The Playbook for Becoming a Sustainable Business
If your company is working toward improving its sustainability performance, you need a strategy, plan and roadmap. There are ten steps we’ve defined at Green Business Bureau to gear your company’s purpose, culture, focus and actions towards sustainability. The steps below were summarized in Executive Guide for Becoming a Sustainable Business – Step 1:
- Step 1: Define your vision, mission and values
- Step 2: Create a sustainability committee or green team
- Step 3: Benchmark and assess your current sustainability performance
- Step 4: Engage your employees
- Step 5: Plan, set goals and prioritize based on over 400 GBB initiatives
- Step 6: Implement the plan, establish and communicate new policies and practices
- Step 7: Leverage the GBB Scorecard to track progress and measure results
- Step 8: Analyze your results and compare to goals and benchmarks
- Step 9: Celebrate and communicate your accomplishments
- Step 10: If you’re ready, get Certified or continue making improvements
Today’s article will cover Step 3.
Step 3: Benchmark and Assess Your Current Sustainability Performance
The third step in your green business journey is completing either a sustainable business self-assessment or a competitive sustainability benchmark. Most companies focus on a self-assessment since very little sustainability benchmarking data is available in the industry. This will change over time as ESG ratings begin to become more popular beyond just the large Fortune 500 type companies that use them today. ESG ratings are also not standard and every company reports differently. This lack of ESG and general standards makes competitive benchmarking difficult. For now, we’ll focus on a self-assessment for Step 3.
What Is A Green Business Assessment or Sustainability Assessment?
There are two popular ways to assess a business for sustainability performance:
- Process-based or initiative-based sustainability assessments
- Carbon footprint-based sustainability assessments
A process-based assessment is much simpler and can be completed in a few hours. It gives you a view into what you’re doing right in terms of applying sustainable practices and what you’re missing in your sustainability program, policies and procedures.
A carbon footprint-based approach is more technical and more difficult to calculate given all the data that needs to be collected and scrubbed. The carbon footprint gives you an estimate of your company’s carbon emissions. The EPA provides a simple carbon calculator for a household that demonstrates the concept, but it is not very practical for a business which has many more elements that contribute emissions beyond heating, electricity and vehicles.
Process-Based Sustainability Assessment
A process-based assessment is entirely initiative based. This type of assessment compares your policies, procedures and completed initiatives to a long list of initiatives that are possible and practical. One real world example, Green Business Bureau’s assessment, takes a points-based approach where your company receives points for each and every initiative it completes. Initiatives are organized by the business area they impact, such as operations, business practices, cafeteria, transportation, bathrooms and office space. This set of assessment questions is something your company can easily answer to measure your efforts and uncover your company’s needs and opportunities. Completing the initial GBB Assessment will produce an overall score that correlates to a specific ranking; Gold or Platinum levels reflect strong sustainability performance.
Carbon Footprint-Based Sustainability Assessment
A carbon footprint-based approach attempts to measure your overall carbon footprint.
A company’s carbon footprint is the quantity of greenhouse gas (GHG) emissions that were produced as a result of its operations. Carbon footprints are usually measured in terms of an annual footprint that takes into account the impact of all the company’s key activities over the course of a calendar year.
Carbon Footprint Calculator
The unit for a carbon footprint is metric tonnes of carbon dioxide equivalent (CO2e). Carbon dioxide is the most common GHG emitted by human activities, but the CO2e unit handily takes into account all other GHGs (like methane and nitrous oxide) as well, by putting them in terms of carbon dioxide.
Carbon footprinting and emissions accounting is fairly standard practice at large corporations and is usually handled by a specialist consultancy. However, it’s possible to get to a reasonably accurate number in-house using online tools and a spreadsheet. That number will allow you to identify the most emissions-intensive areas of your business, opportunities for reductions, and how many offsets you would need to buy to cover your footprint.
Sample Carbon Footprint Calculator (Source: EPA.gov)
Emissions Scope 1 2 3
The Greenhouse Gas Protocol (GHG Protocol) is an emissions reporting standard and breaks down emissions into three categories or emissions scopes. Scope 1 emissions are those produced on a company’s site or directly by the vehicles or power sources it owns. Scope 2 are those resulting from power purchased by the company. Scope 3 emissions are those occurring as a result of its activities but from sources a company does not own or control.
The one shortcoming with a carbon footprint assessment is that it only covers part of your company’s environmental footprint, the carbon emissions part. It doesn’t measure your use of natural resources, the waste you produce, or pollution outside of carbon. If you want a more holistic overview of your sustainability performance, especially if your industry is not a major carbon emitter, then focus on completing an initiative-based assessment.
Business Value of a Sustainability Assessment
Companies that complete a sustainability assessment find that the process is just as valuable as the score itself. It engages your employees, creates a deeper understanding of sustainability, and demonstrates your commitment to being a sustainable business. If you land on a strong assessment score, you’ll have opportunities to promote your sustainability as a competitive advantage. On other hand, a weak assessment score may uncover business risk that was not identified in the past. An assessment can also uncover opportunities to be more energy efficient and less wasteful. Regardless of how you fare, the assessment and the results will help you prioritize what to work on next.
Sustainability Performance Assessment Challenges
There are many challenges to a self-assessment. Here are some of the top challenges:
- No industry standards: You’ll have to create your own assessment or rely on a third-party vendor’s assessment tools. There is no industry standard yet nor open source project that is far enough along to use.
- Lack of knowledge: Sustainable business performance measurement is a relatively nascent area where companies are just now starting to share practices and vendors are starting to build tools. Until then, you have to rely on knowledge from experts you contract or third-parties you engage with.
- Lack of experience: Measuring sustainability performance is often complex and you may not have the right people internally to run an assessment efficiently. The last thing companies need is another time-consuming, burdensome project that does not have a budget. But in most cases, companies have no choice in order to progress on their journey to becoming more sustainable. Online self-assessments are the simplest and most cost effective way to jumpstart this process.
- Internal bias: Your team has likely completed some impressive initiatives and may have a favorable bias to promote the results achieved. This may lead to inaccurate assessment results that do not reflect the reality of your situation.
Given these challenges, the easiest and most cost-effective approach is typically to rely on a third-party certification process and program to validate your accomplishments and uncover opportunities for improvement.
Using a Certification Program To Complete the Assessment
Most third-party certification programs include an online assessment and do not require onsite consultants or auditors. The Green Business Bureau Assessment, an online application available as part of their certification program, is an easy-to-use assessment tool for measuring your company’s sustainability performance and validating your completed green initiatives. If you are a GBB member currently, use the Assessment tool to quickly gain an understanding of your company’s sustainability as a whole.
Record and Analyze Your Sustainability Performance
Once you complete the assessment, be sure to snapshot your results for future reference. Share the results with your green team to start. Then present to the executive team and give them feedback with both constructive criticisms and practical recommendations. Once the results are synthesized and organized, move on to Step 4 in the journey – engage your employees – the topic of our next article in this series.
If you’re interested in learning more about green business certifications and assessments, check out the article on The Business Case for Sustainability Certification.