embedding sustainability report â may 2014

EMBEDDING SUSTAINABILITY INTO SMALL & MEDIUM-SIZED MANUFACTURING ENTERPRISES (SMEs)

REPORT – MAY 2014

AUTHOR Vestal Tutterow, student of the Executive Master of Natural Resources (XMNR) Program at Virginia Tech’s Center for Leadership in Global Sustainability (CLiGS), graduated May 2014.

ABOUT THE REPORT This document was produced as a Directed Study Project for the Executive Master of Natural Resources (XMNR) Program at Virginia Tech’s Center for Leadership in Global Sustainability (CLiGS). This report is a literature review with observations and recommendations, intended to serve as a reference for anyone seeking an overview of corporate sustainability and the challenges and opportunities for embedding sustainability into small and medium-sized manufacturers.

ABOUT CLIGS The Center for Leadership in Global Sustainability (CLiGS), a center within Virginia Tech’s College of Natural Resources and Environment (CNRE) and based in the National Capital Region (NCR), provides education, research, and leadership to navigate in a rapidly changing world towards a more sustainable future. Bringing together faculty and students from Virginia Tech with partners from other educational, business, civic, and government institutions, CLiGS is dedicated to exploring and facilitating collaborative approaches to sustainable development in globally interconnected ecological, economic, and social environments. CLiGS offers a range of graduate education and professional development programs to prepare students to be leaders in environmental and natural resource sustainability.

DISCLAIMER Each Center for Leadership in Global Sustainability report represents a timely, scholarly treatment of a subject of public concern. CLiGS takes responsibility for guaranteeing its authors and researchers freedom of inquiry. Unless otherwise stated, however, all the interpretation and findings set forth in CLiGS publications are those of the authors.

CITATION Tutterow, Vestal. 2014. “Embedding Sustainability into Small and Medium-Sized Manufacturing Enterprises.” Arlington, VA: Virginia Tech, Center for Leadership in Global Sustainability (CLiGS). Accessible at www.cligs.vt.edu.

SUPPORT The author is grateful to the following individuals who shared their knowledge and insights on corporate sustainability: Jennifer Dolin of OSRAM SYLVANIA, Alexis Fuge of Northrop Grumman, Paul Hamilton of Schneider Electric, Amy Hargroves of Sprint, Keith Miller of 3M, and Jeff Yigdall of PPG Industries. Special thanks go to Dr. Barbara McCutchan of CLiGS for her guidance in the development of this document. Thanks also to the entire Executive Master of Natural Resources (XMNR) faculty and colleagues of the 2013-2014 XMNR Cohort for their support.

VIRGINIA TECH - CENTER FOR LEADERSHIP in GLOBAL SUSTAINABILITY • CLIGS.VT.EDU

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CONTENTS Executive Overview ...................................................................................................................... 4 Introduction ................................................................................................................................... 6 Sustainable Practices in Manufacturing ..................................................................................... 7 Recent Developments in Sustainabilty and CSR ....................................................................... 9 Frameworks, Protocols, and Standards ....................................................................... 9 Reporting ...................................................................................................................... 12 Sustainability in Small & Medium Enterprises in U.S. Manufacturing ................................. 15 Sustainability Commitments within SMEs ................................................................ 15 Applicability of Protocols and Standards to SMEs in U.S. Manufacturing ............ 16 Barriers to SMEs’ Pursuit of Sustainability .............................................................................. 18 Sustainability Drivers for SMEs in U.S. Manufacturing .......................................................... 20 Roles of Large Manufacturers to Impact SME Sustainable Practices ................................... 23 Roles of Other Organizations to Impact SME Sustainability ................................................. 26 Recommendations ...................................................................................................................... 28 Conclusions ................................................................................................................................. 30 Appendix...................................................................................................................................... 32


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LIST OF ACRONYMS BSR CDP CLiGS COP CSR E3 EICC ESG EPA GHG GISR GRI IIRC ISO MAPI MEP MIT OECD SASB SEC SME UNGC WBCSD WRI XMNR

Business for Social Responsibility Organization formerly known as Carbon Disclosure Project Center for Leadership in Global Sustainability Communication on Progress Corporate Social Responsibility Economy-Energy-Environment Electronic Industry Citizenship Coalition Environmental, Social, and Governance Environmental Protection Agency Greenhouse Gas Global Initiative for Sustainability Ratings Global Reporting Initiative International Integrated Reporting Council International Organization for Standardization Manufacturers Alliance for Productivity and Innovation Manufacturing Extension Partnership Massachusetts Institute of Technology Organization for Economic Co-operation and Development Sustainability Accounting Standards Board Securities and Exchange Commission Small and Medium Enterprises United Nations Global Compact World Business Council for Sustainable Development World Resources Institute Executive Master of Natural Resources


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EXECUTIVE OVERVIEW Organizations across the globe are starting to embed sustainable practices into their governance, management practices, and daily operations. This is a significant development, especially as global manufacturing companies commit to the pursuit of corporate sustainability or corporate social responsibility (CSR). The potential for resource conservation, emissions reductions, and energy savings as manufacturers adopt sustainable practices is immense. Equally important, manufacturers embracing the social responsibility aspects of sustainability can have huge impacts on workers’ rights and poverty reduction. To date, however, organizations embracing CSR are mostly large organizations. Small and medium-sized enterprises (SMEs), including small and medium-sized manufacturers, are much less likely to have sustainability goals and practices in placei. Therefore, this provides a huge opportunity for environmental and hence social improvement since about 70% of global pollution is attributable to SMEsii. A number of new standards and protocols published over the past few years are assisting companies as they define, implement, and report on sustainability practices. Unfortunately, these standards and protocols are complex and designed as “one size fits all” tools for the operations of large organizations across the spectrum of organization types. Small organizations, especially small manufacturers, typically lack the resources required to put sustainability practices in place that are compliant with these complex standards and protocols, and lack the staffing to prepare the reporting. Understanding the complex protocols and reporting is just one hurdle that small and medium-sized manufacturers face. Except for companies facing demands from customers, many SMEs have no internal or external incentives to begin addressing sustainability. Companies that are not integrating CSR cite unconvinced decision-makers within management who do not see the value of integrating sustainability, and are typically focused on shorter-term business needs, as a major stumbling block. A lack of resources, including financial, in-house knowledge, and personnel time, are other reasons cited by companies for not taking action. Yet another barrier is a lack of methods to readily quantify the value of sustainability. These barriers are especially relevant to SMEs, which are less likely to have the staffing needed to self-educate and develop internal champions. On the other hand, SMEs that embrace corporate sustainability see a number of benefits. Adopting CSR practices will often lead to cost savings through energy efficiency improvements, and new business opportunities through innovation. SMEs with sustainable practices in place are more attractive to potential partners down the supply chain, notably the large multi-nationals, and government agencies are increasingly expecting to see such practices already in place by potential contractors. What is required to get small and medium-sized manufacturers in the United States (U.S.) to adopt corporate sustainability on a widespread basis? The most important factor is a strong internal champion, either someone within management or someone with influence on management decision-making. Lacking an internal champion, stakeholders can start by increasing the awareness within the organization


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of the benefits of sustainable practices. Once companies have an increased awareness, and some degree of knowledge on sustainability, they need resources and tools to understand, develop, and evolve their business case. However, overcoming the business-as-usual inertia will require more than providing SMEs with resources and hoping they act independently. Research for this report identified two promising mechanisms for engaging SME manufacturers. One mechanism is through sustainable supply chain initiatives. A number of leading large companies have launched programs with the goal of making their suppliers more efficient, and fostering innovation in the supply chain. These large companies are establishing sustainability-related criteria that suppliers must meet, and in some cases offering assistance through training, resources, or mentoring. Another mechanism that holds potential is through engaging “network organizations”, such as sectorspecific trade associations and other sector-specific stakeholder groups within the U.S. There have been a number of sustainability initiatives launched in the U.S. in the past few years, led by stakeholders in a number of subsectors within the manufacturing sphere. In addition, existing organizations such as trade or technical associations already have built-in networking and communications within their sectors. These organizations can have significant impact by creating resources and best practices tailored to SMEs in their sectors, along with streamlined reporting protocols. Such a tailored approach can remove or minimize the barriers that SMEs currently face. The report that follows consists primarily of the findings of a literature review supplemented by a number of personal communications with sustainability managers at large manufacturers.


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INTRODUCTION A recent survey conducted by KPMG International found that 93% of the world’s largest companies publish annual corporate sustainability reportsiii. On the surface, this is quite impressive, offering evidence that many of the world’s largest employers and greenhouse gas emitters are addressing the challenges of conducting business while minimizing their impacts on the environment and working to improve their communities. While reporting is an important first step, embedding sustainability into organizations’ business models and operations is required before positive impacts can be realized. What exactly is corporate sustainability? Several similar definitions of sustainability exist, and all are guided by the principles of environmental stewardship, social responsibility, and economic wellbeing. One commonly used definition is from a 1987 report known as the Brundtland Reportiv: Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs. It contains within it two key concepts: • •

the concept of 'needs', in particular the essential needs of the world's poor, to which overriding priority should be given; and the idea of limitations imposed by the state of technology and social organization on the environment's ability to meet present and future needs.

