The environmental consequences of climate change are tangible, though the impact on business has only recently come under focus. The Stern report assessed the impact of climate change and the associated potential economic impact. Every business emits CO2 – through its administration, product manufacture or internal processes and distribution activities – and these all contribute to climate change. Yet it is surprising how few businesses know the emissions they generate. We at UKV were as guilty as most for not knowing what we did know – so we investigated and we made some severe policy changes. We decided we would live with the pain of such changes now but regard them as growing pains that would enable our business to develop in line with a changing cleaner business world we wanted to be part of and which would be sustainable for all.
In many businesses the workforce are the biggest contributors to CO2 and we decided that if we are going to reduce these outputs, we needed to change behaviour in order to bring reductions in emissions. Organisations can reduce their carbon footprint significantly merely by adopting better energy management practices (and significantly reduce their utility bills) and changing employees’ travel habits. We could begin to achieve this by implementing ‘lights off’ policies, encouraging ‘walk to work’ and replacing some business trips with conference calls. We could also look at how we deliver goods and how we choose our suppliers and how we monitor their behavioural impact on the environment and their carbon footprint.
There is good evidence that end user/supply chain purchase decisions are increasingly being made on the basis of the supplier’s environmental credentials. By going green in this way, businesses can protect their market share. There is no doubt that consumers are more attracted to companies who are environmentally aware, especially if they are carbon neutral. Undoubtedly, this has been our experience.
In addition, stakeholders will demand CO2 emissions reduction. Recently FTSE changed its criteria for membership of the FTSE4Good index to include CO2 emission management. As a result, a number of companies had to leave the Index which, in turn, means their shares are excluded from certain ethical funds.
Finally, and, most importantly from a commercial perspective, workforces will demand it. Recruits are more likely to be attracted to employers with strong CO2 reduction credentials and, as individuals become more environmentally aware, they will want to see this reflected in the company they work for. All of UKV’s recruitment meetings in 2011/2012 included presentation of company policy in these areas and observation of potential new personnel’s attitudes to such matters. We were amazed, although perhaps we should not have been by how big an issue it is for staff when they consider making a move to a new employer. It was undoubtedly an excellent move on our part to improve our environmental profile because the evidence is that it helps attract good staff – staff that have actually developed their thinking on what kind of employer they want not just in terms of prospects and benefits but which complement their life-style choices in helping sustain the world they live in.
HOW COMPANIES MEASURE THEIR CARBON FOOTPRINT
Up to now companies have relied on audits carried out by environmental consultants to calculate CO2 emissions. Generally these assessments are broad-brush and, arguably, not very accurate. At UKV we relied on our own assessments that were perhaps better and more accurate because we knew where our environmental ‘bodies’ were buried even though we may have been burying our corporate head in the sand along with them. The shortcomings of external analysis are further compounded because these assessments take place at a single point in time and may not be repeated frequently, thus making it very difficult to track emissions consistently over time. Doing it in-house, dynamically and as part of an ongoing range of procedures keeps us aware and removes complacency.
There are a number of reasons why the current ways of managing carbon footprint often fail:
Lack of ownership
In many organisations emissions management does not always have an obvious home – it can range from facilities management to CSR, to operations and even marketing. More often than not, the programme is passed around functions regularly and fails to get traction in the organisation.
THERE IS HARDLY A BOARDROOM IN THE COUNTRY THAT HASN’T AT LEAST DISCUSSED REDUCING ITS CO2 EMISSIONS IN THE LAST YEAR. BUT RELATIVELY FEW COMPANIES ARE ABLE TO MEASURE AND MANAGE THEIR ENVIRONMENTAL IMPACT SUCCESSFULLY. HERE WE EXPLAIN WHY WE BELIEVE THAT IN-HOUSE STAFF HAVE A KEY ROLE TO PLAY IN HELPING DEVISE AND IMPLEMENT STRATEGIES FOR MANAGING CARBON EMISSIONS AND WHY THIS IS WORKING FOR US.
Lack of engagement
As emissions management can lack a permanent home, communication between staff on such issues is often poor. Without regular updates staff have no yardstick to measure their progress. Very often no recognition is made of team achievements and few incentives are offered to staff. The problem is further compounded by not having systems for data collection which are easy to use. UKV set up an emissions management team, reviewed its policies, simplified data collection procedures, accrued its data and was empowered to act by the board. Some things really cannot wait – and that includes doing our bit to save the planet.
The challenges of accurate data collection
To make the initial calculation of our business’s CO2, we needed to collate data regularly. Many businesses struggle to consolidate data from areas such as energy consumption, business travel and distribution mileage, which are often dispersed across several departments. UKV suffered in this way before developing an in-house monitoring team to look at these issues, inform management and staff, and recommend policy changes. Martin Button Managing Director of UKV took personal ownership of policy and appointed staff members to key roles. Ed Murphy, (National Sales & Marketing Manager) took charge of internal and external communications, Malcolm Keen (Technical Services Manager) oversees analytical matters and implementation and Sharon Trotter maintains day to day co-ordination. Policies and procedures have been built into working practices at every level including quality and in-line with the company’s ISO 9000 and Investors-in-People accreditations and renewals.
