Tennessee Gets Something Worse than Coal in Stocking for Christmas

The State of Tennessee Got an Unwanted Stocking Stuffer for Christmas: Mercury, Arsenic and Benzene…following a coal ash sludge spill. The land area impacted by the Tennessee Valley Authority (TVA) coal generation energy facility accident is larger than 1989 Exxon Valdez Oil Spill. Tom Kilgore, CEO of the TVA, the largest public power company in the country and responsible party for the sludge spill, vowed, “This is not a time where TVA holds its head high...But we won't hang our head, either, because that won't get the job done. I'm here to tell you that we will clean it up, and we will clean it up right.”

In this New Year, Let’s Make a Resolution to Stop Doing Stupid Things.
A retaining wall, holding back 80 acres of sludge broke in Tennessee this week spilling one billion gallons over 400 acres, a land area larger than the size of the 1989 Exxon Valdez oil spill. The sludge was a by-product of ash generated from coal combustion at a Tennessee Valley Authority (TVA) power generation facility in Kingston, TN. In some areas of the spill the sludge was more than four-to-six feet deep; and the amount of sludge spilled equates to more than 800 Olympic sized swimming pools.

The full extent of the TVA waste spill including the economic, ecologic and human health impacts is being evaluated. Because fly ash contains concentrated amounts of mercury, arsenic and benzene, it could have long-term ecologic and human health impacts to the surrounding region. And, the environmental containment and cleanup costs of the TVA spill will be enormous.

Tennessee must have been really bad this year to get such a rotten end-of-year gift. It’s worse than getting coal in your stocking. At least Tennessee could have burned the coal. Now they have a mega-contaminated site on their hands going into 2009 and likely requiring site remediation work for a decade if not longer. A root cause analysis of what caused the TVA event will be interesting. Will TVA and government officials identify a slurry of poor waste containment and maintenance decisions? In 2003 and 2006 the TVA’s Kingston site experienced smaller failures in the dike system, at different location than where the retaining wall most recently failed, but repaired them at that time. But still, was 80 acres of sludge to much for that site location? Why so much? Was the retaining wall designed to hold back that much volume and weight? Were the surrounding residents aware of the volume and composition of waste being retained in their backyard? Or will investigators find that an aging infrastructure and natural causes as the two pronged culprit? Much of TVA’s facilities were built in the 1950s and prior.

There is plenty of time for potential blame, however, that game is ultimately futile and wasteful. The situation in Tennessee is a microcosm of the US at large; and one that readily needs focused attention and action. Our infrastructure is aging. We have an enormous environmental waste challenge. We have an enormous energy challenge. These challenges are not mutually exclusive of one another. Instead, they are integrated in how we produce and use energy, how highly dependent our economy is on fossil fuels, and the waste and environmental damages associated with a fossil fuel based energy infrastructure. Even in the absence of the Tennessee coal sludge spill…the TVA (and Tennessee) still had an enormous one billion gallon waste issue on its hands.

No one deserves anything worse than coal for the holiday, particularly an environmental contamination that can potentially have long-term impacts on water, ecology and economy of the 400 acre Kingston, TN site. There are plenty of Superfund and other environmentally contaminated sites across the US that need to be characterized, remedied and cleaned-up. Accidents and unintended consequences of doing business occur all the time; and often we have risk mitigation plans in place for those. But often we see unfortunate events like the TVA and Exxon Valdez spills occur that can be prevented. In 2009 let us make a commitment to reduce the risk of future environmental accidents from occurring and spend time revitalizing our economy by focusing on the health, resilience and vitality of US infrastructure.

Mark C. Coleman
Senior Associate & World Inc. Case Leader, AHC Group, Inc.
Mark@ahcgroup.com

Want to get real about the future of energy, natural resources and capitalism, go to www.ahcgroup.com and www.worldincbook.com to learn more on how leading companies are reinventing the future of business through social response product development and social response capitalism.

The Carbon Game: Regulatory Roulette?

