OPINION: Taking the lead – NJBIZ

 OPINION: Taking the lead – NJBIZ

Kathleen Shanahan is CEO of Turtle & Hughes, an electrical and power distribution company.

Kathleen Shanahan is CEO of Turtle & Hughes.

With the Supreme Court decision to curtail the Environmental Protection Agency’s authority to regulate the reduction in greenhouse gas emissions, U.S. companies are now in the position to take the lead in setting and achieving specific environmental goals. Most Americans, 69%, generally favor the nation taking steps to becoming carbon neutral by 2050 and pursuing alternative energy sources, according to Pew Research. Businesses can expect customers and employees to continue to demand progress.

Many publicly and privately held companies, including our own, have already committed to principles of ESG (Environmental, Social and Governance policies). To make this work meaningful, we are digging into the hard task of defining, measuring and sharing the progress every step of the way.

But as is true of most cultural transformations, pursuing sustainability and ESG is a process.

For companies in manufacturing and logistics, for example, equipment will need to be replaced, warehouses converted, and most importantly, employees and customers engaged and brought along.

As it stands now, both the U.S. Securities and Exchange Commission and the London-based International Sustainability Standards Board are working on rules that would require public companies to disclose climate-related risks if they are significant to investors. A substantial piece of the SEC’s proposal is the prospect that S&P 500 companies may be required to report “scope 3 emissions” that include greenhouse-gas output of both their supply chains and consumers.

The good news is that they can look to their suppliers for expertise in identifying achievable goals and measuring results.

As a privately held distributor of electrical and power products and complex solutions, headquartered in Linden, we at Turtle & Hughes challenged ourselves to meet these same goals by embedding metrics in our client deliverables. By reverse engineering, we know that suppliers and partners can help corporations unlock their metrics and make reporting easier.

Some approaches to consider:

Start from the ground up. Suppliers have control of a fundamental metric: the number of products delivered to a customer and their impact on climate change reduction. As a distributor of LED lighting fixtures and energy-saving strategies, we use that as the basis of calculating cost savings and greenhouse gas reduction.

For example, in a recent medical technology company project, the job was to upgrade 1,105 inefficient fixtures to LED with integrated occupancy sensors. In comparing the overall energy costs and maintenance of old and new fixtures, the team could identify savings of 50% or $82,355. More important, it was possible to pinpoint the reduction of carbon dioxide by 543,633 kilograms, among numerous greenhouse gasses.

Business environmental goals

Establish system-wide metrics up front. Companies do well to build in metrics during the design stage of an energy-saving project. An international food company worked with us on a facility power structure that integrated solar energy, three diesel generators and a megawatt battery energy storage system. Simply put, the goal was to reduce the use of electricity and diesel fuel by capturing solar and discharging the battery system during peak rates. There were many complexities involved; but the result was a reduction in electricity use by 775,000 kilowatts per year. The drop in utility bills was an added benefit that created a win-win for the company.

Assess broad consumer benefits. Ultimately, regulators are interested in the benefits of a policy to consumers. Here we can examine progress that has already taken place in major municipalities and airports across the country.

Airports are significantly reducing waste and energy consumption in both renovation and new construction. Many almost operate like self-contained ecosystems making them great examples of sustainability engineering and products in action. Advances are being made at Newark Liberty International Airport in energy efficiency, and at New York’s LaGuardia with LED lighting, rooftop solar hot water systems, electric vehicles to move baggage and electric tractors, along with electric charging stations and parking stalls.

Demand innovation and metrics from suppliers. With regulators looking across the supply chains for results, it will be imperative for corporations to align with strategic supply chain partners who can offer both innovative solutions and rigorous ways to measure them. These partnerships can bring breakthrough technologies to the table, such as woman-led Cadenza Innovation, whose next-generation low-cost lithium-ion batteries deliver measurably high performance at a lower cost.

Champion diversity in hiring and retention. Companies can gather more ideas around the table by setting specific goals to hire and promote more women and diverse staff. This requires a culture that provides and tracks supplemental coursework, professional development opportunities and company communications. If an employee is not participating, we can ask “Why?” and gain valuable insights into their experience, and our strategies.

As more public and private companies espouse ESG values, metrics will be essential to their credibility. Companies and their supplier partners have the capabilities to establish a rigorous system of measurement and make good on their promises to save our planet.

Kathleen Shanahan is CEO of Turtle & Hughes, an electrical and power distribution company.

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