Jim Harris2013-05-20T12:07:12-04:00Jim Harrishttp://www.huffingtonpost.ca/author/index.php?author=jim-harrisCopyright 2008, HuffingtonPost.com, Inc.HuffingtonPost Blogger Feed for Jim HarrisGood old fashioned elbow grease.Davos: Talking Champagne on a Sinking Titanictag:www.huffingtonpost.com,2013:/theblog//3.25249212013-01-22T06:47:37-05:002013-03-24T05:12:02-04:00Jim Harrishttp://www.huffingtonpost.com/jim-harris/
Later in the day the temperature rose to 15ºC, at 3 p.m. setting a new record according to Environment Canada.
It is deeply disturbing that we experience +15ºC in the middle of winter. And I am disturbed listening to the media commentary about how wonderful this warm weather is. A friend mentioned that the Magnolia tree in their neighbourhood was showing signs that it was about to bud. If this Spring weather continues in the middle of winter it will bud. And its flowering will be killed off with the inevitable return of winter weather.
The stability and predictability of the seasons is defined as "security" by many Aboriginal peoples. The changing of the weather on a global scale is bringing unprecedented, disastrous changes in human experience.
When I hear on the radio or in media how wonderful this mild weather is, I despair. Because to me it's like people dancing as the Titanic is sinking, unaware of the impending consequences. And so the band played on... Yes, It is deeply disturbing. And frankly depressing.
In 2012 the sustained early spring-like weather during winter followed by the return of cold weather had a disastrous consequence for Niagara Apple growers as the trees budding were killed off by frost.
Wildly variable weather is having drastic economic consequences:
Munich Re, the largest re-insurance company worldwide, estimates that the final damage from Hurricane Sandy will top $50 billion -- of which only half of the losses are insured. Never before has New York been hit by a Hurricane.
The drought that plagued the U.S. in the summer of 2012 was the worst since the 1930s. The consequence for farmers was devastating as the drought was combined with record-breaking heat. The consequence? An estimated $75-150 billion loss -- making it the costliest natural disaster in U.S. history.
Australia has been plagued in January by the worst ever heat wave in Australian history -- setting a new record of 40.3°C, for the highest national average temperature. The result? Wildfires have raged across Australia. And the temperatures have become so hot the country's Bureau of Meteorology was forced to add a new color -- deep purple -- to heat maps to show areas that have exceeded all-time heat records. And it's not just the interior of Australia that's baking -- on January 18, Sydney set a new a record-breaking 46.4ºC (115.5ºC).
Colony Collapse Disorder (CCD) is a phenomenon not well understood but colonies of bees are dying off. Causes are thought to be pesticides and cellphone tower radiation. The death to honey bees in North America would kill $15 billion of commercial agricultural crops.
So here's my point: Just how many apocalyptic signs are required before global leaders get serious about preventing climate change and the preservation of natural capital? Apparently the answer is more.
I am in Davos at the World Economic Forum (WEF), which formally began Monday night. The top issues that world leaders must address, according to a survey of 1,500 experts in academica, business, civil society and governments conducted for WEF, are unstable global economy, eurozone fragility; and financial system instability. Climate change only ranks as the 7th issue -- and then only for Climate Change Adaption, not urgently preventing the change in the first place.
To me it's like a group of business leaders and "experts" on the sinking Titanic discussing the fragility of champagne sales. I am deeply concerned about the Alice-in-Wonderland perception of the big picture of what is happening to our world.
As one of my heroes, Thomas Berry, said: the earth economy is primary, the human economy a derivative. Bankruptcies in the earth economy are immediately followed by bankruptcies in the human economy. In other words, when there are no more Cod on the Grand Banks, Newfoundland fisheries go bankrupt.
In a ground breaking analysis in 1997 Robert Costanza and his colleagues estimated that the value of eco-services that the world's eco-systems provide was $33 trillion-- for instance the value of pollination that bees provide for free; the value that trees and plants provide by turning CO2 back into O2; and the value the hydrological cycle provides by raining -- just to take a few examples. By comparison, the global cumulative national product was $18 trillion. In other words the value of the natural world far, far exceeds the value of the human economy.
Increasingly unpredictable, unstable, extreme weather events will drive increasing economic catastrophes. So if global leaders are concerned with economic stability, addressing economic fragility and building economic resilience, they should start with addressing the more fundamental issue first.
The McKinsey Study Reducing US Greenhouse Gas Emissions: How Much at What Cost? highlights how 40 per cent of the CO2 cuts that were required to meet the Kyoto targets were highly profitable. I interviewed the senior partner in charge of the study -- Jon Creyts. He pointed out that if the profit from these high ROI projects were invested in the next least cost solutions we could have got all the way to achieving the goals at zero cost to society!
Focusing on energy efficiency is not only highly profitable but will spur innovation, job creation and help businesses, homeowners and society as a whole cut costs and create energy and economic security. This is the point of a report entitled More Bang for Our Buck: How Canada can Create More Energy Jobs and Less Pollution. Every $1 million invested in oil and gas only creates two jobs, while by contrast investing in energy efficiency creates 15 jobs, and has the economic benefit of insulating business and homeowners from the inevitable rise in energy prices.
Another McKinsey study: The Case for Investing in Energy Productivityhighlights that the internal rate of return (IRR) for investing in energy efficiency is 17 per cent. I like to note that by comparison the returns for investing in the stock market over the long term is 10 per cent and real estate 16 per cent -- the two vehicles that we've been told create the best long term results.
Globally, oil and gas receive $557 billion a year in subsidies according the International Energy Agency (IEA) and $700-800 billion a year according to the head of the United Nations Environment Program. Why are global governments subsidizing the most profitable industry in the world? Why are governments literally subsidizing climate change? I thought that subsidies were supposed to be for new emerging industries, not highly profitable, mature ones.
And so I question how relevant the discussions are at Davos when world leaders are addressing symptoms, rather than the root causes of the challenges we face. And our economic system is liquidating natural capital and recording it as income.
Jim Harris is in Davos at the World Economic Forum for the launch Corporate Knights' Global 100 -- the ranking of the 100 most responsible firms with a market cap of $2 Billion or more which are doing the best job of charting a sustainable path based on 12 key performance indicators. For more information see http://www.global100.org/ You can follow his live tweeting from Davos at @JimHarris]]>How Much Can Business Influence the Environment?tag:www.huffingtonpost.com,2012:/theblog//3.21941542012-11-26T17:25:41-05:002013-01-26T05:12:01-05:00Jim Harrishttp://www.huffingtonpost.com/jim-harris/This is the eleventh blog and final blog for 2012 in a weekly series on how sustainability can save business. It appeared on Tuesdays, and will commence again in 2013.
Our first blog, How Sustainability Can Save Business, reframes the common purpose of traditional Corporate Social Responsibility (CSR) practitioners -- that of "saving the environment." Our premise: Given the social and economic frameworks and institutions of our society, more can be accomplished (and faster) by viewing sustainability as an economic opportunity relevant to business, compared to viewing it as an environmental initiative in isolation of business. Therefore the goal of "saving the environment" may be more appropriately framed as "saving business."
Our perspective is pragmatic; that the worthy purpose of "saving the environment" is destined to be ineffectual, and at best immaterial, if environmental initiatives are pursued in isolation of the economic engines and structures of our society -- that is, capitalism, business, government and the active participation of other organizations and individuals within this framework. It is within this framework that companies are applying a central guiding principle to their business sustainability strategies -- "derive economic benefits from improved environmental and social outcomes." Why? Because it delivers results.
We do not argue the desired outcome of healthy people and a healthy planet, and an economic framework that includes a broader social purpose. Indeed, we align on these values. After all, Jim was leader of the Green Party of Canada and Tyler used to earn his living as a conservation biologist in the forests of British Columbia, Alaska and the Northwest Territories.
It's just that we don't really think we have time to wait for traditional approaches to environmentalism to be successful. Similarly, we do not argue the value of traditional environmentalism and the vital role it continues to play within our society; rather, we simply note that traditional approaches to environmental objectives have failed to deliver results at the scale that's required and in the time frame that's required. In short, traditional environmental methods have not been successful enough, fast enough.