A good definition of sustainability relevant to corporations in the manufacturing sector comes from the International Institute for Sustainable Developmentv: Adopting business strategies and activities that meet the needs of the enterprise and its stakeholders today while protecting, sustaining and enhancing the human and natural resources that will be needed in the future. Others, especially within the corporate world, have developed succinct phrasing that can be easily communicated both internally with an organization and externally to customers, stockholders, and other stakeholders. The triple bottom line, a commonly used shorthand for the pursuit of sustainability in corporate settings, is the consideration of social equity, economic, and environmental factors when considering an organization’s overall performance. Another common shorthand with similar meaning is people, planet, and profit. Just as several definitions exist, several terms are often applied to sustainability. Most organizations use the terms sustainability, sustainable development, social responsibility, corporate responsibility, and corporate social responsibility (CSR) interchangeably. This report focuses on the state of corporate sustainability within the U.S. manufacturing sector, with an emphasis on small and medium-sized manufacturers. It is based on a literature review and personal


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communications with several sustainability managers at large U.S. and multinational companies with established CSR programs in place. A key intent of the review was to identify the extent to which sustainability is embedded into small and medium enterprises (SMEs) within the U.S. manufacturing sector. The report identifies current codes and standards for reporting, best practices, barriers, incentives, and other pertinent information relative to embedding sustainability into enterprises, and the relevance to SMEs. The personal communications served as a means to confirm findings in the literature, identify any recent trends, and to better understand activities within large companies to engage their small company suppliers in sustainable practices. The Appendix lists the discussion topics that framed the communication with sustainability managers. The report describes initiatives that target SMEs in the U.S., including sustainable supply chain initiatives and the potential these initiatives have to impact SME sustainability. In addition, it examines the mechanisms and opportunities for large enterprises to influence their supply chains. The report concludes with recommendations for both SMEs and their stakeholders that can help achieve widespread adoption of sustainability principles by SMEs nationally.

SUSTAINABLE PRACTICES IN MANUFACTURING Manufacturers seeking to become more sustainable face a myriad of challenges due to the complexities of manufacturing processes and facilities, the byproducts of manufacturing, the need to ensure the health and safety of employees, and the desire to be good citizens within their communities. Manufacturing is seen as a primary culprit of environmental impact due to the air and water emissions, hazardous wastes, and the challenging working conditions faced by many workers in the industrial sector. These challenges, however, can be turned into opportunities by companies willing to take action, whether that be an action as straightforward as reducing waste in their processes, or a more comprehensive approach such as revising their business model based upon the people planet profit concept of sustainability. Manufacturing companies committing to CSR will benefit from developing a Sustainable Enterprise Plan or similar document that lays out a systematic approach to becoming more sustainable. The process of creating such a document will help start an internal dialogue on sustainability goals and scope, identify internal champions and stakeholders, and determine communication strategies and means of reporting. Many companies start with a project-based approach before making a commitment to a comprehensive plan. Manufacturers can start with actions that have proven economic and/or environmental benefits, such as energy efficiency improvements, recycling programs, and lean manufacturing. The Manufacturers Alliance for Productivity and Innovation (MAPI), a manufacturers’ membership organization, reviewed sustainability reports prepared by over one hundred of their members. Table 1 provides a list of the most commonly cited best practice areas in the manufacturing sector, based on the MAPI review and personal communicationsvi,vii,viii,ix.


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Best Practices of Sustainable Manufacturers The public often views manufacturers negatively due to the environmental impacts of their processes and the sometimes-difficult working conditions. Companies committing to sustainable practices can significantly improve their environmental footprint and working conditions while enhancing their profitability and successfully engaging their communities. Best practices among manufacturers pursuing sustainability commonly include: energy efficiency hazardous substances GHG emissions water recycling & waste sustainable supply chains benchmarking community outreach employee wellbeing & safety

Table 1. Common Sustainability Best Practices for Manufacturing Organizations Best Practice

Description

Energy efficiency

Setting energy reduction goals (with >25% over 10 years being a common target), benchmarking, performing energy assessments

Hazardous substances

Setting reduction goals and measuring improvement; particularly for volatile organic compounds, sulfur dioxide, nitrogen oxide, organic lead, chlorine, polyvinyl chloride, and batteries

Greenhouse gas emissions

Setting reduction goals, reporting direct and indirect emissions and measuring greenhouse gas (GHG) emissions intensity, although many companies report on certain facilities only

Water

Setting water intensity (per unit of production, e.g.) reduction goals, mapping water flows, new technology adoption, and employee and community education; companies with facilities in water-stressed countries are particularly more active in goal-setting and water efficient activities

Recycling & waste

Measuring waste generation and waste sent to landfills, tracking reclaimed or recycled materials, setting goals of zero waste to landfills, educating employees, launching community recycling programs, and partnering with other organizations

Sustainable supply chains

Developing policies and standards that set expectations for suppliers, developing guidance, and sharing sustainability best practices

Community outreach

Volunteerism, charitable donations, often targeting education, veterans’ programs, and environment

Employee wellbeing & safety

Diversity and gender inclusion, reporting incident rates, workforce development, and wellness programs for employees and families

Benchmarking against sector

Using ratings such as the Dow Jones Sustainability Indices to compare company

leaders

performance, reviewing sustainability reports of peers


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RECENT DEVELOPMENTS IN SUSTAINABILTY AND CSR Frameworks, Protocols, and Standards Organizations looking to gain an understanding of sustainability and corporate social responsibility will find numerous frameworks, protocols, and reporting standards. The most well-known have at their core carbon and greenhouse gas reporting, and use the GHG Protocol accounting and reporting framework developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD), first published in September 2001. Its success and longevity can be attributed to the collaborative development process that engaged an array of stakeholders, particularly sectors within the business community. Two prominent global initiatives are CDP (formerly the Carbon Disclosure Project) and the Global Reporting Initiative (GRI), both of which now use the GHG Protocol and have portfolios that encompass much more than greenhouse gas (GHG) reporting. CDP is a nonprofit organization which thousands of companies report their GHG emissions and climate change strategies to. CDP has the world’s largest collection of self-reported and publicly available climate change data, which allows for benchmarking by companies (through a scoring methodology), and analysis by institutional investors and others seeking to better understand risks associated with climate changex. Although originally founded as a vehicle for greenhouse gas reporting, CDP now has programs related to water, forests, and supply chains. GRI is also a nonprofit organization, and its Sustainability Reporting Frameworkxi is considered the most comprehensive set of guidelines for reporting the economic, environmental, and social impacts of company activities. Over 11,000 companies worldwide now use the GRI framework as a basis for their reportingxii. G4, the latest version of the guidelines, was published in May 2013. An effort is underway to harmonize the reporting process for the CDP and GRIxiii, which should ease the burden for companies reporting to both organizations. Table 2 lists many of the international sustainability-related protocols, standards, and guidance documents currently available. The table is not a comprehensive list, but does include the most well known, and those most relevant to manufacturing. Companies in the U.S. are not required to conform to any of these standards, but many choose to do so voluntarily for a number of reasons, including economic, reputational, and other business objectives. The drivers that prompt companies to adopt sustainable practices will be discussed in more detail later in this report. The organizations leading the efforts to develop and disseminate these products are generally nonprofit organizations, working in cooperation with stakeholders, particularly the private sector. The International Organization for Standardization (ISO) does not have a comprehensive sustainability standard, but does have related standards on environmental management, energy management, and GHG reporting, including a handbook on environmental management for small businesses. ISO also published a guidance document on social responsibility in 2010.


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Table 3 provides a list of sustainability-related standards that are specific to the U.S. Currently, only the U.S. Environmental Protection Agency’s (EPA) Greenhouse Gas Reporting Rule is mandatory, and only for large emitters. However, mandatory standards can be found in other countriesxiv. U.S. companies adopting CSR or corporate-level sustainability goals tend to turn to the international frameworks, which are now well-known within the business community, and are logical choices for U.S.based multinational companies and internationally-based companies with facilities in the U.S. None of the reporting initiatives or standards listed in Table 3 are as comprehensive in scope as the more widely used international standards, and none are currently in widespread use by manufacturers. A similarity among many of these frameworks, protocols, standards, and other documents is the need for a repeatable set of procedures for creating goals, taking action, and documenting efforts toward becoming more sustainable. This concept is like a “management system”, such as the well-known quality and environmental standards of ISO. William R. Blackburn laid out such a management system for sustainability in his 2007 book, The Sustainability Handbookxv. Blackburn calls his recommended approach a Sustainability Operating System. Many companies, such as 3Mxvi, have developed their own internal management systems, adapting aspects of other management system standards such as ISO 14001. The array of frameworks, protocols, standards, and other documents can be daunting to SMEs looking to better understand how to design and implement a sustainability management system. In addition, most of the protocols and standards were developed with large enterprises in mind, not small and medium-sized enterprises, and certainly not small and medium-sized manufacturers. Blackburn’s sustainability operating system is also geared toward large companies. Table 2. Key International Organizations and Sustainability Reporting Initiatives, Standards, Ratings, Codes, and Other Guidance Relevant to U.S. Manufacturing Sector Product Reporting

Organization

Scope

Climate change reporting questionnaire and reportsxvii

CDP

G4 Sustainability Reporting Guidelinesxviii

GRI

The International Frameworkxix

International Integrated Reporting Council (IIRC)

On-line reporting system; includes guidance and supporting tools; allows for a basic response up to a complete disclosure; also available is on-line reporting for water, forests, and supply chains Economic, environmental, and social sustainability reporting; guidelines are supplemented with reporting principles, standard disclosures, and an implementation manual; released in May 2013 to replace G3 guidelines An integrated approach to corporate reporting, including both financial and sustainability information; designed to better inform providers of financial capital on how an organization creates value over time; released in December 2013


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Product

Organization

Scope

Communication on Progressxx

United Nations Global Compact (UNGC)