Not all games of chance are created equal. In a carbon constrained world the Carbon Game is increasingly complex and potentially to a fault. The time to influence the design of the game is now. Some questions to ask are “Will the House Win? Who’s the House? And How Much Do You Bet?”

Today the European Union’s 27 members reached a compromise deal to reduce carbon emissions 20% by 2020. The compromise lays out a plan for achieving the 20% reduction, but also remains quite contentious. The costs to industry, unfair burden placed on certain sectors of the economy, and the true ability to achieve environmental goals without adversely affecting economic growth are some of the ongoing debates in the European Union. Also today, it is being reported that the state of California has set an aggressive greenhouse gas emissions plan set forth by the California Air Resources Board (CARB). The new law in California will mandate that the state reduce emissions to 1990 levels by 2020. The law includes measures to create a carbon-credit market and to bring new renewable energy generation on-line.

The EU and CA are two examples of where the regulatory market is heading in the New Year. Like many casinos, the house always wins. In this case the “house” is the planet. The gamblers are corporations. The “pit manager” is the new carbon markets, like the Chicago Climate Exchange or the Regional Greenhouse Gas Initiative (RGGI) which is the first mandatory, market-based effort in the US to reduce greenhouse gas emissions. Through RGGI, ten Northeastern and Mid-Atlantic states will cap and then reduce CO2 emissions from the power sector 10% by 2018. RGGI is enabling regional CO2 auctions, watching the “casino floor”. And, no casino is ready for operation without governing rules and regulations, e.g., states like CA or the EU.

I purposefully use the metaphor of “Regulatory Roulette” - a gamble and game of chance, associated with carbon trading and the emerging carbon game. The current state of the carbon game is very confusing however. It is as if dozens of games, with the same general purpose, have been created. Each game has similar rules, but different strategies can be used to “win” the game. And winning the game is relative because you put your winnings into keeping the game going. It’s like being addicted to gambling when what you really need is direct intervention and to be put on a path to recovery. So, to the extent that the carbon game is only about trading and making money, it is futile and ultimately will run its course. However, to the extent the carbon game is much more complex, and involves strategies that change the course of the game over time (for example California is focusing on demand and supply side measures – focusing on enhancing energy efficiency and conservation while simultaneously incentivizing more renewable generation and implementing a low-carbon fuel standard) then the carbon game can become much more lasting and perhaps worth the gamble.

Like a roulette wheel the carbon game is currently seemingly a game of chance for many companies. If the ball drops into number 21 we win! Right now companies have to play a game of roulette within the rules that are being tightly bound together by pit managers and governing boards. And that is logical, and it works. But for the carbon game to result in a big win for the house “the planet”, the game has to evolve from a game of chance, to one that more rooted in strategy that is tied to the success and reward of the players involved. Gambling for the sake of gambling for a decade or two – to see where the ball will land is a game of chance. Gambling knowing where the ball will eventually land is creating your own destiny. It is not that the existing efforts to create carbon markets are futile, it is that we are putting perhaps to much emphasis on trading schemes that keep players playing, but don’t necessarily lead to a win for the house.

Mark C. Coleman
Senior Associate & World Inc. Case Leader, AHC Group, Inc.
Mark@ahcgroup.com

Want to get real about the future of energy, natural resources and capitalism, go to www.ahcgroup.com and www.worldincbook.com to learn more on how leading companies are reinventing the future of business through social response product development and social response capitalism.

What Lies Beneath…The Financial Crisis?

A legacy of environmental liabilities, buried beneath a century of mechanization and economic prosperity, pose considerable human health and environmental risk to the current and future generation. Shortsighted financial bailouts could potentially lead to unintended consequences for millions of taxpayers today and into the future, not to mention continued and in some cases unknown impacts on our natural resources. Economic stimulus and environmental stimulus should be synonymous with one another as the new administration takes office and begins their journey toward a stronger America.

