BSR Blog

How Can We Improve Fuel Sustainability?

2013-05-15T12:00:06Z

Earlier this month, the BSR Future of Fuels team held its first stakeholder forum in San Francisco, which brought together more than 50 leading thinkers and practitioners working to improve the sustainability of our fuel system.

This first in a series of forums on fuel sustainability is a key milestone in our initiative, which is aimed at improving the lifecycle sustainability impacts of transportation fuels and promoting better fuel choices. The event was an opportunity to share results from Future of Fuels’ first phase, which uncovered the “what” (both what we know and what we don’t know about sustainability impacts of fuel types). It also served to initiate discussions on the second phase, the “how” (both existing solutions and new solutions for improving sustainability).

The panelists included NGOs and advocacy organizations alongside fleet managers and academics, who shared perspectives on the challenges and opportunities in making the significant transformation needed to prevent irreversible, catastrophic impacts of climate change, while ensuring economic growth, employment, and the health and safety of communities. The panelists agreed that the task is daunting but remained optimistic, pointing out that the urgency and complexity of the issues may inspire new cross-sector collaborations.

This event highlighted the need for:

New forms of collaboration and stakeholder engagement that ensure the views of affected communities and scientific experts are represented, heard, and addressed. They also require that actors throughout fuel and vehicle value chains work together more effectively to develop innovative solutions.
Greater investment in energy efficiency within and across the lifecycles of fuel derived from oil, gas, biofuels, and electricity, which may offer immediate and long-term cost savings and reductions in fuel consumption.
Policies that incentivize smart choices, such as a carbon tax, which provide the market predictability needed for companies to invest in innovation to achieve scalable and economically viable solutions.

The high level of engagement and interest by participants signals above all that we are working toward the same end and that there is great value in coming together to share leading practices and pitfalls across fuel systems, from oil and natural gas to biofuels and electric vehicles.

Notes from the forum are available here, and those interested in updates can sign up here.

Three Half-Truths of Sustainability Reporting in an Era of Social Media

2013-05-14T17:51:26Z

We all know the trends. Millions of people across all age groups use Facebook, Twitter, Weibo, and other social media platforms to connect, share, download, digest, cogitate, and discuss information about their friends, foes, future partners and...companies. At the same time, an increasing number of companies are issuing sustainability reports—more than 80 percent of the world’s 250 companies at last count.

Surely, social media represents the best way to both get your sustainability message out and interact with diverse stakeholders, versus merely “engaging” with them?

Yes and no.

In reality, there are shades of gray when it comes to sustainability reporting in an era of social media.

Half-truth 1: Build it and they will come.

Building a robust social media platform to communicate your company’s sustainability efforts and allow for interaction with various audiences on material issues is a very attractive proposition. And there are plenty of bells and whistles online that you can experiment with. But just because you put information out there doesn’t mean you’ll attract either the quantity or the quality of stakeholders you want.

It sounds simple, but you’ll get the level of engagement you desire only by integrating social media into your broader sustainability communications strategy. Take the time to think through the channels people use to evaluate your company’s sustainability performance, and meet them there. If not, you might find yourself with nothing more than a large web design bill.

Half-truth 2: People will see my company as being more committed to transparency.

Having a social media presence for your sustainability communications does not automatically signal that your company is committed to the sometimes messy give-and-take of transparency. The most credible companies tend to be those that include executive faces and voices listening to and responding to tough questions about the company’s sustainability challenges, either through video or online “live” discussion forums. This signals senior support for transparency and a commitment to discussion of sustainability issues in the C-suite.

Half-truth 3: B2B companies don’t need to worry about social media.

Social media offers more direct channels to market products, services, and, occasionally, sustainability performance to customers and consumers. However, diverse groups of stakeholders, including investors, are starting to access information on B2C and B2B companies through their favorite social networks, in addition to their Bloomberg terminals. The recent fake AP posting on Twitter claiming an explosion at the White House had an immediate impact on listed stocks in the United States, showing the very real way news shared in social media affects the real world.

In the spirit of social media, we are inviting you to discuss and share these ideas online and/or by participating in BSR’s forthcoming lunch event on this very topic at the GRI Conference later this month.

How Can Companies Reduce Carbon in Their Supply Chains?

