Motivating Staff to be Sustainable

Staff motivation is always an issue and it has been a recurring theme at the Low Carbon Best Practice Exchange events held around the country. Very often the question is “How do you keep people interested once the first enthusiasm has worn off?”

Representatives from all sorts of industries - from bus companies to barristers and hotels to hospitals - have all shared ideas. So, how do you keep the ball rolling once the first few months have passed?

The first point that nearly everyone makes is self-interest. “What’s in it for me?” People are often happy to help an organisation succeed, but after a while, if it’s all about how much money the company is saving and how much better the bottom line looks, they want a share of the savings for themselves. A leading confectionery manager addresses this head on with a bonus scheme. One of the nation’s largest bus companies does much the same. Fuel is a very significant cost for them. An extra 1p/litre on diesel increases their bill, (and reduces their profits) by no less than £1m annually, so they send all their drivers on economical driving courses. The drivers then qualify for a share of all the savings made.

Some people have a personal commitment to sustainability and are less motivated by money than by recognition of their personal achievements. A major telecoms company has Carbon Clubs with a website, news and awards. There is a pledging scheme where staff choose from a list or post their own targets. There is clear top-level endorsement, and 66% of staff say they take pride in the company’s environmental performance. Some organisations go further and encourage their staff to set targets for home as well as work. Incentives like a mountain bike can get people interested and sometimes it is possible to set up competitive rivalry between different departments. Some very generous organisations will advance loans for the purchase of hybrid cars or send employees off on trips to save the rain-forest or help with conservation projects.

Travel-to-work plans, involving car-sharing and cycling, can be popular, but there can be resistance to some green initiatives in this time of cost-cutting. There is often resistance, too, from middle managers who see other things as more important. Training is essential so that these people - many of whom are strongly sceptical of anything green - fully understand the business reasons for adopting environmental best practice. Sometimes a phased approach can help, rather than laying on a whole raft of new initiatives all at once.

In many cases the importance of environmental policy is gauged by the importance of the people who support it. The lead must come from the top. The green agenda must given due prominence in senior management briefings, and not just tacked on at the end. Don’t underestimated the difficulty of getting senior management on board. One organisation tried reimbursing business miles on the basis of the least reward for the least eco-friendly cars. The problem with this was motivating senior management. They were very reluctant to approve a scheme which penalised the sort of prestige car which they thought they ought to be driving!

Industrial psychology makes it clear that people will not respond if things are simply imposed; they must understand and agree before they will buy in. So while top management may be persuaded to buy in, the next essential is effective communication to all levels of the organisation.

I worked with a business machinery supplier where the green policy came from world head quarters. Nevertheless, local sales staff didn’t see it as a priority, so an environmental manager was appointed in each country to help middle managers and to provide a link with the policy-makers at HQ. They also worked with the local community and organised initiatives like farmers’ markets or cycle-to-work schemes. Many companies also use such environmental champions; often they are unpaid volunteers and sometimes their managers begrudge them the time off. In other cases heads of department may send along someone to environmental committees just to make up the numbers, not necessarily a person who is committed to the green agenda. Again this emphasises the need to inform and motivate management at all levels.

Experience shows that encouraging staff to work with the local community on green initiatives is a good motivator - and good PR. Some organisations will formalise environmental responsibilities as part of a staff member’s role and putting people on projects can be valuable learning experience for them. It is important to celebrate their successes. Feedback is essential. How about summarising key successes in bullet points and pasting them on the back of the toilet doors? Hard to ignore!

One problem with feedback is that many of the statistics about climate and emissions are very difficult to imagine. What does a tonne of CO2 look like, for example? These things need to be related to everyday experience - maybe something like the volume of Wembley Stadium. Or you could have a graphic on your website. What about a green tree which grows additional leaves as the company increases its carbon savings?

