 A Toast to Charlie Bartsch! I’m raising a toast today to a truly unique individual – Charlie Bartsch. Charlie is one of the pioneers in America’s brownfields reuse and sustainable communities movement. They certainly broke the mold when Charlie Bartsch came into the world. The mold was irretrievably smashed when he departed last week. It’s still hard to believe he’s not bouncing around the planet. I know his spirit still is. Charlie certainly is worthy of a 450,000 to 600,000-word policy reflection on his inestimable contributions. I’ll keep this ode much briefer.  From his seminal brownfields research and Congressional testimony in the early 1990’s, to the first EPA brownfields pilots, to the passage of the Brownfields Amendments to CERCLA, to the natural extension of brownfields reuse into the climate resilience+smart growth+sustainable communities conversation—Charlie was there and instrumental to framing the policy solutions and implementing on-the-ground improvements. He was an indefatigable champion for better laws and policies that promote public health, environmental protection, and equitable economic opportunity. He was not only an astute scholar and policy wonk, but also one who was grounded in the practical realities that could find common ground in the interests of community organizers and the business world. He brought to the effort his unquenchable thirst to acquire and share knowledge, his prolific ability to make connections and inspire partnerships, and his joyful spirit. Most renowned change agents aren’t as generous or fun as Charlie. Charlie had many nicknames around the brownfields family – all insufficient attempts to categorize his pivotal role in the brownfields movement. Many called him the father, godfather, or uncle of brownfields. Thou, those nicknames caused too much awkwardness to the various female pioneers in the movement to stick. The ‘guru’ + ‘energizer bunny’ of brownfields always seemed most apt to me. My time with Charlie and the brownfields family will always be among my proudest professional accomplishments and most treasured personal memories. Charlie and I shared a love for my home state Oregon, its magical coast and wines, and the western brownfields community. There are too many memories and road trips to re-count, but among the highlights:
I wish I could be there for the services & celebration of his life this week in DC and Chicago. I know they’ll be blowouts. I will be there in spirit! Thanks to Mike Slater, I have a very special bottle of Oregon Pinot Noir earmarked for Wednesday night here in Portland. It couldn’t be more fitting that he kicked the bucket on his way to Paris for a brownfields workshop. Sums up so many of his passions. We should all be so lucky. And, we are – for having shared some of the journey with him. Here’s to you Charlie, King of the BFDs (with all due respect to Seven). Thanks for the memories. ####
Thank you for reading this blog post. Here at Corporate Sustainability Advisors LLC blog and on LinkedIn and Medium, I regularly write about organizational, community, and personal sustainability. If you would like to read my future posts then please subscribe via the adjacent link. Also, feel free to connect via Twitter and Facebook.
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 Re-upping last year's post on how and why to give to your favorite environmental charitable organizations as 2017 comes to a close.
Given the upcoming changes in the tax code for 2018 returns, you may want to consider a larger donation than usual. Many worthy organizations are anticipating a decrease in donations after the tax changes kick in. And, with all the environmental pullbacks at the federal level - their work is more important than ever! Thanks for all you've done in 2017 to make our planet, economy, and hard-working environmental non-profits more sustainable. Peace and best wishes for an even greener and more sustainable New Year! How many new pieces of electronic equipment does your company buy each year? How many old electronic devices does your company dispose of each year? Do you have a closet or a room filled with them? November 15, America Recycles Day is an annual campaign promoted by Keep America Beautiful. It’s a great time to start thinking about your company’s electronic waste stream (e-waste for short). It’s quick to make a pledge to take action. You may want to have a one-day “purge” event (with donation and/or recycling), establish an electronics use and disposal policy, or identify a certified vendor for your ongoing e-cycling needs.  E-Waste Challenges & Opportunities As we become more wired and addicted to having the newest technology, the piles of electronic waste are mounting. But where do all those gadgets go when we are done with them? According to the U.S. Environmental Protection Agency (EPA), the majority of disposed electronic equipment goes to the landfill or incinerators.  Unlike “older” waste streams—like paper, cardboard, glass, and metal—the process to recycle electronics is more complex because of all the component parts and the e-cycling industry is newer. Most projections about e-waste indicate massive increases. E-waste presents a number of unique problems and opportunities, including:
E-Cycling Emerges For the most part, there are no federal laws or regulations that control the disposal of electronic equipment. Many state and local governments are creating electronic “take back” requirements or otherwise creating rules (e.g., banning certain electronics from the waste stream) and infrastructure to tackle the mounting e-waste problem. More than 20 states have enacted bans on disposing some types of electronic waste in landfills and/or incinerators. For example, California has banned certain e-waste from disposal in landfills since 2002 (i.e., cathode ray tubes) and other e-waste since 2006 (e.g., a broader category of “universal waste” including televisions, monitors, printers, VCRs, cell phones, telephones, radios, microwave ovens). North Carolina passed a similar e-waste law in 2007 to establish a statewide electronics recycling program. For individuals there are many options for convenient and safe e-cycling. Many electronics retail stores (e.g., Best Buy, Staples, Office Depot) and charities (e.g., Goodwill, Salvation Army), for example, have convenient drop boxes and accept used consumer electronics for reuse and/or recycling. While these entities don’t always accept used equipment from commercial businesses, there are emerging options for businesses to responsibly dispose their e-waste. And, there are many benefits to the companies, society, and the planet of responsibly disposing used electronics.  Certified E-Cycling Vendors In the absence of a federal regulatory program and to boost the emerging state and local laws governing e-waste recycling and disposal, the recycling industry has developed its own e-cycling standards and certifications to protect their workers and the environment. The EPA encourages, but doesn’t currently require, all electronics recyclers to become certified through an independent third-party auditor. EPA identifies three benefits these certification programs provide:
The U.S. currently has two certification standards for electronics recyclers:
When two or more standards exist, you’ll often find competing camps that tout one over the other. That’s certainly the case with the e-Stewards and R2 programs. The EPA has studied both certification programs to assess if they are operating as intended and found that both are. EPA, however, has not stated a preference for one standard over another. Several environmental groups (e.g., the Natural Resources Defense Council), on the other hand, have stated a preference for the e-Stewards standard. Industry groups tend to promote R2. Both programs are accredited by the ANSI-ASQ National Accreditation Board (ANAB). Both address similar issues (e.g., promote reuse before recycling, data security, environmental protection, worker safety, documentation). Some e-recycling companies are even certified under both standards. One of the most discussed differences is how each standard addresses the exportation of e-waste to developing countries. Many developing countries do not regulate the dismantling or disposal of e-waste. This poses health risks to the workers and the environment. E-Stewards has a very clear-cut ban on exportation of any toxic e-waste. R2 also seeks to address the same problems but allows more flexibility and relies on the recycler’s understanding and compliance with the laws of the country importing the materials. I won’t go into all the other wonky details between the two, but if these types of issues (e.g., human rights, fair trade, worker protection, environmental impacts) are critical to your corporate and/or stakeholder’s social responsibility goals, then I’d error on the side of caution and seek the e-Steward certified vendors. Given the endorsement by several reputable environmental groups, if all other things are equal and you have access to either type of certified vendor, I’d lean towards the e-Stewards camp. But, if you only have access to an R2 certified vendor, know that they too have satisfied the ANAB requirements. To find a certified e-cycling vendor near you:
#### Thank you for reading this blog post. Here at Corporate Sustainability Advisors LLC blog and on LinkedIn and Medium, I regularly write about organizational, community, and personal sustainability. If you would like to read my future posts then please subscribe via the adjacent link. Also, feel free to connect via Twitter and Facebook. Unlocking the Key to Reducing Energy Costs in Leased Space | Landlord-Tenant Collaboration10/24/2017 If your business leases its real estate, it may be overpaying for energy and other operational costs. As noted in the prior 2017 Energy Action Month post many commercial tenants are paying higher energy bills than they need to.  While the U.S. commercial building stock is becoming more energy efficient, there are still institutional barriers and disparate incentives between building owners and tenants that leaves many buildings needlessly wasting energy. This Energy Action Month post provides more in depth information about green (aka “high performance”) leases and how tenants can take more control over their energy costs. Beyond the broader “green” (or better termed “high performance”) building movement there are several initiatives addressing the sometimes split incentives between landlords and tenants that have historically resulted in lots of wasted energy. Some key activities include:
There are three phases during which businesses that lease their real estate have opportunities to optimize the rented space for energy (and other resource) efficiency: (1) pre-lease (including pre-renewal or extension of existing leases); (2) lease - design and construction of space build out (including new building construction); and (3) lease - post occupancy. Pre Lease Considerations Prior to entering a lease for new space (or before negotiating an extension or expansion of an existing leased space), companies can undertake several activities to ensure their leased space gets optimized for energy efficiency. For example, a company can adopt a high performance building leasing policy. The policy should reflect the company’s objectives and aspirations in seeking high performance buildings to lease. For a starting place, California Sustainability Alliance has prepared a sample policy. These defined objectives and aspirations can be used to convey the company’s real estate preferences to its representatives (e.g., real estate broker/agent, lawyer) and in the request for proposal (RFP) stage. California Sustainability Alliance has also prepared a sample “green” request for proposal. Whether formally in a policy and/or RFP or informally in internal discussions, the pre-lease phase typically identifies and documents the company’s priorities with regard to the following four areas (usually along with cost and timing parameters): 
A sample energy-focused checklist might look something like this:  Inspired by the Green Leasing Questionnaire from the Institute for Market Transformation (IMT)/Rocky Mountain Institute (RMI) Lease Considerations Traditionally, standard commercial leases have failed to align the initial cost of energy efficiency improvements with the resulting energy savings. High performance leases, especially those that feature energy efficiency practices can correct these “split incentives” and offer many financial, environmental, and social benefits. These benefits can often provide long-term, shared value to both tenants and landlords. How the benefits are allocated and accrued will often depend on the lease terms and the parties’ ability to monitor energy performance. The following table, from the U.S. General Services Administration (GSA), summarizes some of these benefits to both landlords and tenants.  A high performance building lease differs from a standard lease by specifying and re-aligning the financial incentives of energy and/or other sustainability measures. While these are sometimes also referred to as “green” leases, that term and the environmental focus can dissuade some. These leases ensure a broader set of benefits so the term “high performance” better captures the efficiency objectives. In simplified terms, traditional commercial leases typically present these split incentives because the tenant generally pays for the utilities (arising both in net and modified gross leases either directly to the utility or via rent payment) and the landlord is solely responsible for capital improvements. Alternatively, in full service leases where the landlord pays the utilities, the tenant(s) won’t see financial reason to be energy efficient. Coupling together the investment and savings opportunities results in more efficient operations and the shared benefits. A 2015 study from the Institute for Market Transformation (IMT) estimates that high performance building leases have the potential to reduce energy office consumption in office buildings by 11 to 22 percent. The IMT study estimates that these efficiencies could reduce utility expenditures in U.S. commercial buildings up to $0.51 per square foot (sf). IMT further found that simple modifications to existing lease terms (or the addition of the terms to prospective leases) can yield these shared benefits to owners and tenants. Interestingly, per IMT, much of the projected savings comes from the tenant space (up to 12.5%), with smaller savings coming from the building core systems (up to 5.8%) and common areas (up to 4%). One day soon, these provisions will be market-standard. In the meantime, companies seeking to optimize their operational costs will do well to incorporate these terms. Additional high performance lease resources, including sample lease provisions are provided in the Appendix to this post. Apart from the lease terms, businesses that rent space can seek to improve their energy efficiency by addressing several key areas that may be within the company’s control (as specified by current lease terms) and also by letting the building owner or property manager know of their: (a) interest in the building’s energy use and (b) desire to collaborate to reduce costs. Before you engage with your building owner or property manager, learn a little about the building’s energy use and characteristics by seeking answers to the following:
 Also, if there are other tenants in the building, seek out their interest level in reducing energy costs. You can research any federal, state, municipal, or utility provided incentives (e.g., rebates or tax credits for more energy efficient lighting) and/or technical assistance (e.g., free energy audits) for energy efficiency improvements in your area. And, identify some no- or low-cost improvements that you and/or the building owner could make. Focus on things with an 18-month or less payback. Lighting retrofits, including adding sensors often have a very short payback. Here are a few other technological and/or behavior changes that can immediately reduce costs:
APPENDIXHigh Performance Leases | Recommended Criteria The High Performance Leasing Task Group of GSA’s Green Building Advisory Committee (GBAC) developed materials that provide very simple and action oriented guidance. The EEIA of 2015 required GSA to develop voluntary “model commercial leasing provisions” to encourage building owners and tenants to use greater cost-effective energy efficiency measures in commercial buildings. The recommendations and sample lease clause language in the remainder of this Appendix are derived, in large part, from the Task Group’s report. We have made some minor modifications to and have focused only on the energy and fuel efficiency suggestions from the Task Group’s recommendations. For additional context about the GBAC initiative and its other high performance building recommendations (e.g., water conservation, indoor air quality) check out the Task Group’s full recommendations report and cover letter.  Energy & Fuel Efficiency Criteria for High Performance Building Leases (Primary Source: GSA GBAC November 2016) High Performance Leases | Sample Clauses The following sample clauses, gathered from expert input and a variety of publicly available sources (including those listed in the Additional Sources section of the Task Group’s recommendations report), provide some examples of specific high performance building lease language designed to implement the criteria listed above. The lease clauses below generally map to the criteria included in the table above, though there may be small variations since they were gathered from a variety of sources. Each of these clauses is written in the traditional lease manner of imposing an affirmative obligation to do (or not do) something. However, a lease clause may be made simply aspirational by limiting it to require only (in ascending order of obligation), “good faith efforts,” “reasonable efforts” or “diligent efforts” to perform. In practice, some of these clauses may be of more interest to tenants and some may be of more interest to landlords. Any actual lease language to be used should be developed by or adapted to the particular needs of the parties involved, with full legal review and input. Energy Usage and GHG Emissions Management 1a: Achieve and maintain ENERGY STAR labeling for the building The building must be ENERGY STAR labeled by achieving an ENERGY STAR rating of 75 and ENERGY STAR certification must be maintained for the duration of the lease term:
1b: Provide periodic recommissioning (every 3 years) Landlord shall incorporate recommissioning requirements to verify that the installation and performance of energy consuming systems meet project requirements. Recommissioning shall occur every 3 years at a minimum. Recommissioning shall comply with ASHRAE Guideline 0.2 (for initial commissioning and retro-commissioning of base building systems) or ASHRAE Guideline 202 (for new commissioning of tenant fit out equipment). Recommissioning shall address at a minimum: heating, ventilating, air conditioning, and refrigeration (HVAC&R) systems and associated controls, lighting and lighting controls, and domestic hot water systems. Commissioning and a written report should be provided triennially. Tenant shall triennially commission the energy using equipment in its premises, including plug loads. Opportunities for efficiency shall be coordinated between both parties. 1c: Aspire to net zero energy The building shall [achieve][aspire to] net zero energy, as defined by the U.S. Department of Energy[i] as of the date of this lease, within one year after occupancy and shall maintain that status for the remainder of the lease term.[ii] 1c Alternate: The Parties agree in the original lease to incorporate all energy saving measures necessary to achieve net zero energy, with the understanding that net zero may not be achievable initially. On that basis, the parties agree to periodically (every x years) assess and review the incremental progress/movement towards net zero energy use as measured by the actual usage numbers. The Parties agree, in good faith, to discuss future potential lease amendments and distribution/assignment of cost savings, along with possible lease cost adjustments, based on the resulting information. 2a: Install Lighting Power Density to comply with ASHRAE 90.1 2016 at a minimum The building shall comply with lighting power densities (LPD) at or below ASHRAE 90.1 2016 (e.g., commercial office maximum LPD 0.79 watts/sf). For additional space types or calculation compliance paths and exceptions, please refer directly to the ASHRAE 90.1 2016 standard. 2b: Add lighting controls to adjust to occupancy/vacancy and daylight levels Daylight dimming controls shall be installed in atriums or within 15 feet of windows and skylights where daylight can contribute to energy savings. Daylight dimming controls shall be either integral to the fixtures or ceiling mounted and shall maintain required lighting levels in workspaces. Lighting controls (including vacancy sensors[iii] and scheduling controls) shall be provided for all lighting equipment. 2b Alternate: Implement lighting controls, including daylight dimming controls for at least 50% of lighting load and vacancy sensors for at least 75% of connected lighting load. This measure is to be implemented if the simple payback period is demonstrated to be five years or less based on projected savings and estimated cost subject to building management team's review. Design and build to optimize daylight and views for occupants, which may be achieved through a design that includes interior rather than perimeter offices, or perimeter offices with glass fronts if perimeter offices are a design requirement. 2b Alternate: The Tenant shall initiate a review of lighting needs in all areas of the workplace [x] times within the year to accumulate lighting measurement data to compare with usage patterns. In conjunction with this effort, the specified energy rates for various areas will be reviewed and compared to the data to attempt to identify patterns and potential adjustment to lighting controls and sensors. (Dependent on metered/measured power usage within areas.) 3a: Share whole building or tenant space energy use (either actual or estimated) Landlord shall provide reports for the amount of electricity, natural gas, and fuel oil (where applicable) consumed at the building broken down by utility type, energy unit usage (e.g., kWh, therms or ccf, gallons), cost per month for each energy source for the duration of the Lease and the Energy Use Intensity (EUI measured in kBtu/sf/year). Unless disclosure is prohibited by state or local law or if data is not available or is confidential, estimated energy use per tenant may be provided.[iv] Such reports shall be provided within ninety (90) days after the end of each [calendar quarter] [June 30 and December 31] [calendar year].[v] Where applicable, Landlord shall provide read-only access to tenant of the building’s ENERGY STAR Portfolio Manager account and vice versa. To the extent Tenant obtains electricity independently of the building, Tenant shall give Landlord access to Tenant’s data on energy use for inclusion in Landlord’s annual reports, ENERGY STAR annual rating and similar purposes.[vi] 3b: Submeter electricity use per tenant Landlord shall install an electric meter/submeters to service the leased premises to measure the consumption of electricity in the leased premises. Where Tenant does not occupy the entire building or an entire floor, the partial floor or leased premises shall be separately metered.[vii] 3c: Submetered energy use for major energy end uses (e.g., heating, cooling, lighting, plug loads) per tenant Landlord shall install an electric meter and submeters to service the leased premises to measure the consumption of energy (e.g., electricity, natural gas, and other sources, where applicable) broken out by each major energy end use as well as broken out by tenant. Actual or estimated breakdowns may be used, depending on the granularity of the data provided. Energy end uses shall include, at a minimum heating, cooling, lighting, fans, pumps, plug loads, domestic hot water, elevators, and parking structures (where applicable). 4a: Use ENERGY STAR equipment for all imaging equipment (i.e., copiers and printers). Space heaters banned. All imaging equipment (i.e., copiers, printers, multi-function imaging devices) used by Tenant shall be ENERGY STAR Certified and energy savings modes must be activated. Space heaters are not permitted in the leased premises. 4b: Maintain automatic controls (night setbacks, sleep modes) for office equipment[viii] Tenant shall provide sensor or timer controls for all of its major office equipment, including personal computers, laptops, and copiers/printers. 4c: Use ENERGY STAR equipment for all central HVAC equipment, computers, monitors, displays, and appliances All Tenant equipment and appliances shall be ENERGY STAR certified (where applicable) and energy savings modes must be activated. Such equipment shall include, but is not limited to, computers, external displays, imaging equipment, phones, enterprise servers, network equipment, data center storage units, refrigerators, freezers, dishwashers, vending machines, and coffee makers. All central HVAC units shall be ENERGY STAR certified and (where possible) utilize variable speed compressors, fans, and pumps that are appropriately sized for the heating and cooling loads. 4c/5a, b, c – Combined Language Reduce plug loads by specifying equipment and appliances (including, without limitation, computers, monitors, printers, refrigerators, dishwashers, water coolers, copiers, and A/V and IT equipment) that meet or exceed ENERGY STAR requirements. 5a, b and c: Plug load demand Installed electrical wiring and facilities for plug load equipment including personal computers and other standard office equipment shall be limited to [3.5/2.5/1.5] watts per usable square foot. 6b and c: Green power purchasing or Renewable Energy Credits (RECs) At least [50/100] percent of [the building’s][Tenant’s] electricity shall be purchased from renewable sources. Where direct green power purchasing is not available from the utility, utilize Renewable Energy Credits (RECs) or carbon offsets. For the purposes of this lease, “renewable sources” [shall][shall not] include nuclear-generated power. Shared Savings and Commitments 1a: Conduct regular meetings between landlords and tenants to discuss energy efficiency opportunities and annual reporting[ix] Landlord and Tenant shall meet annually and review energy [and water] use data, recommissioning outputs and recommendations and the effectiveness of efficiency programs and mutually establish an energy optimization plan, including energy management and cost effective savings opportunities for the building and the leased premises. Annual reports shall be produced summarizing both tenant and landlord efficiency efforts. Tenant and landlord shall work together to attain third party green building certifications. 1b: Include clause for landlord cost recovery for efficiency-related capital improvements[x] Landlord may include the costs of certain capital improvements [intended to][that] improve energy efficiency in operating expenses. The amount passed through by Landlord to Tenant in any one year shall not exceed the prorated capital cost of that improvement over the expected life cycle term of that improvement [and shall not exceed in any year the amount of operating expenses actually saved by that improvement]. Interest/the cost of capital can be included. 1b Alternate: Another potential structure derived from New York City’s Energy Aligned Lease template[xi]: Landlord may include the costs of certain Capital Improvements in Operating Expenses pursuant to Section 1.1(a)(v)(16) in accordance with the following: (i) In the case of any capital improvement that an independent engineer experienced in energy efficiency matters and selected by Landlord certifies in writing will, subject to reasonable assumptions and qualifications, reduce the building’s consumption of electricity, oil, natural gas, steam, water or other utilities, and notwithstanding anything to the contrary elsewhere in this lease:
1c: Identify and implement all efficiency measures deemed cost effective Landlord shall perform a retro-commissioning study of base building systems that consume energy [or water] every [3] [5] year(s). Tenant shall perform a retro-commissioning study of the equipment (including plug loads) installed by it in the leased premises every [3] [5] year(s).[xii] Within [2] [3] months after the conclusion of their respective retro-commissioning studies, each party shall start to implement recommendations identified by the retro-commissioning study that are deemed cost effective. For purposes of this section, the term "cost effective" means an improvement that will result in substantial operational cost savings by reducing electricity or fossil fuel consumption, [water, or other utility] costs and where such operational cost saving over the then-remaining term of this lease (or some other period of time that is mutually acceptable) is sufficient to pay the incremental additional costs of making the improvements. 1c Alternate: Perform commissioning of energy systems within the space (including, without limitation, lighting, HVAC, electrical, and plug loads) to ensure design optimizes performance and systems are constructed and function per efficient design. Transportation 1a, 1b, and 1c: Transportation management plan including alternative transportation solution[s] Landlord will develop a Transportation Management Plan for the building to describe the various alternative mobility opportunities available to building occupants. Tenant and Landlord shall work together to implement [one][three] [or X] of the following provisions:[xiii]
APPENDIX ENDNOTES [i] U.S. Department of Energy (2015), A Common Definition for Zero Energy Buildings, https://energy.gov/sites/prod/files/2015/09/f26/bto_common_definition_zero_energy_buildings_093015.pdf [ii] A landlord or a tenant will probably require that the definition of net zero energy, an ASHRAE standard, a LEED® certification, a Green Globes® certification, or any other standard, be a definition known to exist on the date of the lease or some other fixed date. [iii] Vacancy Sensors require someone to manually turn ON the lights when required. The sensor will then automatically turn lights OFF when no presence is detected for a specified amount of time. These sensors ensure the highest level of energy savings since the lights will never automatically turn ON. [iv] For additional guidance from GSA on reporting, refer to: U.S. General Services Administration, Utility Consumption Reporting, http://www.gsa.gov/ucr). [v] Material included in annual reports to tenants should include both energy [and water] use data, [data on the recycling program, whether the build-out materials and systems installed elsewhere in the building] within the particular reporting period comply with the requirements of this particular lease, the degree to which other tenant spaces within the building are leased with similar provisions, sustainability achievements, certifications and awards won, violations received (and the corrective actions taken), etc. [vi] Source: Building Owners & Managers Association International (2011), Commercial Lease: Guide to Sustainable and Energy Efficient Leasing for High-Performance Buildings, https://store.boma.org/shopping_product_detail.asp?pid=52168. [vii] A metering requirement invariably generates a lengthy negotiation between the landlord and the tenant over which of them will pay for the meter. Often, the cost of the meter is negligible and is exceeded by the time and legal fees debating who should pay for the meter. [viii] As noted previously, plug loads often account for more than 30% of a building’s electrical demand. Reducing plug load can therefore have a substantial effect on electrical consumption. [ix] Background and comprehensive lease language is available at: https://www.nrdc.org/resources/energy-efficiency-lease-guidance [x] The concept of passing through to tenants as an operating expense the capital cost of improvements that save operating expenses is well-established in commercial leasing. But its implementation is highly negotiable (i.e., the capital cost could be repaid to the landlord over the projected payback period). [xi] Background and comprehensive lease language is available on energy-aligned leases at: http://www.nyc.gov/html/gbee/downloads/pdf/eac_&_overview.pdf. Consider allowing cost recovery to begin the first month following completion of improvement measure so the landlord does not have to wait until the beginning of the next calendar year to begin recovering the cost of the improvement through operating expenses. [xii] Additional resources on recommissioning can be found at: http://www.peci.org/sites/default/files/epaguide_0.pdf [xiii] Additional resources, tools and information available from Best Workplaces for Commuters, https://www.bestworkplaces.org [xiv] It may not be possible for all landlords to do this. For example, Real Estate Investment Trust (REIT) landlords may have issues with unrelated business income and therefore prefer to bundle parking charges into the rent. APPENDIX | OTHER RESOURCES There are lots of energy efficiency and high performance lease resources available to companies seeking to reduce their energy bills. In addition to the links elsewhere in this and the earlier Energy Action Month post, here are a few other favorites:
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Thank you for reading this blog post. Here at Corporate Sustainability Advisors LLC blog and on LinkedIn and Medium, I regularly write about organizational, community, and personal sustainability. If you would like to read my future posts then please subscribe via the adjacent link. Also, feel free to connect via Twitter and Facebook. October, being Energy Action Month, presents a perfect opportunity for all businesses to learn about and begin taking action to become more energy efficient. Developing an energy management plan will help your company reduce its energy use, costs, and impacts. When I talk with business owners—especially of small or medium sized businesses—about their energy use and impacts, a typical response is:
When I ask two follow up questions—how much energy does your company use each year and how much does it cost—very few have even a ballpark guess. One other question I’ll ask, especially to small or startup business owners – what would you do with an extra few thousand dollars to advance your business? Yes, being a sustainability professional often involves being a gadfly and asking a few pesky questions. A core part of the job is to help businesses be more financially successful – spending their precious cash flow on strategic pursuits rather than on unproductive energy costs that don’t contribute to the company’s success. The old adage ‘you manage what you measure’ is just as true today as when it was first spoken and applies to energy bills as well as other inputs and outputs. While a large business can save hundreds of thousands (if not millions) of dollars a year by becoming more energy efficient, smaller companies also have an opportunity to reduce operating costs. While the savings scale may be smaller, the impacts can be priceless. Startup companies—especially those in clean tech or energy sectors—have a unique opportunity to bake in energy efficiency (and other sustainable practices) from the earliest days when cash flow is scarce. Robust energy efficiency has the added benefit of demonstrating management excellence to prospective investors, lenders, customers, and employees. The financial benefits from energy efficiency can also accrue to sustainable businesses such as B Lab Certified B Corps, benefit corporations, or other social enterprises. And, energy efficiency has the added benefit of contributing to the company’s commitments on reducing its environmental footprint. Actively managing the company’s energy use, costs, and impacts, can also help companies be more accountable and transparent with their stakeholders.