2013-05-08T17:16:33Z

As manufacturing grows in far-flung regions of the globe, the size of carbon emissions in company supply chains continues to increase. There is a significant opportunity to reduce these emissions—as some companies have done, and others are starting to do.

Next week, BSR and the World Resources Institute will host a workshop in Washington, D.C., with more than 50 companies and organizations to explore three questions about the potential for carbon emissions reduction in the supply chain:

What is the relevance to companies of supply chain carbon reductions?
What is the role of business in reducing supply chain emissions?
How do companies effectively reduce supply chain emissions in China and other emerging markets?

What is the Relevance?

Supply chain carbon management is a major corporate sustainability priority. Today, hundreds of companies are managing supply chain carbon impacts with thousands of suppliers through the Carbon Disclosure Project’s (CDP) supply chain program, industry forums, and individual initiatives.

At the workshop, WRI will share initial results of its recent survey of 124 companies with US$1 billion or more in revenue on the relevance of emissions reduction to their operations. We will also hear from participants representing consumer products, manufacturing, and other sectors on their answers to key questions, including: What supply chain emissions reductions have they captured to date? How do they make the case internally to invest in supply chain emissions initiatives?

What is the Role of Business?

Corporate performance expectations are on the rise, and customers, investors, NGOs, and governments are asking companies about labor and environmental practices in their supply chains. Yet many companies struggle to achieve emissions reductions.

BSR has worked with hundreds of companies and their suppliers since 2008 through the Supplier Carbon Performance Initiative. We will share our insights, including the “Three A’s for Improving Supplier Climate Performance,” and ask participants about the role of their companies. Some questions we will explore include: How can companies use existing measurement tools such as GHG Protocol and life cycle analysis to reduce emissions? What stories and lessons do companies have on driving real supplier carbon reductions?

How Does It Work in Emerging Markets?

China surpassed the United States and became the world’s largest carbon emitter in 2006. Emerging markets provide a leading opportunity for supply chain efficiency for many companies, yet progress is beset by cultural, technical, and business-practice barriers.

BSR will share our six factors for structuring successful engagement with suppliers, based on work with Walmart, Starbucks, Electrolux, and others on their supply chains in China. We expect to learn more from participants on their experiences in Asia and other emerging regions, including: What are the enabling factors for success others are seeing in China and elsewhere? Are there any best practices that can be used across different emerging markets?

We are looking forward to hearing from companies next week and also to sharing the outcomes from the workshop—and some answers to these questions—in a follow-up blog. Stay tuned—and feel free to share your company's experience with carbon reduction in the supply chain in the comments field.

What Has Changed Since the Wenchuan Earthquake: Disaster Relief and Social Values in China

2013-05-06T18:15:06Z

Last month, when a 7.0-magnitude earthquake hit the western part of Sichuan province—about 1,500 kilometers from where I live in Beijing—I found out not through the TV news, not through Weibo, but via a text message from a local foundation, You Change. The message included the mobile number for the foundation’s vice secretary general should I want to get in touch.

Sign of the times? Maybe. But it also demonstrates how much China’s philanthropy landscape has changed, particularly since Sichuan’s much more devastating earthquake that claimed 70,000 lives in 2008.

A few days after the recent earthquake, I attended a Cheong Kong Graduate School of Business event that brought together leaders from companies and NGOs to discuss “innovative” approaches to philanthropy in China. With the earthquake top of mind, speakers and attendees were absorbed in discussions about how China can more effectively use its growing philanthropy field to respond to natural disasters, even as it develops a lasting culture of support for times when there isn’t a crisis but there is an acute need.

While the discussion covered a lot of ground, I found three points intriguing:

More people are donating to private organizations over GONGOs: In contrast to the 2008 earthquake, the public is choosing to support private foundations rather than government-affiliated organizations (GONGOs) such as the Chinese Red Cross. Just 24 hours after last month’s earthquake hit, One Foundation, an organization established by Jet Li, had received CNY22.3 million in donations, compared to only CNY140,000 given to the Red Cross. While the numbers had leveled out somewhat several days later, public mistrust of GONGOs, stemming from transparency scandals in 2011, is still a problem in China. To restore the public’s faith in the system, we need oversight mechanisms for NGOs.

