Effective Communication of Sustainability Strategies

Monday, December 06, 2010

13:15 - 13:15

Having a good sustainability strategy is obviously the most important step, but you can fail if you do not communicate this strategy effectively to your various stakeholders. In our survey of 90 Heads of Sustainability this came out as a top three topic, so it is still an area where sustainability functions are looking to become more effective – and critical to building momentum into sustainability strategies.

Leading thinkers from the various stakeholder groups discuss what you need to get right.

Communicating with consumers
How consumers best respond to communications regarding the sustainability of your actions/products. How do you best leverage your sustainability performance to improve sales.

- Ed Gillespie, Co-founder, Futerra

Overall communications strategy
The relative importance and skills needed to succeed with all three groups.

   - Adrian Northover-Smith, Head of Corporate Public Affairs, Sony

Communicating with employees
How employees can best be engaged on sustainability strategies and motivated to execute them to the best of their abilities

   - David Grayson, Director at the Doughty Centre for Corporate Responsibility, Cranfield School of Management

Communicating with investors

How are investors motivated by sustainability performance

  - Paul Dickinson, CEO of the Carbon Disclosure Project

The event will be aimed at our usual Sustainability leaders, plus marketing, HR Functions and investor relations.

Speakers

Adrian Northover-Smith Sony

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David Grayson Cranfield School of Managemen...

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Ed Gillespie Futerra Sustainability Commun...

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Paul Dickinson Carbon Disclosure Project

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Round Tables

Built Environment

Is there sufficient demand for green homes and buildings?

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In addressing this topic, the table considered the following key issues:

1. What are the key motivational drivers for choosing to rent or own a green property?
2. Do tenants and landlords understand the benefits of and have the confidence to invest in green buildings and energy efficient improvements?
3. Do property professionals possess the necessary skills and guidance to advise clients on energy efficiency?
4. How can the Government work with the property market to encourage buyers to consider energy efficiency in their buying decisions?


> Motivations for renting or owning a green property:
Motivations vary when it comes to making procurement decisions for different types of property. As far as domestic property is concerned, purchasing decisions are significantly affected by emotional issues to do with the quality of décor (kitchens, bathrooms etc). Locational criteria in decision-making for domestic properties are more often affected by proximity to relevant social infrastructure (schools, leisure facilities etc), whereas in the commercial context, access to public transport may be more relevant.

It was suggested that a problem arises because of the fact that energy is cheap and energy efficient property is therefore not in high demand. However, perhaps if whole life costs were more transparent/obvious and were thus able to be priced into purchasing decision-making this may be overcome. If mortgagors required their surveys to indicate the green features of a property, this may make this more possible. Green labels, like EPCs, can help but not sufficiently.

The table considered differences as far as existing and new properties are concerned. For existing properties, the concept of embodied carbon is not well understood but needs to be if a whole life cost analysis is to be meaningful.

Most renting or owning decisions are obviously affected by financial matters. Motivations for procuring green properties could therefore be affected by manipulating prices, e.g. through fiscal means (such as reducing council tax, business rates and/or stamp duty land tax for greener premises). With regard to existing premises, most owners and occupiers do not want long paybacks on green improvements, but the Green Deal should help in this regard for domestic and small business premises. In Scotland, the boiler scrappage scheme for landlords has provided some incentive to boost energy efficiency of domestic properties.


> Tenants’ and landlords’ understanding of the benefits of green properties affecting their confidence to invest in them:
It was agreed that the situation between landlords and tenants is complex, particularly in commercial property tenancies, because of the nature of leasehold provisions; landlords don’t often want to invest in green retrofits because tenants derive the financial benefits of landlords’ expenditures. This may be the same in domestic properties but in social rented properties, Registered Social Landlords tend to understand the need to address fuel poverty by investing in energy efficiency measures for their tenants’ benefit.

It was acknowledged that many commercial property landlords can and do derive benefit from investing in green features, such as the attainment of Corporate Responsibility objectives and reduced CRC Energy Efficiency Scheme liabilities. Better engagement between landlords and tenants is essential.

If real green advantage is to be achieved, then it needs to be understood that occupier behaviours must be appropriate: Education is key to this, as is an ability to see whole life costs. If tenants had access to smart energy and other resource metering, both of these aspects would be addressed at least in part.