During the interim, some businesses have demonstrated that they can implement and scale the environmental benefits far better traditional approaches to "saving the environment" while also delivering shareholder value. For example, Canadian Tire estimates that they have accumulated an annual benefit stream of approximately $25 million in cost avoidance since launching its Business Sustainability Strategy in 2008 and reduced its transportation and real estate greenhouse gas footprint by 9 per cent while actually growing -- increasing their tonne-km of product shipped by 22.5 per cent and the amount of real estate area by 9 per cent!
This applied eco-capitalism favours free market principles to achieve environmental objectives. Which is convenient, since business will find itself in an economic context in which sustainability issues will increasingly influence financial performance and global trade.
As such, our observation is this -- for profit seeking companies, sustainability is most successfully employed as a strategic framework for innovation, value creation, employee engagement and organizational improvement -- while generating environmental benefits. What's excites us most about this approach, is that it would appear that Canadian business also shares this view.
Companies are informed and engaged; some even track, manage and mitigate their GHG emissions with internal rates of return (IRRs) at multiples of the cost of capital. And some incorporate internal carbon pricing into management discussions and decision-making. Many have discovered that business sustainability issues are production issues, supply chain issues, marketing, sales and customer issues, and post-consumer use issues. In short, they are economic issues in addition to being environmental issues, and we say, engage them as such.
Most recently, Perrin Beatty, the president of the Canadian Chamber of Commerce, has echoed this opportunity in a policy paper on strategic partnerships among Canada and Mexico, noting that carbon pricing is an area that may be ripe for bilateral Canada-Mexico collaboration. It is interesting to note that Beatty served as a Member of Parliament for the Progressive Conservative Party of Canada for 20 years (1972-1993) and served as a Cabinet Minister.
Change is afoot. The environmental community knows it; the business community knows it. All we need is for Canada's government to know it -- to recognize the opportunity and collaborate with business and the rest of society to build the policy framework that will enable us to participate in the greatest entrepreneurial imperative of our time, the creation of economic benefits from social and environmental leadership.
Which brings us to the original question: Will business influence Canada's approach to environmental issues? We think they already are. And perhaps the question should be: How successful will business be in influencing Canada's approach to environmental issues?
We are going to take some time over the holidays. So all the best for the holidays and Happy New Year to all our readers. Thank you so much for your support, feedback, and getting the word out about this blog! So this will be our last blog for 2012. When we return in 2013, we'll continue to highlight how Canadian business is innovating from the inside out to begin to address many social and environmental issues.]]>Why CFOs Need to Care About Sustainability -- Nowtag:www.huffingtonpost.com,2012:/theblog//3.21590882012-11-20T11:23:10-05:002013-01-20T05:12:01-05:00Jim Harrishttp://www.huffingtonpost.com/jim-harris/ This is the tenth blog in a weekly series on how sustainability can save business. It appears every Tuesday.
Chief Financial Officers (CFOs) and Chief Operating Officers (COOs) are increasingly accountable for sustainability. A study by Deloitte -- Sustainability: CFOs are coming to the table -- found their accountability for sustainability had jumped sharply during the last year. In 2012, 26 per cent of CFOs were responsible to the board for their firm's sustainability strategy, up from 17 per cent in 2011. Similarly, for COOs it was 10 per cent in 2012, up from 3 per cent in 2011. Further, 53 per cent of CFOs said their involvement had increased in the last year, with 61 per cent noting they expected it to increase over the next two years.
The increasing relevance of business sustainability to financial performance and shareholder value was also highlighted in a recent study by the Chartered Accountants of Canada (CAC) -- Sustainability: Environmental and Social Issues Briefing, which noted that "key environmental issues, stakeholder trust and relationships and an evolving environmental and social legal and regulatory landscape are interconnected and impact strategy for competitiveness, risk and resilience."
The report draws attention to the many environmental and social issues of relevance to directors in discharging their oversight responsibilities, including strategy, risk and risk oversight, financial performance, external reporting, and the reliability of reported information.
When Canadian Tire began reporting its environmental footprint and the results of its business sustainability strategy in its core financial documents in Q3 2010, Marco Marrone was the Corporation's CFO. (He is now COO of Canadian Tire Retail.) Rather than issue a separate corporate social responsibility report communicating its environmental footprint, annual productivity gains and reductions in GHG emissions and waste, Marrone oversaw the transfer of business sustainability measurement and accounting from the Business Sustainability function to the Finance and Accounting function, along with adding the associated due diligence of the Corporation's CEO-CFO Certification Process. This enabled the Corporation to build upon the measurement of business sustainability performance in its operating plans, and integrate sustainability into its public quarterly financial reporting. There are a number of reasons:
"When you report measures, you don't want people to question the measures," says Marrone. "So we embedded sustainability measures into our external reporting for two reasons: it is great to provide the external world with updates on our sustainability programs; but putting the numbers through the rigor of our certifications process for external reporting is extremely important. Those numbers have to go before our audit committee."
Embedding sustainability in a company's financial DNA enables executives to communicate business sustainability issues, strategy and results with confidence to the board, while also signaling to every manager that sustainability is measured on the profit and loss statements of the organization. And as the saying goes, what is measured is managed.
An Ernst & Young study -- Bottom-line benefits of sustainable business practices -- looked at some of the drivers for the CFO's involvement in sustainability. First was managing risks (56.9 per cent); second was cost reduction (52.3 per cent); then stakeholder expectations (47.4 per cent), revenue generation (38.3 per cent) and finally government regulation (33.5 per cent).
Managing Risk As Marrone notes: "We've looked at what would happen in a carbon-constrained economy. At a cost of $30 per tonne, in many cases, the impact to the cost of goods sold could be in the low single-digit percentages. However in some product categories, the cost of goods sold could be 30 per cent or 40 per cent higher. The modeling has allowed us to quantify carbon price-risk in these categories and identify how we can take energy and carbon out of the equation. That's how we are working to manage risk."
Meeting Stakeholder Expectations
The CAC report noted above also emphasizes that understanding how business sustainability issues affect stakeholders and their expectations can be an important source of insight for management, helping to identify opportunity and risk, with positive relationships contributing to trust, which is essential for competitiveness and resilience.
For example, a staggering 92 per cent of graduating MBAs want to work for a socially responsible company, according to a 2007 MonsterTRAK.com survey. This is becoming increasingly important to Canadian retailers as more and more foreign retailers enter Canada and compete for talent and market share.
Friedman's edict -- that "the business of business is business," and the creation of shareholder profit, its fundamental mandate -- is just as true now as it ever was. Yet what has changed is the context within which business operates, and thus how one interprets and applies this edict.
In 2022, Canadian Tire will celebrate its 100th year in business. The competitive forces acting upon it continue to change; they are fundamentally different today compared to 1922, and they will be different yet again in 2022. And so, executives and directors should not be surprised by shifts in business criteria, scope of considerations and sources of value, or changes in the business activities required to deliver a winning value proposition. After all, in the broadest sense, is not the management of such considerations at the root of a business's sustainability?
]]>Will Canada Take Action on Energy?tag:www.huffingtonpost.com,2012:/theblog//3.21204192012-11-13T12:34:39-05:002013-01-13T05:12:01-05:00Jim Harrishttp://www.huffingtonpost.com/jim-harris/This is the ninth blog in a weekly series on how sustainability can save business. It appears every Tuesday.
The paper highlights how Canada can build a more competitive economy and a more sustainable society while ensuring adequate public finances to fund Canadian's way of life. It calls for the federal government, in partnership with the provinces and territories, to develop a national energy framework, specifically to "develop clean energy solutions and position Canada for leadership internationally."
And, contrary to current inaction, the CEOs urge Canada to take the lead in establishing a bilateral energy and climate accord with the United States to incorporate Canadian interests, and secure greater cross-border collaboration on energy, climate change policy, technology and trade.
The CCCE stresses that a bilateral approach does not mean that nothing can be done until there is clarity on US action; rather, it argues that we must begin to prioritize areas for coordination and ensure that our policy is adaptable to the eventual US system. One thing is certain; during the interim, we cannot expect the Americans to adequately represent Canadian interests in our absence.
Proffering five strategic recommendations, the CCCEs argue that a national approach to climate policy and carbon pricing should be implemented, beginning with a relatively low price and rising over time. Revenue from this should be available as incentives for companies and individuals to adopt cleaner technologies, products and services and shift consumption from high energy intensive goods to lower intensity.
