The business case for environmental sustainability

Nigel Cassidy: Building back greener, what does it take to work more sustainably and avoid squandering the lessons of the pandemic? I'm Nigel Cassidy and this is the CIPD podcast.

Well with business still generating almost a fifth of all the UK’s greenhouse gas emissions there are no excuses for leaving sustainability on the back burner. Having lived through the pandemic customers and employees alike so clearly want to trade with or work for organisations pledged to build a better world. And there's also profit in purpose using cheaper renewable energy for example, selling planet friendlier products and services. So this podcast is all about taking stock of the environmental impacts of your business and putting sustainability at its heart. To help us Dr James Robey, the long-standing Global Head of Corporate Sustainability at the consulting giant Capgemini. Hello.

James Robey: Good morning. 

NC: Now Capgemini has 270,000 employees so right at the other end of the scale our next guest George May is MD Bio-Bean a company of just 30 people. He recycles spent coffee grounds into sustainable products on an industrial scale, well presumably not all personally! Hello.

George May: Morning Nigel.

NC: But let’s start with Jan Maskell, who’s a chartered psychologist and associate of the Institute of Environmental Management and Assessment who wrote the CIPD’s Sustainability Guide. Hello.

Jan Maskell: Good morning.

NC: Now Jan I was quite surprised to see some stats showing so many organisations actually not really delivering on sustainability, I mean not even matching their own workers’ values or expectations, and this of course in spite of everything that's going on at the moment, the current consciousness, governments and UN initiatives and everything, I mean do organisations not recognise the risks of not taking action, I mean what's going on here?

JM: I think you’re right that a lot of organisations, whilst recognising that climate change is happening don't necessarily see the connection between the weird weather events that we’re experiencing at the moment and what they’re organisation contributes to that and I think even those organisations that are doing things don't necessarily see the role that HR has to play in that and that's the reason why I created the guide for the CIPD is I think that HR has a huge role to play in this but I think that we don't necessarily recognise this as an emergency in the same way that we did the pandemic so we’re responding to it differently. I think there is growing awareness, I think over the last couple of years there has been a huge role played by individuals and organisations, so the Greta effect, as well as things like Extinction Rebellion, whether or not you agree with them they have brought things to the public domain. And increasingly on media, recognising that Sky has a programme every day on this issue and it’s already daily in the news on the BBC. So I think it is becoming much more of an issue that people are aware of but it’s making that link between this is an issue and, what does that mean for my organisation? 

So there’s two ways you could look at this: one is what impact will climate change have on my organisation? And that could be directly in terms of flooding, weather events, health impacts, or down the supply chain. I was talking to someone in the fashion industry the other day who was recognising that there are serious weather effects that will affect their supply chain in other countries. I think that organisations don't necessarily recognise this as an emergency and then don't necessarily realise what they can do about it.

NC: Well Dr James Robey it’s interesting to hear Jan talk there about recent events, I mean for years you were pushing targets and then suddenly along came COVID-19 and we’re travelling less, we’re eating, we’re staying local, I mean I gather that 95% of Capgemini staff are able to work from home, obviously that’s not true of organisations that have a lot more customer-facing roles, manufacturing, that kind of thing, but I mean as far as you’re concerned close the offices, job done!

JR: Partly, but certainly not totally job done. I mean from my perspective and clearly COVID has had a massive impact on many organisations and certainly in the professional services industry it’s been quite transformative in terms of switching people to a much more remote, much more work from home model, but clearly professional services organisations have a relatively modest carbon footprint themselves but often work with organisations which have much larger carbon footprints. So absolutely we have a responsibility to keep driving down the carbon impacts from our offices and from travel, and clearly we are very locked down at the moment but we do expect that to return to some increased level of travel and increased level of office use in the future. 

The other focus for organisations is to think about the bigger impacts through their value chain. So whether it’s thinking about the products and services you buy or the products or services you deliver to your clients. And we’re increasingly working with our clients on their sustainability agendas. If we work with, say, a leading auto manufacturer that organisation may have a carbon footprint which is 100, 200, even 300 times the size of Capgemini’s footprint, so again the opportunity for making an even more material impact is quite significant.

