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:

• Electronics contain many valuable resources (e.g., glass and metals, including precious materials such as gold, copper, silver, palladium) that can be recovered through recycling.
  • According to EPA, for example, for every million cell phones that are recycled, the following can be covered: 35,000 pounds of copper, 770 pounds of silver, 75 pounds of gold, and 33 pounds of palladium. 
• Apart from the regular solid waste, electronics also contain toxic and hazardous materials (e.g., lead, cadmium, chromium, mercury) that can pose significant risks to human health and the environment when burned, buried in landfills, or dismantled for parts (especially in developing countries with little or no protection of waste and recycling industry workers).
• Electronic equipment requires a substantial amount of energy and water to extract the raw natural resources used for production, and to manufacture and distribute the devices.
  • According to EPA, for example, recycling one million laptops saves enough energy to provide electricity to 3,500 homes for a year.
• Technological innovations create a perceived demand for newer gadgets despite older, functioning products still having a useful lifespan.

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:

• Advance best management practices
• Offer a way to assess the environmental, worker health, and security practices of entities managing used electronics
• Are based on strong environmental standards that maximize reuse and recycling, minimize exposure to human health or the environment, ensure safe management of materials by downstream handlers, and require destruction of all data on used electronics.

 
The U.S. currently has two certification standards for electronics recyclers:

• e-Stewards (the e-Stewards for Responsible Recycling and Reuse of Electronic Equipment®)
• R2 (Responsible Recycling/R2 Practices)

 
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:

• e-Stewards certified locator: http://e-stewards.org/find-a-recycler/
• R2 certified locator: https://sustainableelectronics.org/recyclers
• ​EPA also provides a tool that identifies companies with both certifications, but it has not been updated in more than a year.

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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:

1. We’re small so we don’t use much energy.
2. We don’t manufacture things so we don’t use much energy.
3. We rent our space so we can’t do much to reduce our energy use.
4. Our greenhouse gas emissions don’t really contribute that much to climate change.
5. All of the above

 
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:

• reduce operating costs by about $3,800 a year, and
• avoid about 57,000 exercise balls of CO2e emissions.

 
Goals can be absolute or normalized on an intensity basis. Two common intensity-based measures that many businesses use are:

• kWh (and/or MT of CO2e) per $ of revenue
• kWh (and/or MTof CO2e) per employee

 
Publicizing your reduction goal provides additional incentive to reach the goal and helps engage support from the company’s partners.

• How you dispose of things: While proper disposal after a product’s useful lifetime won’t directly save your company money, reusing and recycling reduces energy use (and raw natural resource extraction) across the broader society.

 
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:

• Measuring and monitoring energy use, costs, and impacts,
• Assessing and pursuing energy efficiency projects and practices, and
• Setting and achieving reduction goals.

 
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.

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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.

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:

• Who | Who can become a Certified B Corporation? Who are these B Corps?
• Why | Why are companies choosing to be (or not to be) Certified B Corporations? Why are stakeholders engaging and supporting these B Corps?
• Where | Where are the Certified B Corps doing business? Where can I find these B Corps?
• How | How does a company become a Certified B Corp? How are Certified B Corps being a force for good and creating benefit for all stakeholders, not just shareholders?

 
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:

1. how a company is governed,
2. how it treats its workers,
3. how it respects the environment, and
4. how a business supports its community.

 
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. 

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:

• a set of standards that business leaders, consumers, and investors could use to identify “good” companies
• a legal framework that would enable companies to consider all stakeholder interests, rather than just maximizing shareholder value
• a brand and community to unite the various corporate sustainability/social responsibility monikers

 
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.

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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.

​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:

• Implementing the Recommendations of the Task Force on Climate-Related Financial Disclosures (the “annex”).
• The Use of Scenario Analysis in Disclosure of Climate-Related Risks and Opportunities (the
  “technical supplement”).

 
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:

• Disclosures on climate-related Governance and Risk Management should be made even if a company views climate as a non-material issue. 
  • The FSB distinguished these types of disclosures because many investors want insight into the governance and risk management context in which organizations’ financial and operating results are achieved, regardless of perceived materiality.
  • Acknowledging current differences in sophistication, the Task Force provides flexibility for some companies to begin by incorporating these disclosures in other publicly available reports.  
• Disclosures on climate-related Strategy and Metrics and Targets, on the other hand, should be made only if such information is material.
  