A staggering 88 per cent of CEOs say that innovation is important to grow their top line and increase profitability according to a study by Leger Marketing in conjunction with The Globe and Mail. But only 33 per cent of CEOs are happy with the current results that they are achieving. Among other things, a price on carbon would stimulate innovation because it would give business a greater payback for increasing the efficiency of their operations.
Back to the CCCE paper: the best answer to rising energy costs and environmental impacts associated with energy use is energy efficiency. The most energy efficient countries will have a great competitive advantage in a world of expensive energy.
The paper points out that Canadian electricity production makes use of less than 50 per cent of the energy source used in generation! Coal, nuclear and gas-fired electricity generation plants use only one third of the energy -- the rest goes up the smoke stack as "waste" heat. But it doesn't have to be that way.
Denmark, the global leader in co-generation [also known as Combined Heat and Power (CHP) or district energy], uses that "waste" heat to heat buildings, hospitals and entire towns. CHP or co-gen increased the efficiency of Denmark's electricity production from Canada's 33 per cent to 90 per cent! Imagine tripling the efficiency of the Canadian electricity grid with one simple strategy!
Figure 13 in the CCCE paper articulates the benefits of a climate strategy that engages the end user of energy. On average 100 units of energy of natural gas generating electricity converts into only two units of lighting energy! Meaning that only 2 per cent of the energy generates productive end use -- and 98 per cent is lost due to inefficiency. Is this sustainable from a business perspective? No; and it highlights the value of energy and climate policy being broadly applied across the economy, including consumer end-use.
Jim loves to tell the story about the first oil crisis of 1973 -- when the price of oil quadrupled in just 18 months. Japan recognized how vulnerable its economy was to rises in oil prices -- as the country imports 100 per cent of its oil. So the Ministry of Industry and Trade (MITI) began the most aggressive energy efficiency program in the country and the world's history.
Japan's heavy industries -- pulp and paper, cement, petrochemical and steel -- were able to improve energy efficiency by up to 35 per cent in the following years.
Steel making is hugely energy intensive. By 1987 US Japanese Steel makers were using 41 per cent less energy than US steel makers. And the impact? Over the next 13 years 300,000 American steelmakers lost their jobs, with energy inefficiency being a significant factor. So was energy inefficiency an advantage or a ticking time bomb for America's economy?
In terms of energy efficiency, Canada has the second worst economy of the G8 countries: Germany, for instance, produces almost twice as much GDP for each unit of energy input. Only Russia is worse, but seriously, who wants to benchmark the Canadian economy against Russia's? The world average is 6.1 so Canada not only lags among the G8 but also worldwide:
G8 GDP Produced per Unit of Energy (PPP $ per kg of oil equivalent in 2009)
In summary, we need not wait for others to develop smart policy to promote energy development and environmental stewardship as mutually reinforcing objectives with Canadian interests in mind -- it won't happen and we have more at stake.
Nor should we wait for the Americans to dictate to Canadians our national approach on energy and climate, what qualifies as "renewable" energy or the treatment of embedded carbon in our exports to the US. Canadian business wants to do more; but, we need a policy roadmap that is clear, predictable, fair and efficient, and we need leadership and representation on the international stage so that Canadian firms selling into the US and other markets are not unjustly subject to carbon tariffs or other border adjustments.
]]>Why Culture Eats Strategy for Breakfast (Part II)tag:www.huffingtonpost.com,2012:/theblog//3.20757872012-11-06T08:56:28-05:002013-01-06T05:12:01-05:00Jim Harrishttp://www.huffingtonpost.com/jim-harris/This is the eighth blog in a weekly series on how sustainability can save business. It appears every Tuesday.
Last week we emphasized that culture trumps strategy every time, and that the key to unlocking the value of any strategy is to understand and harness the corporate culture within which the strategy is being implemented.
Implementing a sustainability strategy within any business is equal parts strategy and change management. And, to be successful, one should use the momentum of the forces that oppose change -- the cultural values, practices and inertia of the organization -- as the channel into the business and its operations, a sort of "cultural Judo" to embed sustainability values into the business and its culture.
Every Corporation has a Culture
Implementing a sustainability strategy into the business of a large U.S. retailer proved challenging because the "corporate culture possessed strong anti-bodies," noted Tyler to colleague -- who had only ever worked for the one company, for decades.
"What corporate culture?" replied his colleague looking slightly confused. "We don't have a culture."
Tyler's instant reply was: "Yeah right, and a fish doesn't know it's living in water."
Every corporation has a culture. Some are more "in your face" than others -- such as those that kick-off meetings with a corporate cheer -- and, if you've never really worked anywhere else, you might not even realize it's there.
Friendly and pragmatic... How very Canadian
Canadian Tire's corporate culture is strong yet subtle. Those who've worked within the company described it as "almost too nice," "relationship-based" and "risk-averse" if not a somewhat dry, analytical and pragmatic.
If you're a change agent within the company, you'll no-doubt encounter a common phrase: "I'm not comfortable with that." After working with U.S. corporations for years, Tyler describes it as "very Canadian."
At Canadian Tire, the business case is king, and sustainability's path into the corporate culture and business operations has been all about the business case, risk-management, innovation and, more recently, the creation of good will and brand equity. The sustainability team use the mantra "In the business, By the business, For the business" to ensure that the sustainability objectives are not only in line with business objectives, but that operations ("the business") are the drivers of the economic and environmental outcomes. After all, it is operations that make "sustainability" real and tangible, not the strategy function.
In the spring of 2008, Tyler was being interviewed as a potential leader for Canadian Tire's sustainability initiative. During one interview, a veteran retail executive asked him: "Why should I care?"
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Bypassing the expected "because it's the right thing to do" response, Tyler picked a product off of the executive's shelf and explained the economic and environmental value of package right-sizing. Leading with the business case of efficiency -- proved to be a very practical, analytical and familiar approach within the Canadian Tire culture.
Leading with a belief- or values-based argument would have set off alarm bells. Instead, the objective has been to incorporate the underlying values of business sustainability into the culture over time on a foundation of eco-efficiency and tens-of-millions in annual cost avoidance. Tyler jokes: "It may be the right thing to do, but if that's your only rationale for your sustainability strategy, you're either a non-profit, or soon to become one."
During the first two years of implementing the sustainability strategy, the business focused on eco-efficiency and later tackled more complex and values-based ideas such as sustainable design. The real estate team was already focused on efficiency, and in 2008 began implementing energy efficiency lighting retrofits at hundreds of stores. The initiative delivered excellent returns, recovering the more than $30-million capital investment during the third year of the project and delivering an internal rate of return (IRR) of 23 per cent -- all the while reducing the energy and carbon footprint of operations.
This was soon followed by the installation of central energy management systems to reduce energy use and the carbon footprint of the stores. This project recovered the initial capital investment during the second year of the project and delivered an IRR of 38 per cent!
Although this path of focusing on eco-efficiency and the business case before tackling more complex and abstract concepts such as sustainable design may be seen by some as overly pragmatic and perhaps comparatively dry to an evangelical call to action, the business case for sustainability formed the essential foundation for engaging business operations, executives and the Board.
After a couple of years of focusing on eco-efficiency, the scope of implementation expanded to include sustainable design of packaging and later products, with one buyer and a long-time strategic supplier producing an award-winning line of household storage and container products made from the recycled plastic collected from Ontario's curb-side Blue Box program. However, business sustainability may not have ever gained traction if the strategy had not first proven its worth via eco-efficiency.
The culture and its focus on the numbers and the business case is also why Canadian Tire placed so much emphasis on measurement and reporting of the economic and environmental benefits of the strategy. In Canadian Tire's culture, information, examples and data points enable the Business Sustainability team to have influential conversations with colleagues and give credit to those within the business for the economic and environmental benefits from their work. And accordingly, this has enabled and guided the implementation of the strategy as it expands its scope to additional operational functions and business units.
Today, Canadian Tire is a leader for its integration of sustainability with the business. We measure and communicate progress quarterly, with metrics and performance linked to operational plans, compensation and core financial documents. And while this may have made the company a leader in this field, it is really just a product of what was required for sustainability to be successful within the corporate culture.