> Do property professionals possess the necessary skills and guidance to advise clients on energy efficiency?
It was acknowledged that most consumers are not well informed when it comes to procuring energy efficient property – they usually don’t know what to look for nor what to ask their advisers, whether they be agents, lawyers or valuers. In general, it was agreed that most advisers are not well informed either and that this situation must be addressed.


> How can the Government work with the property market to encourage buyers to consider energy efficiency in their buying decisions?
A number of policy areas were indicated as requiring attention in this regard, e.g. taxation: Making more efficient properties cheaper than less efficient ones (e.g. through Council Tax, Business Rates, Stamp Duty Land Tax etc). An analogy was drawn between car tax and buildings tax where CO2 ratings could directly affect taxation levels. Potential problems with the reliability of data and a decent labelling scheme would need to be addressed if this was the case.

An education campaign to promote green building ownership and occupation was also suggested: Attaching a social stigma to the ownership/occupation of inefficient property would help. At present there is little social value in green building ownership or occupation, although future generations of building owners and tenants may alter this value… but too slowly?


Key issues summarised – what needs to happen to promote green property ownership & occupation?

Increasing motivations for green procurement:
o Encourage a whole life costing approach to decision-making: Mortgagors and other lenders could require this but existing green labels (e.g. EPCs) are often insufficient to enable this. Understanding the impact of embodied carbon is necessary for successful decision-making. The Green Deal and schemes like Boiler Scrappage should help to make green procurement more affordable.
o Price manipulation is probably necessary, e.g. through property taxes, but again a robust and reliable assessment and labelling scheme is essential.
o A green marketing campaign which attaches a social stigma to the ownership/occupation of environmentally inefficient property, which accounts for issues around affordability, should be undertaken by government.

Enabling tenants and landlords to work together:
o Existing leasehold arrangements do not necessarily foster an environment of collaborative working for environmental benefit – this situation needs to be addressed if better engagement is to be achieved.
o Real green advantage will be derived only if occupiers’ behaviours are appropriate – a mass education campaign, coupled with an acceptance of whole life costing, is required.

Improving property professionals’ ability to facilitate change:
o All property professionals need to improve their environmental literacy and exert appropriate influence over green property procurement. Professional institutions must require their members to achieve higher levels of expertise and experience.

Supply Chain

End of life. What are the practical options for minimising waste?

Stakeholder Engagement

Suppliers as Partners for sustainability

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Our discussion focused on defining tactics and strategies to engage suppliers as partners for sustainability. With a full table of professionals from diverse backgrounds, we benefited from the perspective of both supplier and client, and public and private sector experience. We discussed ‘suppliers’ under an umbrella definition of a professional provider of a resource, product or service.

Our ‘golden tips’ for engaging suppliers as partners for sustainability:

Lay Strong Foundations
• SHOW LEADERSHIP AND INNOVATION IN SUSTAINABILITY. This will engage suppliers, give credibility to what you’re expecting of them, and help them to understand your goals. Support from the board level is particularly valuable – opening the door to a shared vision for the companies, genuinely looking to the long term.

Support and Incentivise Your Suppliers
• ESTABLISH MUTUAL BENEFITS AND/OR INCENTIVES. Perhaps the most likely shared benefit is the ‘linking of fortunes’: they help you meet your sustainability goals, and you are more likely to renew the contract. Or, if there don’t appear to be any strong mutual gains (e.g. guaranteed end to the contract), then put incentives on the table.
• MEASURE PROGRESS TOWARDS AGREED GOALS TOGETHER, AND DON’T MOVE THE GOALPOSTS. It should be very clear what the shared strategy is, and what the desired end state looks like. Recognise the time and effort invested in meeting standards and targets – don’t undermine this by calling for a new course.

Establish a Real Partnership
• REGULAR COMMUNICATION, TRUST AND TRANSPARENCY ARE IMPORTANT, with added value of having a dedicated individual communicating with suppliers. Ongoing feedback, trust and transparency are essential. Work with your supplier as a partner – encourage them to openly discuss and overcome issues, rather than penalising them.
• RECOGNISE LEARNING AS A TWO-WAY PROCESS. Both client and supplier can learn from the other as they develop their strategy, rather than independently striving for “the sustainability peak”.