UNGC members reporting on progress toward UNGC’s ten principles related to human rights, labor, environment, and anti-corruption. Provisions allow for CDP, GRI, or IIRC reports to prepare a Communication on Progress

GHG Protocol – Corporate Accounting and Reporting Standardsxxi

WRI & WBCSD

GISR standardxxii (under development)

Global Initiative for Sustainability Ratings (GISR)

ISO 14001:2004 – Environmental Management Systems – Requirements with Guidance for Usexxiii

International Organization for Standardization (ISO)

Greenhouse gas accounting framework used by most programs and standards globally, related guidance documents and calculation tools also available at www.ghgprotocol.rog Accrediting other CSR ratings, rankings, and indices; based on 12 principles related to the design, application, maintenance, scope, quality, and measurement aspects of a rating Environmental management system criteria; allows an organization to certify its environmental management system

ISO 14064:2006 – Greenhouse Gases (parts 1,2,3)xxiv

International Organization for Standardization International Organization for Standardization

Principles and requirements on GHG quantification, reporting, and verification; quantification and reporting requirements are compatible with the GHG Protocol Energy management system framework for continual improvement. Related standards on energy audits, energy measurement and verification, and energy performance indicators are under development

NSF International

Certification protocol based on life-cycle assessment principles. Criteria in environment, labor, and social responsibility for service provider organizations

Standards

ISO 50001:2011 - Energy Management Systems -Requirements with Guidance for Usexxv NSF Protocol 391: General Sustainability Assessment Criteria for Services and Service Providersxxvi


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Ratings Dow Jones Sustainability Indicesxxvii

Standard & Poor’s Dow Jones and RobecoSAM

Maplecroft Climate Innovation Indexesxxviii

Maplecroft Global Risk Analytics

Indices evaluate corporate sustainability and best practices of the 2,500 companies in the Dow Jones Global Total Stock Market Index; indices include World index, regional indices, and several county-specific indices, including the U.S. Ratings of 360 U.S. companies based on their management of climate-related opportunities; focusing on management, mitigation, emissions reductions, innovation, and adaptation

Codes Ten Principles on Human Rights, Labor, Environment, and Anti-Corruptionxxix

United Nations Global Compact

Corporate Strategic Policy Initiative with Annual Communication of Progress; UN Global Compact members are expected to incorporate the principles into daily practices

ISO 14001 - Environmental Management Systems - An Easy to Use Checklist for Small Business. Are You Ready?xxx

International Organization for Standardization

Handbook with checklist guidance tailored to small enterprises; discussing set-up, implementation, and certification for ISO 14001

ISO 26000:2010 – Guidance on Social Responsibilityxxxi

International Organization for Standardization OECD

Voluntary standard providing guidance covering seven social responsibility principles and seven core subject areas relevant to all types of organizations 7 action steps relevant to small enterprises specifically; 18 indicators for measuring environmental performance; available in web or booklet form

Other Guidance

Organization for Economic Co-operation and Development (OECD) Sustainable Manufacturing Toolkitxxxii

Reporting CDP, GRI, and the United Nations Global Compact’s (UNGC) Communication on Progress (COP) all have detailed annual reporting requirements, necessitating a significant investment in time to collect and verify the data, and to then report the data. Even though the data requests by the reporting organizations are not identical, it is encouraging that efforts are underway to harmonize their respective data requests to the maximum extent possible. The number of companies reporting on their CSR efforts is growing steadily, especially by large multinational companies and producers of consumer goods. In addition to the harmonization of the CDP and GRI activity, the International Integrated Reporting Council (IIRC) and the Sustainability Accounting Standards Board (SASB) are collaborating to better align their reporting processesxxxiii .


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Table 3. U.S. Organizations and Key Sustainability Reporting Initiatives, Standards, Ratings, and Other Guidance Relevant to the U.S. Manufacturing Sector Product

Organization

Scope

Reporting Climate Registry Information Systemxxxiv Greenhouse Gas Reporting Rulexxxv

The Climate Registry U.S. EPA Greenhouse Gas Reporting Program

Standards for calculating, verifying and reporting GHGs; for use only by members of The Climate Registry Mandatory reporting for facilities emitting greater than 25,000 metric tons of carbon dioxide equivalent/year

Non-financial

Sustainability Accounting

Standards under development covering 10 sectors for reporting

accounting standards

Standards Board

sustainability-related risks and opportunities to the SEC by publicly

Standards

for ten sectors

xxxvi

traded companies in the U.S. Will cover specific sectors only. Most relevant to manufacturing are the Health Care, Technology & Communications, Non-Renewable Resources, Transportation, and Renewable Resources & Alternative Energy sectors

Ratings Green Plus Certification

Green Plus xxxvii

Certification program for small businesses in U.S.; for Green Plus members only

Other Guidance Sustainability xxxviii

Framework Model

National Council for

Microsoft Excel®-based tool for analysis of financial and

Advanced Manufacturing

environmental impacts of projects; suitable for manufacturers of all sizes

In the U.S., all corporate social responsibility reporting is currently voluntary. Companies have the option of obtaining third-party verification (usually called external “assurance” in CSR reporting parlance) of their reports. External assurance is performed by an outside group or individual with expertise in both the reporting process and the defined procedures of assurance. Verifiers look at the validity of the data in the reports, as well as the adherence to the reporting framework used. Most companies currently do not have their reports verified, with only about 10% of companies that report obtaining verificationxxxix in the U.S. Internationally, about 38% of companies verify. Although third-party verification adds to the cost of reporting, verification can provide benefits such as improved credibility and recognition with stakeholders, in particular with customers. Verification can also confirm the quality of data and internal analysis, while ensuring that the sustainability management system is effectivexl. An emerging trend of note is “integrated reporting”, which combines corporate reporting of financial information with reporting of environmental, social, and governance (ESG) information. Internationally, IIRC published a framework for integrated reporting in December 2013. In the U.S., SASB is developing sector-specific standards designed to tie into the mandatory filings by public U.S. companies to the Securities and Exchange Commission (SEC). The SEC currently does not require integrated reporting, but does require reporting of all material information by public companies in their SEC filings. Historically, companies issued their reports with only financially related material information. SASB and other advocates of integrated reporting believe companies will be obligated to switch to integrated


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reporting to be in compliance with this materiality requirement. To date, only a handful of U.S. companies have prepared integrated reports, but these few do include several manufacturers, including United Technologies Corporation, which issued the first integrated report from a U.S. companyxli. As the SASB standards are completed over the next two years, leading U.S. companies may be attracted by the sector-specific reporting even without it being mandatory. Emerging SASB standards for sector-specific integrated reporting may lead to increased rates of reporting, but since many small manufacturers are privately-owned, the impact of the SASB standards within SMEs is likely to be limited. Regardless, the tailoring of reporting requirements is an important development and can be replicated in other types of CSR standards, protocols, and guidance.

Materiality SASB uses the U.S. Supreme Court’s definition of materiality for its standards: “A substantial likelihood that the disclosure of the omitted fact would have been viewed by the reasonable investor as having significantly altered the “total mix” of information made available.” The GRI G4 reporting guidance defines materiality as: “Factors that have significant economic, environmental, and social impacts on an organization or that substantively influence the assessments and decisions of stakeholders”

South Africa now requires integrated reporting from companies on the Johannesburg Stock Exchangexlii. It waits to be seen whether other governments will require integrated reports from their public companies. The extensive reporting requirements can overwhelm any organization not attuned to such stringent protocols, especially a small or medium-sized company. In fact, the data analysis and reporting requirements (and associated costs) of the CDP and GRI frameworks are seen as a barrier to greater participation by SMEsxliii. Choosing the reporting indicators that are relevant to a company’s specific sector, location, products, and other factors typically requires assessing the materiality of each indicator and performing cost/benefit analyses. Most SMEs do not have the experience or the expertise to conduct these evaluations internally. An alternative reporting process has been proposed for SMEs by researchers at Politecnico di Milano in Italyxliv. Rather than starting with a large set of indicators, they propose a “process-based framework” that could be developed by groups such as trade associations, government agencies, or other network organizations for their SMEs. The process would begin by determining the subset of indicators from within the GRI framework that are relevant to that network organization’s members or constituents. The next step would be to create a matrix of key processes vs. key sustainability issues. From this matrix, indicators are identified and methods of measuring each indicator are determined based on a cost/benefit analysis. Third party experts hired by the network organization would perform each step of this process.


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The process was piloted with success among SME steel manufacturers in Italy. The framework allowed for quicker and less expensive reporting relative to other approaches, and appears to provide flexibility for modification as needed over time. This framework should be applicable in the U.S., and U.S.-based industrial sector trade, and technical associations could be appropriate network organizations. Thanks to the efforts of many stakeholders, including nonprofits, governmental organizations, and progressive corporations, many large organizations now regularly prepare CSR reports. However, the sustainability reporting frameworks were developed over the past two decades with large organizations specifically in mind. The resulting complexity of reporting is a significant deterrent to most small organizations. The Italian-piloted approach for SMEs, engaging network organizations such as trade associations to create tailored frameworks, is worthy of consideration in the U.S. The potential impact of an innovative sustainability reporting framework for U.S. SMEs is significant.