And yes, while an emotive call to action on business sustainability among its employees is largely absent at Canadian Tire, it does not mean that that this cannot evolve over time; it simply means that it was not the best way to initially engage the business.]]>Why Culture Eats Strategy for Breakfasttag:www.huffingtonpost.com,2012:/theblog//3.20377022012-10-30T00:00:19-04:002012-12-29T05:12:02-05:00Jim Harrishttp://www.huffingtonpost.com/jim-harris/This is the seventh blog in a weekly series on how sustainability can save business. It appears every Tuesday.
"Culture eats strategy for breakfast, every day." This was Tyler's response to a question during a panel session at a recent conference. The panel was discussing the challenges faced by professional managers in their efforts to implement sustainability into business.
The other challenge under discussion was about finding the appropriate balance between sharing insights and strategy with others, versus holding some things back for the competitive reasons.
Tyler's comment was relevant to both. His point: having a strategy is one thing, but being able to implement it is entirely another. After all, the value of a strategy is not what is written on the whiteboard or the back of napkin, it is the value unleashed by engaging the minds and hearts of motivated employees and suppliers.
The key to unlocking this value is to understand and harness the corporate culture, work within its bounds and value system, while making room for new ideas. Enterprise Risk Management colleagues refer to the ability to implement a strategy (or not) as "execution risk."
Tyler has been fortunate to have had the experience of developing and implementing business sustainability strategies over the past decade in three different, very large corporations: a $14 billion company, a $400 billion company and Canadian Tire, a $12 billion company. In every instance he had to tailor his approach to the culture's unique value system and the process by which ideas are accepted into the community.
Making Room for New Ideas
New ideas may not easily find room to coexist with pre-existing ones: There is a natural institutional and cultural inertia that opposes new concepts that compete for acceptance within an established corporate culture. It's like a new group of people joining a cocktail party that is already well underway. They are either accepted, adding to and changing the pre-existing dynamic -- tolerated as a fringe element, talking amongst themselves in the corner of the room -- or totally rejected and asked to leave.
In short, one must tailor how the building blocks of the strategy are applied so that they are accepted. This is a very difficult to achieve, particularly for new employees, or "outsiders" tasked with this agenda. And believe us, we've both made a few mistakes; but, we've also learned that it is important to push the boundaries as well. The trick is knowing when and how to do it.
During the launch of the sustainability strategy for Tyler's previous employer (a global retailer headquartered in a "dry county" of a US state in the buckle of the Bible belt) business sustainability "milestone meetings" were held every four months for employees and key suppliers to listen and learn from external sustainability leaders, and to share employee progress and success stories.
At one meeting, Ray Anderson, the Founder of Interface carpet, was the guest speaker. [As an aside: Interface's 15 year sustainability effort has driven $450 million to the bottom line in savings -- equal to 28 per cent of the cumulative operating profit over that period.] When Ray was part way through his talk people began to walk out -- right in front of the CEO, Board members, senior executives and several hundred employees and guests. Tyler was astonished and had no idea why, or how people could be so rude or have such disregard for a guest speaker.
Later, as he found out via a few blunt e-mails from some of those who had left, he learned that Ray's use of the geological time scale and comparing it to a 24-hour clock to demonstrate how relatively little time humans had been on the planet -- a few seconds on Ray's clock -- and yet had how much we had changed it, was offensive to their fundamental religious beliefs
Being Canadian and new to the US south, being an atheist and someone who had studied geology, Tyler had no idea that such ideas could be a source of friction -- that there were still people who believed that the world was only several thousand years old. Who knew?
Debriefing with the CEO after the meeting, Tyler apologized for the cultural oversight. The CEO waved off Tyler's apology and expressed his disappointment at those who had left the meeting because, as he saw it, part of the value of the business sustainability strategy was opening up one's perspective to those of others, to listen and learn about what matters to other people and their value systems. To this very day, one of the core competencies Tyler stress's and includes in job requirements is the ability and wiliness to:
• Raise potentially controversial issues in a manner that encourages dialogue;
• Listen to others while maintaining a wide perspective on issues; and
• Incorporate diverse views and constructive criticism, leading to improved outcomes and understanding.
You Gotta have Faith
Reflecting upon his first few months in his new context, Tyler began to see a pattern of behaviour and expression of acceptance of sustainability into the culture by employees as almost evangelical in nature. People expressed acceptance of business sustainability as they would a faith-based belief system.
It hit Tyler smack in the face when, during one of the regular Saturday morning meetings, a senior vice president stood up and declared that he was now "a believer" in sustainability and its value to business because, if it was not for the business sustainability initiative, he would not have been able to sign the deal with "The Eagles" for the retailer to be the sole distributor of their retrospective CD box set. As it turned out, it was the underlying value system of sustainability that helped the west-coast musicians relate to the executive from rural middle-America. That deal alone probably paid for the entire sustainability team's payroll and consulting budget for the next decade.
A beer-drinking Canadian atheist in the Republican dominated dry-county in the US Bible belt, Tyler had his work cut out for him for the next business sustainability Milestone Meeting. The featured guest speaker was non-other than the former Vice President Al Gore, who was going to give his now famous An Inconvenient Truth talk and promote his movie. If some people didn't believe the world was more than a few thousand years old, how the hell would they ever "believe in climate change" -- from a democrat politician?
Remember, culture trumps strategy every time: As it turned out, the answer was to open up with a preacher as the Vice President's warm-up act. Jim Ball, the Executive Director of the Evangelical Environmental Network, kicked off the meeting's discussion on climate change playing to the home-town audience -- talking about how climate change has repercussions for "the health of our children" and "global and domestic poverty" because it is the world's poor that will be most affected by it.
Jim's message was that climate change was not a political issue; rather, it is an issue of moral duty. "How we care for God's creation is one of the greatest moral challenges of our time. And as Christians, we also know it is a challenge that cuts to the heart of how we promote and cherish life."
After this meeting, "belief" in climate change was never an issue, and Al Gore received a standing ovation.
In closing we offer you this observation: Implementing a business sustainability strategy into any business is equal parts strategy and change management. They are intertwined and dependent. To be successful, one should use the momentum of the force that oppose change -- the cultural values, practices and inertia of the business -- as the conduit into the business and its operations. It's like using a sort of cultural Judo to embed sustainability values into the business operations and its culture.]]>What's Really Killing Print Journalismtag:www.huffingtonpost.com,2012:/theblog//3.20064252012-10-24T00:00:21-04:002012-12-23T05:12:01-05:00Jim Harrishttp://www.huffingtonpost.com/jim-harris/Newsweek magazine announced it will become a digital only publication in 2013, ending 80 years in print.
This graph is published with the permission of SEMPO, you see details here.
I attended the Canadian Journalism Foundation event on this topic last week in Toronto titled: "Gutenberg's Last Stand: Reinventing the Modern Newspaper." And asked the panel of industry leaders: "Now that SEO is larger than the newspaper industry in North America -- why haven't newspapers expanded into this area?" I didn't get a satisfactory answer. It's simple: SEO is out of the scope of the traditional newspaper business model.
I had to smile when the editor of the Toronto Star was commenting on how the Star's articles weren't winning top ranking in Google's organic search -- some pieces ranked below those from the Brandon Manitoba Sun.Toronto Star editors then had to learn how Google algorithm works, and how to optimize headlines and articles for that ranking. So newspapers on the print side have begun to optimize for Google rankings, but the business side of newspapers hasn't. They are choosing, instead, to leave billions in revenue to a highly fragmented market of SEO firms.
It's a classic case of disruptive innovation that I talk about in my book, Blindsided!The print industry enjoyed rich margins for decades. Then along came Google and it was willing to make only pennies for advertising revenue where the print made dollars. Google made up the difference on volume.
Online traffic was so minuscule when Mosaic launched in 1993, Netscape in 1994 and Internet Explorer in 1995, that the newspaper industry could legitimately ignore this new medium. But as the Chinese say: "It is easier to step on a dragon's egg than it is to step on a dragon." The time to get involved was early when the stakes were low. The Huffington Post launched in 2005 and Google News in 2006. But the print industry's decline began years before the launch of either.
People are increasingly consuming information through video. While I, for example, have shot some videos for The Globe and Mail -- newspapers -- in print and online -- are still 99 per cent print. YouTube has hit four billion views per day and is the second largest search engine worldwide (it's also owned by Google). So what business are newspapers in? The business of print? Or the business of news? Of insight? Of commentary? Of immediacy? And if so, it should be in a 21st century form.
