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MIM 521/ BA 548 Evaluating and Measuring the Sustainability Performance for Global Organizations. Certification; GRI; Social Metrics Day 4, June 30. I expect the deliverables will, to some extent: articulate the question and the scope of the project work,

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mim 521 ba 548 evaluating and measuring the sustainability performance for global organizations

MIM 521/ BA 548Evaluating and Measuring the Sustainability Performance for Global Organizations

Certification; GRI; Social Metrics

Day 4, June 30

slide2
I expect the deliverables will, to some extent:
  • articulate the question and the scope of the project work,
  • discuss and/or identify best practices in the domain of the question,
  • address the City’s/PSU’s current status in relation to this question,
  • identify methods or frameworks that could be brought to bear on the question,
  • identify the data needed, the data-capture process (in some detail), how the data will be reported, and
  • propose things that the City/PSU might do to help them understand, evaluate, and/or report about this question.
certification definitions
Certification definitions
  • Standards—attributes to attain
  • Certification—signal of attainment
  • Accreditation—authorize to certify
  • Verification—check on the N (whatever is being certified)
foundations of independent certification systems
Foundations of Independent Certification Systems
  • Governance—oversight over the entire process
  • Standardization—developing the standards
  • Accreditation—certifying the certifiers
  • Verification—certifying the subject
  • Tracking and Labeling—using the certification
  • Much of this is from a white paper by Metafore
governance
Governance
  • Mechanisms and procedures for operating a certification system
    • Groups involved
    • How decisions are reached
    • Influence of parties
    • Procedures to ensure implementation
  • GRI
standardization
Standardization
  • Developing, maintaining, and enhancing standards
      • May be guidance and/or performance requirements
    • Participation (public, industry, NGOs?)
    • Procedures for addressing disputes
    • Decision making process (consensus, majority?)
  • Who is represented, who reviews, who approves
epeat standard participants
EPEAT-Standard participants

• Pitney Bowes Corporation - Dave Gallaer

• Sharp Electronics Corp. - Frank Marella

• Silicon Valley Toxics Coalition

• State of Massachusetts - Eric Friedman

• State of Minnesota - Garth Hickle

• State of Oregon - Gayle Montgomery

• The Center for a New American Dream - Naomi Friedman

• Tufts University - Patricia Dillon

• U.S. Department of the Interior - James Weiner

• U.S. EPA - Oliver Voss

• U.S. EPA - Viccy Salazar

• U.S. Government - John Howard

• United Recycling Industries, Inc. - Lauren Roman

• University of Tennessee - Socolof

• Waste Management - Bobby Farris

• Zero Waste Alliance - Larry Chalfan

  • • Apple Computer - Dave Cassano
  • • California Integrated Waste Management Board - Terri Persons
  • • City of Seattle - David Matthews
  • • Dell Computer - Mark Schaffer
  • • Electronic Industries Alliance - Holly Evans
  • • GATX Inc. - Ronalda Meson
  • • Hewlett Packard - John Burkitt
  • • IBM - Tim Mann
  • • INFORM - Sarah O¹Brien
  • • Intel Corporation - Allen R. Wilson
  • • International Assn of Electronics Recyclers - Peter Muscanelli
  • • New Jersey Institute of Technology - Reggie Caudill
  • • Noranda Recycling Inc. - Steve Skurnac
  • • Northeast Recycling Council, Inc. - Lynn Rubinstein
  • • Panasonic Matsushita Electronics Corp. - David Thompson
epeat ieee standard 1680
EPEAT: IEEE Standard 1680
  • determined through stakeholder consensus
  • contained in the IEEE 1680 Family of Standards for Environmental Assessment of Electronic Products
  • Bronze, Silver, Gold
accreditation
Accreditation
  • Authorizing an individual or entity as capable of certifying the subject item
      • Certifying the certifier
    • Application
    • Evaluation (by some ‘certifying’ body)
    • Reporting
    • Attention to non-conformance
    • Decision (not by the evaluator)
    • Monitoring
forestry stewardship council
Forestry Stewardship Council
  • Entity submits application to be a certifier
  • FSC Review team assess the application
      • Values consistency over globe
    • Competence
    • Processes
  • Review team office audit, review prior evaluations
  • In absence of non-compliance, separate team makes decision
  • Regular monitoring
  • Re-accredited every 5 years
verification
Verification
  • Confirming that organization/product/process meets the requirements of the certification system
      • Credibility for certification comes here
    • Pre-assessment
    • Main assessment
    • Decision making
    • Monitoring
verification schemes
Verification schemes