Protocols, Standards, and Reporting Summary for SMEs • • • • • • • • •

Manufacturers have a confusing array of frameworks, protocols, standards, and other guidance documents available to them from a number of organizations. The reporting frameworks were developed with large organizations in mind. The basis for many of the reporting standards is the GHG Protocol, although guidance and reporting now cover sustainability topics well beyond just GHG emissions. CDP and GRI are the most popular voluntary reporting systems for U.S. manufacturers. The business areas a company must include in reporting depend on their materiality. A few of the reporting initiatives are collaborating to harmonize their data requests as a way to minimize the reporting burden. Integrated reporting is an emerging trend, combining corporate financial reporting with sustainability reporting. Companies with management systems in place will more easily plan, implement and report on their sustainability efforts. Most SMEs lack the resources needed to prepare reports compliant with the requirements of the international protocols.

SUSTAINABILITY IN SMALL & MEDIUM ENTERPRISES IN U.S. MANUFACTURING Sustainability Commitments within SMEs Small and medium-sized businesses are vital to the economies and social structures of the U.S. and the world, accounting for over 90% of businesses worldwide and 50-60% of employmentxlv. However, SMEs are much less likely to be on the path to sustainability than their large counterparts. According to the 2013 Global Corporate Sustainability Report from the UNGC, company size is the most telling indicator of whether a company is pursuing sustainabilityxlvi . The report is based on survey results from over 1,700 of


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the 8,000 companies participating in the Global Compact, including 753 (44%) SME respondents. The survey found that only 37% of SMEs are monitoring the environmental performance of their operations. This is particularly surprising considering that the Global Compact is an initiative based upon participant commitments to ten principles closely aligned with sustainability – principles related to human rights, labor, environment, and anti-corruption. The participants, large and small, should be leaders in the corporate world. The report does not differentiate respondents between manufacturers and other types of businesses; however, the results can be expected to be similar among manufacturers and other business types. The basic tenet of corporate sustainability – meeting the needs of the organization while sustaining resources for the future – applies to manufacturers of all sizes, not just large organizations. Similarly, the manufacturing sustainability best practices listed in Table 1 are all applicable to SME manufacturers. SMEs are more apt to pursue individual best practices, such as setting energy efficiency improvement goals and implementing efficiency improvement projects, and less likely than their larger counterparts to embrace a more comprehensive approach to becoming more sustainable. While no data was found to confirm, SMEs presumably are less likely to have a sustainability plan in place.

Applicability of Protocols and Standards to SMEs in U.S. Manufacturing The principles of sustainability are universal, addressing economic, environmental, and social issues within companies. In an effort to create a comprehensive method of accounting for all aspects of these issues, the standards-setting organizations developed rather complex frameworks and reporting standards, with large enterprises in mind. For example, Figure 1 shows a table of reporting categories from the new G4 Reporting Principles and Standard Disclosures document. This document is 94 pages in length, and the companion Implementation Manual is 266 pages longxlvii . Understandably, training on GRI reporting is recommended before starting to compile a first report. Before reporting can begin, a large data collection exercise is required to gather all of the report inputs. GRI recommends: “Some of the information requested will be easy to obtain and will only take days or weeks to gather and organize. Other sections may require you to implement a series of actions and procedures in order to obtain the required information. To complete the template will require your organization to undergo both internal and external discussions”xlviii. To an SME with limited resources, participation in such reporting schemes is not feasible. Furthermore, an SME’s operations may not touch upon all of the areas (“aspects” in GRI terminology) included in the reporting framework. In addition, a universal reporting framework such as GRI covers areas that, while of great concern in developing countries, are essentially non-issues (“non-material” in reporting terminology) in the U.S. This includes many of the issues shown in Figure 1 related to human rights, for example. The new G4 GRI guidelines attempt to be more user-friendly by adding discussion on determining “materiality”, that is, determining the relevance of a particular area to a company’s business when


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deciding whether to include that area in the reporting. This should make the reports less burdensome, but still requires a degree of analysis when determining materiality. The UNGC’s Communication on Progress (COP) reporting allows flexibility for its members to use their CDP, GRI, or IIRC reports as a basis for the annual Communication on Progress. To encourage smaller members to participate, the UN Global Compact provides an online Basic COP template, which includes guidance and examples within the streamlined template. But with its emphasis on labor rights and human rights, the UNGC COP will not be the first choice for reporting for most U.S. SMEs.

Figure 1: List of Reporting Categories from GRIxlix

With only 37% of the SME members of the CSR-focused Global Compact monitoring their environmental performance, it is clear that these reporting frameworks and standards are not ideal for SMEs. The marketplace currently lacks the frameworks to facilitate embedding sustainability into SMEs, including SME manufacturers, and lacks a proven reporting protocol for them.


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Sustainability in SMEs – Key Learnings

The reasons for pursuing sustainable practices applies equally to small and medium-sized manufacturers as they do to large manufacturers, however smaller manufacturers are less likely to have sustainability programs in place and are much less likely to prepare sustainability reports. Navigating this expanding universe of organizations, documents, and jargon can be especially daunting to a small organization with limited internal resources. Furthermore, most existing reporting requirements were designed for large organizations. Smaller manufacturers typically lack the specialized expertise needed to prepare sustainability reports and facilitate third party audits. SME-focused guidance and reporting frameworks are currently lacking in the marketplace.

BARRIERS TO SMES’ PURSUIT OF SUSTAINABILITY While a number of compelling reasons lead companies to establish comprehensive sustainable practices, most companies, especially SMEs, have no comprehensive strategies and practices in place. Some recent surveys and reports identify the barriers that companies face. The 2013 Business for Social Responsibility (BSR)/GlobeScan State of Sustainable Business Survey was completed by over 700 sustainability professionals within BSR’s membership, with results published in October 2013l. Respondents cited convincing leadership of the value of sustainability and changing management’s mindset as the top two barriers to fully integrating CSR into their businesses. Other barriers these professionals face include inability to correlate sustainability to business goals, identifying key performance indicators to measure value, financial barriers, and lack of a return on investment. According to the Global Compact’s Global Corporate Sustainability Reportli, based on a survey of the UNGC’s participants, the barriers are different for large companies than for SMEs. The three primary barriers for large companies are: • • •

Extending the strategy through their supply chain Implementing the strategy across business functions Competing strategic priorities

For SMEs, the three primary barriers are more basic: • • •

Lack of financial resources Lack of knowledge Extending the strategy through their supply chain


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The report goes on to state that “Of all the factors that impact sustainability performance, company size has the most significant influence, with small and medium-sized enterprises more challenged to move from commitment to action”lii (page 7). These surveys and reports indicate that companies have a lot of work to do even after committing to sustainability. Many of the barriers identified above can be brought back to the need for total management buy-in. With full management support, including Chief Executive Officer and board support, financial resources will be made available, supply chain strategies will change, and definition of business value will be broadened to include CSR concepts. It is important to note, however, that both of these surveys were of companies already committed to corporate sustainability. Both BSR and the Global Compact are membership organizations made up of companies that have made commitments to becoming more sustainable organizations. Therefore, these companies generally already understand the value of corporate sustainability, so their perspectives, when discussing barriers, relate to barriers to integrating or further integrating sustainability into their organizations. Companies not pursuing sustainability may identify different barriers. Another survey, conducted by the Massachusetts Institute of Technology (MIT) Sloan Management Review and the Boston Consulting Group, surveyed a broad cross section of companies globally, not just organizations with sustainability commitmentsliii. The survey asked companies for a more specific response – to identify barriers to making the business case for CSR. The responses, provided in their report The Innovation Bottom Line, resulted in these top obstacles: • • • •

Difficulty in quantifying intangible effects of sustainability actions Competing priorities Difficulty capturing comprehensive metrics Lack of a model or framework

Forty-six percent of the companies responding to the MIT Sloan Management Review identified difficulty in quantifying the benefits of sustainability actions as a key barrier. Since this survey included a broader spectrum of companies – not just those already pledged to the pursuit of sustainability actions – the importance of being able to quantify the benefits of CSR is noteworthy. One organization, Sustainability4SMEs.com, is surveying U.S. SMEs exclusively. Their survey is ongoing, but their findings so far identify these primary reasons for SMEs not pursuing sustainabilityliv: • • •

Limited resources (financial, personnel, and time) to develop and implement a sustainability program Lack of customer demand Lack of knowledge


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Note that both the UN Global Compact study and the Sustainability4SMEs.com findings point to a lack of resources and a lack of knowledge as key barriers for SMEs. Sustainability4SMEs.com goes on to state that for companies that identify as not currently incorporating sustainability practices, limited time to develop and implement is most often cited as the principal constraint. It is interesting that the SMEs not pursuing CSR do not cite a lack of knowledge as their top constraint. Sustainability4SMEs.com states that twice as many respondents not pursuing sustainability indicate time as the primary constraint compared to the number citing lack of knowledge. Unfortunately, there are no surveys or studies that focus exclusively on U.S. manufacturers, and none that focus on small and medium-sized manufacturers. U.S. companies tend to lag behind other developed countries in adopting sustainable practiceslv and this report assumes that the extent of sustainability programs within U.S. SME manufacturers similarly lags other countries, and lags relative to large manufacturers. Sustainability managers contacted identified many of the same barriers for SMEs. Additional barriers identified through these personal communications were a lack of urgency (likely due to limited customer demand) and the complexity of adopting a management system-type of approach to embedding sustainable practices. Even without the benefit of survey data specific to SME manufacturers, the likely barriers to greater embedding of CSR can be discerned. The Barriers to SMEs’ Pursuit of Sustainability – Key Learnings text box lists the primary barriers. Despite the barriers that exist for organizations of all types and sizes, many organizations have overcome these barriers, putting sustainability-related systems in place and reporting their progress.