NC: And I know you’re pledged to work at speed to be a net zero business. Just remind us what that is and I mean is it really based on science or are you just buying carbon credits and offsetting to make people feel better?

JR: So I think it’s a really good question and there's been lots of debate about net zero, it’s still in some places quite a contentious term, we’re trying to align with the emerging consensus led by organisations like the CDP and the Science-Based Targets Initiative and for me there's three parts to net zero and it absolutely starts with reduction. So in the first place you have to first of all quantify your impacts, measure your impacts and set targets which are aligned with the 1.5 degree climate science, so we have targets signed off by the Science-Based Targets Initiative, SBTI, in line with the Paris agreement, in line with that 1.5 degree pathway. So that’s number one. 

Secondly you have to deliver on those targets, it’s no good just having the targets, you have to drive down your targets over the medium term. So our net zero target is 2030 because we believe a ten year horizon is a sensible horizon for driving down our emissions. 

And then thirdly you need to compensate your residual emissions. So if it is impossible for your organisation to get to absolute zero, and recognising that there are certain processes, certain actions which that's not possible with then you compensate your residual emissions. But Nigel, very much compensation and offset is last, targets and reduction has to come first. 

NC: Nonetheless there's quite a lot of science and analysis in there and you’re a big firm, that's kind of what you do, George May yours is a firm of 30 people, now while this Bio-Bean activity clearly is sustainable by design I would imagine that your actual day to day business is not necessarily automatically sustainable in terms of its practices, its energy use and engaging your staff with all that?

GM: I think that’s right. So yes like you say inherently what we do is sustainable, it’s environmentally focused, the purpose of the business is to create big change that lasts through recycling spent coffee grounds, through valorising something that's previously a waste. So that is inherently sustainable, inherently environmentally friendly, but the challenge for us is we are an SME, we are a manufacturing business, what we are doing hasn’t been done before, so there's been a lot of trial and error with machinery and plant and different processes, so yes there is a challenge there in that obviously we have a carbon footprint in terms of what we do and how we do it. And I think you’re right as well to touch on that piece around engagement of staff and colleagues and it doesn’t automatically flow that just because you are an inherently environmentally sustainable business that all colleagues in the team will have the same views on life. 

So we’ve done a number of different things, we are, and as much as I dislike the phrase, we are on a journey, on a path towards improving how we do what we do. We have undertaken a life cycle analysis that doesn’t include our Scope 3 emissions, it’s not something that at the moment we are in a position to be able to undertake that analysis unfortunately, just the resourcing of the business. We have a sustainability improvement plan internally. We are a B corporation, we’ve taken the results of our B impact assessment and undertaken a gap analysis to see where those areas of improvement are. We’ve listened to staff from internal staff engagement surveys to see where they feel we can do better and we’ve put in place a plan to try and move forward. We also have the ISO Standard 14001, the environmental management system to give us a framework to operate to. So we’re doing quite a lot and it’s important to us that not only is the business inherently good and environmentally sustainable but that we try and improve our impact day to day.

NC: If we have time perhaps we’ll go back to this question of being a B corporation or using any of that kind of analysis to see where you are and see how you can improve, but Jan Maskell let’s really begin at the beginning, how do you start evaluating the environment impact of your operation and the effectiveness of what you might already be doing?

JM: I think James and George have talked about this in terms of starting off with measuring what you currently do. So there's lots of ways you can do that in terms of looking at your resource use, looking at your travel, looking at your energy and looking at your investment, that's often missed off the list of things that people look at and that's particularly relevant to HR. So I think in an organisation, even if, and thinking about James and George’s organisations, it’s seeing that there's a role for everyone in this, this isn't just something that the sustainability professional does or the facilities management person does, this is relevant to all employees and this is where HR comes in, in that HR professionals are in a unique position in any organisation in that they’re probably the only part of a company that has a connection with every single employee at some point, now whether that's to do with recruitment, selection, pay, benefits, performance management, HR is able to engage with all employees. 