  • The FSB further recommends that certain types of companies disclose their climate-related Strategy, Metrics, and Targets (even if they deem climate is immaterial) through other public reporting. [1]

 
Two other key changes between the draft and final recommendations report, included:

• Expanding the guidance on disclosures about remuneration to cover all organizations that have identified climate-related risks as material (the draft had this applicable only to organizations in the energy sector).
  • This falls under recommended disclosure (a) for Metrics and Targets and states: Where climate-related issues are material, organizations should consider describing whether and how related performance metrics are incorporated into remuneration policies.
• Simplification of the disclosure related to the scenarios analysis (recommended Strategy disclosure (c)) and clarification to focus on resiliency of an organization’s strategy to climate risks and opportunities.

The FSB also added emphasis and/or further explanation about several items addressed in the draft report:

• Clear linkage of climate-related risks and opportunities and associated financial impacts are widely applicable to all organizations, regardless of sector or location.
• Increasing demand and need for more public disclosure of climate-related financial implications by companies with public equity or debt and for more consistency (and further encouraging both publicly capitalized companies and asset owners/managers to quickly implement the recommendations).
• Refined the recommended disclosures and streamlined the supplemental materials for disclosures from two key groups: the financial sector and the four non-financial sectors (e.g., energy, transportation, materials and buildings, and agriculture, food, and forest products) with the highest proportion of greenhouse gas (GHG) emissions, energy usage, and water usage.
• Benefits of the disclosures being made in annual financial filings (and subject to internal governance processes substantially similar to those used for financial reporting).

• Acknowledgement of existing national reporting requirements (e.g., the U.S. SEC requires disclosure of material issues affecting the company’s financial condition) and clarification that any of recommendations that are incompatible with national requirements should be disclosed in other official company reports.
• Consideration existing voluntary and mandatory climate-related reporting frameworks (e.g., CDP, GRI, IIRC) and encouraged those frameworks to further align with the recommendations.
• Understanding that reporting of climate-related information will continue to evolve.

 
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:

• Increasing adoption of mandatory and voluntary disclosure requirements from trading exchanges and asset owners/managers (plus regulators of publicly traded companies).

• More shareholder proxy action on climate and associated risks.
• Growing action and coalition efforts from the largest companies and investors to incentivize and strengthen commitments to science-based reduction targets and renewable energy (e.g., the RE100)
• Evolution and streamlining of analyst research tools and reporting schemes (e.g., CDP, CDSB, IIRC, SASB, DJSI, MSCI), including more media and public access to climate-related disclosures.

 
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:

1. Review and share the final FSB recommendations with the company’s senior leadership, including board members. Chief Financial Officers, in particular, should be in the loop to assess and implement the recommendations.
2. Consider whether and how positioned your company is to make the recommended, voluntary disclosures.
3. Research whether your trading exchange (and/or its regulatory body) is exploring specific climate-related disclosures in addition to those already required.
4. Assess your key analysts’ and major shareholder’s climate-risk management and disclosure expectations.
5. Initiate development of: (i) a GHG emissions and energy use inventory (and water, if relevant) and (ii) a plan to explore how your company might be impacted by climatic changes and shifts to a lower carbon economy.
   • Both activities will require access to the requisite subject matter experts who can develop GHG/energy/water inventories, build climate-knowledge capacity among your senior leadership, and facilitate adequate board oversight.
   • While the FSB final recommendations clarify that GHG emissions and energy usage metrics do not need to be publicly disclosed in the annual financial filings if deemed immaterial, companies will need the data to assess the materiality, governance, and risk management practices in light of potential climate-related financial impacts.

 
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.

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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.

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).

The image below is from the most recent SAM Questionnaire for Representations and Certifications  (Reps and Certs user guide) (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. 

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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.

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:

• physical hazards such as increased temperatures, storm events or sea level rise; 
• regulatory changes such as voluntary or mandatory CO2 emissions reporting or green building standards; and
• market changes including energy and other resource cost increases, new provisions to "green" your lease terms, or shifts in workforce and consumer valuation of sustainability practices.