Other interesting points that the discussion touched on:

Relative strength: Businesses are not on an equal playing field for promoting sustainability in the supply chain. Those with big purchasing power, who are willing to pay more for a sustainable product/service, are in a better position to do this. Equally, it’s easier to promote change through a long-term partnership with a supplier. Perhaps these factors are to the advantage of the public sector, in particular.

Accreditation and penalties: Gaining accreditation (particularly voluntary accreditation) can be valuable in terms of building trust and setting standards. There was less agreement about passing on penalties when standards and goals are not met: this could incentivise the supplier to meet standards, or it could break down the partnership and raise the risk of false accounting.

Repackaging products: We also touched on the opportunity for suppliers to repackage their service to incentivise sustainable behaviour. For example, an energy provider could bill a consumer for “a warm building” rather than fuel usage. This would incentivise the supplier to help the consumer to insulate their home, thus lowering fuel consumption and the supplier’s costs, whilst safeguarding revenue and promoting sustainability.

Carbon Strategies

Once an organisation has reduced its emissions by taking the ‘low-hanging fruit’ actions, what needs to be done to ensure the next steps are taken to further reduce its footprint?

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This discussion followed on from a previous session which explored why so many organisations have still not taken advantage of these ‘low-hanging fruit’ – actions which not only reduce emissions but save money (when judged against the organisation’s standard ROI and payback parameters).

These ‘cost-positive’ initiatives typically reduce an organisation’s carbon footprint by 10-15%, but deeper reductions need to be made and an organisation soon reaches a point where reducing its footprint further requires investment. The discussion focussed on how sustainability professionals within an organisation can ensure that this investment is made so that the remaining emissions are reduced. The group concluded that there were different approaches to take to secure this investment;

1. Try to change the organisational ROI and payback time parameters so that the investment required to reduce emissions becomes acceptable.
Implementing a carbon price in the organisation can tip the balance in favour of some low-carbon investments, as can applying future energy price curves to ROI calculations. Offsetting remaining emissions provides a price and addresses unavoidable emissions whilst the internal reduction programme is implemented
2. Incentivise employees and suppliers to reduce emissions. Introduce carbon management KPIs into performance reviews and reward top performers. Work with suppliers to reduce their emissions impact and share the financial benefits.
3. Communicate the other benefits of taking your organisation down a low-carbon path; including future-proofing; risk mitigation; employee retention and attracting talent. This will help to get high level buy-in from those responsible for overall strategy – a key feature of organisations strong on sustainability.

If all of these initiatives run in parallel, the organisation has a great chance to significantly reduce its footprint.

Finance & Corporate Sustainability

A Christmas wish list for finance: what needs to be done in 2011

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The discussion flowed around a number of main ‘wishes’ for 2011. These were as follows...

• Some wanted banks to lend to small businesses more.
• Banks would like to see increased professionalism in the applications that they are receiving for financing for renewable projects (currently, these are less mature than other investment proposals that they receive).
• A secondary market for the cash flows from renewable energy projects.
• The renewable energy market to mature, and for the simple heuristic ‘rules’ that identify good from bad projects to develop.
• For there to be a greater understanding (and non-acceptance) in society at large of how the current macro economic systems works, and how this leads to an inequitable distribution of wealth and debt.
• Environmental impacts to be quantified on balance sheets.
• Employee behaviour change: for people to be more engaged and interested.
• For ‘our clients’ to be asking us more about sustainability.
• More sustainability investment options to be available to our clients.
• More ‘real world moments’, when people get in touch with global environmental and social issues.
• Decision-makers being more open to longer-term horizons for projects, financing and returns.
• More finance for R&D.
• Particular reference was given to an increase in funding being made available for wave and tidal power.
• There was a split of opinion around the table with respect to a call for smaller Government.

Communications

Communicating Sustainability Through Social Media

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There was a mixed bunch at the green communications table for this months Green Mondays. The topic we discussed was that of sustainability communications & social media. While some people at the table had ample experience in the area, there were others who were just taking baby steps into the blogosphere and others who were yet to tweet, making for an interesting and varied debate.

Conversation originated from a question posed to Ed Gillespie on the possibility of an upcoming marketing revolution. If price and quality have been the dominant messages of the past fifty years, should they soon be replaced by messages of transparency, inspiration & desirability? The idea of marketing with people rather then at people led us onto the topic of social media.