Companies are taking a more strategic approach to philanthropy: Over the past five years, companies and individuals have begun moving beyond philanthropy and donations to pursue more strategic approaches to giving back. Companies are contributing their core expertise or resources, such as through pro bono volunteering, to customize their approaches to social investment.

The public is getting more involved: As indicated by news reports about the oversupply of volunteers going into Sichuan, the public interest in giving back is stronger than ever. To improve alignment between demand for resources, be it from companies or individuals, and supply of help, we need two things: First, the government must relax its restrictions on channels for giving and support to allow more NGOs “of choice” to receive donations (a policy unlikely to change soon). Second, and perhaps more feasible, is a resource-matching mechanism that will channel help to where it is needed most.

Perhaps my most interesting observation from this discussion is that events like natural disasters have a way of uniting people around a common cause. Whether this spirit can be sustained as a part of everyday life in China is an open question. Here, I believe the media can play a role in fostering social values and encouraging both corporate and individual responsibility. We need more articles that challenge the public to reflect on the kind of China they want to be a part of and spur positive action. And we need media coverage that both highlights when business takes the lead in societal contributions and holds accountable those actors with less reputable behavior. This kind of activity will help cultivate and sustain the kind of active, responsive civil society we see in times of disaster.

Three Ways to Benefit from Carbon Reductions with the New Scope 3 Guidance

2013-05-01T12:00:41Z

Last week, we crossed another sustainability standards milestone for carbon emissions when the Greenhouse Gas Protocol (GHG Protocol) released its Scope 3 Calculation Guidance. Scope 3 emissions are value chain emissions outside direct operations, including emissions from suppliers, employees, and product users.

This guidance is an important milestone for business for three reasons. It helps companies:

Evaluate their performance more effectively.
Focus on generating value from their emissions strategies.
Create demonstrable impact from their emissions reductions.

Performance

The Scope 3 Calculation Guidance allows companies to set goals and track performance both internally and in comparison to peers. Once a company has developed a climate strategy that identifies the biggest source of carbon emissions in the value chain, the guidance will allow for immediate development of targets and systems to measure progress.

Kraft Foods was a participant in the “road test” of the new Scope 3 Guidance. The company worked with the GHG Protocol and found as much as 90 percent of total value chain emissions from Kraft products are Scope 3 emissions. Initiatives within Kraft to address Scope 3 emissions have led to new partnerships with the company’s research and development teams that are expected to drive down supply chain carbon emissions.

Value

The Scope 3 Calculation Guidance provides the tools companies need to identify the greatest sources of value in GHG management and direct resources toward executing carbon and GHG emissions strategies.

Scope 3 emissions can be indicators of exposure to climate risks, such as carbon and energy “hot spots” in the supply chain or use of products. They can also help companies identify opportunities to create greater efficiencies in their value chains.

Walmart has been among the most aggressive in tackling carbon and GHG emission inefficiencies by committing to reducing 20 million metric tons of emissions from its supply chain by 2015. Such an ambitious goal has launched several projects to capture the value of efficiency. By the end of 2011, 148 of the Chinese supplier factories with which Walmart worked had achieved a 20 percent reduction in energy consumption per unit.

Impact

With the new Scope 3 Guidance, companies have an important tool to demonstrate real emissions reductions. The guidance allows for ambitious goal setting, deployment of resources and management systems to reduce emissions, and rigorous tracking of impact.

Electronic product and service provider Toshiba uses the standards to report eight categories of Scope 3 emissions. According to Toshiba's 2012 Corporate Responsibility Report, the company achieved carbon reductions of 4.7 million metric tons in 2011 through sales of environmentally conscious products. While impact was lower than Toshiba’s goal of 6.8 million metric tons, the Scope 3 Guidance allows the company to report impact and adjust its management approach to reach next year’s goals and a target of tripling eco-efficiency of products by 2015.

The Scope 3 Guidance is an important tool in evaluating performance, creating value, and achieving impact in carbon and GHG emissions strategy. To make the most of this guidance, GHG Protocol is hosting an online training course on the Scope 3 Guidance on May 7, 8, and 9. BSR will launch its own series of events on driving climate action in the supply chain, which begins with a May 13 event co-hosted with World Resources Institute, a partner of the GHG Protocol.

For more information, please contact BSR Climate and Energy Manager Ryan Schuchard.