energy professional visits your building, reviews mechanical, electrical and control systems, interviews operations staff, and recommends operational adjustments or capital-intensive equipment upgrades to improve energy efficiency. You’ll then receive a report of recommendations, typically prioritized by financial payback.

Need #2: “I want all issues identified and then addressed so that my building is running more efficiently than ever.”

Approach: Retro-commissioning (RCx)

Retro-commissioning is more of a full-facility tune-up, kind of similar to taking your car to the shop for a routine 60,000 mile checkup – except that through RCx, you can save up to 15% of your facility’s annual energy costs (so that’s where the analogy ends – try telling your mechanic to improve MPG by 15%!).

RCx is an interactive and participatory process, during which your operations staff will work closely with an energy professional to run mechanical, electrical, and controls systems through rigorous tests. The team will identify actionable measures like replacing leaking valves and adjusting temperature setpoints, which you implement over the course of the project. Each issue found will be tracked to completion, so that at the end of the project, your facility’s systems are operating smoothly and efficiently.

Need #3: “I have a specific, targeted problem area that I need to investigate further to understand the root issue and how to fix it.”

Approach: Energy assessments

Energy assessments are more targeted projects to dig deep into a particular facility system, such as a compressed air system or central chilled water plant. If you know you have a problem with one of these systems, an assessment is a great way to understand what you can do about it. The assessment can also help present the business case to justify potentially costly improvements to building systems.

3) Consider your budget, now and next year.

You’ve now decided which process is right for you, but that doesn’t mean the work is done. Budgeting for energy efficiency investments is an important step in setting your course to success.

The range of options from low-touch virtual audits to deeper retro-commissioning obviously span a wide range of prices. If you have limited resources now, but are looking to develop a capital improvement plan for budgeting next year, an ASHRAE Level II Energy Audit will present low-cost savings opportunities and give you estimated costs for capital-intensive energy projects. If you have committed funding for projects this year, but are uncertain what the future will bring, an RCx project can bring your facility back to its ideal state, locking in savings for the next few years.

4) Figure out how much time you can commit.

Realizing energy savings takes some effort – whether it’s scheduling an on-site visit during an audit or managing implementation during retro-commissioning, the most successful audits, assessments, and retro-commissioning exercises happen when facilities staff can engage in the process and resulting outcomes.

Energy audits are generally much less demanding of facility operations staff, because the auditor is there to observe and report on building systems. Retro-commissioning is more time intensive, requiring facility staff to participate during system testing. This has additional benefits, though, empowering your staff to deeply understand the causes of energy waste within the facility.

Each of these processes can identify areas of improvement for your facility and help to make it more efficient, but it’s important to choose the right approach given your organization’s goals and your facility’s unique characteristics – understanding that over time, achieving and maintaining deep energy savings can require a few different approaches. Like any journey through the high seas, it’s important to set a course of action, measure performance, and adjust your plans over time.

To read the full article click here.

Categories: Energy Efficiency

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4 Steps to Deliver the “Whole Sustainability Package”

March 26th, 2014

Source: GreenBiz

1. Benchmarks and Metrics

In order to accomplish sustainability goals in multiple facility locations, it is critical to research and develop benchmarks into easily understandable checklists so that you end up with uniform results throughout the company. You also need to simultaneously track metrics in order to measure success. To do this, you must find acceptable third-party calculations whose assumptions and sources can be trusted. Often, these metrics can be compiled into a handful of environmental and sustainability currencies, such as greenhouse gas emissions reductions, gallons of water saved, waste reduced, jobs created and dollars of donations.

2. Data Tracking

Once you have developed the metrics and benchmarks, they must be built into tools to make the tracking process easy for users. Collecting metrics needs to be efficiently built-in as a part of the process, not as an afterthought.

3. Green Teams

You can’t do all of this work by yourself. Building cross-disciplinary teams at each facility makes it easier to move through the checklist and track progress. The teams could consist of leads from each department. It is especially important to engage leads from facilities and/or custodial departments. You can improve employee engagement in the process and productively encourage innovation by creating rewards, friendly competitions or games surrounding accomplishments.

4. Marketing and Communications

Once your teams have done the work and collected the data, you or your marketing/communications expert must translate sustainability data into information that makes sense to the general public. Although your sustainability peers may be very excited about the tons of greenhouse gases you have reduced, that isn’t a metric that makes sense to your customers. Instead, you want to find a way to explain the data in a way that gets them excited about purchasing a product or using a service. Perhaps that means translating it into the energy to power whole neighborhoods, or the equivalent of hectares of rainforest restored. Once you’ve determined the story you want your data to tell, use your communications expertise to tie the story into your company’s product or service, and to make sure that you’re telling that story to consumers. Green marketing is a completely new paradigm. Consumers expect a company to add value to its community, not just in dollars, but also in social capital.

Consumers are also savvy enough to know when they are being misled, and there is some corporate mistrust. You may need some third-party certifications to back up your claims. Lean heavily on these certifications, as well as social media, to broadcast your efforts. Consumers trust messages that come from their peers, friends and third parties.

To read the full article click here.

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