A recent study by Christian Aid concluded that UK businesses are under-declaring carbon emissions significantly. They found that if all FTSE 100 companies were to report their emissions properly, they would have to declare a further 190 millions tonnes of carbon – almost 30% above the current declared level. We too had been kidding ourselves for years that outdated policies and equipment were cost effective and suitable for how we worked – and our environment. Analysis proved that carbon emissions reduction and power efficiency helped to streamline business delivery and we were stupid not to have taken steps years ago – and being a medium sized business and not a conglomerate was not a good enough excuse not to make vital changes.
Some businesses overlook the impact of their transportation use. Those businesses that do calculate the environmental impact of their vehicles make broad-brush estimates. For example, a small fleet of 10 mixed vehicles over a one year period could have CO2 emissions ranging from 44.40 tonnes to 31.48 tonnes depending on the accuracy of the measurement used – a 29% variance. UKV is working hard to reduce their vehicle emissions impact on the planet.
Business-related travel has a significant impact yet virtually no expense systems allow automatic calculation of CO2 resulting from this activity. Many organisations do not consider employees’ ‘travel to work’ CO2 emissions, which adds significantly to the corporate footprint. UKV has adopted a sophisticated policy to ensure that employee travel reduces such impact and with targets set to reduce impact further successively over the next three years.
Lack of benchmarking & measurement
Businesses that measure their environmental impact are often unclear of what reductions they should be aiming for. Without benchmarking it is difficult to establish actionable emission reduction plans. Companies often lack the requisite technology to be able to measure emissions but the more accurate the data is, the easier it is to manage. Data accrual has been key to the policy changes already brought in by UKV Ltd and ongoing monthly reviews seek better and more accurate ways of producing, interpreting and acting on information. We know that complacency must at all costs be avoided.
THE ROLE OF HR IN CARBON EMISSION MANAGEMENT
Since it has become a topical issue, carbon emission management, especially related to the workforce, has always struggled to find a champion in the business. UKV believes the responsibility for the management of data relating to the carbon emissions of the workforce should rest with HR. After all, Human Resources are what we are looking to improve and save for the future of everyone by the measures we are taking now.
As the custodians of the workforce data it is HR who are best placed to communicate strategy, influence and change behaviour, and to put into place effective systems to collect and collate emission data.
Effective management of a company’s carbon footprint starts with having effective sponsorship at the highest level of the business – so it was imperative for Martin Button and fellow Directors to get behind the programme. HR is a strong influencer and should use its status to secure commitment at board level. At UKV this is a daily happenstance.
HR also has a critical role to play around data collection. The fastest and easiest way to improve workforce-related carbon data is through employee self-service. If we make it easy for our workforce to provide information, then it will be easier to manage – that was and is our policy and it is working extremely well.
Communication of carbon strategies is critical, starting with the need to implement policies that reward staff for changing behaviour. Being seen to be an environmentally-aware organisation aids employee motivation and attracting new recruits. UKV has definitely seen improvements through staff ownership of these issues.
At the heart of effective CO2 management is the workforce – only with their engagement will any organisation ultimately make the changes and savings which lead to both the environment’s protection and the company’s profitability. For this, teams need appropriate incentives which should be reflected in compensation and benefits plans. Here at UKV there is a considerable distance still to go, but get there we will and our customers tell us we are doing the right thing – and our excellent staff ensure that it is not just window dressing, we actually deliver what we say we will – after all, we have been in business for 40 years and we want a sustainable planet to do business on for the next 40 years and the 40 after that.
Finally, how nice it is to find a policy that is enthusiastically greeted by both staff and customers. Implementation has been a real team building exercise at UKV and telling everyone about it has been an excellent, marketing strategy at every level. Although we did not enter into this cynically and we really did want to make a difference, had we been cynical the end result would still have been the same: significant improvements all round. We can only ask ourselves why we did not do this sooner. We can only wish that all our commercial colleagues around the world will also, if they have not done so already, be soon asking themselves the same question.
(Martin Button is the Managing Director of UKV Solutions Ltd incorporating UKV Vending (Britain’s longest serving vending business), UKV Finance (underwriting sales aid leasing across a vast range of product groups in the UK and Ireland), UKV Corporate Solutions (software development and distribution), UKV Solar (providing Green Energy solutions to businesses through unique financing packages) and UKV Office Perfect (nationally providing reprographics technology including printing, photocopying, MFPs and SFPs and integrated server based and in-cloud software.
Martin Button – Managing Director