So it was interesting when George was saying about engaging with employees that 14001 doesn’t necessarily enable you to do that, 14001 is a good measure and it’s a good start but it doesn’t necessarily encourage engagement with employees, and I think that's a key thing that HR professionals can bring to this and the significant leadership role that they can play in this.

NC: And George May of course you are the HR department and quite a lot of the other departments yourself as well.

GM: Yeah and it’s a really good point, so 14001 is a framework, it gives you a framework to operate to and it gives you guidance, it gives you direction, it doesn’t automatically lead to engagement. And we’re an SME in every sense and we don't have a head of sustainability or similar, we don't actually have an in-house HR function either. We have two directors, myself and a colleague of mine and we effectively are the HR department between us. So then the engagement piece therefore becomes really important and I think from a small business perspective if you’re looking at environmental improvement, day to day in a business, getting that buy-in is hugely important. 

So our sustainability improvement plan is not headed by Pete, my co-director, or myself, it’s headed by our head of marketing, our HSEQ lead and one of our finance team. So what we’ve done we’ve found champions within the business who can fill that role and that helps with the engagement piece. That draws people in, making sure that questions in the staff engagement survey try to draw out areas for improvement and that then we show that we are taking that on board and acting in response to those. Again that helps drive that engagement I think.

So I completely agree the engagement is crucial and in businesses where you have sustainability professionals, where you have HR professionals, I couldn’t agree more they have a huge role to play, in smaller businesses I think it’s about making sure you find the champions, that you acknowledge as well that this tends to fall outside of people’s day to day jobs in some instances, you know, if you don't have a sustainability individual then it’s an add on to people's role, so you need to find those who want to do it.

JM: Yeah I think there are some really good points there George thank you. The question you asked Nigel was about the gaps and I think what any organisation can do is look at what do we currently do in terms of our policies and procedures and rather than bringing in new things how can we integrate environmental sustainability into what we currently do well. So if you already have something like a competency framework have a look at that and see where does it relate to things that could be deemed to be ethical or around environmental sustainability, any maybe enhance those. 

Similarly if you've got training and development in your organisation and learning opportunities, even in induction, do we cover what our approach is to environmental sustainability? So where is it in the job description; where is it in the personal specifications, so is it listed as things that people do or is it knowledge requirements? So right throughout the HR piece there are ways in which environmental sustainability can be integrated into what’s currently done. And I think it’s an important point not to see it as an add on, so see it more like equality, diversity and inclusion, which back in the day was seen as something extra to do or health and safety as something extra to do, so you look at your HR practices through an EDI lens or a health and safety lens, so you look at all of those practices through a sustainability lens and say, what’s the impact of doing this in terms of thinking about learning and development? So you look at that in terms of what’s the content of our learning and development offer but also the process by which we deliver it. So what’s the content? What do we talk about? How do we integrate sustainability into everything from induction through to leadership development and also how do we deliver that? Do we send people off to expensive programmes in Switzerland or do we deliver that through online methods?

NC: And James Robey I was quite struck by something you said to me just before we started the podcast about things which are very obvious to people and things which are hidden with the example say that the data centre may be busy guzzling energy 24/7 yet people are probably more likely to complain about the use of single use coffee cups.

JR: So yes let me build on that and build on some of the points which we’ve just been talking about. So I think in terms of thinking about the sustainability of your organisation I think a lot of what we’ve been talking about is absolutely right in terms of, if you like, eco efficiency, how do we make what we’re doing more efficient? But I think the starting point for many organisations needs to be a level deeper and actually looking at what are they trying to deliver as an organisation and is that inherently sustainable or not sustainable and actually how can you potentially redesign your business about the service or the underlying service or product that you are trying to deliver? 

For example most of us own washing machines, we don't actually really want to own 75 kilos of metal and plastic what we actually want to own is the ability to have clean clothes. Most of us have cars and think about you get in the car and you drive from London to Birmingham, you end up moving 1500 kilos of metal and other components to move 75 kilos of you from A to B. So again inherently the process you’re trying to do, which is move yourself from A to B has a huge level of inefficiency around it just because of the way we’re framing it and looking at it. 