The vote was 237 to 170. Yesterday, the US House of Representative passed an auto bailout plan that will provide $14 billion to keep GM and Chrysler from going into bankruptcy, at least for now. Many policy makers and politicians talk of an auto industry restructuring as the best solution, and an immediate infusion of cash is only prolonging ultimate collapse. I begin this blog with the auto bailout not because it is timely news, but because the auto industry, the big 3, and their network of thousands of suppliers, is one of the oldest industries in America. The auto industry has, next to big oil and chemical (which have enabled the 20th and 21st century growth of the auto industry), a legacy of environmental liabilities that lay beneath the corporate mansions that have brought us an industrialized world through mechanization, modern machines and assembly lines.

A Tale of Three Knights
The auto industry was front and center in the industrial revolution of the past century, enabling economic prosperity, job growth and resulting in numerous societal benefits as a result. We can not argue that the industrial revolution and its triage of knights, auto, oil and chemical, have not led to some incredible quality of life advancements across the past 100 years. In fact these industries have seeded new advancements in materials science, chemistry, environmental science, energy storage and propulsion technologies and even health sciences. But a century of growth and advancement has not come without a social and environmental cost either.

Environmental liabilities in the form of Brownfield’s, hazardous waste sites, chemical spills, landfills, or contaminated earth with uncharacterized chemicals and materials are the post-industrialization scars that remain to be healed. In some cases environmental liabilities were created deliberately, illegally and many of those companies and the individuals that created those ills, have been prosecuted, fined and sent to prison. In other cases (and in most cases), environmental damages were the result of our modern machines and industrialized culture, growing at a fast clip, and in the absence of corporate-and-government policies and rules that establish requirements on pollution. In addition, advancements in science and technology and greater understanding of the transport and impact of chemicals in the environment and on human health has influenced an entire generation of environmental scientists and new rulemaking on what level of chemical accumulation in our land, water and air is acceptable for human and ecologic health. These advancements, for example, now let us measure chemical attenuation at very low levels, over time, and at specific sites to determine if remediation technologies are having an impact on cleaning up the soil.

The three knights, auto, oil and chemical, have been cleaning up their environmental liabilities through rigorous corporate site remediation programs for decades. And, our knights have made incredible progress. We now have a cleaner and less polluted earth due to the combined efforts of hundreds of multinational and domestic corporations that diligently characterize environmental contamination at their facilities, develop site cleanup plans, and engage with numerous stakeholders from the communities in which they operate, government, academia and environmental engineering to cleanup, redevelop and improve contaminated properties.

But with all the progress industry has made, there remains much more to do. There are thousands of sites on the national Superfund registry and thousands more that need to be assessed, characterized and put on a path of remediation. And, there are still sites being discovered. Take for example the early 2008 discovery of a WWII munitions site in Florida that left a Florida neighborhood wondering how their homes were ever built there. Or the 2007 discovery that vapor intrusion was affecting a Victor, NY neighborhood and trichloroethane and trichloroethene being the prominent chemicals involved. By the way, the US government, through research conducted by the Department of Energy, Department of Defense and NASA has, like industry, created enormous environmental liabilities that are in the process of being cleaned up or are, in some cases, awaiting action. What lies beneath government land is just as ugly, if not uglier than what lies beneath land owned by some of the world’s most prominent brand names.

For many domestic and multinational corporations the number one exposure they have with regard to financial risk is their environmental liabilities and legacy. Automotive, oil and gas, chemical electric utility, railroad, and other industrial machining and manufacturing companies are highly at risk to potential erosion of shareholder value or even their ability to obtain credit due to their environmental liability profile.

