By Ory Zik, founder and CEO, Energy Points
Ask five passers-by on the street to define environmental sustainability, and you’re very likely to get answers full of words like “green” and “clean.” Perhaps you’ll even get some examples like “Prius” or “solar power.”
There is an ongoing debate among media, industry experts and the general public regarding how best to define and assign definitive value to environmental sustainability. To be transparent, businesses must report on their sustainability efforts. But, with thousands, even millions of data points and different (read: incompatible) metrics for just about every area of industry, the reports and information published are often confusing and misunderstood by the public. The creation of a universal metric is the ‘ah ha!’ moment for calculating the true impact of environmental sustainability.
The key to this ‘ah ha!’ moment? — translating core environmental resources such as electricity and water into a common unit of measure we can all relate to, in such a way that we are also accounting for variations in regionality and resource scarcity to facilitate optimal sustainability decisions.
In the following, we will break down some of the key questions around environmental sustainability faced by today’s companies as they struggle to provide real, meaningful information around their environmental efforts and initiatives.
Q: How do I derive meaning and value from environmental sustainability?
A: Merriam Webster’s dictionary defines the verb, “to derive” as: to take, receive, or obtain especially from a specified source.
When it comes to reporting on environmental sustainability, for most companies, it’s that last bit that’s the challenge. With so many environmental metrics out there, it can seem next to impossible to figure out just what “specified source” we should be pulling our data from and reporting on.
Is it the gallons of water we use? The tons of carbon we emit? The kilowatt hours of electricity we burn? And, ultimately, if we measure only our direct impacts at the corporate level, is our reporting accurate, or do we have to delve deeper into the impacts of each distributor and producer within our supply chain?
To accurately derive meaning and value from our environmental sustainability measures — and to ensure we’re undertaking the ones with the most value to our business and the environment — we need to identify a common denominator, a “specified source” that not only applies to all of the aforementioned values but does so in a way that makes sense to the average person on the street.
The common denominator is energy. The energy to gather, clean and use the gallons of water, the energy to burn through the tons of CO2, and the energy to generate the thousands upon thousands of kWh of electricity. By calculating our energy consumption as the “specified source” of all environmental impacts, we can conduct an unquestionably accurate side-by-side comparison or derive a sum total of all project impacts.
Q: How can business leaders benefit from a universal metric for calculating environmental sustainability?
A: The latest annual sustainability ratings and rankings have, for the past few weeks, topped industry headlines across the globe. Depending on where they fell (or didn’t fall) on the lists, companies generally have either been delighted or outraged by the findings. And actually, both sides may have valid arguments. While each list serves an important function in helping identify the companies best at minimizing their CO2, or saving energy, or reducing their impact in a single, or even a number of areas, the Catch 22 of even the most comprehensive lists out there is that they are only as good as the data they receive. Without an intuitive way to comprehensively track and compare environmental sustainability measures across multiple domains, the sum efforts and improvements of even the greenest companies may be simply overlooked.
Q: Why are regionality and resource scarcity so important to understanding the impact of environmental sustainability?
A: Take for example, Intel. Consistently one of the top-ranked companies for environmental sustainability, the company may actually be even more green than it reports. According to a recent report from the U.S. Environmental Protection Agency, Intel is the largest purchaser of green power in the U.S. But, while the company does report on its power consumption, its annual Corporate Responsibility Report only takes into account that the power was used, not where it was sourced or how it was generated. But with that in mind, how do we differentiate between the kWh of electricity generated from fossil-fuel-fired plants and the kWh from hydro, solar or wind?
Location matters. Whether the resource in question is electricity or water, how environmentally sustainable it is ultimately depends on where it comes from.
Consider for example, the drought conditions currently withering crops on the vine in much of the U.S.
From a pricing perspective, water is often cheapest in the areas where it is also most scarce, and vice versa. Take Boston for instance, where water is abundant (there is a six- year storage of water) but priced high in order to recover recent investments in infrastructure. Conversely, while Kansas City blisters in the heat, the price of water there may be significantly less expensive.
Without tracking for resource location and scarcity, companies and their stakeholders will continue to lack the context necessary to reporting on their real environmental impacts.
Let’s face it. While those five people you asked on the street may tentatively suggest that they think the new water recycling measures implemented at the company down the street are green, they, along with the rest of us won’t really have that ‘ah ha!’ moment until businesses are accounting for their core environmental resources in the same way, with one common metric—allowing for variations in regionality and resource scarcity, and deriving accurate, translatable meaning and value from the data they generate.
In 2010, Dr. Ory Zik founded Energy Points to enable corporations capture the value of sustainability in a practical way.
Prior to founding Energy Points, he was the founding CEO of solar thermal augmentation company, HelioFocus Inc., which develops solutions for conventional power plants. Dr. Zik led HelioFocus from 2007 to 2010 and currently serves on its board. The company is now growing in Israel and China with strategic partners such as Israel Corp and the Sanhua Group. Dr. Zik holds a B.Sc. (cum laude) in Physics and Mathematics from Tel Aviv University; M.Sc. (cum laude) and Ph.D. in Physics from the Weizmann Institute of Science. He is a recipient of the National Amos De Shalit Physics prize. In 1993, he was the curator of Israel’s National Museum of Science. Dr. Zik holds worldwide patents for his inventions.