Ultimately it has been the newspaper industry's failure to adjust to market forces -- the failure to change as swiftly as the public news consumption patterns. Newspapers have failed, so far, to acquire the skill sets required for print journalism in the 21st century. And the industry has failed to understand just how deep and profound these changes are.
Here's another irony: I pitched this column to a number of print publications -- because it's an interesting story in my opinion -- but none would print it (surprise!). So I decided to publish it here on my HuffPost blog. If you like this, please subscribe to my RSS feed, tweet about this (I'm @JimHarris on Twitter)
Jim's HuffPo blog on electoral fraud was the #1 HuffPo blog of the day, week, and month when it was published with ~20,000 likes, shares, tweets and comments.]]>The Benefits of Carbon Shadow Pricingtag:www.huffingtonpost.com,2012:/theblog//3.20010042012-10-22T10:41:52-04:002012-12-22T05:12:01-05:00Jim Harrishttp://www.huffingtonpost.com/jim-harris/This is the sixth blog in a weekly series on how sustainability can save business. It appears every Tuesday.
Placing a shadow price on carbon can help a company cut costs, while dramatically reducing its risk and exposure to rising energy prices and a price being put on carbon.
One of the roles of corporate strategy function is to assist the CEO and board in managing strategic uncertainty and risk. Knowing that it's impossible to accurately forecast future events, one of the jobs of corporate strategy is to develop scenarios of potential future realities, strategies for these scenarios, and a portfolio of options that may be exercised in the event that a scenario comes into being.
Royal Dutch Shell is perhaps the best known example of a company using scenario planning to prepare for future events, beginning in the 1970s. Shell's scenario planning prepared it for the first oil crisis in 1973 -- when the price of oil quadrupled in just 18 months. Most recently Shell has been using scenario planning for developing strategies mitigating the effects of climate change.
The greater the value of resources and time invested in a strategic commitment -- such as developing a new oil field or pipeline -- the greater the value of scenario planning is to an organization. But a firm doesn't have to be a multinational oil company to get value from managing the risk that is implicit in any business strategy.
Planning for a Carbon-constrained Economy
Placing a price on carbon of anywhere from $10 to $80 a tonne can have a profound effect on business planning. It immediately highlights the areas of business operations that will be negatively affected when a price is finally put on carbon. Using a shadow price can assist management in quantifying and identifying material risk and making strategic decisions on how to take action to mitigate that risk -- such as by reducing the energy and carbon associated with material composition of products, manufacturing process, product sourcing and transportation decisions and other business activities.
Doing so identifies "hot-spots" in the value chain and often opportunities for reducing risk where it is currently profitable to do so, financing the mitigation of future commodity and carbon price-risk via energy savings and cost avoidance today.
Canadian Tire has been doing this for four years. Managers coined the term "carbon price-risk" and defined it as the potential economic cost to the value chain of carbon being priced. Managers can tell their executives and the board how a price on carbon will affect the average cost of goods sold, which product categories will be hardest hit, whether or not the energy mix in one country versus another should affect sourcing decisions, and how it could affect transportation practices. And, most importantly, what strategies the company can put in place today to mitigate and prepare for a carbon-constrained world.
The right mind-set makes all the difference
Upon framing the issue in terms of business performance and risk -- as opposed to the traditional language of corporate social responsibility (CSR) -- the concept of carbon price-risk becomes real and relevant to strategy, the C-suite and the board. Two things become immediately apparent:
First, one does not have to "believe" in climate change to see the value in developing strategies and options for addressing risk. Whether one believes in climate change is irrelevant when the risk is 1) rising energy prices (which are inevitable over the long-term) and 2) legislative and likely to be a significant issue in international trade.
Second, it establishes the value chain as the appropriate scope for strategic thinking, scenario planning, and mitigation -- far beyond the traditional corporate mindset and boundaries of "responsibility." After all, it does not matter if your corporation is "responsible" for the carbon emissions or if it is in a distant third-party in your value chain; in the end, the cost will be passed on to the consumer, like all costs -- which is a good thing, because it promotes better decision-making.
Placing a shadow price on carbon is a powerful tool for corporations to use. It exposes the carbon risk inherent in operations, and it allows management to communicate that risk to the Board and executives -- who are tasked with mitigating risk and ensuring the long-term competitiveness of the company. Which brings us to an important question...
What's your company's carbon price-risk and what are you doing about it?]]>A Little Less Cardboard Can Save You Millionstag:www.huffingtonpost.com,2012:/theblog//3.19669042012-10-16T07:25:26-04:002012-12-16T05:12:02-05:00Jim Harrishttp://www.huffingtonpost.com/jim-harris/This is the fifth blog in a weekly series on how sustainability can save business. It appears every Tuesday.
Using sustainability as strategy can drive change within a company's supply chain by engaging suppliers and service providers with the resulting savings running into the millions of dollars a year.
A case in point: one of Canadian Tire's most popular products is a six-foot folding utility table, selling many tens-of-thousands a year. The company collaborated with its supplier on product redesign and packaging to use less raw materials to make and package the product. Now, the tables use 11 per cent less plastic in their construction and occupy 15 per cent less volume for shipping. The annual savings for Canadian Tire: more than $375,000 a year as a result of reduced material, packaging and shipping costs.
Employee Engagement
Sustainability as strategy can also engage employees. In 2010, Canadian Tire's Senior Vice President of Merchandizing invited all the company's buyers to the conference centre for an afternoon departmental meeting. Employees thought it was to discuss organizational restructuring. Before the start of the meeting, the conference centre was very quiet.
The goal, it turned out, was to engage buyers in a creative way -- to shake things up -- to facilitate some disruptive innovation on something that should have been a core element of their business activities, but at the time wasn't.
Corporate thinking is often to execute on a perfect plan -- in this case, we wanted to take buyers out of their usual, comfortable environment and see what insights could be developed by briefing them on a subject and then turning them loose in a store to see how they could apply it. We wanted our buyers to see things with new eyes.
At the conference centre the buyers learned the real purpose of the event: to gain new insight into how packaging sustainability can affect profitability and the environment. After a couple of presentations, the group boarded buses to a local Canadian Tire store where the goal was to discover examples of "stupid packaging" -- examples of too much packaging, improper packaging, or even too little packaging resulting in damaged product, waste, squandered energy use, and excessive greenhouse gas emissions from shipping damaged product that can't be sold.
The buyers identified over 3,000 examples and calculated the potential savings to the company of improving the packaging into the millions annually in cost avoidance. One of the best finds: the company sold a tool for opening plastic clamshell packaging. And guess what? The tool came in a thick plastic clamshell.
Prior to the session buyers really hadn't seen the relevance or value of packaging to profitability. The session kicked off a disciplined, systematic focus on package right-sizing that each year results in hundreds of packaging changes and is generating more than $3 million annually in avoided costs.
In 2011 and 2010, Canadian Tire completed 320 packaging changes that saved the company $6.3 million in costs, while reducing greenhouse gas emissions by more than 4,300 tonnes each and every year the products are stocked.
Of course to sustain such an initiative requires more than just a bus trip, it also requires the systems and structures to support and foster the ongoing effort, such as good measurement, reporting -- and aligned incentives -- now going into a third year.
Mitigating Risk
There's another reason for companies to focus on cutting unnecessary packaging. Extended Producer Responsibility (EPR) costs are rising dramatically. Since 2004 stewardship fees charged to companies and the associated cost of managing dozens of different EPR programs across Canada have grown at a cumulative average rate of 38 per cent.
This dramatic rise has been driven by four factors: 1) implementation of EPR legislation in provincial jurisdictions across Canada; 2) increasing rates being charged for products and packaging under EPR programs; 3) a shift of those costs from government to business, and 4) the data management, point of sale and other systems and resources required to manage them.
The cost of the Blue Box program used to be shared equally between companies and the government. But today, corporations are paying all the blue box fees. For Canadian Tire in 2008, fees alone were $8.9 million and these basically have doubled to $18.5 million in 2011. In 2008 only 4,000 products had environmental fees and this has grown almost six-fold to 23,541 at the end of 2011 with many products being attached to multiple programs in different provinces.
Fees are based on the type of material used and the weight and volume of packaging. Having a disciplined focus on packaging materials and right-sizing can decrease the fee rates applied and the volume and weight of packaging, dramatically mitigating costs and the risk of increasing EPR fees.