Now, many firms don’t want you to know that, and I suppose one cannot blame them, particularly during a time of financial uncertainty like we are in now. So, no corporate names will be mentioned here. However, if you look at the 10-K SEC filings for 30 companies and build into that analysis a cross section of auto, chemical, oil and gas, electric utilities and other manufacturers you will discover that the environmental reserves for these 30 companies total more than $8 billion. And, on average, these 30 companies spend in excess of $1.5 billion per year to manage their environmental liabilities. It is not uncommon for individual companies comprising the three knights, auto, oil and chemical to spend in excess of $200 or $300 million per year on environmental liabilities and have an environmental reserve exceeding $1 billion. According to USEPA’s 2008 Superfund National Accomplishments Summary “EPA secured private party commitments of nearly $1.9 billion in Fiscal Year 2008 to fund cleanup work. Of this amount, potentially responsible parties agreed to conduct $1.575 billion in future response work, and to reimburse EPA for $232 million in past costs.” Site remediation is big business, and it is growing. In addition, existing and new accounting rules from the Financial Accounting Standards Board (FASB) and the U.S. Securities and Exchange Commission (SEC) now require publicly traded companies to disclose their environmental liabilities and estimating the financial costs for those liabilities by what is estimable and probable. As if companies don’t have enough to think about during a financial crisis, management of environmental liabilities, accounting for those liabilities and ensuring there is money to pay for the cleanup of those liabilities is a business enterprise unto itself. So much so that some oil and chemical companies have spun off entirely separate businesses that are billion dollar enterprises that cleanup their environmental contamination.

Healing our Wounds: Stop Doing Stupid Things on Purpose
So, let’s revisit the auto bailout for a moment. In this time of credit and financial crisis, corporate America is hurting. Product is not being sold, jobs are being cut, and some companies are near collapse which could result in a cascading affect on their suppliers and throughout the economy. It is logical that jobs and economic prosperity is the #1 issue among the new administration, policy makers and most Americans. However, let’s not forget what lies beneath the surface of this financial turmoil. A century of environmental scars pose considerable human health and environmental risk to the current and future generation. If our industrial leaders that brought us jobs, economic prosperity and quality of life go under; who pays for their legacy buried beneath our feet?

For better or for worse, we are intrinsically linked to these companies more that we think. It is actually in our best interest to see them revive and survive this financial crisis, reinvent themselves, and continue to cleanup their environmental liabilities. Otherwise hundreds if not thousands of remediation sites, representing billions of dollars will fall into the fiscal responsibility of government and ultimately, taxpayers. So do we pay now, or do we pay later?

This brings me to my final thought on this December morning. As the new administration takes office this January I encourage them and others that influence politics and governing, to make economic stimulus and environmental stimulus one in the same. We can no longer afford to be shortsighted when it comes to creating jobs and economic growth. As one corporate remediation leader once put it to me, “…we [industry and government] need to stop doing stupid things on purpose”. As a society we know too much. We have right the skills, technology and I believe political will to create a better world that ties economic growth with environmental concerns. We must now leverage this financial crisis as an opportunity to avoid unintended consequences, by encouraging economic stimulus that incorporates clean technologies, incentives for environmental restoration and remediation, Brownfield redevelopment and the construction and redevelopment of critical infrastructure that both improves the environment and improves human health and economic prosperity.

So as we weigh economic stimulus packages, like the auto bailout, with jobs and “business as usual” let us also weigh in “what lies beneath” within the context of those decisions. We have to stop doing stupid things on purpose. Let us consider the following options for moving economic stimulus and environmental stimulus plans forward simultaneously:

Greater advocacy for corporate site remediation is needed at all levels of government and within our communities. More awareness to the different and common challenges faced by industry is needed at all levels of government if we are to truly move beyond blame and toward a more economically vibrant and environmentally sound America. In many ways industry needs to come together toward this cause, and make their unique and common needs known. The complexity of site remediation and managing environmental liabilities is known by just a select few. But the impact environmental liabilities have on our urban landscape, the health of our children and environment, affects millions. Industry and government much work together to share ideas on how they remove institutional barriers to cleaning up contaminated properties and develop new models for working together.

