Corporate Leaders Explore Environmental Excellence
At an October 2002 forum, 37 senior environmental executives from 20 companies representing a diverse group of industries -- including broadcasting, electric utilities, chemicals, aerospace, pharmaceuticals, and telecommunications -- discussed their own definitions of environmental excellence. Here's what they had to say.
In order to explore environmental excellence, Consolidated Edison of New York decided to establish a series of annual forums. The first forum, “Commitment to Excellence: Practical Approaches to Environmental Leadership,” was held on October 24, 2002 at Consolidated Edison’s Learning Center in Long Island City, New York. Thirty-seven senior environmental executives from 20 companies representing a diverse group of industries -- including broadcasting, electric utilities, chemicals, aerospace, pharmaceuticals, and telecommunications -- met to discuss their own definitions of environmental excellence.
This article is an excerpt of Steve Rice’s coverage of the first Commitment to Excellence forum, which is published in its entirety in the summer 2003 issue of “Environmental Quality Management” magazine, published by John Wiley.
United Technologies
Ellen Quinn, director of environmental programs at United Technologies, said that her company sees several issues as being important for moving forward in a global community:
Bristol-Myers Squibb
Craig Woodard, director of EH&S research and business support at Bristol-Myers Squibb, noted that business units now provide input to the EH&S staff regarding current and future sustainable business needs, especially in the area of pharmaceuticals in the environment.
The company’s EH&S management system is substantially aligned with ISO 14001 and its performance measurements are derived from the Charter for Sustainable Development developed by the International Chamber of Commerce. In addition, Bristol-Myers Squibb has established Sustainability 2010 Goals to:
Randy Price, Consolidated Edison’s vice president of environment, health, and safety, presented the company’s 12-element environmental management system (EMS). While the organization has companywide ISO 14001 certification, this internally developed EMS provides the framework for both long-term and daily EH&S efforts.
The company’s EMS operates within a three-tiered leadership structure:
Strategic Planning
Perhaps the most intriguing discussion held by the strategic planning group involved two distinctively different strategies for environmental goal-setting. One strategy involves setting definitive “must meet” goals that the company or department knows it can achieve -- or at least believes it has a high probability of achieving -- because the company has made a review and determination before the goal is established, and because the means to achieve the selected goal are largely under the control of the company.
The other strategy involves setting “stretch” goals that strive to go beyond what the company or department can reasonably be expected to accomplish with normal processes or known technologies. While taking this approach may result in some goals not being reached, the strategy encourages employees and business units to expand their vision of what it is possible to achieve.
In general, the “must meet” strategy is primarily used when setting externally publicized goals. The “stretch” strategy is used primarily when setting internal company, department, or personal goals. All participants agreed that the appropriateness of a particular strategy would depend on the situation and on each company’s abilities, culture, and personnel.
Company Culture Issues
Interestingly, the company culture issues group concluded that a commitment to “break-through” thinking and radical innovation were essential characteristics that promote excellence. This contrasts with the preference for incremental change expressed by the strategic planning group.
Several group members indicated that a majority of EH&S personnel appear to believe, probably incorrectly, that a culture of excellence can be established without a “defining moment.” Moreover, many EH&S professionals assume that, once the commitment is made, change will occur automatically.
Because company cultural changes can take a long time to become established in organizations, particularly large and diverse companies, the group indicated that efforts must be taken to sustain momentum and avoid the positioning of excellence as merely a project or program.
There was a consensus of opinion in the company culture issues group that an excellence initiative must be forward-looking. It cannot focus simply on eliminating activities that were acceptable in the past, but that are no longer acceptable today. Rather, it must consider that many activities that are acceptable today may not be acceptable in the future.
Metrics
The metrics group offered one important qualification on the “stakeholder” metric. While considering stakeholders and having them participate in the decision-making process is important, the group was careful to qualify that this does not necessarily require obtaining stakeholder agreement with the final decision. What is important is to include stakeholders as a bona-fide part of the process, clearly defining their role and ensuring that they are aware of where and how the final decision is to be made. This is classic decision- making management.
Tools and Programs
Project XL (the letters stand for eXcellence and Leadership) was specifically mentioned as an example of an unsuccessful program. The EPA program encourages regulated entities to develop innovative and cost-effective methods to achieve environmental protection. In return, the EPA has agreed in principle to offer the regulatory flexibility needed to pursue innovation.
In practice, however, many companies state that they have spent considerable time and money on XL projects, only to find in the end that the federal government had no regulatory or legislative authority to grant the needed compliance flexibility, or that state regulatory authorities did not want to undertake the effort of granting and administering customized flexibility for a single facility.
Thus, in the minds of many forum participants, Project XL exemplified what the group listed as the first problem of unsuccessful programs: a failure to recognize design or implementation disconnects.