1. Learn how much energy the company uses, how much it costs, and what impacts that creates. Gather all the energy bills that the company pays directly to your utilities (e.g., electricity, natural gas, fuel oil, other). Many utilities allow you to download historical usage and cost data into spreadsheet applications. If you don’t already haven an online account, sign up for one. If your utilities costs are embedded with your rent payment, seek the information from your building owner or property manager. If you can’t obtain the actual data on your company’s energy use, the table below provides some average US energy data to help to estimate your company’s usage and cost. The table below provides the energy use and cost for an average commercial building in the U.S. Note: the building(s) your company leases may not use all these energy sources.  For example, if your company leases (or owns) 10,000 square foot of commercial space (e.g., office, retail, warehouse), your estimated annual energy cost is about $19,000 ($1.90 x 10,000). These data come from the U.S. Energy Information Administration’s (EIA) 2012 Commercial Buildings Energy Consumption Survey (CBECS for shorthand), Table C14 (purchased electricity). Table C24 (natural gas), and Table 34 (fuel oil). You can also use the CBECS data to develop a more refined estimate based on the variables of your company’s commercial space (e.g., geographic region, type of building, age of building, number of floors, principal activities). Or, if you have your company’s direct energy usage and cost data, you can use this table (and/or the underlying CBECS data) to benchmark your company’s usage and costs against national averages. If the environmental impacts are also critical to your business mission and/or stakeholders, you can also assess the environmental impacts from the energy used in your facility. The greenhouse gas (GHG) emissions and other impacts are highly variable based on the company’s energy sources, including where any purchased electricity comes from. Developing a precise GHG emissions inventory can be very complex. The U.S. Environmental Protection Agency (EPA) provides a simple tool in which you plug in the company’s energy usage units to roughly calculate the associated emissions. Note: for a building’s energy use, the tool can only calculate units of purchased electricity and natural gas (i.e., no heating oil). The following table shows the results from the EPA GHG Carbon Calculator, applying the CBECS average annual usage for the sample 10,000 building referenced above.  EPA’s calculator also provides some more tangible equivalents to help contextualize otherwise amorphous figures. For example, 129 metric tons of CO2e is about the same emissions from driving an average passenger car about 315,000 miles. Another visualization technique I frequently use to provide a more concrete illustration of the otherwise unseen emissions: 1 pound of GHG emissions fills 1 exercise ball. And, a metric ton equates to almost 2,205 pounds. So, the energy to light, cool, heat, and power that average 10,000 square foot commercial space spews out about 285,000 exercise balls of CO2e each year. That image alone usually makes me go hunting for wasted energy. 2. Plan, pledge, and reduce your company’s energy use and costs. Once you know how much energy the company uses (and how much it costs financially and environmentally), you can develop a plan to reduce. Set a goal to reduce and a timeframe (both base year and target year). You can try the always popular “20 by 2020” goal. That means committing to using 20% less energy (e.g., kWh of purchased electricity, and/or therms of natural gas, gallons of heating oil) by 2020 (for example, compared with calendar year 2016). So for the above sample 10,000 sf space, the target would be to reduce purchased electricity use to 116,800 or less kilowatt hours in 2020. The 20% energy use reduction for this space would:
Goals can be absolute or normalized on an intensity basis. Two common intensity-based measures that many businesses use are:
Publicizing your reduction goal provides additional incentive to reach the goal and helps engage support from the company’s partners.  Here are three systemic areas to reduce your company’s energy use and costs:
If your company has already tackled (or has a plan to reduce the energy use in the company’s facilities), you can try more advanced energy and emissions management by assessing and addressing things like energy associated with: employee commuting, business travel, waste management, and the company’s supply chain. And, if the company decides to also measure and reduce the environmental impacts from its energy use, it might make sense to explore renewable and other clean energy options. 3. Engage with your employees (and other stakeholders). To successfully implement an energy management plan, it’s important to identify roles and responsibilities for:
Also, once you decide to actively manage your energy use and budget, don’t forget to engage all your employees! They are critical to reducing usage. One fun exercise is to conduct an energy treasure hunt (and October is the perfect month do to one). These are based on the kaizen practices made famous by Toyota. Kaizen is Japanese for continual improvement. Energy kaizens can be designed to be very comprehensive and technical audits (even lasting several days for larger, more complex businesses) or short, focused, and fun team building (and money saving) exercises. 4. Keep measuring and monitoring (and reporting). Set a regular schedule to measure the company’s energy use and costs. Most companies will conduct an annual assessment on a calendar year or fiscal year basis. For companies that spend more on energy, a quarterly (or even monthly) check in may pay off. The data collection process may be a bit cumbersome the first couple times, but should become more efficient over time. Be sure to document what energy efficiency steps the company takes. Track the date(s), cost(s), activity(ies), and location(s) of your efficiency action(s) to ensure you can (1) measure the delta from the “business as usual” costs and impacts and (2) share your successes and lessons learned. Most companies will also calculate the GHG emissions on the same cycle and in conjunction with the company’s energy measurement. How your company reports and shares (internally and externally) its energy management activities should reflect the reasons you’ve engaged in the journey. Many of your company’s stakeholders will benefit from learning about your energy efficiency (and any associated emissions reduction) efforts and progress. As stated earlier, investors, supply chain partners, customers, and employees value energy efficiency as a very concrete demonstration of your management prowess. 5. You Too - Companies That Lease! If your company leases all of its building space and other real estate – don’t fret, you too can and should pursue an energy management plan! The green buildings movement (e.g., spurred by improved state building code requirements, Energy Star, LEED, Green Globes, The Living Building Challenge) is helping to transform America’s building stock. Buildings are becoming more energy efficient and healthier places more conducive to a highly productive workforce. Unfortunately, there are still institutional barriers and disparate incentives between building owners and tenants that leaves many buildings needlessly wasting energy. Usually, it’s the tenant companies who are stuck paying the costs of the inefficiency. According to the EIA CBECS, for example, there’s a clear difference in the energy use and costs between owners and tenants.  It’s incumbent on and in the best interest of companies that rent real estate to actively engage on the building’s energy performance. Fortunately, there are emerging advances in “green” lease terms that are helping tenants have more of a say in the energy performance of their leased space. And, more and more property management companies and building owners are interested collaborating with tenants to improve energy efficiency. I’ll be posting another article later this month with more in depth information about green leases and how tenants can take more control over their energy costs. In the meantime, give us a call if you are interested in help developing an energy management plan or conducting an energy treasure hunt. ####
Thank you for reading this blog post. Here at Corporate Sustainability Advisors LLC blog and on LinkedIn and Medium, I regularly write about organizational, community, and personal sustainability. If you would like to read my future posts then please subscribe via the adjacent link. Also, feel free to connect via Twitter and Facebook. {This is the second in a series about a new breed of business striving to be a force for a better world. Here’s a link to the first blog post.} As described in the first post in this series, there’s a movement afoot that is shifting how we view and measure corporate success. The non-profit B Lab launched a platform to certify the best companies (aka Certified B Corporations or B Corps, for short) and is cultivating a community of these companies, their supporters, and other stakeholders. The “B” stands for “benefit”. Several have touted the B Corp certification as one of the highest and most trustworthy standards for socially responsible businesses. The Certified B Corps are companies that want to improve society—by being better for their customers, workers, communities, and the environment—while making a profit. The founders and owners of these companies are intent on building great businesses that are also a force for societal good. Energizing the pendulum swing away from Milton Freidman’s profit maximization principle, the B Corp movement is leading the charge to shift from ‘greed is good’ to “doing good is good.” So, who and where are these B Corporations? Who Is Eligible to Be a B Corp? Any type of for-profit company is eligible to become a B Lab Certified B Corp. There are no legal structure (e.g., S corp, C corp, LLC), size, or industry parameters or requirements. If a company is for profit, it is eligible to earn the certification. That said, most B Corps are privately held small or medium sized businesses. Even start-ups (i.e., companies in operations for less than 12 months) can earn a temporary “Certification Pending” designation (steps here). This special designation is good for a 12-month period (versus the normal certification which is 24 months). Since the B Impact Assessment (“BIA” for short) measures policies, practices, and performance from the previous year, start-ups aren’t able to earn the full certification. While multi-national and publicly traded companies are eligible for the certification (see e.g., Etsy, Laureate, KeHE, Natura, Silver Chef), some have faced institutional and practical barriers to qualify. Currently, the process is most suitable to parent multi-national and publicly traded companies of limited size, scope, and complexity. B Lab identifies the following characteristics as most likely to allow a parent multi-national and publicly traded to qualify for the certification:
Several large companies have also achieved B Corp certification for a subsidiary (e.g., Ben & Jerry’s/Unilever, Plum Organics/Campbell’s Soup, Happy Family/Danone, New Chapter/Procter & Gamble). To address the existing barriers, B Lab has created an advisory council (the “Multinationals and Public Markets,” MPM Advisory Council) to enable the B Corp movement to scale and diversify beyond the current small and mid-sized company core. Apart for seeking certification, multi-national and publicly traded companies actively engage in a number of ways to boost the positive impact business can have on society. Who are the B Corps? The B Corp movement is growing exponentially. As of late September 2017, B Labs reported about 2,200 Certified B Corps. In its first year (2007), B Lab certified more than 30 companies as B Corporations. After a small dip during the recession years, the number of B Corps is growing fast. So far, 2016 has the biggest class of first time certifiers with nearly 600. Through early September 2017, B Lab has completed the certification process for about 250 new B Corps.  B Corps | By Initial Year Certification via Data World (dataworld/blab) The companies in the B Corp movement come from every conceivable line of business, including manufacturers, retailers, wholesalers, construction companies, and service businesses, The following representative list of Oregon companies earning the B Corp certification for the first time in 2017 helps to illustrate the range of companies in the movement.  Illustrative List of Oregon B Corps Certified for First Time in 2017 The largest segment of B Corps is the professional services companies (e.g., accounting, architecture, consultants, law firms, health care) (about 33%). Wholesale and retail businesses make up another significant swath (about 26%) of the B Corps, And, about 10% of B Corps are in the information and communication technology sector.  The B Corp Movement is Springing Up Across All Industries The B Corps represent companies of all sizes—from zero employee sole proprietor LLC’s to 10,000+ employee international corporations. Included in the B Corps ranks are many brand-name companies you’ve heard of---Patagonia, Method, Seventh Generation, Cabot Creamery; and thousands of other companies you haven’t heard of (yet). Beyond the 2,200 or so Certified B Corps, about 15,000 companies have taken the BIA to assess, compare, and improve their environmental and social performance. Some companies take it upon themselves to engage with the BIA. Other companies are invited to take the BIA by their supply chain or other business partners. As a reminder, to qualify for the B Corp certification, a company must score at least 80 points (of a possible 200) on the BIA. According to researchers, there’s about a 7.5 percent passing rate (i.e., companies that take the BIA and later become Certified B Corps).
The vast majority of Certified B Corps are U.S. businesses. Most states have at least one B Corp incorporated (or having their primary operating location) in the state. A handful of states still don’t have a Certified B Corp (i.e., Delaware, Mississippi, North Dakota, West Virginia). While B Corps are spread across the country, some states are B Corp magnets. The 5 states with the most B Corps are: California, New York, Oregon, Colorado, and Pennsylvania. On a per capita basis, there’s a change to the states with the most (relative) B Corps: Vermont, Oregon, Washington DC, Colorado, and Massachusetts.  Certified B Corps | Top 10 States Whether on the raw numbers or on a per capita basis, the State of Oregon is home to a sizable chunk of the world’s B Corps (ranked #3 and #2 of US States, respectively). More than 70 (of the 90+) Oregon B Corps call the Portland metro area their home operating base. Later in this blog series, we’ll go into more detail about why Oregon is such fertile ground for B Corps. The Best of the Best! Each year, B Lab honors the best of the B Corps through its annual “Best for the World” list. These are the companies that score the best on the BIA. B Lab recognizes the “overall” best (i.e., those scoring in the top 10 percent of all B Corporations), along with the best scoring in six other categories (e.g., Best for Customers, Best for the Environment, Best for Community, Best for Workers). Earlier this month, B Lab announced the 2017 list of Best for the World honorees—846 leading companies across more than 50 industries from nearly 50 countries. Stay tuned to this series for more on the B Corp movement wherefore and why’s:
#### Nota bene: Companies get newly certified almost every week (and some don’t re-certify). This leads to some fluidity in the numbers. All B Corp data for this article was pulled from B Lab’s website and Data World on September 25, 2017. ####
Thank you for reading this blog post. Here at Corporate Sustainability Advisors LLC blog and on LinkedIn and Medium, I regularly write about organizational, community, and personal sustainability. If you would like to read my future posts then please subscribe via the adjacent link. Also, feel free to connect via Twitter and Facebook. 2,200+ Reasons for Hope | Benefit Corporations are Changing The Business World (for the better)8/31/2017 The news cycle feels overwhelming at times. We get barraged with negative stories about violence, corruption, greed, injustice, hate, and massive weather damage. As sustainability professional, I get questions all the time about whether our collective goose is cooked. Is catastrophic climate change irreversible? What can I as an individual do to combat it? How can I do better as a business leader? Do my actions and decisions really make a difference? While my responses may vary depending on the news cycle influences, I’m always able to consistently share hope by highlighting a new type of company and a burgeoning movement of “B Corps”—the better companies that often go by the designation “benefit corporations” and/or “certified B corporations™.” B Lab, the non-profit that started the “global movement of people using business as a force for good™,” has a vision that one day all companies compete not only to be the best in the world, but the “Best for the World®.” I’m old enough to remember when more companies acted with some semblance of a conscience. When they earned a good profit for the owner(s), when they paid their workers a fair wage, when they built lasting relationships with their customers, and when they built enduring products. When they took some effort to minimize externalities and do the ‘right thing’ even if the law strictly allowed them to do otherwise. All before Milton Friedman’s principle of profit maximization at all costs became the prime directive for American business owners and investors. Those old-school businesses weren’t perfect nor always the most efficient, but the most successful took some measure to act ethically and legally—to engage in some level of social responsibility—for the mutual betterment of the owner(s) and society. Don’t get me wrong. I love me some profit. It’s an elemental factor in business motivation and success. But, it doesn’t happen in a vacuum. And, a high profit today, may lead to a business failure tomorrow. To succeed, businesses also require good employees and customers and sufficient natural resources (i.e., raw materials for product-based companies, in the way of energy, buildings, computers, phones for service-oriented companies). Some companies are bringing corporate America back to the future—where the power of business is used to benefit both shareholders and society. Some of these companies are successfully managing to the triple bottom line (factoring people, planet, profit). Some are designing their products to minimize their environmental and other social impacts (e.g., EPEAT electronics, Fair Trade coffee or chocolate, sustainably harvested forest products). Increasingly, some are using more comprehensive reporting frameworks such as the Global Reporting Initiative (GRI), ISO 26000, or the CDP (formerly the Carbon Disclosure Project) that measure corporate-wide practices and impacts. There is also a smaller sub-set of for-profit companies that were launched to advance general or specific public benefits. Some of these do-good, for-profit companies may be called many things—social enterprises, conscious capitalism, benefit corporations, B corps. Some have been around for decades (e.g., Patagonia, Ben & Jerry’s, Stonyfield Farm, Eileen Fisher, Sokol Blosser Winery, Hog Island Oyster Company); others were launched more recently (e.g., Etsy, Warby Parker). If an individual or business is looking to support these trends to redefine business success, how do they go about distinguishing between all these so-called good companies? Many, myself included, think that the Certified B Corporations™ set themselves from the rest of the pack because of the comprehensive, independent assessment and rating process they go through to become and remain certified. I am working, with some collaborative partners, on a series of blog posts about some of these new breed companies. We’ll start by focusing on the benefit and certified B corporation designations. This first article is a basic primer about the “what” (What is a Certified B Corp, What is a Benefit Corporation) and provides a brief history about the movement that introduces the who, why, where, and how Certified B Corps came to be. Subsequent articles will focus even more specifically and deeply on the B Lab Certified B Corporations, including:
Please travel with us as we explore these back-to-the-future companies and discover a movement that may just disrupt capitalism, our planet, and our communities—for the better. Along the way, we’ll feature some data about and conversations with Oregon-based B corporations. Thanks, in advance, for indulging some home-state pride! We come honestly to featuring Oregon B Corps as Oregon is home to a significant percentage of the certified B corporation community. The Basics | What is a Certified B Corporation versus a Benefit Corporation? Some of the phrasing for this new breed of company has caused some confusion. There are basically two terms to understand and distinguish: “certified B corporations” and “benefit corporations.” Part of the confusion is that the shorthand phrases “B Corp” or a “B” company are being informally used to describe either type of company. My preference is to use the “B Corp” term just for the B Lab Certified B Corporations. Certified B corporations and benefit corporations have a lot in common. A company can even be both. But, the two types can be distinguished by a few key differences.  In brief, Certified B Corporations™ are companies that have gone through a third-party assessment process (conducted by the non-profit B Labs®) that certifies their social and environmental performance, legal accountability, and public transparency. B Lab frequently uses the following analogy: a Certified B Corp is to business what Fair Trade certification is to coffee, USDA Organic certification is to milk, or USGBC LEED certification is to green buildings. The B Lab assessment process is iterative and evolves to adapt to emerging best practices and standards. The assessment covers the company’s entire operation and measures the company’s impacts across four areas:
The applicability and weightings in each category are tailored to the company’s industry, geographic location, and number of employees. Under the current scoring system, companies can score a potential 200 points. A company must earn at least 80 points to earn the Certified B Corporation label. They must also re-certify and meet the scoring minimum every two years. Today, more than 2,200 companies are B Lab Certified B Corps. These companies come from more than 140 industries and are from 50 countries. Tens of thousands of other companies have also used the B Lab assessment framework to measure themselves and provide a roadmap to improve. Benefit corporations, on the other hand, are a new type of incorporation category that have a social, environmental, or some other identified public benefit as an integral part of their business purpose and meet the legal requirements established by state laws (where the company is incorporated and/or registered). Similar to S or C corporations, wholly owned subsidiaries, or limited liability corporations, benefit corporations are a legislatively recognized category of company. More than 30 states have enacted some form of benefit corporation laws; many other states are actively considering benefit corporation legislation.  From B Lab - Status of State Action to Enact Benefit Corporation Laws Typically, these states require their benefit corporations have a stated public benefit and meet higher transparency and accountability standards than the other types of corporations. For example, many states with the benefit corporation designation require such companies to submit to periodic independent third-party assessments and publicly release the assessment results. Unlike other types of incorporated businesses, benefit corporations are legally obligated to consider impacts beyond profit or maximizing shareholder value. They must also consider the impact of their decisions on their workers, consumers, their communities, and the environment. This legal structure enables business owners to support the company’s business and mission while growing over the long-term. New companies can initially file as benefit corporations. Existing companies may also amend their governing documents to change to the benefit corporation structure and re-file with the state to change their legal status. Here is a brief summary from B Labs that outlines some of the intersections and differences between legislatively recognized benefit corporations and B Lab Certified B Corporations.  A Little History | How the B’s Began About 10 years ago, B Lab was launched to accelerate the growth and amplify the voice of the socially and environmentally responsible business sector. The founders—Jay Coen Gilbert, Bart Houlahand, and Andrew Kassoy—identified three key elements needed to foment this movement:
The first foundational component of their strategy was to create a comprehensive set of best practices performance standards and legal requirements to distinguish and provide credibility to companies portraying themselves as a “good” company. In addition to measuring what matters, and benchmarking the impact against similar companies, the standards provide a framework for companies to improve their performance. The founders worked with many leading businesses, investors, and attorneys to develop this initial set of standards. What has now become the “B Impact Assessment” started with a spreadsheet to measure some of the best practices in socially responsible businesses. The first 19 companies were certified as B Corps in June 2007. While most of the certified companies are American companies, companies in many other countries have been certified. Canada has the second most B Corps with more than 150 certified companies to date. By 2011, more than 500 companies had been certified. While companies must pay a fee to be audited and certified, any company can use the B Impact Assessment rating tool for free. The standards for the B Corp certification evolved over the years and will continue to evolve. Moving forward, B Lab will update the B Impact Assessment about every three years. B Lab now uses an independent advisory council to maintain and advance the standards. It always welcomes public comments on the standards. Passing legislation to create a new type of corporation was the B Lab founders’ second piece of infrastructure to spur a more massive and durable movement. B Lab (with pro bono attorneys from Drinker Biddle & Reath) developed model legislation to create a statutorily recognized class of social enterprise companies—the benefit corporations. B Lab, in partnership with many, worked (and continues to work) with states to enact benefit corporation laws. In April 2010, Maryland became the first state to pass a benefit corporation statute. In June 2017 Texas became the 33rd state to create a benefit corporation class. The Texas law is effective September 1, 2017. Six other states are actively exploring benefit corporation legislation: Alaska, Georgia, Iowa, Mississippi New Mexico, and Oklahoma. These social innovators were motivated to create this new type of corporation, in large part, to counter the strong perception and several legal decisions—framed by Milton Friedman’s 1970 business social responsibility article—that protect shareholder profit maximization over all other business and societal interests. These battles over a company’s pursuing its mission versus shareholder’s rights to maximum profit typically arose in the context of potential corporate takeovers or other sales or after leadership changes. The benefit corporation pioneers felt this type of legal structure was needed to ensure “long term mission alignment and value creation.” To protect the mission “through capital raises and leadership changes,” to create “more flexibility when evaluating potential sale and liquidity options,” and to prepare businesses to “lead a mission-driven life post-IPO.” Since this type of corporate class is still relatively new, there are no known court cases ruling on the merits of these protections. One interesting corporate transaction that received some press and many have speculated about—whether Ben and Jerry would have fought the Unilever bid if they had the benefit corporation status protection. To Unilever’s and Ben & Jerry’s credit, Ben & Jerry’s became a Certified B Corporation in 2012, twelve years after Unilever acquired it. The B Lab founders also understood the need to create a brand and community to both unify and amplify the voice of these like-minded companies and their supporters. B Lab has worked to construct a vocabulary that reflects the shared values of those who believe that businesses can be a force for good. They’ve also implemented a series of campaigns such as “Measure What Matters”, “Best for the World”, and “B the Change”. B Lab is also nurturing and expanding the community through events and recognition such as the B Corp Champions retreats, B Corp Leadership Development, and the B Corp Ambassadors. Stay tuned for the next article in this series—a deeper dive about what it takes to become a Certified B Corporation and/or a benefit corporation and why companies are voluntarily choosing these routes. ####