So I think for me when you start thinking about it from an organisational perspective in terms of that sustainability journey you need to start by looking at the underlying product or service that you are trying to deliver and then just challenge yourself in terms of how you’re doing it. A very interesting conversation a few years ago with a chief executive from a major airline who was thinking about investing in video conferencing because the underlying business model they had was about connecting business around the world and traditionally as an airline you did that by putting people in thin aluminium tubes and flying them from A to B and he was trying to explore well actually is there a different way of connecting business people which didn’t involve putting them in thin aluminium tubes and blasting them around the world? So again that was just a step back before you then drive into the efficiency side which Jan and George talked a lot about in terms of understanding your business and looking for where you can be more efficient. 

But I think coming on to your other point Nigel in terms of the visible and the invisible and I think, particularly in larger organisations where initiatives aren’t often visible to everybody you need to make sure you have that spectrum, you need to do both the visible things, the taking away the plastic cups, putting in place recycling bins which are highly visible as well as the impacts, you know, the things you do as an organisation which have the biggest impact, so use the example there of data centres, for organisations that run data centres they use huge amounts of energy, they have a very large environmental impact in fact if you looked at the energy consumption of the IT industry it would that we would be the third largest country in the world in terms of our energy consumption, so clearly there's a responsibility for work there. 

NC: Because it can George May be seen as kind of green-wash, I mean I keep seeing stuff about initiatives by major soft drinks manufacturers, I mean basically they’re producing vast quantities of plastic bottles that may not get recycled. So such a massive undertaking and you can very easily confuse or mislead your consumers.

GM: Yes I think you definitely can. I think there's an interesting role to play by big brands in the drive to sustainability and more sustainable ways of doing business in that my personal view is that the brands have a really big role to play. People follow where brands lead, I think legislation is a sort of secondary factor in all of this and it’s the stick not the carrot. So yes you’re right that is the case and I think I suppose when I look at our business we’re not quite at that scale yet but we try to make sure that we align, I suppose to James’ point that we try to align what we do and the way that we do it with the kind of business that we want to be. 

We sell a domestic solid fuel for stoves and wood burners, everyone in that market, bar no one, sells it in plastic bags, we have made a point of selling it in a paper bag that is more readily recycled, that is FFC approved. Now I'm sure there are holes that can be picked in using plastic over paper, I can probably see Jan and James smirking already but we deliberately do that because we want to make the point, you know, to challenge the norms to try and tell a story in the way that we do things, trying to make sure that the way we approach our business is consistent with the overarching purpose of the business. And yes we’ve definitely got a way to go. We want to make sure that we source sustainably, that when we’re choosing suppliers we consider their impact, all of those things. 

So it is difficult. I think it’s a minefield and I think probably whatever you do you'll always get it slightly wrong but I think the main thing is that you’re engaging your workforce, that you are moving forward and you’re putting in place legitimate bona fide activities that do have an impact and that's crucial, whether that's, and we talked about before we started recording, we’re looking at changing our loo rolls from a bleached, virgin loo roll to an unbleached, recycled paper. Now that will get some people going, hang on why has the loo roll gone a funny brown colour? And it’s not very nice. But it triggers thinking and to me that's the big bit. And as always I want to trigger people’s thinking, I want to make them think differently. I want them to go, okay well if that’s changed that makes me think about other things, you know, we’ve replaced all of the taps with push taps. It’s the little things you can do that build engagement that trickle through and that builds a sort of collective desire to do more.

JM: I think George has made some good points there about the obvious visible things that make people think. And this is about modelling. So if the organisation is modelling these things then there's a possibility for engagement and people asking the question, why have we done this, and maybe suggesting other things. But then there's also the possibility of spill over. So this is about values as well, so people may come to work and not share the values of the organisation but as they experience these things they may start to shift towards that. 