Barriers to SMEs’ Pursuit of Sustainability – Key Learnings

Small companies are much less likely to have sustainability programs in place, due to: • • • • • • •

Lack of resources (financial, personnel, and time) Limited demand from customers Lack of an internal champion Lack of knowledge Lack of management commitment Lack of appropriate metrics to quantify the costs and benefits Complexity of management system-based sustainability programs

SUSTAINABILITY DRIVERS FOR SMES IN U.S. MANUFACTURING What leads organizations to the pursuit of sustainability? For organizations in Europe and some other locations, mandatory reporting rules on sustainability efforts are strong incentives. For organizations in other countries, and for those considering factors beyond compliance, several benefits that go well beyond “doing good” are documented. The MIT Sloan Management Review and the Boston Consulting Group’s report, The Innovation Bottom


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Line, also asked companies to identify the benefits of addressing sustainabilitylvi. The most often cited benefits to companies are: • • • • • • •

Improved brand reputation (40%) Better innovation of product/service offerings (29%) Improved perception of how well the company is managed (26%) Increased competitive advantage (22%) Reduced costs due to energy efficiency (22%) Reduced costs due to materials or waste efficiencies (20%) Better innovation of business models and processes (19%)

In this survey, companies could provide up to three benefits. The percentages in parentheses reflect the percent of respondents listing that benefit. Through personal communication with sustainability managers at a number of large companies with mature sustainability programs, additional drivers for their organizations include: • • • •

Business growthlvii Revenue creationlviii,lix Risk managementlx,lxi,lxii Employee engagementlxiii,lxiv

Sustainability4SMEs.com’s survey asked SMEs to provide their drivers for pursuing CSR. For SMEs, the overwhelming principle driver was the “personal values of the company’s founders and/or leaders”. Seventy-five percent of respondents note this driver. The other top drivers, noted by between 20-25% of respondents, were: • • •

Customer demand or downstream imperatives Cost reductions New markets, products, or service opportunities

The Sustainability4SMEs.com survey finds regulatory compliance, financial incentives, and upstream supply chain directives as the least mentioned drivers. A number of U.S. manufacturers actively promote their CSR practices in print and social media. The companies doing so tend to be the more “customer facing” manufacturers – such as those producing consumer goods. Such media efforts are often meant to improve brand reputation, the top factor noted in the MIT Sloan Management Review report. For SMEs, the top-down leadership is notably important. Without that leadership and management directive, the typical barriers noted earlier (in particular, a lack of resources) are likely to keep sustainability as a non-starter for most SMEs. For companies already implementing sustainable practices, continual improvement often depends on proving the business case internally. The MIT Sloan Management Review report found a strong


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correlation between profiting from sustainability and having a defined business case for CSR. The survey results found that “companies that profit from sustainability are almost 200% more likely to develop sustainability business cases”.

Key Quotes from Company Surveys “Companies that profit from sustainability are almost 200% more likely to develop sustainability business cases”. - MIT Sloan Management Review For SMEs, adoption of sustainable practices depends upon the “personal values of the company’s founders and/or leaders.” - Sustainability4SMEs.com

As identified by the Sustainability4SMEs.com survey, the drivers internal to the organization (corporate management values, cost reduction, new market opportunities, etc.) are most influential in SME adoption of sustainable practices. External drivers, such as brand reputation, others’ perception of the company, and regulations, are less effective as motivators for SMEs. Table 4 categorizes the key drivers. Thus SME motivations for becoming more sustainable will not always align with the motivations of large companies, which most often cite brand reputation as a key driver. In the U.S., GHG and other emissions reductions and energy costs savings are often motivating factors for companies to improve their operations. Drivers for these individual actions may include environmental regulatory compliance and financial incentives for installing energy-efficient equipment. These drivers may indirectly facilitate sustainable actions, but drivers for the broader CSR efforts do not exist. Utility companies, which often provide financial incentives to companies for investing in energy efficiency, have no reason to encourage other sustainable practices by their customers. Governments, especially at the federal and state levels, lack policies for sustainability within the private sector. The Council on Environmental Quality coordinates federal agency environmental efforts, but is not engaged in outreach to the private sector. In addition, Executive Order 13514, issued in 2009, requires federal government agencies to report annually on progress toward energy, water, and greenhouse gas reduction goals using an Office of Management and Budget Sustainability/Energy scorecardlxv . While this activity is an important way for the federal government to lead by example, there is no federal agency or office with the mandate to formulate policy, incentivize, or create awareness of the business rationale for corporations to pursue sustainability. Despite the numerous barriers to pursuing sustainability, a number of SME manufacturers are moving forward, often driven by the vision or leadership of company leaders. Some companies find direct cost benefits or find new markets through CSR, and others are driven by customer demand – such as customers up their supply chain. To date, however, these drivers have not been sufficient to entice most


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SME manufacturers toward sustainable practices. Table 4. Internal and External Drivers for SME Corporate Sustainability Internal Drivers

External Drivers

Personal values of corporate leaders

Customer or consumer demand

Better innovation of product/service offerings

Supply chain directives

Increased competitive advantage

Improved perception of how well the company is managed

Cost reductions

Regulatory compliance

Better innovation of business models and processes

Financial incentives Improved brand reputation

As stated earlier, SMEs often have difficulty moving from commitment to action on sustainable practices. This is in large part due to the lack of knowledge of the steps that need to be taken and of the common best practices (see Table 1). Many SMEs may be addressing individual sustainability practices, such as energy efficiency and recycling, based on their merits, without consideration of any broader CSR efforts. Sustainability Drivers for SMEs – Key Learnings

• Large companies tend to be driven by external factors such as brand or image enhancement, or customer demand. • Internal factors, such as a motivated company leader or cost reductions, are common drivers for SMEs. • Creating a business case for sustainable practices is critical to companies of all sizes. • A number of manufacturers report gaining a competitive advantage by adopting sustainable practices, through product or process innovation, resource efficiencies, or improvement in energy efficiency.

ROLES OF LARGE MANUFACTURERS TO IMPACT SME SUSTAINABLE PRACTICES One way large manufacturers can influence smaller manufacturers is through leading by example. A number of large organizations are doing this, and making their efforts known to the public through sustainability reports, company websites, print media, and social media. The CSR goals, policies, and metrics are available for SMEs to emulate or adapt. Large manufacturers with a national or global presence are able to engage in large, broad-based membership initiatives such as the Global Environmental Management Initiative and the World Business Council for Sustainable Development, and to partner with nonprofit organizations on sustainability issues of interest. 3M, for example, partners with over 20 nonprofits and community organizations, and has membership in over 16 different associations which focus on various aspects of sustainabilitylxvi . SMEs may not have the capacity for such extensive participation, but they can engage with community or even state-level organizations on issues of relevance to their companies and employees.


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Large manufacturers can also lead through innovation, creating innovative new products, “greening” their manufacturing processes, developing new best practices, or even creating new metrics. In fact, the pursuit of sustainability often leads to innovation, according to 3Mlxvii . Schneider Electric participates in a number of sustainability-related initiatives and reporting programs, but still developed their own metric – the Planet & Society Barometer – for tracking three-year goals for fourteen different indicatorslxviii. Most measures of CSR factor in the contributions and impacts of companies’ supply chains, similar to the Scope 3 (corporate value chain) emissions reporting for the GHG Protocol. For many manufacturers, the combined contributions and impacts of their suppliers can far exceed those of the companies themselves. Therefore, it is important for manufacturers to understand the sustainability implications of their supply chain partners. As discussed earlier, the Global Compact reportlxix found that large companies see “extending corporate sustainability strategies through the supply chain” as the top impediment to improving their own corporate sustainability. While true that their supply chain partners are vital to the overall CSR performance of large manufacturers, of equal importance is the influence large manufacturers can have in their suppliers becoming more sustainable. While not all supply chain partners are small or medium-sized, most SME manufacturers are a part of one or more supply chains. So this discussion equates sustainability within supply chains with corporate sustainability in SME manufacturers. Fifty-seven percent of the Global Compact survey participants are providing sustainability goals or expectations to their supply chainlxx. However, significantly fewer companies are monitoring their suppliers’ efforts to meet expectations. Only a small percentage of respondents are actively engaged in helping their suppliers become sustainable. For example, only 18% are assisting in setting and reviewing CSR goals, and only 11% provide suppliers with resources for specific improvement projects. The potential impact through engaging supply chains is enormous, and a few leading companies are taking action. For example, Sprint, which has about 5,000 suppliers active in any given year, has a goal of engaging with 90% of their top 100 or so suppliers by 2017lxxi . Sprint has a set of supplier criteria that requires suppliers to complete a materiality assessment, and to also set, measure, and publicly report a GHG reduction target by 2015. In addition, Sprint has developed certain sector-specific requirements that supplement their general supplier criteria. Sprint is preparing to offer assistance to any key suppliers that have difficulty in meeting the criteria. Lockheed Martin is another company engaging its suppliers. Lockheed Martin has about 30,000 suppliers, and about one half of them are small businesseslxxii . To begin engaging with its suppliers on sustainability, Lockheed Martin is providing resources to inform and educate. Furthermore, Lockheed Martin will soon be asking suppliers to provide information on emissions, social responsibility, climate change risks, and other areas. Other examples include 3M and OSRAM SYLVANIA, companies with comprehensive supply chain