While the scale of these risks is certainly smaller in terms of overall costs/revenue/GDP, the relative risk to each business can be significant,  even making the difference between thriving or going under.  

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.

Sharing a couple news items regarding GSA's Alliant 2 GWAC.

1.  GAO recently denied protests.  Evaluations and awards can now proceed. See the January 11th decision here. 

2. GSA issued a revised Information Collection Request (ICR) notice for the greenhouse gas (GHG) emissions information required under Alliant 2's Section G.25.  Based on comments to the first ICR notice, including those of Corporate Sustainability Advisors, GSA has a new burden estimate for the GHG reporting.  Per the new calculation, GSA estimates that the average Alliant 2 awardee will take about 120 hours each year to comply with the G.25 provisions.  This is up from GSA's original estimate of 80 hours. The revised ICR notice is here.  The public comment period closes February 13th. 

​Homeowners in Portland Oregon soon will. The City of Portland just joined a small group of other US (Austin, Berkeley, Boulder, Santa Fe) and international cities (in the UK, Denmark and Australia) to require energy scores as part of home sales.
 
Beginning in 2018, sellers of certain single-family homes in the City of Portland must obtain a home energy score and share the report with:

1. real estate agents working on the seller’s behalf,
2. real estate listings,
3. prospective buyers who visit the home while it is on the market, and
4. the City of Portland.

 
To reduce costs and carbon emissions, the City has adopted its new ordinance in hopes of increasing the pace of energy efficiency improvements in its residential stock. The energy assessment and report is similar to a miles per gallon sticker required for car sales.
 
Among other benefits, these disclosures help homebuyers make more informed decisions about the total cost of owning a particular home.

Read the adopted City code language, Title 17.108, and FAQs from the City.
 
This move follows a similar push in the City’s commercial buildings market. In 2015, the City adopted an ordinance, Title 17.104, mandating energy benchmarking and disclosure for large commercial buildings. That rule requires owners of buildings greater than 20,000 square feet to report annual energy use. The City estimates that by mid-2017, about 80% of Portland’s commercial building stock will report energy performance data via the ENERGY STAR Portfolio Manager tool. The US Environmental Protection Agency maintains the Portfolio Manager tool. It is widely used in the commercial market. Read the associated administrative rules for the commercial building ordinance here.

A​pplicability
You’ll want to read this if:

• You are on the board of directors or work at a company that has (or is seeking) public equity or debt.
• You work in the financial sector (e.g., at an asset owner or management firm, bank or other lending institution, insurance company, endowment, foundation).
• You invest in publicly capitalized companies or privately managed assets are interested in the potential financial risks posed to them and the financial system by climate impacts.

 
These issues are most relevant to a publicly capitalized company’s board of directors and its financial and risk executives and sustainability leaders (if any). Also, all employees might want to be aware of how climate risks and opportunities might impact their company.
 
Summary
A Financial Stability Board (FSB) task force of the G20 nations released recommendations that 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.
 
These recommendations send a strong market signal that climate-related risks are financial risks. The  guidance is designed to “elicit decision-useful, forward-looking information” on climate-related financial impacts to help “investors, lenders and insurance underwriters to appropriately assess and price climate-related risks and opportunities.”
 
The Recommendations | Companies are Encouraged to Address 4 Areas
The recommendations focus on four thematic areas that the FSB feels reflect how many organizations operate. These include: governance, strategy, risk management, and metrics and targets.

The FSB recommends specific disclosures that organizations should include in financial filings. See the report’s Figure 3 below. For example, the task force recommends companies conduct and publish a 2 degree scenario business plan, Scope 1 and 2 greenhouse gas (GHG) emissions, and any ‘appropriate’ Scope 3 emissions. The FSB provided supplemental guidance for sectors it judges are most affected by climate change.

The FSB states that the recommendations are applicable to organizations across sectors and jurisdictions. It also recognizes the key role that large asset owners and asset managers play “in influencing the organizations in which they invest to provide better climate-related financial disclosures.”

Climate Risks and Opportunities with Financial Implications
The report provides context about the range of financial implications posed by climate change. It summarizes why some organizations haven’t yet factored climate change into their business strategy.
 
