As part of our ongoing interview series, Scott Tew, Executive Director of the Center for Energy Efficiency and Sustainability (CEES) at Ingersoll Rand, recently shared some of his thoughts with us. A big thank you to Scott for taking the time out of his busy schedule!
I have always had a passion for sustainability. Growing up in a family with generations of farmers, it was clear to me at an early age of the connection and interdependence between my family’s business and the environment. Throughout my 20 year career in roles (such as) I have seen sustainability evolve as a compliance activity, to becoming a critical business strategy for growth and differentiation.
As the director of our Center for Energy Efficiency and Sustainability (CEES) at Ingersoll Rand, I lead a team of internal experts who are focused on helping our lines of business incorporate energy efficiency and environmentally responsible processes into the daily operations of the company. Specifically, we concentrate on product innovation, education and engagement, operations and supply chain and advocacy. Our team is an essential conduit between the company and government and non-government organizations, universities, and technology and industry leaders that allows Ingersoll Rand to understand and implement sustainable best practices, because of our desire to achieve accountability for our sustainability initiatives across the company, and among our lines of business, there are several additional mechanisms that provide counsel, insight and authority. First, our initiatives are guided by an advisory council of internal executives, and external global thought leaders in sustainability, energy policy and technology. Next, corporate governance and oversight of sustainability issues is handled by the Board of Directors’ Corporate Governance and Nominating Committee. Finally, our Sustainability Strategy Council, comprised of a cross-sector team of executives, sets priorities and provides guidance on key social, community and environmental issues.
Regarding philanthropic activities, our Corporate organization oversees the Ingersoll Rand Foundation, whose mission is to match funding to charitable requests. However, like many large multi-nationals, many of our philanthropic programs are spread out by sector and geographic ally so that we can ensure we are best meeting our business goals to the needs of our local communities.
2. What are the top 3 challenges facing you as a CSR/Sustainability executive over the next 12-18 months? Why?
Many companies are struggling with developing effective performance related compensation policies in the areas, of sustainability. Because these activities are often driven by top leaders, and are recognized as important by most employees, we must appropriately align compensation and rewards with a environmental or social performance goal. This will help encourage every employee to think about sustainability factors in their everyday work.This will drive true change in the company. It’s about creating a culture of sustainability and a performance goal, aligned with the proper compensation, is a good way to achieve that transformation.
Next, many companies are more aggressively looking at their supply chain and establishing performance standards for suppliers. A significant portion of Ingersoll Rand’s environmental impact is embedded in our supply chain. By understanding how our best, and worst, suppliers are performing in the area of sustainability we can both eliminate those that create risk for the company, and collaborate with those that are best in class. Understanding and reporting scope 3 emissions will only grow in importance, and a good supply chain program will help us drive fundamental change in environmental performance.
Further, one of our greatest challenges is to rethink how we can embedded sustainability as a filter in our new product development and innovation processes. For the majority of our products, the biggest area of impact is in the use phase of the product’s life cycle, and maximizing energy efficiency of products is a key area of focus for us. Identifying the other areas of impact so that we can improve our operational and supply chain efficiency will be the focus of our efforts for the next twelve months. We currently have a robust program around identifying the key criteria that make a product environmentally superior. We are now taking those criteria and embedding them in the innovation and new product development processes. The intent is to ensure that life cycle impacts are considered up front, and that tradeoffs are identified.
3. Given the emergence of CSR/Sustainability as a strategic imperative over the last decade, how do you see it continuing to evolve in the future?
As I write today, our world’s population is at seven billion and growing. Providing our society with our clean water, energy and resources for the next generation is going to require new innovation and behavior change.
Sustainability will increasingly be used as a lens to identify growth and new opportunities for the company. As an example, we believe that open and crowd sourcing innovation will be critical for driving innovation, especially in the area of social responsibility and environmental performance. Identifying the customer’s most pressing needs in dealing with resource constraints will be the key to driving revenue growth both inorganically and geographically. Open source innovation will allow us to approach potential solutions with an open mind, consider that the seemingly impossible might be possible and address key climate change and resource conservation issues with a global perspective.
We also recognize that, even for non-water resource intense companies, water use and water management in particular will be a critical performance metric in the future. We are addressing this by identifying those facilities and suppliers located in water stressed areas, and by considering water use as one of our criteria when assessing products for the premium green portfolio.
We have recently completed the world’s first, third-party verified, environmental product declaration for a commercial chiller (large-scale equipment for cooling commercial buildings) and have identified additional targets for life cycle assessments over the next twelve months.
We have also developed a rigorous set of criteria around defining a premium green product or service. This set of criteria is very unique in that it is holistic, it considers the entire life cycle of the product not just the use phase, and it requires a customer benefit. These are real products that are providing real environmental benefits for customers, and as a group they show significant revenue growth potential for the company. Additionally these criteria are serving as the benchmark for our efforts to embed sustainability thinking into the new product development and innovation processes.
Earlier this year, we were listed on Dow Jones Sustainability Index (DJSI) World and North American indices. There is evidence that companies that perform well on the DJSI are also well-managed companies, so this is something we are very proud of.
5. If you had one piece of advice to give companies beginning their journey in corporate social responsibility and sustainability, what would it be?
Start by getting the right team in place. In order to truly make sustainability part of the culture you must be connected to every facet of the company; the right team can make this happen. Someone, or a single team, must be accountable to drive significant progress. Then define what is most material to your organization and view it through the sustainability lens. This will help you focus and set priorities. Then you can use these priorities to set metrics that are meaningful to the work of every employee.
6. Any additional thoughts?
For best in class companies, it may seem obvious and academic that sustainability offers a path for business growth by uncovering new innovation opportunities while eliminating waste, energy costs and operational inefficiencies. The truth of the matter is, it is not that simple. There is no one “big swing” that will solve any company’s sustainability issues. It is a battle waged every day.
Therefore, companies must focus much of their effort on changing the behavior of their people. Success can only come when employees, up and down the organization, are passionate, educated and engaged in making sustainability happen on an individual level. Small wins – such as the purchasing manager who identifies a new “green vendor”, or manufacturing employee that uncovers a small energy savings – that leads to big results overtime. Creating a culture of sustainability in a company can be the most difficult, but also the most effective way to achieve sustainable success.