Posted on March 10, 2011 in The GreenBiz Executive Network is a peer-to-peer forum of senior sustainability executives from over 50 large companies. In a recent Network meeting I discussed how sustainability, by its very definition, has an economic return on investment (ROI). At Diversey, we see sustainability through an innovation lens, enabling us to solve old business problems with new solutions.
Integrated Bottom Line
We measure returns on sustainability investments with a focus on an Integrated Bottom Line. This concept is derived from triple-bottom-line accounting, whereby environmental, societal, and economic factors are considered together. Investments to improve social and environmental performance are measured on a financial balance sheet—instead of treated separately. We first embraced this concept whilst working with Natural Capitalism Solutions.
A great example of the integrated bottom line is investment in energy efficiency to address climate change. Diversey uses a unique portfolio management approach to deliver significant reductions in greenhouse gas emissions and an attractive economic ROI. This approach leverages existing capabilities, fosters growth and increases shareholder value.
A student charts the rise in global carbon dioxide emissions during a school presentation by Dan Daggett
Climate Savers
Three years ago, Diversey became a member of Climate Savers, the World Wildlife Fund’s (WWF) rigorous greenhouse gas reduction program and—along with more than 30 other Climate Savers corporations—established ambitious targets to voluntarily reduce greenhouse gas emissions. A year later we were able to triple this commitment, thanks to the diligence and commitment of our staff, and a continuous cycle of waste reduction measures funding further waste reduction measures.
In order to be accepted into the Climate Savers program, we had to make four commitments in addressing climate change:
- Make a challenging, measurable reduction in its emissions within a specified time frame
- Be accountable through a third party validation process
- Partner with customers and suppliers to help them reduce greenhouse gas emissions, and
- Share what we learn and encourage others in the industry to achieve similar emission reductions
To deliver the aggressive greenhouse gas reduction targets, Diversey’s portfolio management approach helps prioritize energy efficiency projects. Instead of evaluating each efficiency project individually, opportunities are analyzed as part of a long term strategy that balances the speed and volume of financial return with the cost of the carbon investment across an entire portfolio of projects. This approach reduces uncertainty and risk through diversification, addresses regional electricity cost variation, increases opportunity by looking beyond just the ‘low hanging fruit’ and most importantly allows for a predictable and reliable rate of return.
Corporate commitment to sustainability motivates employees, drives innovation and creates a sense of purpose
The economic aspects of energy efficiency are easy to measure. However, some sustainability programs may not seem to provide immediate ROI until more qualitative returns are considered. The integrated bottom line can facilitate such analysis. Doing the right thing is good for business—it is sustainable in the truest sense of the word. For example, Diversey’s Global Children’s Initiative seeks to improve the lives of 1 million children; we have found that this program encourages employee volunteerism and staff engagement. Diversey’s Target Zero program, while seeking to eliminate workplace injury, creates a safer work environment, improves the lives of employees, and reduces costs to the company. For numerous other examples of the ROI of sustainability measures that exist across Diversey, check out our Global Responsibility Reports at http://bit.ly/DivRespReps
To read more about my presentation to the GreenBiz Executive Network, here is a brief summary: http://bit.ly/DDaggettGBiz