Sustainability
Sustainability in the Tech Sector

Silicon Valley's sustainability problem

Burgess COMMENTARY

Peter Burgess

Silicon Valley's sustainability problem
Office buildings in Silicon Valley. Shutterstocksoulgems

The tech sector has stepped up its fight against climate change since COP21 last year. From the Bill Gates-led Breakthrough Energy Coalition pledging more than $1 billion towards the transition to clean energy, to Google purchasing nearly 2.5 gigawatts of renewable energy, tech companies have made bold commitments.

As innovation leaders, however, much of Silicon Valley still lags on championing comprehensive sustainability strategies. A new report by the Centre for Sustainability and Excellence (CSE) sheds light on the big issue at play: Most large companies are compliant but aren’t driving a thorough, transparent approach to sustainability.

The report, 'Sustainability Trends in Silicon Valley,' claims to be the first systematic research of its kind about tech giants headquartered in Silicon Valley. CSE examined 100 public and private companies, all either small-to-medium sized businesses with up to 500 employees or large companies with up to 100,000 workers, about their sustainability reporting strategies — if any.

From tech innovators to environmental stewards

From the outset, things look good: 61 percent of surveyed companies (including Apple, Adobe, eBay, Oracle and other well-known names) have a sustainability professional on staff. The number drops slightly for large companies, of which 59 percent have a full-time sustainability officer.

'While true that large companies might have greater resources, they also have more departments which might have managers in charge of sustainability but not at the C-level,' Rosalinda Sanquiche, executive manager of CSE North America, told GreenBiz. 'All too often, responsibility for sustainability falls under department headings such as human resources, marketing, health and safety or stakeholder engagement because it is not yet seen as something that should exist throughout an organization.'

Smaller companies and startups also may 'be more in tune' with the need to integrate sustainability practices from the start, while larger companies need to reorganize to accommodate a new role.

Overall, only 29 percent of companies surveyed produced a sustainability report anytime from 2013 until 2016. CSE only accounted for reports that are formatted clearly, leaving out strictly web-based reports that are produced solely for compliance, those featuring only quick facts or 'large and vague goals.'

'A 'substantial goal' has a defined and quantifiable metric,' clarified Sanquiche. 'Rather than say 'improve agricultural resources,' they’ll say 'improve access to healthy foods with our farm-to-table initiative connecting organic farms with local farmer’s markets and groceries.''

Disclosure provides quantifiable metrics by which to judge a company’s intent and success. Stakeholders, investors and customers want to see numbers about investments, specific roles of those leading initiatives, and the expected benefits of these efforts. Showing progress and improvement — listed on a formal report — increases branding, credibility and engagement among socially responsible consumers and investors.

Overall, only 29 percent of companies produced a sustainability report anytime from 2013 until 2016.

Top of the charts

CSE chose the top 21 companies with comprehensive sustainability practices. These organizations were ranked by six focus areas of sustainability:

• Community, focusing on community outreach, volunteerism and education programs;

• Environmental, focusing on facility and product operations, sustainable materials and carbon reduction;

• Ethics, focusing on governance, transparency and compliance;

• Employees, focusing on employee development and community involvement;

• Supply chain, focusing on health and safety, conflict minerals and supply chain;

• Philanthropy, focusing on the company’s work with philanthropic foundations.

Of these — led by Adobe, Applied Minerals, and Cisco — 86 percent have a sustainability report or web-based sustainability efforts. CSE noted that some famous tech names, such as LinkedIn and PayPal, did not make it on the list because 'their sustainability efforts were either narrow or limited in a particular area.' For example, LinkedIn focuses on ethical governance on its website, rather than on displaying compelling information about its sustainability strategy concerning the environment, community or supply chain.

Ethics was the leading category of practice focus (95 percent) among all surveyed tech companies, followed by supply chain (64 percent) and environment (63 percent). These outweighed community and employee welfare (both 51 percent) and philanthropy (32 percent). Computer networking, consumer electronics and telecommunications companies spent the most effort on environmental programs.

'We’ve seen trends in sustainability that focus on improved efficiency and green branding; an improved supply chain facilitates both of these,' said Sanquiche. 'Better suppliers often reduce costs. Using more socially responsible sourcing improves reputation. I don't believe there is ever just one motivation to make change. Closed-loop and circular economies have proven themselves to reduce costs, particularly long-term costs of waste disposal, transportation, litigation and energy use. If a company can say they've moved to a local supplier or one which pays fair wages or employs sustainable harvesting, so much the better for their own marketing efforts.'

CSE noted that some famous tech names, such as LinkedIn and PayPal, did not make it on the list because 'their sustainability efforts were either narrow or limited in a particular area.' Leading by example

The report delved into Adobe as having exemplary, visible sustainability strategy including both a report and web-based summary. The company tries to reduce waste through operational actions, recycling and product innovations. It has joined RE100 in its conservation efforts, as well as pledged to the White House’s American Business Act on Climate, for which they measure and manage their energy use, reduce energy demand and produce their energy on-site via renewables.

