environmental social and governance | Risk Management Monitor

The Environmental Protection Agency (EPA) estimates that 75% of the U.S. waste stream is recyclable, yet only about 30% of it is recycled. Even though individuals can be more diligent in their daily lives, businesses can make a larger difference at a greater scale, while setting a precedent for people within their company. This weekend’s America Recycles Day, celebrated on November 15, is a great opportunity to take action.

In addition to the obvious positives for the planet, risk professionals should be aware that sustainability initiatives can also create business value—saving money, advancing reputation and building a better community of people, among other benefits. While sustainability risk management is a newer area of business strategy, many companies have proven how profit and success can align with green strategies and policies, as well as the negative effects of not complying.

As the global focus on sustainability continues to gain traction, creating good sustainability practices could be the way to future-proof businesses from tomorrow’s policies. Some tips on how to start making a difference right now include:

Instituting a Green Policy

A green policy is a company’s statement about its commitment to sustainability and environmental management. It should contain components such as a declaration, what the company is trying to achieve, and how it will accomplish these goals, all of which will help put the plans in place and achieve them. It will not only position the company well—showing both staff and prospective clients or customers where the company stands on the issue and how it intends to carry out its green objectives—but will also show that the company is trustworthy enough to be transparent in its efforts.

Businesses can use this accountability to inspire action. Packaging retailer RAJA’s operations director Mark O’Neill explained how this culpability helps the team to keep pushing sustainability efforts: “We recognise our responsibility to protect the environment and are committed to continual improvement in sustainability. Our business is internally audited once per year. This ensures we are accountable and aligned with our core green policy point, adopting best practices to our activities wherever practicable.”

An Eco-Training Program

Once the green policy is in place, the company will need its staff on board too. Generally, people wantto be responsible, but knowing what can be recycled, how to recycle it and where to recycle it can cause confusion. By educating employees on ways to be more eco-responsible, rather than just telling them they are expected to be, they can feel confident in their choices, and the impact that they can have.

America Recycles Day (November 15) or other environment-related occasions are the ideal time to work on these issues. For example, the company could send out a quick survey to staff beforehand, gauging gaps in their knowledge, then hold a kick-off event that will provide information that will be useful for their life both inside and outside of the office, while answering any questions they may have. The company can also incentivize eco-responsible behavior, reinforcing good habits around the office.

Greener Energy: Reduce and Renew

According to a recent Deloitte study, over half of U.S. businesses have increased their commitment to renewable energy in response to reports warning of a worsening climate crisis. There are also ways for businesses to reduce their overall energy use, regardless of whether it is renewable or not. The company can start as small as making its lighting eco-friendlier with energy-efficient LED lights and putting timers on the building’s thermostats to limit unneeded energy use.

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And, ensure staff switch off monitors, projectors and TV screens at the end of the day to conserve energy through the night.

Having the business go remote can also help your business become greener. For one, people are traveling to and from work less during the COVID-19 pandemic.
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According to Global Workplace Analytics, if people worked from home just half the time, the nation could save over $700 billion per year. If the company’s staff is now working from home, it can be useful to pass on the same information for employees’ home offices, including tips on how to save energy by via their lights, thermostats and monitors.

Providing Staff Green Goods

Providing staff with gifts is a good way to incentivize them to become more eco-conscious, and it can help the company be greener as a community, too. It is estimated that somewhere between 4.8 million tons of plastic enters our oceans each year, taking hundreds of years to biodegrade, if at all. Two cost-effective items the company could provide its employees are a reusable water bottle and a reusable coffee cup. The United States is the leading consumer of coffee in the world, at 400 million cups of coffee a day, while studies suggest that Americans make their way through 2.5 million plastic bottles every hour. These two items, therefore, will help to make businesses more streamlined in its eco-responsibilities, while also addressing bigger environmental problems.

Last week, online home goods retailer Wayfair saw a mass employee walkout related to the company selling $200,000 worth of bedroom furniture to BCFS, a government contractor running a facility in Texas that would detain thousands of immigrant children along the border. The employees were dissatisfied with the company’s response to their letter objecting to the transaction and a previous furniture sale to another BCFS facility for children that was shut down after the Department of Health and Human Services raised concerns, including that the company was not conducting required staff background checks, such as for records of child abuse.

U.S. Customs and Border Patrol (CBP) and U.S. Immigration and Customs Enforcement (ICE) have detained tens of thousands of undocumented immigrants, including many asylum-seekers, who have crossed the U.S. southern border in facilities that have been plagued with terrible conditions. These facilities also house children who have allegedly faced widespread mistreatment after the government separated them from their families.

Over 500 Wayfair employees signed the letter to management objecting to the BCFS sale and asking that the company donate resulting profits to RAICES, a nonprofit organization providing legal support to asylum-seekers and refugees on the border. The letter also called for the company to cease all business with BCFS and “establish a code of ethics for B2B [business-to-business] sales that empowers Wayfair and its employees to act in accordance with our core values.”

In an internal statement, Wayfair executives lauded the employees’ passion but said that, “as a retailer, it is standard practice to fulfill orders to all customers and we believe it is our business to sell to any customer who is acting within the laws of the countries within we operate.” Later, executives also stated that they would donate $100,000 to the American Red Cross to support work along the border. While applauding the donation, employees at the company’s Boston office staged a walkout the next day that attracted national media attention.

As certain political issues become more fraught and attract more media and public attention, companies should expect increased scrutiny of their connections and business dealings with government agencies and their contractors, including from their own workers. Continuing these relationships and work could expose businesses to reputational risk—being seen as participating in or facilitating unpopular or unethical conduct—and could seriously impact employees’ work satisfaction, as well as their belief in the company and its professed values.

Specifically responding to criticism of its funding of immigrant detention sites, last Wednesday, Bank of America vice chair Anne Finucane told Bloomberg that the bank would stop lending to companies that run immigrant detention centers and private prisons, including government facilities at the border. According to Bloomberg, the decision was made after the company’s environmental, social and governance (ESG) committee reviewed the policy, including visiting prisons and consulting experts, clients, civil rights leaders and the company’s Hispanic and black leaders. JPMorgan Chase made a similar move in March, and Wells Fargo is reportedly following suit.

Over the past year, employees of many top companies have spoken out against their employers for facilitating controversial immigration enforcement activities. In June 2018, Microsoft employees expressed comparable objections to chief executive Satya Nadella after discovering that the company had a $19.4 million contract to provide ICE with data processing and AI services. In response, Nadella released a memo decrying the Trump administration’s immigration policies and explaining that the company’s work did not have anything to do with family separations, but did not promise to cancel the contract. The same month, after a meeting in which Amazon pitched ICE its Rekogition facial recognition platform, employees sent a letter to CEO Jeff Bezos objecting to the company working with ICE, selling Rekognition to police departments, and providing digital infrastructure to tech companies running surveillance and other services for ICE.