Benefits of Sustainability Certifications
The benefits of sustainability certifications for business go well beyond a rating, a seal or certificate of proof. The process itself becomes a journey to create a green corporate culture and a more sustainable, socially responsible business. A sustainability certification program engages employees and drives company-wide commitment and purpose.
Of course, the final official certification is very valuable. It not only demonstrates your commitment to employees and partners internally, but it verifies your sustainability to customers and community. This is especially important when customers require or prefer to work with verifiably sustainable businesses.
This article is an overview of the most common and popular sustainability certifications and reporting standards. It provides executives, leaders, managers and workers with insight on how to select and implement the right sustainability certification for their business.
Sustainable Business Certification Options
Third party sustainability certifications provide credibility. Certifications from respected third parties reinforce and amplify a company’s sustainability efforts and are clearly viewed as the most trustworthy source of green credibility for business. In fact, most customers researching a solution, product or service will often seek out companies with well regarded seals and certifications.
The world of certifications is currently complicated because of the lack of a single agreed upon industry standard. The organizations providing frameworks and standards each provide their own approach to the reporting which makes it incredibly difficult to decide which reporting-related certification to pursue. Recently, five of the leading sustainability reporting groups (CDP, CDSB, GRI, IIRC and SASB) issued a statement of their intent to work together to create a comprehensive global corporate reporting system. Two other organizations, IIRC and SASB announced an intent to merge to become the Value Reporting Foundation.
Reporting vs. Certifications
When choosing your company’s sustainability framework, it’s important to understand what your stakeholders (customers, partners, investors) require. In many cases, they are looking for a detailed report describing your commitments, accomplishments and carbon footprint. Your focus is more on “reporting”, i.e. how to provide and share all the details with your stakeholders as opposed to a formal certification. A certification is audited and verified by a 3rd party although the line between reporting and certifications is becoming more blurry as certifications begin to embrace reporting standards. Eventually, official sustainability accounting standards will emerge similar to the financial accounting standards we have today that are highly regulated.
According to this GreenBiz article on the state of corporate sustainability reporting, we’re not likely to have one single reporting framework that everyone uses anytime soon. Here are some of the most popular sustainability reporting standards available. They are typically used by large public corporations that require public disclosure of any information that can impact their business.
Global Reporting Initiative (GRI)
GRI is an independent, international organization that helps businesses and other organizations take responsibility for their impacts by providing them with the global common language to communicate those impacts. They are the world’s most widely used standards for sustainability reporting – commonly referred to as the GRI Standards.
Sustainability Accounting Standards Board (SASB)
SASB has developed a complete set of 77 industry standards. It’s ideal for public corporations requiring complete disclosure of their sustainability efforts and results. In November 2018, SASB published these standards, providing a complete set of globally applicable industry-specific standards which identify the minimal set of financially material sustainability topics and their associated metrics for the typical company in an industry. These standards are explained graphically through a Materiality Map and are available for individual sector download.
Task Force on Climate-Related Financial Disclosures (TCFD)
The Financial Stability Board created the Task Force on Climate-Related Financial Disclosures (TCFD) to improve and increase reporting of climate-related financial information. It is designed to help companies provide better information to support informed capital allocation. Their disclosure recommendations are structured around four thematic areas that represent core elements of how organizations operate: governance, strategy, risk management, and metrics and targets.
TCFD reporting is very detailed and in many cases requires a 3rd party expert firm like CDP to create the reports. CDP is a not-for-profit charity that runs the global disclosure system for investors, companies, cities, states and regions to manage their environmental impacts. CDP focuses on complete disclosure based on the regulatory guidelines and policies for your industry. CDP’s climate questionnaires are fully aligned with the TCFD recommendations.
3rd Party Sustainability Certifications
Sustainable business certifications are verified by a 3rd party and available from many organizations. Similar to the public sustainability reporting world, there is no one certification standard and the certification options are very fragmented. The most popular certification organizations include LEED, ISO, B-Corp, and Green Business Bureau.
U.S. Green Building Council (USGBC) Leadership in Energy and Environmental Design (LEED) is the most well-known and prolific green building certification system in the United States. Buildings that are LEED certified have been designed and built using strategies aimed at improving performance in energy efficiency, water efficiency, CO2 emissions reductions, improved indoor air quality and resource stewardship.