First party—internal

EPEAT

Second party—external, with stake in organization being verified

some GRI

Third party—external, independent

FSC

fairtrade
Fairtrade
  • Application form -- will be informed if you qualify.
  • Application Pack with how to continue with your application—500 Euros..
  • You are audited for Fairtrade compliance
  • FLO-CERT (third-party certifier) certification manager will plan an on-site audit
  • Auditor will visit site and check against compliance criteria.
  • Certifier may highlight non-compliance
  • Once compliance is determined a certificate will be issued
tracking and labeling
Tracking and Labeling
  • Labels
    • indicators of certification
    • provide information to observers
  • Tracking
    • method of transparency
    • auditing the certificate (not certification)
food alliance labels
Food Alliance (Labels)
  • Labels (Food Alliance)
    • Food Alliance Certified
      • Products
      • Handlers
      • Producers
    • FAC Grassfed
    • Made with FAC ingredients (50-79% FAC)
wood products tracking
Wood Products (Tracking)
  • Tracking (wood products)
    • Chain of custody (FSC)
        • Product level activities
      • Physical separation
      • Batch model—certifies temporally
      • Mixed certified and not
    • Sustainable procurement (SFI)
      • Business level practices
slide18
GRI
  • Create reporting standards
  • Element of certification, of reporting, but not performance
part c of the guidelines comprises five sections
Part C of the Guidelines comprises five sections
  • 1. Vision and Strategy – description of the reporting Organization’s strategy with regard to sustainability, including a statement from the CEO.
  • 2. Profile – overview of the reporting Organization’s structure and operations and of the scope of the report.
  • 3. Governance Structure and Management Systems – description of Organizational structure, policies, and management systems, including stakeholder engagement efforts.
  • 4. GRI Content Index – a table supplied by the reporting Organization identifying where the information listed in Part C of the Guidelines is located within the Organization’s report.
  • 5. Performance Indicators – measures of the impact or effect of the reporting Organization divided into integrated, economic, environmental, and social performance indicators.
report content gri guidelines
Report content (GRI-guidelines)

CEO statement

Profile of reporting organisation

Executive summary and key indicators

Vision and strategy

Policies, organization and management systems

Performance:

  • environmental
  • economic
  • social
gri guidelines principles and indicators
GRI guidelines—principles and indicators
  • Principles
    • What information to report
    • Quality of reported information
    • Accessibility of reported information
  • Indicators:
    • Economic
    • Social
    • Environmental
slide25
EN17. Other relevant indirect greenhouse gas emissions by weight.
  • 1. Relevance
  • Greenhouse gas emissions are the main cause of climate change and are governed by the United Nations Framework Convention on Climate Change (UNFCC) and the subsequent Kyoto Protocol. For some organizations, indirect greenhouse gas emissions are significantly greater…
  • 2. Compilation
  • 2.1 Identify the greenhouse gas emissions resulting from indirect energy use. Exclude … as these are covered by EN16.
  • 2.2 Additionally, identify which of the reporting organization’s activities cause …
  • When deciding on the relevance of these activities, consider whether emissions:
  • Are large compared to other activities; Are judged to be critical by stakeholders;
  • Could be substantially reduced through actions taken by the reporting organization.
  • 2.3 Report the sum of indirect GHG emissions identified in tonnes of CO2 equivalent.
  • 3. Definitions
  • Indirect emissions
  • Carbon dioxide equivalent
  • CO2 (Carbon Dioxide) equivalent is the measure used to compare emissions from various greenhouse gases based on their global warming potential (GWP). The CO2 equivalent for a gas is derived by multiplying the tonnes of the gas by the associated GWP.
  • 4. Documentation
  • Information can be obtained from external suppliers of products and services. For certain types of indirect emissions such as business travel, the organization may need to combine its own records with data from external sources to arrive at an estimate.
  • 5. References
slide28

The Guidelines

Foundation for GRI

Technical protocols

Measurement guidance

The Guidelines

Energy

Water

Child

labour

Sector supplements

Sector-specific indicators

Resource Documents

Topical and user-specific supporting material

Automotive

Financial

Tourism

Mining

SMEs

Productivity

HIV/AIDS

general notes from gri
General Notes—from GRI
  • 1. Boundaries:
  • 2. Use of technical protocols:
  • 3. Metrics:
  • 4. Time frames and targets:
  • 5. Absolute/normalized data:
  • 6. Data consolidation and disaggregation:
  • 7. Graphics:
  • 8. Executive summary:
social indicators
Social Indicators
  • Difficulty
  • Morally thick
social return on investment
Social return on investment
  • Evaluation of social benefit resulting from variety of inputs
  • REDF—pretty much the gold standard, by default…
  • We will also look at work by the New Economics Foundation
  • formerly Roberts Enterprise Development Fund
concept behind sroi proposed by redf
Concept behind SROI proposed by REDF
  • Historical Non-profit capital:
    • Charity based
    • Process measures
    • Directed to funders needs, financial accounting
  • Current Non-profit capital:
    • Investment based
    • Outcome measures
    • Internal operations focused, MIS
redf sroi calculations
REDF—SROI calculations