More education and research and development for environmental engineering and site remediation will be needed to help America cleanup and rebuild a modern and more vibrant industrial infrastructure. Technology can take us only so far. In recent years the amount of emphasis on environmental engineering programs with a focus on remediation technology innovations has waned. Corporations have made investments in new remedial technologies and educating future practitioners of environmental remediation, however their investment has been constrained. There is a need for more government investment in R&D and remedial remedies to enable government and industry to collaborate on the cleanup of contaminated properties more effectively and efficiently. Working together, industry and government can educate the workforce of the future, deploy a green collar workforce and rebuild a new industrial complex that is cleaner and more efficient than what we are working with today.

The inclusion of sustainability principles into government and corporate efforts to clean up contaminated properties, and in the design of new infrastructure, facilities and products will be required for creating a stronger America. We cannot address contaminated properties without forethought toward why they were created in the first place. We can minimize, or completely eliminate, the creation of future contaminated properties by incorporating elements of sustainable design, operation and use into our modern industrial complex. This is needed in all facets of government and industry. To get us there any future infrastructure and economic stimulus packages need to fully consider the environmental implications of those packages, today and into the future.

The scars of our industrial past can be healed. Poking and prodding these scars for decades on end only leaves wounds unhealed. A holistic approach toward tying economic and environmental stimulus together can be an option for economic growth and environmental protection that reduces the risk of unintended consequences and maximize the hope and promise that is cresting upon America in the form of a new administration.

Mark C. Coleman
Senior Associate & World Inc. Case Leader, AHC Group, Inc.
Mark@ahcgroup.com

Want to get real about the future of energy, natural resources and capitalism, go to www.ahcgroup.com and www.worldincbook.com to learn more on how leading companies are reinventing the future of business through social response product development and social response capitalism.

During Times of Economic & Environmental Uncertainty – Pick up a Book

10 Books to Add to Your Holiday Gift or Personal Reading Lists

We are in the midst of profound political, economic and environmental change. The complexity of operating a business amidst these challenges is greater than ever. Businesses have been challenged by the credit crisis, energy supply and price fluctuations, increased requirements for product stewardship and end-of-life management, concern over climate change and adaptation strategies, carbon mitigation and management, managing water and other resources in a natural resource constrained world, managing security and sustainable development.

These challenges are directly affecting business strategy, product development and consumer preferences for more sustainable (“green”) products and services. We see a global transformation in how corporations are responding to these challenges, while building stronger brands, stronger operations and stronger bottom lines. Whether you are a newcomer to the “green movement”, or a “true blue” early adopter, there are many new and old books that are excellent additions to your growing library. Here are ten books to add to your holiday gift list for the business sustainability guru in your life:

1. Hot, Flat, and Crowded – Why we Need a Green Revolution – And How it Can Renew America by Thomas L. Friedman. Building upon his brand and success as an author and global strategists, Friedman now introduces us to Hot, Flat, and Crowded examining how America can recapture its greatness in ingenuity, innovation and economic vibrancy through the creation of green collar workforce, greater investment in alternative energy and newfound respect for energy conservation and management.

2. Strategies for the Green Economy by Joel Makower. In Strategies for the Green Economy, Joel Makower distills his more than twenty years of watching the green business scene and offers insights and inspiration for understanding and untangling the complexities and controversies of profiting in the growing green economy.

3. Green to Gold: How Smart Companies Use Environmental Strategy to Innovate, Create Value, and Build Competitive Advantage by Daniel C. Esty and Andrew S. Winston. In Green to Gold Esty and Winston bring to life the notion of a “Green Wave” that is cresting and carrying with it, some of the largest corporations in the world. Green to Gold highlight the drivers, like climate change, resource constraints in a global economy, and natural resource management issues including fisheries, forests and fauna that are impacting how corporate boardrooms are thinking about, creating policy around, and addressing these classical business challenges.