And then there's the possibility of spill over from work to home. So some of those behaviours, even if it’s things like changing your loo roll, it might be things like travel options that James was talking about, so if my organisation is saying, we don't want you to travel to meetings anymore, we want you to do virtual meetings, and we’re discouraging that, so we’re making it harder for you to use your car, then people might think, well why are they doing that? And that will potentially spill over into their behaviour in their private lives as well and they’ll start to question. Does every household needs to have a car, are there other options? And then you've got co-benefits that are associated with those things. So anyone who’s looked into the issue of active travel and how to encourage that in organisations, one of the big drivers for that is the co-benefits for the health benefits for individuals as well as the reduced CO2 for the organisation and the individual.

JR: We've found that more and more people want to get involved with these types of initiatives and they’re not all driven centrally, often they spring up. In fact our global legal team across the group have been running a competition over the summer in terms of sustainable activity. So they created a range of activities you can do and you get points for each one. So for example eating vegetarian for a week, or eating vegan for a week. Interestingly the top scoring point was taking a three minute cold shower, I'm not sure how many people actually signed up for that one, but it was a great way of engaging the team and almost gamifying the whole topic so people were recognising that they can make a difference. And my experience is that people do want to make a difference, they do want to engage with this topic, they do want to work for organisations that are doing the right thing. And coming back to Jan’s point at the beginning that's where HR is absolutely critical.

JM: They also want the recognition for that. So your point there about the reward scheme, it might only be a tiny reward: an organisation I work with runs a lot of cycling initiatives and they have a monthly draw and you might win something like a Hi-Viz jacket. So the rewards don't have to be huge but for some people that is a real motivator. For other people rewards can be seen differently. But I think, coming back to the HR issue if HR is responsible for those things like paying benefits are we rewarding our top people by giving them a bigger, fatter car? And it’s just thinking about that as a whole systems approach that you can't just do one thing like set organisational targets, we have to engage individuals and maybe them set their own targets as well.

NC: And it maybe those individuals are at the most senior level.

JM: Absolutely those are the best to role model because if the organisation’s saying, we want to cut down our greenhouse gas emissions and yet our chief exec is driving to work in a gas-guzzling SUV, that's not sending the right message, so we need to have consistency and certainly that modelling, particularly from senior management will have huge ripple effects through the organisation. So if the boss is cycling to work that normalises that behaviour and makes it socially acceptable, so more people will probably sign up for that sort of thing.

JR: EV100 come in where you can commit to transitioning your fleet to 100% electric vehicles which again is something we’ve done and we’ve actually now removed all pure petrol and pure diesels from our car scheme, so if you order a car today you have to order either a pure electric or a hybrid car, and the hybrids will be disappearing after a couple of years as well. So we’re making that transition and as you say helping people along the journey towards more sustainable choices.

JM: But it’s also challenging do you actually need a car?

NC: Okay well that's a massive question as well. George May I just want to ask you about being a B corporation, I was intrigued to see Coutts, the bank, has just become one of the largest UK bank brands to secure that kind of status, this is a company upholding standards in its dealing with staff, community, customers, the environment, that kind of thing, and I know that you have been through that process, I mean the Body Shop, Innocent Drinks, a lot of companies have done it, I just wondered what for you was the point, the value of that kind of accreditation?

GM: Where we came at it from was initially we recognised that the B corporation standard is a robust and increasingly well-recognised standard, it’s a very thorough review of a way that a business operates: so it looks at your environmental impacts, the impact on the community, workers, supply chain, governance, all of these things. So initially at the back end of 2019 we set out to work through the B impact assessment, which is about 200 questions, really as a benchmarking exercise, just to see how do we shape up against this criteria, where are the areas that we’re not performing so well? So we set out really as a benchmarking gap analysis type exercise to identify areas for improvement. 

Having gone through that we realised we then had sufficient points to proceed to the verification step and we certified in October 2020. And subsequently, as I mentioned, our sustainability improvement plan has been in part based on then running the gap analysis of, okay we’ve certified as B corp but there are obviously areas for improvement and what are they: they fall into obviously environmental categories but also workers, governance and others as well. So it’s a commitment. We have had to change our corporate governing documents to be a B corp, so we’ve made a public statement that we believe business should be run for the benefit of all, not just for the shareholders, you’re running it for all stakeholders and for the benefit of the environment. So you are taking a public stand in doing this. It is something that you are saying, we are going to run our business differently and for what we believe are better end purposes. I think there is obviously still the risk that some people see it purely as a potential marketing exercise. For us, like I say, it was very much built out of, going back to Jan’s point at the very beginning, assessing where are we?