Economic

Socio-Economic

Social

  • Based on enterprises with multiple functions, economic and social
  • Omit solely Social…
  • Blend Economic and Socio-Economic
enterprise value
Enterprise value
  • Project enterprise cash flows
    • Time horizon
    • Assumptions of future performance
    • Income, adjust to cash
    • Investments and repayments
  • Calculate terminal value
    • Standard valuation methods
  • Discount the cash flows
complete enterprise value
Complete enterprise value
  • Discount cash flows
  • Use some model (Capital Asset Pricing Model) to determine cost of equity
  • Risk free rate + risk premium * industry beta + small business premium = Cost of equity
  • Use Weighted Average Cost of Capital (WACC) to determine discount rate
the importance of discount rate
The importance of discount rate
  • Determines the value of the out-year cash flows
  • Too high, implies too much risk, undervalues the cash flows
  • Too low, implies too little risk, overvalues the cash flows
  • Huge issue in trying to establish distant benefits when compared with current costs…
  • 10 years @ 5%, 10%, 20% (.61, .39, .16)
  • 25 years @ 5%, 10%, 20% (.29, .09, .01)
calculate social purpose value
Calculate social purpose value
  • Project social cash flows
    • Time horizon
    • Assumptions of future performance
    • Cost savings adjusted to cash
  • Calculate terminal value
    • Standard valuation methods
  • Discount the cash flows
from new economics foundation
From New Economics Foundation
  • Become increasingly sophisticated
  • Understanding accounting
  • Activity based accounting/costing
  • Segregate costs by activity
expenditure v capital
Expenditure v. capital
  • ROI is generally thought of as on invested capital
  • SROI may well be on continuing revenues as well
concepts for adjusting
Concepts for adjusting
  • Accounting for deadweight—things that would have been done without the program.
  • Displacement—accomplishing something that diminishes the work of another program
  • Outcomes may have future value even if organizations disappear
  • What is the true benefit period?
  • What other interventions are relevant…
benefits per stakeholder then totaled
Benefits per stakeholder…then totaled
  • Who are the stakeholders?
  • What impacts occur to each stakeholder?
slide53
Training program for hard to employ
  • Average starting salary in Year 1 for all participants is £9500
  • Average annual growth in salary is 3% from year 1
  • Welfare payments = £6800 per year (£130 per week)
  • Income tax = 10% of salary plus 5% for employer contribution
  • Non-accumulative = 10% That is 10% of the participants probably would have found a job without the intervention.
  • Cannibalizing other programs is assumed to be zero.
  • Drop-off = 12% annually. Each year 12% of the prior year’s employed participants lose their job.
  • Time period to accrue benefits = 5 years
  • Discount rate = 3.5%
  • Investment: Public funding paid up front = £500,000 to fund one-year pilot project
less economics oriented
Less ‘economics’ oriented
  • Address more types of indicators
  • Easier to accept
  • Less socio-economic and more ‘Social”
janet hammer framework elements for development
JanetHammer…framework elements for development
  • 5 elements, 20 objectives…with questions to assess each objective
  • 1. Corresponds to community context
  • 2. Fosters healthy living
  • 3. Strengthens community fabric
  • A. Community Sense of Place and Identity
  • B. Inviting Public Spaces
  • C. Enhance Social Connection and Civic Engagement
  • D. Empowerment
  • 1. In what ways, if any does the project support or offer programs designed to build individual and community leadership capacity?
  • 2. In what ways, if any, does the project support community ownership and governance?
  • 3. In what ways, if any, does the project work with and support community organizations and networks?
  • E. Community Involvement by Project Developers and Project Businesses
  • 4. Fairly Distributes Burdens and Benefits of Growth
  • 5. Contributes to a Vibrant Community Economy
  • Note that these are based on the impacts of development…
shorebank pacific community indicators
Shorebank Pacific—community indicators
  • • Work: includes jobs, job quality, benefits, job safety, and opportunities for personal growth
  • • Necessities: includes shelter, infrastructure and transportation, education, food, medical care, as well as walkability, reduced driving, and multiple modes of access
  • • Stability/Quality of life: includes wealth creation and retention, community leadership, business connectivity, education, entrepreneurial development
framework for assessing a building integrating sustainability into appraisal of property worth
Framework for assessing a building—integrating sustainability into appraisal of property worth
  • Criteria
  • Building flexibility
  • Energy efficiency
  • Transport
  • Pollutants
  • Location
  • Occupier
  • Ecology
  • Design
shorebank pacific environment
Shorebank Pacific—environment
  • Conservation
    • • Energy: includes onsite and regional distributed capacity, as well as alternative power, storage and transmission
    • • Materials/Resources: includes materials recycling, reuse, durability, green building actions, utilization of local food
    • • Land and Water Capacity: includes restoration, building neutral capacity and reducing impacts
shorebank pacific economy
Shorebank Pacific-Economy
  • • Risk Assessment & Management: includes risk ratings and business management operations
  • • Local Business Connectivity: includes interactions between locally owned and operated businesses, and the use of local labor, goods, and services
  • • Scalability: includes business capacity for growth, the ability to franchise its approach in other markets, or the potential for an education franchise.