4. Outliers – The Story of Success by Malcolm Gladwell. The author of the bestselling books “Blink” and “The Tipping Point” brings us the story of Outliers, seemingly ordinary people that through unique circumstances in their upbringing and culture, have gone on to do great things and bring much success to their lives. The book is an easy read, engaging and thoughtful. It makes one think of all of the intricate influences on a persons life, and how seemingly small things, like when you were born or where your ancestry dates back to hundreds of years ago, can have enormous impact on your success as an individual. Outliers makes me think of the evolving green revolution and the many firms that have found very early success through their own commitment to social responsibility because it is part of the fabric of their business values, philosophy and strategy. Firms like Green Mountain Coffee, Patagonia, Nike, Apple, Starbuck’s and HP exhibit elements of this “outlier” philosophy. Some continue to harness that in their business growth; while others seemingly heed to their corporate bureaucracy. I see with innovative firms, more the “outlier” philosophy still embedded in their culture.

5. The Green Collar Economy: How One Solution Can Fix Our Two Biggest Problems by Van Jones. Published in 2008, political advisor and social activist Van Jones uses the power of storytelling in The Green Collar Economy to offer another side to our current worldly woes involving the economy and the environment. Some have referenced Jones book as a prescription for a sustainability stimulus package that addressed economic and environmental challenges in our modern society.

6. Blessed Unrest: How the Largest Social Movement in History Is Restoring Grace, Justice, and Beauty to the World by Paul Hawken. Published in 2008, Blessed Unrest provides a history perspective behind the social justice movement and how modern environmental and social issues will be influenced largely from a bottoms up movement involving billions of people.

7. Biomimicry: Innovation Inspired by Nature by Janine M. Benyus. I will confess, I have not yet read Janine Benyus’ book Biomimicry. It was released a decade ago in 1998, yet it will be, in my view, one of these lasting books because of its profound ability to entertain, delight and inspire. Biomimicry is essentially the ability to look toward nature as the ultimate innovator. In nature we can find solutions to our own challenges with waste, better utilization of natural resources, security and sustainability. Benyus has inspired an entire generation of “Biomimics” and many in the design, engineering and building professions have used principles of biomimicry in their work since this book launched.

8. Cradle to Cradle: Remaking the Way we Make Things by William McDonough & Michael Braungart. Another classical book (published in 2002), Cradle to Cradle was and remains one of the launching pads for the McDonough revolution. In Cradle to Cradle McDonough and Braungart examine the flawed logic behind doing business as usual in a post-industrialized nation. They present how numerous unintended consequences have emerged from our machines and industrial society, many which can be avoided in the future and minimized with new thinking and nature inspired design.

9. World Inc.: When It Comes to Solutions — Both Local and Global — Businesses Are Now More Powerful Than Government by Bruce Piasecki. Published in April 2007, World Inc. was Bruce Piasecki’s sixth book. Some of his notable other works include “Corporate Environmental Strategy: The Avalanche of Change Since Bhopal” and “In Search of Environmental Excellence: Moving Beyond Blame”. World Inc. introduces the concept of “social response product development” and “social response capitalism”. Piasecki examines how the largest economies of the world are now corporations, not nation states, and how corporations are shaping a better world through an advanced form of capitalism, social response capitalism. World Inc. also digs deeper than many similar books on the financial and money side of sustainability, offering insights into how companies are evaluated by rating agencies for superior environmental and social performance and why these indicators are transforming company values and strategies from the boardroom to the shop floor. In a time when economic crisis has taken center stage, World Inc. offers both example and solution for companies to design/innovate new products and offer society and shareholders greater return on their investment. For those interested in having a social and business history on the transformation of business as well as an “insiders” account of how large multinational firms are redirecting their products and services toward an advanced form of capitalism, World Inc. is a welcomed read.

10. Small is Beautiful: Economics as if People Mattered by E.F. Schumacher. First published in 1973, the book Small is Beautiful is a collection of essays by British economist E.F. Schumacher. The book was published on the eve of the 1973 energy crisis as well as the emergence of globalization. Schumacher frames the modern economy (some forty years ago) as unsustainable based upon its pricing, valuation and consumptive use of natural resources. The E.F. Schumacher Society was founded in 1980. Its programs demonstrate that both social and environmental sustainability can be achieved by applying the values of human-scale communities and respect for the natural environment to economic issues. Small is Beautiful is a great addition to anyone’s library.

