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How EP&L Anchors Sustainability in Becker Underwood's Core Business
September 24, 2012
This is the second of a two-part piece from Becker Underwood on the development of their environmental profit & loss methodology. Read part one.
In 2008, we set out on a mission to address sustainability throughout all of our business practices. It was our goal to develop a strategy that best represented the core of our business: to increase productivity in agriculture and address one of humanities greatest challenges — how are we going to feed a growing global population sustainably? Based on this, our NET positive framework was developed. Our core challenge was figuring out how to measure the positive and negative impacts the NET positive initiative aims to address.
That’s where the Environmental Profit and Loss Account (EP&L) comes in.
Environmental impact is commonly measured in tonnes (carbon and other pollutants); cubic meters (water); and hectares (land use). This makes comparing the relative impact and materiality of sustainability issues challenging. Applying a dollar value to our sustainability issues — e.g., identifying suppliers or processes with carbon “hot spots” or by identifying areas in the value chain more exposed to water scarcity and risks of drought — has provided a common framework to identify and compare positive and negative impacts, and identify focus areas to improve our environmental performance across our own operations and supply chain. It also enables us to integrate sustainability metrics alongside the traditional business metrics of our business practices, ensuring that sustainability issues are consistently placed at the heart of our business planning.
The process required to deploy the first stage of the EP&L method was by no means a cakewalk, but to my own surprise we didn’t run into any major challenges. However, the success of this methodology with our company is strongly due to the following reasons:
- Data collection. Data is key to the success of this methodology. As with any baseline-setting exercise, time spent extracting all of the data required was the most time-consuming aspect of the process — not to mention data collection itself is a challenge. But with the help of a great team, all of the data required was collected and given to Trucost to start the first stage of the EP&L measuring Becker Underwood’s carbon and water footprints.
- Global support. An assessment of this size can’t be done successfully by one person. Employees from all of our global facilities played a huge role in collecting data, developing projects, implementing the projects and organizing the data. Without their support I know we would not have completed this project.
- C-suite approval. It’s crucial to have support from your CEO and board of directors. Our company was successful because we had the freedom to explore, discover, create and fail. Without this I know we would have gone nowhere with the implementation of the EP&L account — but even more importantly, with the integration of sustainability into our business practices.
The first stage of the EP&L measured our carbon and water footprints — see results here. Before starting the EP&L process, I expected our supply chain impact would be significantly larger than our operation impact; to my surprise, it wasn’t. I was expecting the total carbon risk cost to be a lot higher as well. My goal for Becker Underwood is to never have to buy or sell carbon credits to comply with a carbon financial system anywhere in the world.
Following the "hot spot" results from the preliminary stage of the EP&L account, we identified an immediate opportunity to reduce the environmental impact of our product packaging. We were able to quickly identify opportunities to collaborate with suppliers in an effort to reduce our impacts jointly (as part of our vendor performance scorecard program), by asking them to develop action plans to manage GHG emissions and monitor their water use. We are also encouraging them to focus on improving the efficiency of fuel, electricity and water use so they can benefit from both environmental and cost savings.
Phase II of the EP&L account is underway; we are working with Trucost to dive deeper into the more complex transport and water aspects of our business by identifying risks to our supply chain from volatile energy prices and increasing environmental costs.