Nearly three-quarters of Adobe’s workspaces are LEED certified. Adobe focuses not only on sustainable corporate governance practices and compliance, but also that of its supply chain and on Adobe’s community impact.

The report also noted Cisco, which has an environmental sustainability report and sustainable supply chain practice; eBay’s Greener Commerce initiative; and Western Digital’s supply chain management focus, among other organizations.

Only 21 of 100 Silicon Valley giants had a well-rounded approach to sustainability, which will ensure their sustained long-term growth without having a negative impact on the surrounding world and the resources they need to survive. The CSE report urges further thought about the influence large companies have on their competitors, and the global market as a whole, when they do not focus on all aspects of sustainably creating value for stakeholders.

'The transparency of disclosure is scary for companies still in the old model. Business school still teaches competition over collaboration, protecting trade secrets and putting the best face on quarterly reports,' said Sanquiche. 'That's going to be a hard habit to break.'

http://www.cse-net.org/article/859/cse-announces-surprising-findings-corporate-sustainability-silicon-valley

CSE Announces Surprising Findings for Corporate Sustainability In Silicon Valley

(Chicago, IL, Nov. 17, 2016) The Centre for Sustainability and Excellence (CSE) announces its ground breaking report: Sustainability Trends in Silicon Valley. While much has been made about whether Silicon Valley corporations, start-ups and tech giants are or are not models of sustainability, CSE provides the first systematic research on the true picture of sustainability efforts by analyzing the current state of sustainability and corporate social responsibility reporting by Silicon Valley-based companies and organizations. The report provides insight for investors, business leaders, company boards, CSR and sustainability professionals, NGOs, customers, academics and students and other stakeholders. This research examines 100 companies ranging from small and medium-sized businesses (SMBs) to large businesses with 1000 to over 100,000 employees. The research reports on company or organization size, type, industry, and it tracks if organizations follow best practices for sustainability and whether or not they are sustainability role models to other sectors.

Some of the 100 companies examined are global leaders in their field such as Adobe, AMD, Apple, Cisco, Dolby, eBay, Facebook, FICO, Google, Intel, Intuit, PayPal, Oracle, SunPower, Tesla, Twitter and Zynga. Industries covered include automotive, computer and internet, entertainment, financial services, medical, renewables and telecommunications. The findings outline trends and various analyses ranging from which particular focus areas are emphasized more heavily than others to which type of companies generally produce the highest number of comprehensive sustainability practices, have the highest percentage of sustainability professionals or sustainability reporting, if any.

The report notes that 61% of companies have a sustainability professional, weighted in favor of large companies over SMBs. Even though more than half of the companies studied have sustainability professionals, only 29% have sustainability reporting. Companies choose instead to vaguely display what sustainability practices they have, often with slick online promotion. The report breaks down sustainability practices into five categories: community, environment, employee, ethics, supply chain and philanthropy. Only 21% of the companies studied address all six practices, each showing greater or lesser emphasis on particular categories. Finding Google on the list is no surprise, while Apple is notably absent.

While many of the companies examined are leaders in their field, they are not necessarily leaders in Sustainability as many people expect! Overall, the companies to do not appear to have a clear strategy to address stakeholder concerns or expectations. With the exception of those strongest companies at the top of the scale such as Adobe, Applied Materials and Cisco, corporate strategy seems to be focused on one or two elements of sustainability, rather than a systems approach.

While the report offers many insights, one surprising finding is the focus on Ethics, with 95% practicing ethical governance. What are the implications for due diligence, investors or community watchdogs? In this political climate where ethical behavior is gravely in question, the computer industry, across the board, as well as entertainment, financial services and telecommunications demonstrate a heavy emphasis on Ethics. This contradicts perceived malfeasance and reported unethical behavior. The report raises the question of how an industry can show significant ethical conduct in-house (governance) while having a reputation for misconduct toward customers and consumers at large.

This report is the first of its kind to delve into corporate behavior in Silicon Valley. CSE also has reports on Sustainability Reporting Trends in North America for the mining, energy, food and retail industries. CSE's research furthers its commitment to providing the highest caliber training in sustainability for corporate executives and sustainability managers worldwide. Its Sustainability Academy, a global initiative with the mission to train 100,000 sustainability professionals by 2020, provides rigorous education to sustainability professionals, entrepreneurs and graduates needing the latest resources to advance in this ever evolving field. See CSE's lineup for 2017.

Certified Sustainability Practitioner (CSR) Program. Leading program for qualifying Sustainability Professionals that want a career in this field:
• Houston, TX, February 23-24, 2017,
• Toronto, Ontario, March 27-28, 2017
• New York, NY, May 25-26, 2017

The Sustainability Academy offers the following specialized Online Programs for continues education:
• Diploma on Corporate Sustainability
• Certificate on Sustainability (CSR) Reporting
• Certificate on Carbon Reduction Strategy
• Online Certificate on ESG performance for Investors and Sustainability Professionals