The ten selections above are great resources for providing context, insight and new ideas in this time of tumultuous challenge and change. We hope you enjoy these selections this holiday season.

Mark C. Coleman
Senior Associate & World Inc. Case Leader, AHC Group, Inc.
Mark@ahcgroup.com

Want to get real about the future of energy, natural resources and capitalism, go to www.ahcgroup.com and www.worldincbook.com to learn more on how leading companies are reinventing the future of business through social response product development and social response capitalism.

Communicating Your Corporate Sustainability Story & Strategy

As in Politics - Creating a Vision of the Future through Words also Matters in Corporate Communications...

According to a recent 2008 survey by KPMG, annual reports on Corporate Social Responsibility (CSR) are on the rise, “…Corporate responsibility reporting has gone mainstream - nearly 80 percent of the largest 250 companies worldwide issued reports, up from about 50 percent in 2005.” The reputational value surrounding disclosure on corporate ethics and economics were among the top drivers referenced by KPMG that are influencing more and more companies to publicly report out on key CSR indicators. In the mad rush to publish CSR content, how effective are companies at communicating themselves to their stakeholders? How can companies differentiate sustainability as a business and societal directive? And, how do they communicate clarity when there is conjecture about the future?

The eloquence by which President-elect Barack Obama speaks of his vision for our nation is, in my personal view, one of the defining and winning elements of his campaign. Trying to communicate such vision to 100 million registered voters, through nothing more than the delivery of words, is an incredible skill and nothing shy of amazing. President Obama’s victory speech was exemplified how and why words matter.

There are some basic principles and key lessons in communication that we can draw from the leadership of President Obama and his ability to communicate complicated and often unresolved issues to diverse audiences. These key lessons on are valuable for communicating complex information like a corporate sustainability strategy, which is often not well defined, not yet rooted, and in most cases, a vision or framework for business strategy and governance.

Key Lessons for Communicating Your Sustainability Strategy

1. Create Trust by Giving Praise
2. Be Articulate and Succinct
3. Be Visionary yet Grounded in Tangible Example and Application
4. Show Emphasis but not Exaggeration
5. Transcend All Stakeholders with Common Themes and Examples
6. Be Realistic on the Present and Future
7. Demonstrate Force and Grace Simultaneously
8. Don’t Overwhelm Your Audience
9. Create Enthusiasm
10. Leave a Door Open for Others to Join

I am sure there are other basic principles one can draw from President-elect Obama’s oratory and speech writing skills, however, these ten principles are directly applicable to corporate communications and disclosure on sustainability.

As I think about some of the more successful communicators of business sustainability I see these ten principles in their blogs, annual reports, speeches and presentations and press releases. The ten principles are often tied together to tell a story, one that is rooted in both the emotional-and-tactical side of business. I often see sustainability communications that are so mechanical that the essence and richness of what is being communicated is lost in a sea of data and numbers, non-descript and non-personal quotes, or language that is unrealistic with regard to what is being communicated. There is a certain bravado that garners attention from investors and the media, but to much can send many analysts running for the hills.

Constantly solid purveyors of the ten principles identified above for the purposes of telling their sustainability story have been:

Campbell Soup Company “Nourishing Peoples Lives” is one of the themes of their 2008 corporate social responsibility report. Campbell’s conjures up immediate emotion of home and warmth, thinking back to a cold winter day, just in from a two-hour cross-country skiing excursion across barren land, or building the indestructible snow fort to ward off neighborhood trespassers. Campbell’s ability to leverage their brand to show common themes across all stakeholders in their social responsibility report is one aspect of good communications. They understand that consumers are concerned about healthy foods, where foods are sources, how nutritious their diets are and responsibility in advertising through disclosure in product labeling and the use of certain commercials targeted to children. Food and beverage companies like Campbell’s elicit very strong consumer emotion and ties. It is essential for firms that have such immediate impact on the daily lives of consumers to communicate their sustainability story using the ten principles of good communication.