“The large-scale and long-term nature of the problem makes it uniquely challenging, especially in the context of economic decision making. Accordingly, many organizations incorrectly perceive the implications of climate change to be long term and, therefore, not necessarily relevant to decisions made today.”
 
It noted that climate-related risks and an anticipated transition to a lower-carbon economy will impact some industries (e.g., organizations dependent on extracting, producing, and using coal, oil, and natural gas) more significantly than others. It also remarked that these fossil fuel-centric organizations are not alone: “in fact, climate-related risks and the expected transition to a lower-carbon economy affect most economic sectors and industries.”
 
In a similar vein, the FSB cautioned organizations not to prematurely assume that climate impacts—risks or opportunities—are not material to them. The Task Force believes “climate-related risks are material risks for many organizations, and this framework should be useful to organizations in complying more effectively with existing disclosure obligations.”
 
It further found that while the risks presented are significant, so are the opportunities for organizations “focused on climate change mitigation and adaptation solutions.”
 
As illustrated in the report’s Figure 1, “climate-related risks and opportunities can affect organizations’ revenues and expenditures, and possibly estimates of future cash flows, as well as their assets and liabilities in a number of ways.”

​Context
Although the recommendations are voluntary, each G20 nation will determine—after the FSB finalizes them in 2017—whether and how to incorporate them into legislation, regulations, or guidance. Many investors are calling for countries and exchanges to adopt them as mandatory as some countries have already done.
 
Regulators or exchanges in many countries, including the US, already require companies to report on material risks—including climate-related risks—in their financial disclosures. Increasingly, more countries require specific disclosures such as quantitative metrics on energy usage and/or GHG emissions and at least qualitative reporting on climate impacts.
 
France’s Energy Transition Law (Act 17), for example, requires France-domiciled listed companies and asset owners/managers to report climate factors and carbon emissions footprints by June 2017). The United Kingdom’s Companies Act 2006, Regulations 2013, requires listed companies to publish in  its Directors’ Report annual GHG emissions data.
 
For more details and other examples, check out the Principles for Responsible Investment’s Global Guide to Responsible Investment Regulation.
 
The FSB’s directs its recommendations to asset owners/managers and publicly capitalized companies. It also encourages other companies to explore and disclose the financial implications of climate risks and opportunities because it believes “climate-related risks and opportunities are relevant for organizations across all sectors.”
 
The FSB further acknowledged that climate-related financial reporting is at an early stage. The guidance it offers should advance the quality and consistency of mainstream financial disclosures related to the potential climate change effects on organizations.
  
What Next? Our Suggested Actions for 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 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, consider the following actions:

1. Review and share the draft recommendations with the board and senior leadership.
2. Consider how positioned your company is to make the recommended, voluntary disclosures.
3. Begin to explore how climatic changes and shifts to a lower carbon economy might present risks and opportunities that might impact your company

 
Whether your company has been addressing these issues or is just becoming aware of them, consider providing feedback on the FSB’s recommendations via the online consultation here. The public consultation process is open through mid February.  

Background About the FSB and the Task Force 
In response to the global economic crisis, the G20 nations established the Financial Stability Board (FSB) in 2009. The FSB serves as an international body that monitors and makes recommendations about the global financial system to promote international financial stability.
 
In December 2015, the G20 nations asked the FSB to establish an industry-led task force to review how the financial sector can take account of climate-related issues. The FSB created and asked the Task Force on Climate-related Financial Disclosures (TCFD) to develop voluntary, consistent climate-related financial risk disclosures for use by companies in providing information to investors, lenders, insurers, and other stakeholders. The FSB choose the TCFD’s 32 members to include both users and preparers of disclosures from across the G20 nations covering a broad range of economic sectors and financial markets. The members which include Unilever, Axa, PwC, Standard and Poor's, Blackrock and Barclays, represent $1.5 trillion in market capital, with $20 trillion in assets under management. See here for task force member statements supporting the report.

Summary
Federal agencies have amended the Federal Acquisition Regulations (FAR) to require certain contractors to indicate whether or not they publicly share information about their corporate greenhouse gas (GHG) emissions inventory or goals. Published in the Federal Register on November 18 (81 FR 83092), the new rule does not actually require contractors to calculate or reduce their GHG emissions, just that they indicate whether they publicly disclose either emissions or goals information.
 