Of course there is a balance that needs to be achieved: packaging can't be reduced so much that it results in higher damage rates to the goods being sold.
Rightsizing packaging also resonates with customers, as the number one complaint re sustainability from customer is excessive packaging
So using sustainability as strategy is a way of engaging employees, suppliers and service providers in a concerted effort to drive innovation within retail, to drive out waste and inefficiency, and to lower the corporate footprint and reduce the liability to extended producer fees. We believe all retailers should be aggressively pursuing sustainability as strategy.]]>There's More Oil in Detroit than Saudi Arabiatag:www.huffingtonpost.com,2012:/theblog//3.19500302012-10-09T00:54:28-04:002012-12-08T05:12:01-05:00Jim Harrishttp://www.huffingtonpost.com/jim-harris/This is the fourth blog in a weekly series on how sustainability can save business. It appears every Tuesday.
Transportation accounts for 29 per cent of US and 26 per cent of Canada's Greenhouse Gas (GHG) emissions. It also accounts for 70 per cent of oil consumed in North America is used for transportation.
In the US, passenger cars, SUVs, pickup trucks and minivans account for 59 per cent of transportation GHG emissions while freight trucks represent 19 per cent and commercial aircraft (both domestic and international) account for 12 per cent.
Canadians drive more than 300 billion kilometres (186 billion miles), each driving on average 16,000 km per year.
All in all, it is billions of barrels per year. And what's the potential for savings? Huge!
First off, if every car in North America got the same fuel efficiency as Jim's Toyota Prius, there'd be no need for oil imports into North America. And there'd be no need to drill in the Gulf of Mexico or to drill in the Arctic.
In other words, the billions of dollars that the US sends to Middle Eastern countries to import is a choice. By choosing not to regulate for higher fuel efficiency standards, the US voluntarily sends billions of dollars to foreign countries every year and unnecessarily exposes itself to environmental, economic and political risk. Roughly half the US oil consumption is from imports.
This has led Amory Lovins to state that there's more oil in Detroit than in Saudi Arabia. There's actually no oil in Detroit, but the reluctance of auto executives to pursue higher fuel efficiency standards, imposes billions of dollars of cost on North American companies and car owners.
Canadians put an average of 16,000 kms a year on a car. Logically, high-use cars -- taxis, and those used by sales reps, repair people, and long-distance commuters -- should be the most efficient vehicles possible. If cars are company owned, simply ensure that they're an efficient model. Or ensure that only efficient cars are available for high-use functions.
Similarly, if the company re-imburses employees for the use of their cars, the CRA standard is 53¢ a kilometre, a policy paying a premium for using high-efficiency vehicle -- such as a Toyota Prius, Smart Car, Nissan LEAF, Mitsubishi i-MiEVm, Honda Civic Hybrid, Honda Insight -- might seem counter intuitive, but it would help shift employees into more efficient vehicles. When oil rises to the $225 a barrel -- as former CIBC Chief Economist Jeff Rubin predicts it will -- companies that have incented employees to shift to high efficiency vehicles will reap significant financial benefits for their leadership.
Long-Haul Trucking --the average long-haul truck in North America is only loaded to 50 per cent capacity! Empty backhauls or deadhead miles are the largest contributor to fuel waste. Some experts suggest that load optimization software and freight matching web-based systems could cut deadheading by 90 per cent. In Canada, Sustainable Development Technology Canada (SDTC) notes that empty backhauling results in one in every three trucks on Canadian highways being empty and more than half are not fully loaded.
Auxiliary Power Units (APUs) -- allow the cab to be heated or cooled while the driver sleeps without having to keep the truck idling. This can save up to eight per cent of fuel use for long-haul trucks.
Low Resistance Tires & Proper Inflation -- can cut fuel use by up to 4-8 per cent.
Hybrid Chilling -- can save 10 per cent of fuel use.
Aerodynamic Design -- of the tractor and trailers, side-skirts on the trailer and rear fairing can reduce fuel consumption by up to five per cent according to the EPA, but according to the Rocky Mountain Institute, futuristic design could save up to 10 per cent.
Altogether these strategies can reduce the fuel consumption by more than 50 per cent in the North American trucking fleet. And each 1 per cent increase in efficiency reduces diesel use by 245 million gallons (927 million litres) a year!
So the available savings are significant. Which contributes to our thesis for this blog -- that sustainability can save business.]]>In Business, Don't Waste a Crisistag:www.huffingtonpost.com,2012:/theblog//3.19290882012-10-02T00:00:36-04:002012-12-01T05:12:01-05:00Jim Harrishttp://www.huffingtonpost.com/jim-harris/ This is the third blog in a weekly series on how sustainability can save business. It appears every Tuesday.
Many Canadians are trying to do more with less during this economy of thrift. But we all face essential expenses -- those costs associated with "keeping the lights on" -- often, literally.
Whether you're managing a household or a large corporation, energy -- that stuff that enables your car to move from one place to another, keeps your beer cold and your shower hot -- is generally regarded as an essential expense. Sure, you could drink warm beer and take cold showers; but really? There's got to be a better way.
During a poor economy, it can be a challenge for a business to increase profitability as competition for the "cautious consumer" intensifies and there is increasing pressure on margins. But a recession offers the perfect opportunity to question the way things have always been done -- and drive out waste and inefficiency. One of Jim's favourite slogans is: "a crisis is a terrible thing to waste."
While most are cautiously optimistic about the North American economy today, it was a different story in the latter half of 2008 when Canadian Tire launched its Business Sustainability Strategy with an aspiration to profitably grow the business without increasing energy use or contributing to an increase in the carbon footprint of the economy.
And the company has been somewhat successful: energy and fuel used to move product from vendors to stores is nine per cent lower, despite a 22 per cent increase in tonne-km of product shipped. And energy use for buildings and operations has been cut nine per cent despite more than a nine per cent increase in the amount of real estate square footage.
So sustainability cut costs and mitigated risk against rising energy prices. So how did Canadian Tire achieve this?
The first step was insight and political will. Business leaders need to view sustainability as a way of driving out waste and inefficiency -- and a strategic tool in engaging employees and suppliers in transforming operations.
Second was measuring the energy and carbon footprint of the business and its supply chain -- after all, what gets measured gets managed. This quickly identified two core operational functions responsible for most of the energy use: heating, lighting and cooling over 34-million square feet of retail space, and moving billions of dollars worth of product from over 50 countries from all over the world to a store near you.
The third step was to recognize that innovation is a social process. Employees formed "sustainable innovation networks" around buildings and operations, product transportation, and products and packaging, bringing together people from Corporate Strategy, Marketing, Merchandizing, Packaging, Real Estate, Supply Chain, Strategic Sourcing and Transportation.
These teams broke through their traditional silos to examine and optimize the systems that are Canadian Tire's extended value chain, identifying inefficiency and waste. They brainstormed what more streamlined, energy efficient operations would look like in three, five and 10 years. And then the teams brainstormed the projects and initiatives that would get them there.
With the path revealed, they began their journey and started reporting progress quarterly and measuring economic and environmental benefits.
Three years and more than 1,350 business sustainability projects later, the energy use of Canadian Tire's operations have become significantly more efficient. The amount of energy used to transport a tonne of product one kilometre has decreased by more than 26 per cent, and the amount of energy used to heat, light and cool a single square foot of real estate has decreased by 18 per cent.
That's like having more cold beer at a lower cost while doing your part for the environment -- it's a win-win-win -- or, for Canadian Tire, it's the equivalent of realizing the net profit of three and a half additional stores without actually having to build and operate them.
So sustainability is a strategy that business should be pursuing, especially in a recessionary market.]]>You Are Better Off Investing in Sustainability Than Stockstag:www.huffingtonpost.com,2012:/theblog//3.19096102012-09-25T10:58:57-04:002012-11-25T05:12:01-05:00Jim Harrishttp://www.huffingtonpost.com/jim-harris/
In just the energy efficiency (EE) field McKinsey & Company estimates that $2 trillion can be invested in EE by 2020 with an internal rate of return (IRR) of 17 per cent. To put that into perspective: that rate of return is better than investing in the stock market or in real estate over the long-term -- the two investments we're always told give the best long-term returns.
The net effect would be equivalent to cutting the need for 64 million barrels of oil a day -- about one and a half times today's entire U.S. consumption.