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policies and standardslxxiii ,lxxiv . The documents set expectations for supplier practices in the areas such as responsible sourcing, use of materials (reuse, recycling), energy efficiency, environmental, health & safety, transportation, labor and human resources, and conflict minerals. Ford Motor Company, like a number of other companies, is looking to sector-specific initiatives to engage their supply chains. Ford is active in the Automotive Industry Action Group that, among other objectives, seeks to assist suppliers through resources, training, and stakeholder groups such as a GHG Reporting Group. Table 5 lists several active sector-specific sustainability initiatives. Nonprofit organizations such as CDP have also launched sustainable supply chain initiatives that provide resources and seek to engage suppliers in CSR efforts. In addition, the U.S. General Services Administration has a new initiative centered on information sharing, with hopes of creating a knowledge base useful to SMEslxxv . Table 6 lists examples of sustainable supply chain initiatives. Table 5. Sustainability Initiatives Relevant to U.S. Manufacturing Sector Initiative Sustainable Apparel Coalition Sustainable Textiles Coalition Sustainable Furnishings Council Automotive Industry Action Group

American Chemical Society’s Green Chemistry Institute Cement Sustainability Initiative

Sustainable Packaging Coalition

Bioplastic Feedstock Alliance

Relevance Developed the Higg Index, a tool for measuring the environmental and social performance of apparel products Developing a tool for home textile products, based on the apparel industry’s Higg Index Raising awareness and promoting best practices among manufacturers and retailers in the home furnishings industry Long-established automotive industry nonprofit; mission includes sustainable supply chains among other topics. Offers training, collaboration opportunities, and a supplier sustainability self-assessment tool. Promotes green chemistry through industry roundtables, education programs, and research Sustainable development within the cement industry through an Agenda for Action; an initiative of the World Business Council for Sustainable Development Provides resources for member companies and others on sustainable packaging, including the COMPASS (Comparative Packaging Assessment) online life cycle assessment tool Eight companies and the World Wildlife Fund supporting responsible development of plastics from agricultural materials

Large manufacturers (as well as other large companies) can potentially have a significant positive impact on the planet through their leadership in engaging their supply chain companies in CSR efforts. Large companies can individually serve as mentors, establish robust sustainability-related criteria, and provide resources and training that empower their suppliers to become more sustainable. Large companies can also participate in sustainability and sustainable supply chain initiatives, such as those in Table 6, where they can collaborate with peers and other stakeholders to develop new resources and frameworks for their suppliers.


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Table 6. Example Sustainable Supply Chain Initiatives Relevant to the U.S. Manufacturing Sector Initiative Sector-specific Sustainable Supply Chain Initiatives Pharmaceutical Supply Chain Initiative Together for Sustainability Aluminum Stewardship Initiative Electronics Industry Citizenship Coalition (EICC) International Aerospace Environmental Group

Relevance Pharmaceutical Industry Principles for Responsible Supply Chain Management, guidance, and other resources Sustainability assessments of chemicals industry suppliers by third party experts Developing a global standard for aluminum sustainability throughout its value chain EICC Code of Conduct for Suppliers; EICC Carbon Reporting System (template), other resources Working to harmonize voluntary health and environmental standards (including GHG reporting) for aerospace companies and their suppliers

Other Supply Chain Initiatives CDP Supply Chain Program Global Compact Advisory Group on Supply Chain Sustainability U.S. General Services Administration’s Sustainable Supply Chain Community of Practice Economy-Energy-Environment (E3) Green Suppliers Network Sustainable Supply Chain Foundation Global Environmental Management Initiative’s Forging New Links

Coordinated surveys of suppliers on climate and water-related activities Developing guidance for companies to improve transparency and traceability Sharing of information, supplier engagement tools, and other resources U.S. federal agencies’ program offering technical assistance and resources Research related to sustainable supply chains Tools and resources for companies seeking to better engage their suppliers

Roles of Large Manufacturers to Impact SME Sustainable Practices – Key Learnings Large manufacturers can foster sustainability within smaller manufacturers by: • Leading by example • Innovating and sharing (new products, improved processes, best practices) • Leveraging supply chain relationships through initiatives that mentor SMEs and establish supplier criteria, requirements, and resources related to sustainable practices. • Participating in other sustainability initiatives engaged in developing new best practices or sectorspecific tailoring of guidance and resources.

ROLES OF OTHER ORGANIZATIONS TO IMPACT SME SUSTAINABILITY While there is much that large manufacturers can do through their power to leverage their supply chain companies, a number of other organizations can also help SME manufacturers embed sustainability into their practices. The Italian-piloted concept of a tailored sector-specific framework for reporting is a promising template that trade and technical associations in the U.S. can adopt. These trade and technical associations are also well-positioned for activities beyond tailored reporting. They can collect and institutionalize CSR best practices, offer training, facilitate benchmarking, and other services. The


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Responsible Care® program within the chemical industry is an example of a successful voluntary association-based initiativelxxvi . Launched by the Canadian Chemical Producers’ Association in 1985, it is now a widely recognized source of certification and resources on chemical manufacturers’ health, safety, and environmental performance adopted by 54 chemical associations globally, including the American Chemistry Council. In some manufacturing sectors, coalitions and alliances of manufacturers now serve as sources for training, best practices, tools, and other resources. Several of these initiatives are listed in Table 5. For example, the Sustainable Cement Initiative, organized by the World Business Council for Sustainable Development, provides guidelines and other resources on key sustainability issues within the cement industry. The Sustainable Apparel Coalition is singularly focused on a suite of self-assessment tools known as the Higg Index for apparel and footwear companieslxxvii . The tools provide a standardized approach to measuring environmental and social performance at the facility, product, and brand levels. Similarly, the International Aerospace Environmental Group is working to ease the reporting burden and costs related to health and environmental regulatory compliance for their sector and their supplierslxxviii . They are collaborating to develop an industry GHG accounting and reporting supplement to WRI’s GHG Reporting Protocol Corporate Standard. A goal of this guidance is to identify and drive best practices and improve transparency while minimizing the administrative burden on aerospace companies and their suppliers. Several agencies within the U.S. federal sector have resources and programs that can benefit SMEs. In addition to the General Services Administration’s Sustainable Supply Chain Community of Practice discussed earlier, the U.S. Department of Commerce’s Manufacturing Extension Partnership (MEP)lxxix has offices throughout the country specifically tasked to assist small and medium-sized manufacturers. CSR is not currently a focus area for MEP, but MEP is part of a broad agency technical assistance initiative called E3lxxx . Also, the U.S. Small Business Administration provides tips on sustainable business practices such as waste reduction and water conservation. Nonprofit organizations can also play an important role by increasing awareness, providing resources, and launching initiatives that bring stakeholders together. The work of WBCSD is one example. WBCSD has brought together many stakeholders to create a number of initiatives, tools, and publications on corporate sustainability. Another example is Ceres, a nonprofit devoted to sustainable development. Ceres leads several initiatives and produces many reports and other publications, including The 21st Century Corporation: The Ceres Roadmap for Sustainability, which provides guidance on corporate sustainability. The guidance spells out twenty expectations for corporations in the areas of governance, stakeholder engagement, disclosure, and performancelxxxi .


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Roles of Other Organizations to Impact SME Sustainability – Key Learnings Small manufacturers lack adequate guidance and resources to compensate for their lack of internal resources. Some trade associations, technical associations, and other sector-specific groups are creating tailored sustainability resources that can benefit SMEs. Corporate sustainability-focused nonprofit organizations provide awareness-building resources and tools to help build a business case.

RECOMMENDATIONS This report is largely a literature review, but the review has prompted a few thoughts on how to better inform and engage SME manufacturers on sustainability. The need exists for additional tools, best practices, and other resources tailored to individual manufacturing sectors, and to SME manufacturers. Creating such resources can be facilitated by alignment of stakeholders, especially within the manufacturing sector, and the individual subsectors within manufacturing. Nonprofits and associations, groups with the experience and credibility to draw in SMEs, can best create such alignment. Perhaps most importantly, when considering and adopting sustainability best practices, SMEs should develop, and stakeholders should encourage, CSR plans as the keystone to their sustainability journey and as their first sustainability best practice. Having a sustainability plan in place will ensure a systematic approach that fosters continual improvement and continuity of engagement within the organization. Prior to putting a plan into place, smaller companies will need to create internal awareness and a knowledge base, and insure management commitment. A business case for sustainability tailored to the organization is usually necessary for support from company leadership. The formation of a number of sustainable supply chain initiatives is encouraging since the large organizations have considerable leverage over suppliers, many of which are SMEs. Even though the Sustainability4SMEs.com survey found supply chain directives to be of limited influence as a driver for SME adoption of sustainability practices, such initiatives should be encouraged due to the huge potential for positive impact. Proper leadership on the part of larger manufacturers can make supply chain initiatives an effective means of engaging SMEs. They can be used to increase SME awareness of sustainable practices, provide tools and resources, and even mentor SMEs. For example, Sprint developed a supplier guidebook that provides a thorough discussion on materiality assessments and provides guidance to small companies looking to conduct a materiality assessmentlxxxii . Sprint made the resource publicly available on their website. Further, alignment on CSR policy at the federal level would benefit companies large and small.