Green Mountain Coffee Roasters “From Understanding to Action” Corporate Social Responsibility Report, Fiscal Year 2005. This report by GMCR achieves the ten principles. The first words in the report are “For 25 years, we have been on a deliberate journey to create and sustain a values-driven company that views profit as a means to achieve a higher purpose.” Like Patagonia, GMCR has a foundation with a passionate and articulate executive. Bob Stiller, founder and President of GMCR says “Understanding the realities of people’s lives and the conditions of our shared world motivates us and helps guide our decisions. When people understand underlying issues, I believe they will take action. That is why we have sent more than 20% of our full-time employees on trips to coffee-farming communities. Whenever I visit with coffee farmers, I am touched by their hard work, perseverance and pride in producing high-quality coffee. Seeing first-hand some of the challenges and complexities integral to the specialty coffee industry inspires us to move toward a vision of long-term sustainability for everyone in our supply chain.” You get an immediate sense of how personal GMCR’s sustainability and social responsibility efforts are to their success as a company. GMCR’s views its suppliers not as commodity providers, but as an integral part of the company’s future and vice versa. This humanistic and emotional connection to their products and the communities in which they source products from enables GMCR to have a realistic notion of their business present and future.

Marriott International “Spirit to Preserve” initiative is changing the culture at this leading property development, management and lodging company. With more than 3,000 properties in the US and abroad Marriot International has a large social and environmental footprint. Their “Spirit to Preserve” initiative includes green building development, greening of their supply chain, protecting the rainforest, resource conservation (through water, waste and energy reductions) and employee and guest engagement in Marriott’s sustainability efforts. Marriott’s Green Stories serve to communicate how they are transforming the built environment, enabling more sustainable conferences and meetings with the use of greener products and facilities, and instilling a new culture of conservation into their business model through tangible example.

Patagonia “Leading the Examined Life” communications and Yvon Chouinard (Patagonia's founder) ability to be articulate, create enthusiasm and personal emotion to his products and his firms purpose as a company. In a creative disclosure of their environmental footprint Patagonia has created The Footprint Chronicles to help stakeholders track (and offer input on) the company’s environmental impact of specific products from design through delivery. The Footprint Chronicles examines “the good and the bad” with Patagonia offering their input on why their product is bad for the environment. This honest disclosure shows the humility of Patagonia and how they are grounded in reality.

As more companies publicly disclose their corporate social responsibility and sustainability efforts in annual reports, press releases, investor presentations and marketing collateral it will be crucial for good communications. There is a risk of under-and-over stating your sustainability story to the public. Increasingly the general public and all stakeholders are becoming more educated on best practices in corporate governance, social responsibility, environmental management, and sustainable business models and practices. Coherent, clear and concise communications are essential to quality reporting on CSR. In addition, it is equally important to have sustainability communications that like Patagonia, Green Mountain Coffee, Campbell’s Soup and Marriott International, are consistent with the vision and commitment of senior management and also tell a story. Stakeholders are more forgiving of communications that have a face and a personality than those that are seemingly transparent but with no real connection to the vision, policies and practices of the disclosing firm.
Remember also that communicating sustainability should be your story; not your competitors or what you feel stakeholders want to hear. Business sustainability is about not only effectively managing your risk and your future, but also your ability to connect with the present through clear communications.

Mark C. Coleman
Senior Associate & World Inc. Case Leader, AHC Group, Inc.
Mark@ahcgroup.com

Want to get real about the future of energy, natural resources and capitalism, go to www.ahcgroup.com and www.worldincbook.com to learn more on how leading companies are reinventing the future of business through social response product development and social response capitalism.