In a separate McKinsey study, "Reducing US greenhouse gas emissions: How much at what cost?"shows that 40 per cent of the CO2 emissions reduction strategies are highly profitable. Jon Creyts, the US McKinsey partner in charge of the study, notes that if these profits were re-invested in the next least-cost solutions, the U.S. would achieve all of its Kyoto reductions at no cost to society!
It's important to note that these two studies come from one of the pre-eminent management consulting firms worldwide -- so business leaders should pay attention.
Amory Lovins, the founder of the Rocky Mountain Institute, and one of the world's leading energy efficiency experts, has documented how North American firms could cut their energy use by 70-90 per cent using existing, proven, practical technology -- all in a way that profitable.
Multitude of Simple Solutions
One of the insights from these studies is that there is no single silver bullet -- what we need is silver buckshot. There are a multitude of strategies that can profitably cut energy and fuel costs. And solutions in many cases are simple:
If every car in North America got the same fuel efficiency as Jim's Toyota Prius, there would be no need for any oil imports to this continent. Similarly, there'd be no need to drill for oil in the Arctic or the Gulf of Mexico. When oil was $147 a barrel in 2008, the U.S. was paying $700 billion a year to Middle Eastern countries. This wealth transfer was entirely unnecessary. Aggressive fuel efficiency standards would have eliminated that transfer of wealth.
Here's another surprising one: if every roof worldwide was white, it would eliminate $2 trillion of carbon emissions. Black roofs are the industry standard. Because black surfaces retain the sun's heat, on a hot 32°C day a black roof will be 88°C while a white roof will be 43°C -- a staggering 45°C cooler. And where do engineers put the air handling equipment? Yes, on the roof! So fresh air is being drawn in at 88°C and having to be cooled to a comfortable temperature. On installation there's no difference in capital cost between a black and a white roof, and on resurfacing there is no cost difference. So imagine being able to save $2 trillion for free!
We could triple the efficiency of Ontario's electric grid by using combined heat and power (CHP). Conventional power plants, whether coal, gas or nuclear vent two-thirds of the energy as waste heat. By contrast CHP -- also known as co-generation or district heat -- uses this "waste" heat to heat buildings. This increases the efficiency up to 90 per cent. Denmark generates a staggering 54 per cent of it's power from co-gen.
And so this leaves us with the question of why aren't we executing some of these simple, economically viable -- in fact hugely profitable solutions?
Well, some are. Canadian Tire, for example, has increased its energy productivity significantly since 2008 when it first began implementing its business sustainability strategy. During that time the company has taken the "silver buckshot" analogy to heart, implementing more than a thousand individual projects that collectively add up to some big numbers.
Energy use in its supply chain has been reduced by approximately 350,000 Gigajoules a year -- that's enough energy to power more than 4,000 Canadian homes -- and all the while earning a financial return for the company in excess of its' cost of capital.
Indeed, while the sustainability opportunity is big, it's about time that we got on with it. We'd rather it be considered old news than surprising.]]>How Sustainability Can Save Businesstag:www.huffingtonpost.com,2012:/theblog//3.18897812012-09-18T08:48:08-04:002012-11-18T05:12:02-05:00Jim Harrishttp://www.huffingtonpost.com/jim-harris/
This is the first of a series of weekly columns to be published on Tuesday by Tyler Elm and Jim Harris on how sustainability as strategy cuts cost, raises revenue and mitigates risk for business.
Ever since Rachel Carson's groundbreaking Silent Spring was published in 1962, environmentalists have been trying to save the planet. While there has been progress, overall the efforts have clearly failed, because the planet is in worse shape today than 50 years ago. We need not document the litany of damage here.
Decades of experience have shown that environmental initiatives pursued in isolation of the economic benefit are largely immaterial.
But when environmental objectives are framed as business strategy and tied to business operations and measured in terms of cutting cost and increasing profitability -- significant environmental benefits are generated. Sustainability then garners executive focus and corporate resources. Companies like General Electric, Interface Carpet and Canadian Tire have realized the profound bottom-line benefit that pursuing sustainability as strategy yields.
In the early 2000's a number of environmentalists were feeling the futility of the environmental movement's historic approach to business. In 2004, this led Adam Werbach, then president of the Sierra Club -- the largest US environmental group, to proclaim that traditional environmentalism was ineffective, outdated and dead. In a grist.org interview, following his speech called the "Death of Environmentalism" Werbach noted:
"Perhaps during the many battles between environmentalists and business people we have been asking the wrong question all these years. As generally proposed, the question is: 'How do we save the environment?' As ridiculous as it may sound to both sides, the question may be 'how do we save business?' When you look at the environmental movement, at the great ecological challenges that the planet is faced with, that humanity is faced with, environmentalism has proven utterly incapable of addressing them. The reason we called for environmentalism's death is so that we could call for a new movement... (one) that can address these challenges."
And it wasn't just Werbach that was feeling this -- but he captured the zeitgeist of the time. As a result, environmentalists in greater number began working with businesses to prove that going green has incredible bottom-line benefits. This is a fortunate trend for environmentalism and business.
Sustainability as strategy is a rallying cry for driving out waste and inefficiency. It is a powerful tool for engaging employees and suppliers in an innovation strategy drive to both incremental and radical improvements in operations while managing risk. In the two year period of 2010 and 2011, sustainability initiatives saved Canadian Tire approximately $10.7 million in annual avoided costs; 215,000 gigajoules (GJ) of energy (enough to power more than 2,000 homes for a year); 14,000 tonnes of greenhouse gas emissions and more than 6,600 pounds of waste.(LINK)
Just how much potential savings could sustainability generate for corporations and society? Amory Lovins, the founder of the Rocky Mountain Institute, has documented how using best available existing technology we could reduce current energy use in North American by 70 per cent to 90 per cent without changing our current lifestyle!
The Challenge
Like many large, established companies, growing from a single Toronto location in 1922 to the national retailer and brand management company, Canadian Tire, required specialization of business by functions -- such as strategic sourcing, merchandizing, marketing, transportation, and the operation of distribution centres and stores.
While enabling the business to scale, the unintended consequence of this organizational structure is that individual functions optimize around an increasingly narrow core purpose, leading to the erosion of a system-wide perspective of the enterprise level. As silos evolve, business decisions in one area may be undertaken without the insight into the unintentional effects on other areas.
Sustainability as strategy forces siloed departments to work cooperatively to both define opportunities and devise solutions. Businesses that are using sustainability as strategy are realizing that it is the most powerful tool for driving cooperation and innovation in the organization.
The result: rethinking business activities, redefining peoples' roles, responsibilities, measurement and incentives. The experience at Canadian Tire of pursuing sustainability as a strategy has been organizational innovation, while generating millions of dollars cost avoidance, new sources of revenue, and thousands of tonnes of avoided waste and greenhouse gas emissions.
Why CSR is Not the Answer
Today, many companies are focused on Corporate Social Responsibility (CSR). As we often see it practiced, CSR is about reporting the company's activities. As a reporting function, CSR has little, if any, power to transform the organization. If we were cynical, we might say that many CSR activities are nothing more than a public relations initiative.
What excites us is sustainability as strategy. By dramatically reducing energy use -- electricity, natural gas and fuel -- companies not only cut costs, but mitigate risk against rising energy prices, and raise revenue from new products and services
Management literature has shown that the majority of change initiatives fail. But sustainability engages the hearts, minds and motivation of employees and suppliers and can become a truly transformative driver. It can drive innovation and create new business value. And tip the balance to ensure success of the change initiative.
When looking at sustainability as strategy you ask fundamentally different questions than looking at sustainability in the framework of CSR. The former focuses business performance, organizational transformation -- looking at roles, incentives, re-engineering operational processes, and creating change through the whole supply chain -- while the latter focuses on reporting.
And so we believe that environmentalism can save business, as the more powerful engagement tool that business has at its disposal to drive innovation.]]>The Only Call Harper Should Be Making is a Judicial Inquirytag:www.huffingtonpost.com,2012:/theblog//3.13417572012-03-14T07:40:29-04:002012-05-14T05:12:01-04:00Jim Harrishttp://www.huffingtonpost.com/jim-harris/
With the corruption of Adscam, the Conservatives demanded a judicial inquiry into the financial fraud perpetrated by the Liberal party in Quebec on a daily basis until the Gomery Inquiry was called. And I agreed with them.