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Considerable technical and policy expertise exists within the Departments of Energy and Commerce, the EPA, the Small Business Administration, and other agencies, but to date, no agency provides policy or comprehensive resources for companies in the U.S. The E3 initiative is the federal government’s most relevant program targeting U.S. manufacturers. E3 offers limited technical assistance to manufacturers and, through its website, offers links to a wide range of toolslxxxiii . A federal-level sustainability program promoting sustainable practices within the private sector could take the form of providing nonprofits and associations with the financial resources to move forward on sector-specific and SME-specific programs. However, the greatest contribution the government could provide may be funding support for a broadbased network or set of networks organized and implemented by private sector organizations such as nonprofits. Business networks tailored to topics on sustainable practices can be beneficial to SMEs that participate. Both locally-focused and sector-focused networks have the potential to engage SMEs. Local networks can provide forums for better understanding community and state-level sustainability issues. Sector-focused SME networks can be based in trade and technical associations or in existing sustainability initiatives, offering tailored tools, best practices, and resources. Network organizations such as trade and technical associations are well positioned to engage the proper stakeholders and lead such sector-specific programs. An online network that serves as a home for the above suggestions as well as a forum to connect SME management, energy, environmental, and sustainability professionals in a peer-to-peer setting can be valuable. Such a network can include online resources such as tools and training, links to solution providers. An organization such as a nonprofit could organize and implement such a network. The 2degrees Community is a good example of such a networklxxxiv . Although the 2degrees Community is focused on the United Kingdom and is run by a for-profit companylxxxv , it does provide a good example of an online sustainability-oriented forum for businesses. Recommendations for SMEs • • • • •

Develop internal knowledge base Join existing sustainability initiatives and trade/technical associations Identify internal champions Develop business case and work toward management commitment Craft sustainability plans and commit to continuous improvement

Recommendations for Stakeholders • • • •

• •

Facilitate awareness-building Develop additional tools, best practices and other resources tailored to SMEs Encourage growth of sustainable supply chains and supply chain initiatives Develop sector-based and locally-based SME networks through associations or nonprofits Develop on-line forums for knowledge and best practice-sharing among SMEs Federal financial support to foster initiatives identified above


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CONCLUSIONS Many organizations across the world are working to embed sustainability into their operations and to report on their actions. Companies in the U.S. are less likely to be pursuing sustainability however, especially small and medium-sized U.S. businesses, including small and medium-sized manufacturers. A number of factors account for the limited engagement by SME manufacturers. Many have limited understanding of sustainability, no direct incentive, and see no economic value in establishing a CSR program. While many SME manufacturers do not see the need to alter their current practices, those with an interest face a number of barriers to further embedding sustainability within their organizations. These barriers include a lack of resources (financial, personnel, and time), limited demand from customers, lack of an internal champion, lack of knowledge, and a lack of appropriate metrics to quantify the costs and benefits. In addition, the complex sustainability reporting requirements, developed for large (typically multinational) companies in mind, are a particularly onerous barrier for smaller organizations. The one-sizefits-all analysis and documentation needed to report is challenging for resource-constrained SMEs. New reporting guidance, in the form of the GRI G4 guidelines, are aimed at streamlining the reporting to only the aspects of companies’ business that is “material”, based on a materiality assessment. To an extent, the G4 guidelines should ease the reporting burden. Despite the numerous barriers to pursuing sustainability, a number of SME manufacturers are moving forward, often driven by the vision or leadership of company leaders. Some companies find direct cost benefits or find new markets through CSR, and others are driven by customer demand – such as customers up their supply chain. Companies with active CSR programs are typically the companies that have established the “business case” for sustainable practices. A significant opportunity exists for large manufacturers and other large companies to engage their supply chain companies in sustainability efforts. Large companies can mentor and train their suppliers. They can develop and require suppliers to meet sustainability-related criteria as a condition of doing business together. In addition, a growing number of sustainable supply chain initiatives provide opportunities for large manufacturers to collaborate with peers and other stakeholders to develop new resources and frameworks for their suppliers. Opportunities exist for sector-specific trade and technical associations to create tailored CSR programs that help manufacturers, especially SME manufacturers, begin embedding sustainability into their organizations and to develop streamlined standards and reporting. These organizations are also positioned to foster best practice-sharing methods between large manufacturers and SMEs and to develop networks to engage smaller manufacturers. While several federal agencies have activities in place to assist manufacturers, including SME manufacturers, opportunities exist to increase collaboration of these agencies with manufacturers, and with stakeholders such as nonprofits and associations.


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Much has been accomplished, with some SMEs forging ahead. But much more remains to be done to ensure that a critical mass is reached for embedding sustainability into small and medium-sized manufacturers.

Key Learning Outcomes U.S. manufacturers lag behind their European and Asian counterparts in embedding sustainability in their organizations, and small U.S. manufacturers are even less likely to have programs in place. The standards, protocols, and guidance on CSR were designed for large organizations and do not work well for SMEs. SMEs typically lack resources and knowledge needed to get started, and see limited customer-driven motivation. Some small manufacturers are pursuing sustainability, often driven by committed company leadership or other internal champion. These companies have successfully made the business case for sustainability. Large manufacturers have an important leadership role to play in leading by example, setting best practices, and supply chain engagement. A growing number of sustainable supply chain and sectorbased initiatives exist, with opportunities for associations and nonprofits to engage SMEs.


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APPENDIX – DISCUSSION POINTS DURING PERSONAL COMMUNICATIONS 1) 2) 3) 4) 5) 6) 7) 8) 9) 10) 11) 12) 13) 14) 15) 16) 17) 18) 19) 20)

What terminology do you use to define your sustainability activities, for both internal and external communications? Briefly describe the objectives of your sustainability program. What are the main drivers for your company becoming more sustainable? Does your company employ a "management system" (structured processes and procedures) approach to your program? If so, briefly describe the structure. Which, if any, sustainability standards, guidance, or protocols do you most closely use or reference? Which reporting schemes do you participate in, if any? Do you consider reporting requirements to be appropriate, too lax, or too complex? What activities account for most of your company's GHG emissions? What do you consider to be best practices for sustainability, either for your company or your industry sector? Has your company implemented these best practices? Why/why not? Do you have a program in place to encourage small manufacturers in your supply chain to be more sustainable, reduce emissions, or improve energy efficiency? If yes, briefly describe. What approximate percentage of your supply chain is comprised of small & mediumsized enterprises (SMEs)? Has your organization established any sustainable supply chain initiatives? If so, please briefly discuss how you engage with SMEs, any deliverables you provide, and any impacts/successes of the initiative. Do you have any programs (not including supply chain initiatives) in place to encourage SMEs to adopt sustainable practices, reduce emissions, or energy efficiency? Do you participate in any trade or technical associations that have a SME-focused sustainability initiative? If so, briefly discuss how you participate/engage, any deliverables you provide to SMEs, and thoughts on the success/impact of the initiative. Do you feel that any trade or technical association you participate in would be an appropriate outlet for engaging SME members in sustainability? What do you feel are the barriers to SMEs becoming more sustainable? Is your perception based on observations, supplier feedback, or other? What, in your opinion, would encourage SMEs to more widely adopt sustainability practices? How relevant do you see management system approaches to corporate energy management, such as ISO 50001, as a “bridge” to a company adopting broader sustainability practices? What do you consider to be best practices in sustainability for small and medium-sized manufacturers?


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i

Matthew P. Johnson, “Sustainability Management and Small and Medium-Sized Enterprises: Managers’ Ruth Hillary, Small and Medium-Sized Enterprises and the Environment: Business Imperatives (Sheffield: Greenleaf Pub., 2000), http://oclc-marc.ebrary.com/id/10650088. iii KPMG, The KPMG Survey of Corporate Responsibility Reporting 2013 | KPMG | GLOBAL (Amstelveen, the Netherlands: KPMG International, December 2013), http://www.kpmg.com/global/en/issuesandinsights/articlespublications/corporateresponsibility/pages/default.aspx. iv Gro Harlem Brundtland, Our Common Future (New York City, NY: United Nations World Commission on Environment and Development, 1987). v International Institute for Sustainable Development, “Business Strategies for Sustainable Development” (International Institute for Sustainable Development, n.d.), http://www.iisd.org/business/tools/strategies.asp. vi Alissa Wolf, “Trends in Sustainability Reporting,” MAPI: Manufacturers Alliance for Productivity and Innovation, March 6, 2014, https://www.mapi.net/research/publications/trends-sustainability-reporting. vii Keith Miller, 3M Sustainability Program, Personal communication, February 28, 2014. viii Jennifer Dolin, OSRAM SYLVANIA Sustainability Program, Personal communication, March 10, 2014. ix Amy Hargroves, Sprint Sustainability Program, Personal communication, February 24, 2014. x “CDP - Driving Sustainable Economies,” accessed December 15, 2013, https://www.cdp.net/enUS/Pages/HomePage.aspx. xi “Reporting Framework Overview,” Global Reporting Initiative, accessed December 15, 2013, https://www.globalreporting.org/reporting/reporting-framework-overview/Pages/default.aspx. xii “Global Reporting Initiative: A New Framework? | Guardian Sustainable Business | Guardian Professional,” February 22, 2013, http://www.theguardian.com/sustainable-business/global-reportinginitiative-updates. xiii “Companies to Benefit as CDP and GRI Collaborate to Harmonize Reporting Frameworks,” accessed December 15, 2013, https://www.globalreporting.org/information/news-and-presscenter/Pages/Companies-to-benefit-as-CDP-and-GRI-collaborate-to-harmonize-reportingframeworks.aspx. xiv Andrew Marsh-Patrick, Company GHG Emissions Reporting – a Study on Methods and Initiatives (Manchester, United Kingdom: Environmental Resources Management, October 2010), http://ec.europa.eu/environment/pubs/pdf/ERM_GHG_Reporting_final.pdf. xv William R. Blackburn, The Sustainability Handbook: The Complete Management Guide to Achieving Social, Economic, and Environmental Responsibility (Washington D.C: Environmental Law Institute, 2007). xvi Keith Miller, 3M Sustainability Program, Personal communication, February 28, 2014. xvii “CDP - Driving Sustainable Economies.” xviii “G4 Sustainability Reporting Guidelines,” accessed December 15, 2013, https://www.globalreporting.org/reporting/g4/Pages/default.aspx. xix The International Framework (London: International Integrated Reporting Council, December 2013), http://www.theiirc.org/wp-content/uploads/2013/12/13-12-08-THE-INTERNATIONAL-IRFRAMEWORK-2-1.pdf. xx “What Is a COP?,” accessed March 5, 2014, http://www.unglobalcompact.org/COP/index.html. xxi “Corporate Accounting and Reporting Standard” (World Business Council for Sustainable Development and World Resources Institute, March 2004), http://www.ghgprotocol.org/standards. xxii “GISR Standard,” Global Initiative for Sustainability Ratings, December 19, 2013, http://ratesustainability.org/standards/. xxiii “ISO 14001:2004 - Environmental Management Systems - Requirements with Guidance for Use” (International Organization for Standardization, 2004), http://www.iso.org/iso/catalogue_detail?csnumber=31807. xxiv “ISO 14064:2006 - Parts 1,2,3” (International Organization for Standardization, 2006), http://www.iso.org/iso/catalogue_detail?csnumber=38381. ii