In the final rulemaking the government clarified the purpose and goals of the FAR modifications. The representations are intended to help the government better understand, not regulate, the GHG management practices of its industry partners. The rule is designed to be a low-burden, minimally intrusive effort to enable greater insight into the GHG management practices of the federal supply chain.
 
Effective December 19, 2016, the final FAR rule establishes an annual representation requirement for contractors to indicate whether or not they publicly disclose GHG emissions data and/or emissions reduction goals. For companies that do publicly disclose such information, they must also indicate where it is publicly available on the Internet. The requirements are applicable to companies that had $7.5+ million in federal contract awards in the prior federal fiscal year.
 
The final rule is almost identical to the proposed rule released in May 2016 (81 FR 33192). Some minor clarifications where made to address comments made to the draft rule.

Representations Required
New FAR provision 52.223-22 (and an equivalent at 52.212-3 for commercial/COTS items) representations:

1. The Offeror (itself or through its immediate owner or highest-level owner) [ ] does, [ ] does not publicly disclose greenhouse gas emissions, i.e., makes available on a publicly accessible Web site the results of a greenhouse gas inventory, performed in accordance with an accounting standard with publicly available and consistently applied criteria, such as the Greenhouse Gas Protocol Corporate Standard.
2. The Offeror (itself or through its immediate owner or highest-level owner) [ ] does, [ ] does not publicly disclose a quantitative greenhouse gas emissions reduction goal, i.e., make available on a publicly accessible Web site a target to reduce absolute emissions or emissions intensity by a specific quantity or percentage.
3. If the Offeror checks "does" [under either provision], the Offeror shall provide the publicly accessible Web site(s) where greenhouse gas emissions and/or reduction goals are reported: ___________________.

 
Implications
The new rule may be a target for repeal by the incoming administration because it is based on an Executive Order of President Obama (EO 13693). On the other hand, the EO and rule mirror the supply chain practices of many successful US-based and global corporations. Applying such practices to the US government’s $400 billion supply chain could well have bi-partisan appeal as they will likely result in cost savings to the companies and taxpayers alike.
 
GHG management is closely connected with cost savings from energy use reduction, and serves as an indicator of operational efficiency and excellent management practices.  Thus, organizations that purchase large volumes of goods and services (e.g., AT&T, Bank of America, Coca-Cola, Nike, Walmart) have started asking their supply chain (i.e., the companies they buy from) about these practices.
 
Private and publicly-traded companies are enhancing their environmental, social and governance (ESG) practices, including disclosing details about their GHG management and other sustainability practices through tools such as the CDP and the GRI Sustainability Disclosure Database. For example, nearly 10,000 organizations have submitted more than 35,000 reports via the GRI database. Last year, companies representing more than 50% of the combined market capitalization of the G20 reported emissions data to CDP.  These public disclosures, and the management efforts behind them, help the bottom line. 

• “The strong performance of three-year reporters [to the CDP] is also displayed in the carbon and cost savings in the reporting cohorts…Those reporting for three or more years reported an average savings of US$1.5 million per initiative, versus first-time reporters, which had an average savings of US$900 thousand per initiative.” ~ From Agreement to Action: Mobilizing Suppliers Toward a Climate Resilient World: CDP Supply Chain Report, 2016.

​In response to these efficiency opportunities, supply chain management practices, and investor expectations, many federal contractors already have GHG and energy management programs. This is especially true of the largest contractors. The Council on Environmental Quality (CEQ) just released the 2016 Federal Supplier GHG Management Scorecard that reflects a survey of approximately 80 companies and represents $214+ billion in FY15 federal procurement spending (about half the annual contracted amount). Of those surveyed, about 57% (by count) or 73% (by contracted dollars) have public GHG emissions inventories in 2015 or 2016. 

​Slightly fewer have public GHG reduction goals for 2016 or beyond—about 44% (by count) or 62% (by contracted dollars). 

​Whether or not the new rule remains in effect throughout the next administration’s term, there are compelling business reasons for federal contractors and other companies to manage their GHG emissions and energy use.