In this case of election fraud, the Conservatives are changing their tune daily as Chantal Hébert noted in a recent column. The Conservative twisting and turning appears desperate in the daily changing of response -- and it begins to sound more and more like Watergate every day.
The only acceptable response is: "Election fraud violates our constitutional right to free and fair elections. It violates Canada's election law. It erodes Canadians' faith in our democracy. It is completely unacceptable. Canadians have a right to know exactly what occurred. And only a judicial inquiry with the power to subpoena anyone and compel witnesses to testify will expose what happened."
Seventy-five per cent of Canadians want an Independent judicial inquiry according to a national poll sponsored by the National Post and released on March 12 by Ipsos Reid.
Some national media commentary asks whether the Conservatives might get away with this and whether their failure to call a judicial inquiry will hurt their standing with Canadians. Pollster Nik Nanos believes that the scandal is just reinforcing existing prejudices, with Conservatives supporters unconcerned. By contrast Frank Graves of EKOS warns that this issue could be "catastrophic" for Conservatives.
I find this debate itself deeply offensive. Since when is democracy debatable? Since when is electoral corruption not a concern for all parties? Since when would electoral fraud go uninvestigated with all findings not made public?
In the 2006 election, campaigning on accountability and transparency in government, Harper said: "There's going to be a new code on Parliament Hill. Bend the rules, you will be punished; break the law, you will be charged; abuse the public trust, you will go to prison."
The failure of the Conservatives to now make unequivocal statements like this, and to ensure that there is a full, transparent investigation to uncover the source of the electoral fraud in the 2011 election will ultimately prove corrosive to Conservatives -- just as Watergate proved corrosive to Republicans and Adscam fatal to the Liberals.
If you think this is having no impact on right-wing politics in Canada think again: This story was broken by Stephen Maher of Postmedia News and Ottawa Citizen reporter Glen McGregor and kudos to them. McGregor and Maher are part of the Postmedia network -- the most right-wing mainstream national network of newspapers.
And from Preston Manning: "The patriarch of the current Conservative movement in Canada, says the robocall vote-suppression scandal that's rocking Canadian politics is 'deplorable.'"
This scandal is deeply corrosive the very fabric of Canada. What is more fundamental than faith in our democracy? Faith in our basic fundamental institutions, such as free and fair elections?
Only a Judicial Inquiry is Acceptable as a Response
I had to laugh when in the House of Commons Prime Minister Harper urged MPs to turn over any information they had about fraudulent election calls to Elections Canada. You see, every Elections Canada investigation is conducted in complete secrecy. Working with the RCMP, Elections Canada normally doesn't comment on ongoing investigations and the only information that ever comes out is when an action goes to court and documents become public through legal proceedings. So Harper was really saying: "Give all your evidence to Elections Canada which will keep it a lock box so Canadians never learn about what happened."
The House of Commons passed a motion on March 12 increasing Elections Canada's power so it can compel political parties to turn over records to aid in the investigation. While I agree completely with this, the fact still remains Canadians will never know the majority of what Elections Canada uncovers.
In fact, the only reason this election fraud story broke in the first place, is Maher and McGregor used Freedom of Information requests to access legal documents on the investigation.
If Harper does not call an independent judicial inquiry I predict that it will breed a new form of fierce resistance we have never seen before in Canadian politics. It will serve as the catalyst to force electoral cooperation among the opposition parties and galvanize a new electoral approach in Canada.
"We get the behaviour we tolerate" is a powerful truth. If this election fraud is not rooted out, no opposition party will trust the Conservatives to honour the law in future elections. Failure to expose this fraud is to accept and condone it. The resulting erosion of trust will fuel an electoral accommodation in targeted swing ridings. It will be the very thing that brings all opposition parties to work together to defeat Harper.
And finally there is the judicial route. Lawyer Peter Rosenthal has fought a legal case on election law all the way to the Supreme Court of Canada and won -- requiring changes to the Canada Elections Act. Rosenthal points out that any elector or candidate may challenge the results in a riding if irregularities, fraud or corrupt or illegal practices affected the outcome by application to a superior court.
A court has the power to subpoena witnesses and the proceedings create a public record of wrongdoings. If the Conservatives fail in their duty to call a judicial inquiry this will be the route, no doubt, that incensed Canadians take.
The opposition parties will not let this go. The media will not let this go. Canadians will not let this go. The truth will come out.
]]>Harper Conquers Canada, One Robocall at a Timetag:www.huffingtonpost.com,2012:/theblog//3.13053972012-02-27T18:49:06-05:002012-04-28T05:12:01-04:00Jim Harrishttp://www.huffingtonpost.com/jim-harris/
The language we use to describe a situation, the words that a journalist uses in their coverage of an issue, literally frame the issue and how we think about it.
This isn't a story about "dirty tricks," it's about election fraud. This isn't "stupid," it's illegal. This isn't "folly," it was a deliberate, systematic, strategic, targeted campaign to steal the election. This isn't "voter suppression," it's stealing democracy.
We should not treat this as some petty misdemeanor. This is a grave threat to our very basic freedom. This is a threat to our democracy. This is corruption.
You would expect this in some tin-pot dictatorship--not in Canada.
The stakes are much, much higher than most people or commentators realize. Harper won his "majority" with 6,848 votes. That's the difference between a Conservative candidate getting elected and the second place candidate in the 14 closest races that the Conservatives "won."
For instance, in Nipissing-Timiskaming the Conservatives "won" the riding with a mere 18 votes. In Etobicoke Centre it was just 26 votes. Out of the 14.7 million votes cast across Canada that is an infinitesimally small margin for a majority -- it's 0.048 per cent.
What was the exact nature of the illegality? Liberal supporters in tightly fought ridings received pre-recorded messages on Election Day claiming to be from Elections Canada telling them that the location of their polling station had been changed. The Liberals claim it was a factor in losing 27 seats. The NDP is claiming it happened to them too. The Conservatives didn't need to misdirect very many voters in very many ridings with tight races to steal the 2011 election.
What is the impact of this illegal action? With a "majority" Harper has eliminated the gun registry. He has appointed 48 Conservative so far in the 105 seat Senate, and four of the nine Supreme Court of Canada justices. This issue is not just about some inconvenient phone calls, it's about subverting our democracy, it's about altering the outcome of the election. And it's about Harper remaking Canada in his own image.
This is the heart of the real story: It's about the Conservative's usurping the power of government.
There are a few important points to make about this scandal:
The Conservatives have proven they will happily break the law to win power
The Conservatives pleaded guilty to breaking campaign spending laws in 2006 in the election that brought Harper to power. The Conservative party violated election spending limits, exceeding the amount the party was allowed to spend by $1.3 million -- through an "in-and-out" scheme.
In the end the Conservatives pled guilty and got a $52,000 fine.
There was no appropriate consequence for the Conservatives breaking Canada's election law. The fine is a joke. The Conservatives spent $1.3 million more than allowed to by law, "won" the election, and paid a penalty of $52,000. The reward: gaining access to the levers of power and deciding how to spend the Government of Canada's $270.5 billion budget.
The case took five years to be resolved. By this time the Conservatives had been in power for five years and had appointed 48 Conservatives to the Senate.
The Conservatives strategy is clear: break the law, deny any wrong doing, frustrate and stall any investigation -- whether by Elections Canada or House of Commons committee -- and when the final decision is about to be rendered, plea bargain and pay a fine.
But here's the realpolitik of it: It's five years after the fact, the media isn't paying attention. It's been covered already. Meanwhile the Conservatives have been enjoying power for five years. The consequences are, well, inconsequential.
Harper's style is one of systematic command and control. No messaging, no strategy, is executed without the Prime Minister's Office (PMO) vetting and approving it. This has become crystal clear during Harper's tenure. Lawrence Martin's book Harperland documents this in detail.
Young Sona, having worked for a so many different Harper Conservatives would have had this drilled into him. The fact that it has taken Elections Canada and the RCMP almost a year -- with their powers to investigate -- to uncover this scheme shows to what great length the Conservatives went to to hide this.
The consequences for this electoral fraud should match the crime: Criminal charges should be laid and by-elections called for every riding where electoral fraud occurred. Any person or firm involved should be barred from working in any election campaign ever again.