NC: And indeed we’ve seen in the news that the Scottish brewer Brewdog is being challenged over some of its work culture practices and while we don't need to go into that here I mean just to illustrate the point that it’s no good trying to burnish your environmental reputation if you fall short somewhere else in your people management Jan?

JM: Yeah absolutely reputational risk is a huge issue, so you talked about green washing if organisations are held to account for their claims they have to be able to substantiate what they’re doing and I think that's a really important aspect, particularly as reputation is what can attract people to work for an organisation. And Brewdog did have that good reputation which has been tarnished now, as your example. So reputational risk is something organisations take very seriously but also reputational enhancement through green credentials. And I think that's what George is talking about with the B corporation.

NC: And indeed that's obviously one of the prizes here. We’re almost coming to the end of our time, I just want to ask each of you, perhaps starting with James Robey, bringing this together just kind of give us a top tip from your own experience on really good ways of embedding sustainability in your organisation so you can see results?

JR: So I think a couple of things, first of all, as we’ve mentioned before you've got to understand where your impacts are, you've got to understand where you make the biggest material impact on the environment. So first of all you need to quantify that and measure that. And then secondly I would encourage people to think through the business case for what you’re trying to do, and there is a business case there. It may be a really obvious financial one that if you put in energy efficiency initiatives then you get direct payback in terms of savings to the bottom line. It may be a little bit less tangible, it may be in terms of your reputation, your ability to recruit the best people; it may be about getting the best customers or the best clients on board. So my suggestion, start with thinking about your material impacts and what you’re trying to do, what you’re trying to deliver and then think through, make sure you've got a strong business case for what you’re doing and that will then help you follow though.

NC: And George May other than doing something useful with your coffee grounds what was your tip?

GM: I think James makes very good points around assessing what you’re currently doing and how you’re doing it and then the business case. I think beyond that my bet, especially in a small business where we’re so interrelated and everyone deals with each other and crossover in terms of teams, that engagement piece is crucial, finding your champions. We don't have an HR function, we don't have a sustainability function, therefore those who pick up the driving, the sustainability elements of what we do forward, those who are running our sustainability improvement plan are volunteers if you like, and so it comes down to recruitment, getting the right people into the business, engaging them in the right way and I also think it’s different for smaller businesses because we perhaps have less scrutiny but my view is don't let the perfect be the enemy of the good. I think you want to move forward, for the likes of James and other who are much more in the spotlight than we are, obviously there's more scrutiny for listed companies and so on, but don't let the perfect be the enemy of the good. If you’re moving forward, if you’re taking proactive steps to improve what you do and how you do it I think that's the most important thing and ideally that you’re measuring it and monitoring it. 

NC: And last word to Jan Maskell.

JM: Absolutely agree with James and George about measurement being important because what gets measured becomes important. To add to what they’ve said I think taking a systems approach so that you’re not just looking at one aspect you’re looking right across the business of everything, and particularly thinking about things like policies and practices, so organisations will have policies, and should have an environmental sustainability policy but is that consistent with all the other policies and practices that are taking place? So that's where you get that systems approach that it’s not just about the organisation or the individual it’s about everything.

NC: Excellent thank you very much indeed, our grateful thanks to all our guests: Jan Maskell there, James Robey and George May. And Jan's sustainability guide is on the CIPD website. Only last month we were discussing how people professionals can lead change and we were pleased to have that edition endorsed by the Association of Elite Human Resource Professionals, they pointed out that many negotiated their way through the pandemic by reflex, adjusting practices on the fly. It really is time, they say, for a different approach. We certainly agree with that. We’d love to get your comments this time on your experiences so far in the drive towards sustainability so please do that via the CIPD podcast site or you can find me, Nigel Cassidy, on LinkedIn. Please subscribe to the podcast if you haven’t already but until next time from me and all of us here at the CIPD it’s goodbye.