Thank you for reading this blog post. Here at Corporate Sustainability Advisors LLC blog and on LinkedIn, I regularly write about organizational, community, and personal sustainability. If you would like to read my future posts then please subscribe via the adjacent link. Also, feel free to connect via Twitter and Facebook. Here’s a follow-up to our December 2016 blog on the Financial Stability Board’s (FSB’s) recommendations to facilitate wide-spread climate-related disclosures by organizations with public debt or equity to promote more informed investing, lending, and insurance underwriting decisions. In late June 2017, the FSB Task Force of the G20 nations released its final recommendations (the “report”) to encourage companies and financial-sector organizations (e.g., banks, asset owners and managers, insurance companies, lenders) in G20 countries to assess and incorporate climate risks and opportunities in their mainstream public financial reporting. At the time the report was released, more than 100 CEO’s expressed support for the recommendations (full list of pre-release signatories). To supplement the final recommendations, the FSB also provided accompanying documents including:
In finalizing its recommendations, the Task Force received more than 300 responses through its public consultation process. The FSB noted that, overall the commenters were supportive of the recommendations (summary of the public consultative process and comments). The Task Force used the specific and constructive feedback on the draft to refine the recommendations in its final report. Final Recommendations | Key Changes and Enhancements from the Draft The Task Force made only slight changes from the draft recommendations. The final report keeps the focus on the four thematic areas targeted in the draft recommendations: governance, strategy, risk management, and metrics and targets.  O ne of the more notable refinements relates to the FSB’s recommended disclosures that organizations should make in their annual, public financial filings. The FSB provided clarifications in response to concerns about having potentially immaterial issues reported in public financial filings. The FSB also repeated its caution that organizations should not prematurely conclude that climate-related risks and opportunities are not material. As highlighted in the FSB’s Summary of Key Changes and Clarifications document (see highlighted table below), the FSB now recommends:
Two other key changes between the draft and final recommendations report, included:
 The FSB also added emphasis and/or further explanation about several items addressed in the draft report:
The FSB highlighted four key benefits to the publicly-traded companies that implement these recommendations:  The Task Force also re-emphasized the potential financial impacts of climate-related risks. The final report and the supplemental materials (e.g., Implementation Annex, Technical Supplement) provide additional explanation and examples of the potential climate-related financial impacts potentially facing many companies in the short, medium, or long term. For example, see Figure 1 (below) and Tables 1 and 2 from the final report.  What to Expect Next Now that the FSB recommendations are final, we can expect continued action on these issues from a number of perspectives, including:
Our Suggested Action Items to Publicly Capitalized Companies The FSB’s recommendations provide a great reflection point for publicly capitalized companies to consider their climate-related risks and opportunities. For the many companies that have already begun this journey, it provides confirmation of the business case for doing so and additional guidance to improve the quality, efficiency, and consistency of the analysis and disclosures. It provides impetus for increased collaboration amongst a company’s board of directors and leaders from across the organization including: the Chief Financial Officer and other financial leaders, the Chief Investment Officer and other investor relations leaders, risk management leaders, and climate/sustainability leaders. For publicly capitalized companies that haven’t yet begun to assess which, if any, climate risks or opportunities may impact them, now is a good time to start. If you are a board member or senior leader at one of these companies, we recommend the following five initial steps:
If your next annual financial filing occurs before you’ve taken these steps and you choose to omit any of the recommended disclosures, you should consider providing a rationale for omitting the disclosures. This could include a statement that the company acknowledges the FSB’s recommendations, is assessing how it will implement them, and will reflect any such implementation in the next annual filing. Footnote: [1] The FSB recommends that certain companies (i.e., in the four non-financial groups with $1+ billion in annual revenue) should consider publicly disclosing the Strategy and Metrics and Targets information even if the information is not deemed material and not included in financial filings. Suitable public disclosure mechanisms would be “other official company reports” (i.e., defined as those issued at least annually, widely distributed, available to investors and others, and subject to internal governance processes substantially similar to those used for financial reporting).
#### Thank you for reading this blog post. Here at Corporate Sustainability Advisors LLC blog and on LinkedIn, I regularly write about organizational, community, and personal sustainability. If you would like to read my future posts then please subscribe via the adjacent link. Also, feel free to connect via Twitter and Facebook.  Federal contractors - have you recently updated your reps and certs in SAM? If you've recently been in GSA's System for Awards Management, you've run into the new FAR requirement for certain contractors to make representations about their public disclosure of greenhouse gas (GHG) emissions inventories and goals. For more background on the rule, check out our prior blog posts here and here. If you haven't recently updated your reps and certs, the new representations are required for most contractors under FAR provisions 52.204-7 and 52.223-22 (and an equivalent at 52.212-3 for commercial/COTS items). The trigger is simple: If your company received $7.5+ million in Federal contracts during the prior Federal fiscal year, you are required to make the representations. If your company was below $7.5 million in FY16, you may voluntarily choose to report on your public GHG disclosures but are not required do to so.  Federal Acquisition Regulation 52.223-22 Public Disclosure of Greenhouse Gas Emissions and Reduction Goals-Representation The GHG reps appear in Question 32 (FAR response page 4). The image below is a screen shot from the SAM reps section, after selecting "yes" for the first value (i.e., the company received $7.5+ million in Federal contracts during the prior Federal fiscal year).  Question 32 in SAM | Representations About GHG Emissions Inventories/Reduction Goals Public Disclosure The image below is from the most recent SAM Questionnaire for Representations and Certifications (Reps and Certs user guide) (February 24, 2017).  SAM Reps & Certs Questionnaire Users Guide, FAR Responses Question 32. (February 24, 2017) There is a noted departure between the final FAR rule and how the representation is stated in SAM. The SAM language implies that GHG emissions inventories and goals must be publicly disclosed (for those with $7.5+M the prior Federal fiscal year). In the final rule making, however, the FAR Council was very clear that they are only seeking information about whether companies are making public GHG disclosures. So, the FAR just requires you to report whether or not you publicly disclose GHG emissions inventories/reduction goals. If you already publicly disclose either an emissions inventory and/or reduction goals, you are required to provide a link to the publicly accessible web site where the disclosure(s) have been made. If you're new to GHG emissions reporting or goal setting, we can help you navigate these new representations. Give us a call at (888) 807-5237 or email us at info@corporatesustainabilityadvisors.com. ####
Thank you for reading this blog post. Here at Corporate Sustainability Advisors LLC blog and on LinkedIn, I regularly write about organizational, community, and personal sustainability. If you would like to read my future posts then please subscribe via the adjacent link. Also, feel free to connect via Twitter and Facebook.  With so many climate change stories in the news these days, what's an owner of a medium-size or small business to do? There's a lot of talk about what governments and large, global companies are doing to climate-ready their businesses, but fewer tips for smaller businesses. Owners of smaller businesses face similar risks (and may also have opportunities) from climate-related impacts:
Here are 5 things any business owner or leader can do to take action on climate change and make their business more resilient.
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Thank you for reading this blog post. Here at Corporate Sustainability Advisors LLC blog and on LinkedIn, I regularly write about organizational, community, and personal sustainability. If you would like to read my future posts then please subscribe via the adjacent link. Also, feel free to connect via Twitter and Facebook. |
AuthorHi. I'm Colleen, Corporate Sustainability Advisor's founder and owner. Blogging about corporate sustainability trends, benefits, and best practices. Archives
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