Corporations have been implicated in this crisis because of their perceived role in the political system (through campaign contributions and resistance to campaign funding reform) and because of their role in the corruption of the financial system (through companies such as Enron, Tyco, and WorldCom).
According to Frankel, the relationship among corporations, the government, and individuals sets up the “Construct of the Triad.” This is a situational conflict involving the objective domain (corporations), the social domain (government), and the depth dimension (the individual).
When the social domain supports the domination of the objective domain, as is essentially the current situation, there is necessarily a suppression of the depth dimension. This results in a loss of meaning for the individual, a perceived lack of authenticity in their leaders and, ultimately, suppression of the individual.
“No wonder people are angry!” Frankel reflected.
He concluded with the following insight, “We live in a global dysfunctional family, where corporations are ‘big daddy.’” Companies that wish to pursue environmental excellence must:
A company starting from a very low (or even negative) level of performance that merely rises to average within a short time may receive more positive recognition for its progress than a company that is already perceived as excellent but that makes no significant strides forward during the same time period.
Participants also recognized that environmental excellence, like financial performance, is not static. It creates expectations for improvement. Rarely can a company that achieves a set level of excellence expect to stay at that level. Excellence, particularly from the public’s perspective, is integrally related to further advancement.
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Steve Rice is president of Environmental Opportunities Inc., a strategic environmental management and project support firm located in Florham Park, New Jersey. He also co-hosts the “Ask the Experts” forum on Greenbiz.com.
This article is an excerpt of Steve Rice’s coverage of the first Commitment to Excellence forum, which is published in its entirety in the summer 2003 issue of “Environmental Quality Management” magazine, published by John Wiley.
A General Cannot Be Successful Alone
Jim Connaughton, chairman of the President’s Council on Environmental Quality, gave the keynote address. Remarking that “a general cannot be successful by him or her self,” Connaughton:- Urged companies to get community leaders involved with environmental efforts so that influential members of the community can witness the good things that are getting done.
- Noted that there was still much work to be done to integrate EH&S and social topics into the curricula of business, law, and engineering schools.
- Suggested that every corporate environmental professional should “adopt a bureaucrat” -- that is, partner with an official in local government or in a state or regional agency.
Three Companies’ Environmental Approaches
Session 1 provided participants with insights into the environmental philosophies, overall direction, and issues at three different companies.United Technologies
Ellen Quinn, director of environmental programs at United Technologies, said that her company sees several issues as being important for moving forward in a global community:
- The company’s environmental footprint
- Relationships with environmental activists and NGOs
- Social responsibility
- The growing efforts to associate ecology with religion
Bristol-Myers Squibb
Craig Woodard, director of EH&S research and business support at Bristol-Myers Squibb, noted that business units now provide input to the EH&S staff regarding current and future sustainable business needs, especially in the area of pharmaceuticals in the environment.
The company’s EH&S management system is substantially aligned with ISO 14001 and its performance measurements are derived from the Charter for Sustainable Development developed by the International Chamber of Commerce. In addition, Bristol-Myers Squibb has established Sustainability 2010 Goals to:
- Reduce its environmental footprint.
- Conduct an EH&S effects and opportunities-improvement assessment for every facility and business operation.
- Preserve biologically diverse land to offset the property used by the company’s total worldwide operations.
Randy Price, Consolidated Edison’s vice president of environment, health, and safety, presented the company’s 12-element environmental management system (EMS). While the organization has companywide ISO 14001 certification, this internally developed EMS provides the framework for both long-term and daily EH&S efforts.
The company’s EMS operates within a three-tiered leadership structure:
- Environmental Committee of the Board of Directors, comprising four board members who meet quarterly.
- EH&S Committee, comprising senior company executives and external advisors who meet monthly.
- EH&S Leadership Team, comprising EH&S leaders who meet monthly.
- The unique “Reporting Without Retaliation” element of Consolidated Edison’s EMS, which “is a critical component of getting employees involved in correcting both environmental situations and the process or events that may have led to those situations.”
- The “Time Out” card that each employee is empowered to use to stop an action that the employee considers to be violating the company’s EH&S principles or a regulatory requirement.
Exploring Specific Aspects of Environmental Excellence
In Session 2, participants attended one of four breakout groups; findings were presented during Session 3.Strategic Planning
Perhaps the most intriguing discussion held by the strategic planning group involved two distinctively different strategies for environmental goal-setting. One strategy involves setting definitive “must meet” goals that the company or department knows it can achieve -- or at least believes it has a high probability of achieving -- because the company has made a review and determination before the goal is established, and because the means to achieve the selected goal are largely under the control of the company.
The other strategy involves setting “stretch” goals that strive to go beyond what the company or department can reasonably be expected to accomplish with normal processes or known technologies. While taking this approach may result in some goals not being reached, the strategy encourages employees and business units to expand their vision of what it is possible to achieve.