33

xxv

“ISO 50001:2011 - Energy Management Systems - Requirements with Guidance for Use” (International Organization for Standardization, 2011), http://www.iso.org/iso/home/standards/management-standards/iso50001.htm. xxvi “NSF P391: General Sustainability Assessment Criteria for Services and Service Providers” (NSF International, January 2012), http://www.techstreet.com/nsf/searches/2425716. xxvii “Dow Jones Sustainability Indices,” Dow Jones Sustainability Indices, December 19, 2013, http://www.sustainability-indices.com/. xxviii “Maplecroft | Home | Global Risks Portfolio | Climate Innovation Indexes,” accessed March 8, 2014, https://maplecroft.com/cii/. xxix “The Ten Principles,” United Nations Global Compact, December 19, 2013, http://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/index.html. xxx “ISO 14001 - Environmental Management Systems - An Easy to Use Checklist for Small Business. Are You Ready?” (International Organization for Standardization, 2010), http://www.iso.org/iso/home/store/publication_item.htm?pid=PUB100329. xxxi “ISO 26000:2010 - Guidance on Social Responsibility” (International Organization for Standardization, 2010), http://www.iso.org/iso/home/standards/iso26000.htm. xxxii “OECD Sustainable Manufacturing Toolkit,” OECD, December 19, 2013, http://www.oecd.org/innovation/green/toolkit/. xxxiii “SASB and IIRC Announce Memorandum of Understanding | The IIRC,” accessed March 1, 2014, http://www.theiirc.org/2014/01/16/sasb-and-iirc-announce-memorandum-of-understanding/. xxxiv “Climate Registry Information System,” The Climate Registry, December 19, 2013, http://www.theclimateregistry.org/climate-registry-information-system-cris/. xxxv Consolidated Appropriations Act, Greenhouse Gas Reporting Rule, 2009. xxxvi “SASB Sustainability Accounting Standards,” Sustainability Accounting Standards Board, December 19, 2013, http://www.sasb.org/. xxxvii “Green Plus Certification,” Go Green Plus, December 19, 2013, http://gogreenplus.org/sustainablebusines-certification/. xxxviii Jeffrey Mittelstadt, “NACFAM Sustainability Framework Model,” NACFAM, December 19, 2013, http://www.nacfam.org/PolicyInitiatives/SustainableManufacturing/NACFAMSustainabilityFramework Model/tabid/102/Default.aspx. xxxix Trends in External Assurance of Sustainability Reports: Spotlight on the USA (Global Reporting Initiative, April 2013), https://www.globalreporting.org/resourcelibrary/GRI-Assurance-Survey2013.pdf. xl The External Assurance of Sustainability Reporting (Global Reporting Initiative, 2013), https://www.globalreporting.org/resourcelibrary/GRI-Assurance.pdf. xli Robert Eccles and George Serafeim, “Corporate and Integrated Reporting: A Functional Perspective” (Harvard Business School, April 3, 2014). xlii Ibid. xliii Marika Arena and Giovanni Azzone, “A Process-Based Operational Framework for Sustainability Reporting in SMEs,” Journal of Small Business and Enterprise Development 19, no. 4 (2012): 669– 86, doi:10.1108/14626001211277460. xliv Ibid. xlv P Raynard and M Forstater, Corporate Social Responsibility: Implications for Small and Medium Enterprises in Developing Countries (Vienna, Austria: United Nations Industrial Development Organization, 2002). xlvi United Nations Global Compact, Global Corporate Sustainability Report 2013 (New York City, NY: United Nations Global Compact, September 2013). xlvii “G4 Sustainability Reporting Guidelines.” xlviii “Let’s Report! Explanations Summary” (Global Reporting Initiative), accessed December 15, 2013, https://www.globalreporting.org/resourcelibrary/English-Lets-Report-Explanation.pdf. xlix “G4 Sustainability Reporting Guidelines.” l State of Sustainable Business Survey 2013, October 2013, https://www.bsr.org/reports/BSR_GlobeScan_Survey_2013.pdf. li United Nations Global Compact, Global Corporate Sustainability Report 2013.


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lii

Ibid. (page 20) David Kiron et al., The Innovation Bottom Line (MIT Sloan Management Review and The Boston Consulting Group, February 2013), http://sloanreview.mit.edu/reports/sustainability-innovation/. liv “Hurdles and Barriers: Or What Is Getting in the Way of Implementing Sustainability Practices for Small and Mid-Sized Companies? | Sustainability for SMEs,” Sustainability4SMEs.com, accessed December 15, 2013, http://sustainability4smes.com/hurdles-and-barriers-or-what-is-getting-in-theway-of-implementing-sustainability-practices-for-small-and-mid-sized-companies/. lv Thomas Singer and Matteo Tonello, Sustainability Practices: 2013 Edition (New York City, NY: The Conference Board, July 2013). lvi Kiron et al., The Innovation Bottom Line. lvii Keith Miller, 3M Sustainability Program, Personal communication, February 28, 2014. lviii Amy Hargroves, Sprint Sustainability Program, Personal communication, February 24, 2014. lix Paul Hamilton, Schneider Electric Sustainability Program, Personal communication, March 3, 2014. lx Keith Miller, 3M Sustainability Program, Personal communication, February 28, 2014. lxi Amy Hargroves, Sprint Sustainability Program, Personal communication, February 24, 2014. lxii Alexis Fuge, Northrop Grumman Sustainability Program, Personal communication, March 10, 2014. lxiii Amy Hargroves, Sprint Sustainability Program, Personal communication, February 24, 2014. lxiv Paul Hamilton, Schneider Electric Sustainability Program, Personal communication, March 3, 2014. lxv “Performance.gov | Sustainability,” accessed March 2, 2014, http://sustainability.performance.gov/. lxvi 3M 2013 Sustainability Report (St. Paul, MN: 3M, 2013), www.3m.com/sustainability. lxvii Keith Miller, 3M Sustainability Program, Personal communication, February 28, 2014. lxviii Schneider Electric 2012-2013 Strategy and Sustainability Highlights (Rueil-Malmaison, France: Schneider Electric, April 2013). lxix United Nations Global Compact, Global Corporate Sustainability Report 2013. lxx Ibid. lxxi Amy Hargroves, “Sprint Corporate Responsibility and Sustainability” (presented at the Association of Climate Change Officers’ Operation Supply Chain Workshop, Las Vegas, NV, November 18, 2013). lxxii Dan Pleshko, “Lockheed Martin Sustainable Supply Chain Overview” (presented at the Association of Climate Change Officers’ Operation Supply Chain Workshop, Las Vegas, NV, November 18, 2013). lxxiii Keith Miller, 3M Sustainability Program, Personal communication, February 28, 2014. lxxiv Jennifer Dolin, OSRAM SYLVANIA Sustainability Program, Personal communication, March 10, 2014. lxxv Timothy M. Laseter and Nancy Gillis, “Collaborating for a More Sustainable Supply Chain,” Supply Chain Management Review, no. September/October 2012 (September 2012): 7. lxxvi “ICCA Responsible Care Initiative,” accessed March 4, 2014, http://www.iccachem.org/en/home/responsible-care/. lxxvii “Sustainable Apparel Coalition - Home,” accessed March 3, 2014, http://www.apparelcoalition.org/. lxxviii Alexis Fuge, Northrop Grumman Sustainability Program, Personal communication, March 10, 2014. lxxix “Manufacturing Extension Partnership Homepage,” accessed April 8, 2014, http://www.nist.gov/mep/. lxxx “E3: Economy – Energy – Environment,” accessed March 3, 2014, http://e3.gov/. lxxxi Andrea Moffat, The 21st Century Corporation: The Ceres Roadmap for Sustainability (Boston, MA: Ceres, 2010). lxxxii “Meeting Sprint’s Supplier Criteria: Materiality Assessment and Greenhouse Gas Emissions” (Sprint, September 24, 2013), http://www.sprint.com/companyinfo/scm/docs/SprintSupplierGuide_v1.0_092413.pdf. lxxxiii “E3: Economy – Energy – Environment.” lxxxiv “About 2degrees Community | 2degrees,” accessed March 4, 2014, https://www.2degreesnetwork.com/groups/2degrees-community/mission/. lxxxv Ibid. liii


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