1. Is social media a threat or an opportunity?
The majority of the table agreed that social media was a huge opportunity, if handled correctly. Key to this was ‘having something to say’, being prepared to loose a little bit of control, and being transparent.

Reservations revolved around whether you can control conversations, deflect criticism, allow angry people to vent, provide a separate space for potentially negative conversations and to always deal with situations rather then ignore them. It was agreed that conversations should be nurtured rather than controlled.

Web content (or indeed criticism) will always be around to show up in Google searches. The table agreed that as well as a reason to be cautious this has also given companies a great opportunity for proactive myth busting. Environmental commentators can often by very vocal (and sometimes misinformed) on points they disagree with and it was felt that the best option was often to ‘ride the storm’. If you have confidence in your message and information to back it up, then situations tend to self regulate with others coming to your defense in the face of irrational criticism.

The overriding message from the table was 'don’t bother talking about a campaign on social media if you don’t have anything relevant to say'.

2. CSR, Sustainability, and social media
The characteristics of social media means that it lends itself to varying different forms of sustainability communications, we touched on a few of these within the hour;
• Becoming a ‘trusted presence’ in consumers lives
• Often working to a small budget
• Building brand advocates and gathering opinion & advice. We discussed the concept of ‘flipping the funnel’ on traditional marketing, changing from broad communications to many, to tailored communications to a select few
• Developing a strong call to action and taking engagement offline to convert it into long lasting sustainable behaviour change
• Listening to the debate

3. Should social media be integrated or separate from traditional strategies?
Previous to the event, a blog comment had refereed to social media as ‘just another channel’ and it was this point that seemed to split the table the most. Some felt that social media should be one channel for a broader campaign (with the same core messaging & tactics). Others felt that social media had a far greater potential when considered separately, with individual platforms (or even parts of platforms) broken down into channels.

This led onto the topic of audiences and some of those new to social media raised the important question of selecting the right messages for the right audiences and how to avoid cross-over. We discussed this in the context of traditional media, how companies like GE are capable of communicating non-sustainability messages at the same time as launching their Ecoimagination campaign. GE’s messages have separate audiences and through considerations like placement, media type, and timing avoid turning off uninterested audiences. The table felt that many companies using social media have not yet found this balance.

A second, important point was raised on audiences; that social media is not applicable to all. Those attracted are of a disproportionately high level of engagement & activity and this should be taken into account in relation to the campaign objectives and evaluation. The table felt that this was particularly pertinent for situations where consumers are not the end target for messages.

4. So what’s next for social media & sustainability communications?
A key realisation that many at the table felt was that social media is moving ‘beyond the usual suspects’. This is in relation to age, sex, and location but also sustainability knowledge & engagement. Social media creates a dialogue with potential advocates that other media sources have little influence over. This gives a great opportunity both for educating and gathering ideas. There was excitement about the possibility of crowd sourcing ideas and solutions to create new ideas to tackle old problems.

The table was split over the future of social media technologies. Some felt that most applications are merging into each other while others predicted the rise of smaller sites with activity becoming more fragmented and localised. Many at the table felt that there was a need for development in audience segmentation and evaluation techniques.

We ended the discussion (reluctantly) with our thoughts on who is doing it well, who is combining the best of social media with the best of sustainability to generate real, and long lasting results?

The Pepsi Refresh campaign got an honorable mention but the winner was Hermione Taylor of The Do Nation. The table felt that although in it's early days, a campaign like this has the most potential to use the best bits of social media to really inspire action and progress the sustainability agenda (so no pressure Hermione…).

CSR Reporting Best Practices

CSR Reports are dead – What comes next ?