LEED is an excellent certification for your buildings, but that’s it. It does not cover all the other dimensions of being a sustainable business including waste management, pollution, recycling, reuse, plastics, vehicles, commuting, delivery, manufacturing, etc. In other words, it is useful for ensuring your physical offices and buildings are environmentally friendly, but misses all the other important elements of being a sustainable business. Consider LEED a secondary certification.
ISO-International Organization for Standardization has developed over 18,500 International Standards on a variety of subjects. Of particular relevance is the ISO 14001 (environmental management systems). It maps out a framework that a company or organization can follow to set up an effective environmental management system. The ISO 14000 family of standards are developed by ISO Technical Committee ISO/TC 207 and its various subcommittees. For a full list of published standards in the series see their standards catalogue.
An ISO 14001 certification is well respected and understood in the industry, but it is a major undertaking. The budget, time and resources required are significant and hence ISO certifications are typically only taken on by large, mature, well-funded organizations. Here are the three main challenges with an ISO certification:
- Cost – An ISO project can run several months and requires certified ISO consultants and auditors, an expensive endeavor. The potential cost of fines and penalties due to non-compliance is also a significant factor.
- Time – An ISO project will use up lots of internal employee time and take them away from their vital daily activities. This time can be reduced by having an employee who has completed an ISO 14001 certification in the past.
- Resources – ISO Projects require the right expertise and knowledge. There are online resources and external consultants available, but this will obviously lead to more cost and time.
B Corp Certification is an international certification that verifies companies meet the highest standards of overall social and environmental performance, public transparency and legal accountability. The scope includes 5 major areas: Governance, Workers, Community, Environment, and Customers. Adherence to the requirements are assessed and verified by B Lab, a non-profit corporation that certifies B Corporations.
B Corporation certification establishes very high standards of social and environmental performance, public transparency, and legal accountability that may be difficult for some businesses to meet. Companies applying must undergo a rigorous certification process and meet a long list of significant conditions. The B Corp certification looks at operations, which covers a company’s day-to-day activities, and business models, which must be designed to create additional positive impact. Unfortunately, not every company has the resources and budget to meet the standards, verify compliance and complete the audits required. Companies considering B Corp certification can complete the assessment as a first step to see if they qualify and to better understand their compliance gap. They may discover that their governance procedures, customer processes and sustainability practices fall short. But the assessment would not be wasted as it would enable a company to set future goals and establish a roadmap to compliance.
Green Business Bureau
The Green Business Bureau program is a robust program for helping companies become more sustainable and includes the online EcoAssessment and EcoPlanner tools and green business certification. It includes over 400 green initiatives and EcoPlans to consider and choose from.
The GBB certification is the most automated and guided certification available. GBB’s certification process is entirely online and initiative based, so a company will receive points for each and every activity it has completed. Initiatives are very granular and well-defined and the library is designed to capture your completed initiatives and give you full credit for all your accomplishments. This even includes initiatives completed before joining the program. As more initiatives are fulfilled over time, your EcoScore will increase, granting an opportunity to reach Gold and Platinum certification levels.
Initiatives are organized by the business area they impact, such as building, cafeteria, transportation or office materials, and further marked by the effort, cost and greening impact of the initiative. This simple but flexible structure ensures a company can easily target and implement the efforts that best suit the company’s needs and opportunities.
The GBB seal is well-recognized so member businesses get the positive recognition of their commitment to sustainability and the environment. GBB provides a collection of tools and opportunities for member companies to share, differentiate and be recognized for their greening achievements with customers, prospects, partners, regulators and communities alike. A ‘clickable’ web seal takes customers and employees to a personal sustainability webpage that shows a business’s certification level, total points, sustainability mission and accomplishments.
Certification Program Comparisons
The B Corp and GBB programs are similar in that they both establish social responsibility, i.e. doing good as a priority for your company. They are different in scope and focus and understanding the differences will help you select the right program to pursue.
B Corp is broader in scope, evaluating the overall impact of your business to the environment, customers, employees, shareholders, and local community, while GBB is more focused on sustainability and environmental initiatives. They are comparable in that both programs will provide you with a blueprint and solid foundation to track and manage your social and environmental performance. That said, a detailed review of the programs also makes it clear that the B Corp program is designed for companies that have already fully invested in being clear leaders in the CSR arena, while the GBB program provides a blueprint for the green and greening alike with a growth and improvement mindset at the core of its ethos.