In general, the “must meet” strategy is primarily used when setting externally publicized goals. The “stretch” strategy is used primarily when setting internal company, department, or personal goals. All participants agreed that the appropriateness of a particular strategy would depend on the situation and on each company’s abilities, culture, and personnel.
Company Culture Issues
Interestingly, the company culture issues group concluded that a commitment to “break-through” thinking and radical innovation were essential characteristics that promote excellence. This contrasts with the preference for incremental change expressed by the strategic planning group.
Several group members indicated that a majority of EH&S personnel appear to believe, probably incorrectly, that a culture of excellence can be established without a “defining moment.” Moreover, many EH&S professionals assume that, once the commitment is made, change will occur automatically.
Because company cultural changes can take a long time to become established in organizations, particularly large and diverse companies, the group indicated that efforts must be taken to sustain momentum and avoid the positioning of excellence as merely a project or program.
There was a consensus of opinion in the company culture issues group that an excellence initiative must be forward-looking. It cannot focus simply on eliminating activities that were acceptable in the past, but that are no longer acceptable today. Rather, it must consider that many activities that are acceptable today may not be acceptable in the future.
Metrics
The metrics group offered one important qualification on the “stakeholder” metric. While considering stakeholders and having them participate in the decision-making process is important, the group was careful to qualify that this does not necessarily require obtaining stakeholder agreement with the final decision. What is important is to include stakeholders as a bona-fide part of the process, clearly defining their role and ensuring that they are aware of where and how the final decision is to be made. This is classic decision- making management.
Tools and Programs
Project XL (the letters stand for eXcellence and Leadership) was specifically mentioned as an example of an unsuccessful program. The EPA program encourages regulated entities to develop innovative and cost-effective methods to achieve environmental protection. In return, the EPA has agreed in principle to offer the regulatory flexibility needed to pursue innovation.
In practice, however, many companies state that they have spent considerable time and money on XL projects, only to find in the end that the federal government had no regulatory or legislative authority to grant the needed compliance flexibility, or that state regulatory authorities did not want to undertake the effort of granting and administering customized flexibility for a single facility.
Thus, in the minds of many forum participants, Project XL exemplified what the group listed as the first problem of unsuccessful programs: a failure to recognize design or implementation disconnects.
A Crisis of Trust
The forum’s luncheon speaker, Carl Frankel, provided a spirited and insightful perspective on corporate environmental excellence from the public’s perspective, presenting concepts from his forthcoming book, “The Integral Way: A Path for the 21st Century.” In summary, he suggested that the U.S. is in the midst of a crisis of trust.Corporations have been implicated in this crisis because of their perceived role in the political system (through campaign contributions and resistance to campaign funding reform) and because of their role in the corruption of the financial system (through companies such as Enron, Tyco, and WorldCom).
According to Frankel, the relationship among corporations, the government, and individuals sets up the “Construct of the Triad.” This is a situational conflict involving the objective domain (corporations), the social domain (government), and the depth dimension (the individual).
When the social domain supports the domination of the objective domain, as is essentially the current situation, there is necessarily a suppression of the depth dimension. This results in a loss of meaning for the individual, a perceived lack of authenticity in their leaders and, ultimately, suppression of the individual.
“No wonder people are angry!” Frankel reflected.
He concluded with the following insight, “We live in a global dysfunctional family, where corporations are ‘big daddy.’” Companies that wish to pursue environmental excellence must:
- Recognize that, from the public’s perspective, excellence is a start, but it alone is not enough.
- Restore public trust and build social capital.
- Acknowledge their unintentional role in the “Tyranny of the Objective” and commit to a proactive role in ending that tyranny.
Results and Conclusions
Among participants, there was consensus that environmental excellence does not have pre-defined measures. It is often relative to each company’s recent past and its speed of improvement.A company starting from a very low (or even negative) level of performance that merely rises to average within a short time may receive more positive recognition for its progress than a company that is already perceived as excellent but that makes no significant strides forward during the same time period.
Participants also recognized that environmental excellence, like financial performance, is not static. It creates expectations for improvement. Rarely can a company that achieves a set level of excellence expect to stay at that level. Excellence, particularly from the public’s perspective, is integrally related to further advancement.
Next Steps
Positive participant feedback has confirmed Consolidated Edison’s decision to conduct a second annual environmental leadership forum in 2003. The upcoming forum will explore a few select aspects of environmental excellence in greater detail. Possible topics include:- Using firm numerical goals vs. directional, stretch goals
- Normalizing metrics
- Linking executive pay to EH&S performance
- Choosing generic or customized tools
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Steve Rice is president of Environmental Opportunities Inc., a strategic environmental management and project support firm located in Florham Park, New Jersey. He also co-hosts the “Ask the Experts” forum on Greenbiz.com.