Technology

How can we ensure that green standards are achieved in areas of waste management, the built environment and consumer products

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Looked at how you evidence that standards have been achieved and that this process is transparent and auditable.
What are the standards? Excessively complex and difficult to understand often conflicting
Standards need wherever possible to be European thought Worldwide standards unlikely to be achievable due to difference in US standards
Example of success of fridges where A-E energy rating has led to raising of standards from manufacturers and clear understanding from consumers with no effect on price or quality
The Olympic Delivery Authority was quoted as a great example where standards are set using BREEAM for buildings, CEEQUAL for infrastructure and WRAP toolkit for waste. Contractors are independently audited on a monthly basis. This has led to long term efficiencies
The process is regularly reviewed against performance and a legacy website will be set up shortly to help others learn the lessons from the Olympic site.
Helps that they have an enlightened client
Problems on other sites with a failure to comply with regulations such as Air Conditioning inspections and Fgas regulations cause widespread disregard for the law.
Feeling that regulations are over complex with competing objectives and can't possibly be understood unless you are an expert in the field. Differing requirements of councils for recycling domestic waste given as an example.
Specific problem of suppliers delivering equipment to site one day but being unable to remove the packaging the next day as it is now licensed waste and suppliers would need to become controlled waste licensed.

Actions:
DEFRA representative to pass on details of intended revision to regulations to allow waste to be re designated to group
All to check out ODA legacy site when it is up and running

Energy Effeciency

An overview of how energy efficiency currently fits into the sustainability agenda

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1. Sustainability in general is about going on a journey and Energy Efficiency is a good way for companies who are willing to invest some capital to get quick returns, there are even some measures through employee engagement where no capital is required on behaviour change. M&S plan A was cited as a good example of a business where they have mapped out journey and are looking at 115 areas across the business; we observed that M&S could communicate more widely about progress.

2. Energy Efficiency also a good way to get into sustainability as it is less green and woolly than some of the other areas of CSR or CR and show an immediate ROI

3. Industry needs clarity and certainty from the government on a 10 yr+ horizon as often investments are made on this basis, the recent change of the goalposts on CRC and CDP are not helpful to business.

4. Crises often serve as a catalyst to spur people on example of water crisis in New Zealand in and 90s where a lot of energy generation came from hydro, with dry conditions government asked people to look for 10% more efficiency which they managed to do and improve on.

Sustainable transport for all? How can we move from activism to collective solutions that work for business, the people and the environment?

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We considered the importance of collaboration between business, government, employees and citizens to convert activism into sustainable solutions for transport. As we have heard on the round table throughout the year, there is no shortage of initiative, but a tendency to point to others for leadership and funding. All stakeholders have a role to play, with common purpose in the realisation of integrated transport solutions that work for the economy, the people and the environment. All of us need to join in informed and purposeful dialog - what is less clear is what should be the forum for that dialog..

Corporate Strategies

A case review of companies who effectively communicate their sustainability strategies. Case study: M&S Plan A
 

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December’s roundtable was a case study discussion on M&S as a good example of “effective communication of sustainability strategies”.

The discussion started with a question asking the group to name companies with distinctive sustainability strategies and the following were mentioned: M&S, GE, Unilever, Interface, innocent, SKY, KPMG, Pepsi, Nestle, Timberland, P&G, Skanska and Patagonia.

The group then focused on M&S with a series of questions to see which messages from Plan A were resonating. While everyone knew “Plan A because there is no Plan B” and that M&S seeks to be the most sustainable retailer, the details were not considered important. No-one could name the 5 pillars nor that 80 new commitments had recently been added to their 100 point plan, nor that 45 of these have already been achieved. The delegates simply felt that M&S was doing a lot, was the first mover in the retail sector, could be trusted more than other companies to deliver on their promises and were engaging their stakeholders. Using SecondNature’s Steering Wheel, the group agreed that M&S’s leadership, brand story, stakeholder engagement, sustainable growth, culture change and strategy were all strong. When pushed, operational efficiency was the area the group suggested M&S could do more on and explain how consumers were benefiting from the £50 million per annum savings so that M&S could become more accessible to lower income groups. Further, when the group heard that only 40,000 tonnes of CO2 were cut in 2009/2010, they were disappointed saying M&S should be cutting much more per annum. Some also felt that budget brands like Primark had less to gain from embedding sustainability and this became the main point of debate.

Venue Detail

Bank of America Merrill Lynch: King Edward Hall

King Edward Hall | 2 King Edward Street | London | EC1A 1HQ

Directions

Bank of America's offices are a very short walk from St Paul's tube station (Central Line). Exit the station at Cheapside/Newgate Street. Go past the BT centre, with it on your right-hand side and take the first available right down Edward Street. Continue down this road for 80m and the entrance to the venue is on your left-hand side.

Do not go to the main reception desk at their offices when you arrive. You are looking for an entrance that leads you directly into the King Edward Hall.