Sustainability Certification Implementation
Sustainability certification starts with an assessment and typically involves a sustainability leader or sustainability committee. An online assessment makes it easy to identify where a company’s sustainability efforts stand currently and map out areas to focus on in order to become more sustainable long-term. It also lays out a handful of green initiatives that can be implemented and reviewed for short-term completion. These can include initiatives that assess and improve upon power and energy use, transportation, recycling and materials reuse, lighting and resource conservation. Depending on the industry, there may also be more specific areas that can be analyzed to determine industry-specific improvements and growth opportunities.
Why Sustainability Certifications for Business Really Matters
Businesses today need more than good products and services to succeed – they need purpose. Whether that be by supporting the local community or launching a larger initiative to support the world as a whole, smart business leaders understand the importance of making a difference, big and small. One impactful way to do this is to formally commit to sustainability certification for your business.
Sustainability certification for business is more than just a stamp of approval. It’s a commitment to making business changes that really make an impact. These green programs and social initiatives are not just one-off tactics. They can build upon each other and help to ensure eco-friendly and socially-responsible programs are ingrained into each part of the company. Sustainability certification can also do more than just provide a new talking point for business owners. Improving sustainability performance can save money, increase customers and provide a new way to go up against competition. In fact, 48% of U.S. consumers would change buying habits to reduce environmental impacts and 86% of US consumers expect companies to act on social, environmental issues.
How Sustainability Certifications Force Companies to Improve
A program focused on sustainability may seem overwhelming at times, especially for small business owners or small companies who are busy running the ins and outs of their companies. Owners might want to start their sustainability journey or may already be well on their way but may be unsure of which direction to take next or how to effectively communicate their progress to stakeholders. That’s where green certification programs can help. These types of programs take the guesswork out of sustainability for businesses and hone in on the specific areas where their companies will be able to not only make a difference to the world, but also save money and attract more customers and partners.
Certification Drives Executive and Employee Involvement and Alignment
Successful sustainability and greening efforts require executive leadership and expert guidance. Across the board, successful green companies cite two key factors in driving their success: 1. Executive leadership and 2. Utilizing a sound business case framework. According to a recent MIT Innovation Report, companies with C-level executives driving their sustainability efforts are far more likely to effectively implement and profit from their efforts. Further, companies utilizing a clear implementation framework that starts with a business case are three times more likely to report success than those that don’t. A certification program is a great way to engage the executive team and ensure commitment to the process. In a final report of an eight-year study of how corporations address sustainability from MIT Sloan Management Review, researchers found that 90% of executives see sustainability as important but only 60% of companies have a sustainability strategy and have taken real action beyond a few stand-alone initiatives.
Certification Drives Employee Engagement and Creates a Sustainable Culture
The green certification process for business is an excellent way to engage employees and get more people involved in driving sustainability initiatives. Third party certification providers like the Green Business Bureau typically provide online applications that are easy, flexible and effective in rallying the workforce. Companies are often scored on each green activity they complete. In a way, this almost gamifies the process and helps drive a culture that cares more about the planet, the local community and society. Certification programs can also provide best practices and step-by-step guidelines to help ensure businesses can actually accomplish the necessary tasks to accomplish a new green program.
Sustainable Business Certification Drives Profit
Starting the certification process early in your sustainable business journey often leads to implementing green business practices that drive innovation and profitability. There are many tangible business benefits that certification programs uncover. The tremendous upside of greening often offsets the cost of investing in green initiatives.
In a recent Accenture CEO Study on Sustainability, 99% of large company CEOs agreed that “sustainability issues are important to the future success of their businesses.” Being a sustainable company elevates your brand and appeals to a larger audience including a new audience of buyers who prefer to buy from “good” companies. Another Accenture study of 6000 consumers found that while consumers remain primarily focused on quality and price, 83% believe it’s important or extremely important for companies to design products that are meant to be reused or recycled, proving the influence that the eco-conscious consumer has in today’s market.
Executives and managers have also seen significant cost savings and waste reduction from new sustainability initiatives uncovered in the certification process. Furthermore, despite the commonly held belief that pursuing sustainability is solely a long-term strategy, research shows there are tangible, short-term improvements within operations and profit. Oxford University and Arabesque Partners conducted a meta-study entitled ‘From the stockholder to the stakeholder’ based on a detailed analysis of more than 200 different sources and found that 88% of companies with solid sustainability practices had better operational performance.
Get Started on Your Green Journey
If you’re ready to begin or continue your green journey, we’d love to be your partner along the way. Getting started on green certification with Green Business Bureau is an easy and affordable way to show your customers and community that you care about sustainability.
To learn more or become a member, check out GreenBusinessBureau.com today.