Sometimes there can be negative motivation at corporate level. The attitude of major customers and pressure from taxes and other outside factors can all make their mark. For example, supermarkets are very keen that their suppliers should be as efficient as possible, but then they expect these efficiencies to be passed on to them in lower prices. Secondly, since energy prices and waste disposal costs are rising, companies have to make continued efforts just to stay in the same place. BT is introducing its Climate Stabilisation Index to take account of the fact that while its emissions are rising the number of clients and services provided is rising as well, and the net footprint per transaction is falling. (This may be good PR, but the fact is that the objective is to cut CO2 emissions by 80% absolutely, regardless of the level of economic activity.) The Carbon Reduction Commitment comes into force next year and already some people are concerned that it will be biased against organisations that are already efficient.

So, in summary, here are our TOP TEN TIPS for motivating staff to be green:

1. Align messages with your corporate commitment

In other words - walk the talk. Make sure your policy is consistent both internally and externally - and seen to be so.

2. Provide an incentive

Maybe a bonus scheme, maybe an award ceremony, maybe both.

3. Choose an initiative that will reach everyone

Or let people choose their own challenges

4. Monitor progress

Otherwise how do people know what they’ve achieved?

5. Provide positive feedback

Thank-you may be enough; others may need a cash reward. Make it a win-win situation.

6. Provide resources to support action

Time can be as valuable as money

7. Be imaginative

Keep the ideas coming

8. Keep the momentum

Have a plan. There must always be the next success to strive for.

9. Continue to improve the process

Build on the knowledge gained from feedback

10. Empower people to get involved

The best way to ensure success in any field!

Cyber Associates can design your sustainability strategy, train your staff and set up the feedback loop to keep them engaged and motivated.

www.cyber-associates.com

Carbon Reduction Commitment

Is CRC just another tax?

If you’re liable for the Carbon Reduction Commitment (CRC) you should have heard from the Environment Agency by now. This measure will affect about 20,000 UK organisations - public and private - who pay for their electricity via a ‘half-hour’ meter. That’s any organisation with a peak load exceeding 100kW. About 5,000 of these will be spending £500,000 or more annually on electricity, and they will be full participants in the scheme. What does this mean? Any organisation with a half-hour meter will have to report its energy use and its carbon footprint. Not just for the department with the heavy electricity usage, but for the whole organisation including subsidiaries, branch offices and remote sites. Not just electricity consumption, but gas and fuel oil as well. Auditable records must be kept and there are penalties for non-compliance. Reporting starts now and in April 2011 the 5,000 largest users will have to pay for their CO2 emissions at £12/tonne, both for actual emissions in 2010/11 and forecast emissions in 2011/12. How much will that be for your organisation?

So is this just another tax? The government might say not, because in October 2011 it’s going to give all this money back - yes, every penny. What’s the point? On the basis of actual emissions in 2010/11 the government will construct a league table, ranking organisations according to how good they have been at reducing their emissions. When the government returns the levy the best performers will get more than they paid and the worst performers will get less. And the following year the targets will get harder.

This is all part of the obligation under the Climate Change Act to cut CO2 by 34% by 2020 and 80% by 2050. With UK emissions still growing, even standing still will be difficult. The oil price has been on the rise for most of this year, so energy is going to be expensive to buy and if you use it inefficiently the government is making it expensive to use!

Whatever the size of your organisation, have you got an environmental management system (EMS)? An EMS is a system of procedures and controls providing a framework for the management of energy, resources and waste. It will help you identify your energy usage and carbon footprint, to control them and monitor the savings achieved.

Cyber Associates have the skills and experience to help you design, implement and maintain an Environmental Management System for your organisation to ISO 14001.

More information at www.cyber-associates.com

Low Carbon Futures - The Prince's May Day Summit

Last Friday I attended the Prince’s May Day Summit. That’s the Prince of Wales’s third annual convention of businesses committed to a low carbon future, sponsored by Carbon Action Yorkshire, CE Electric UK and KCom Group. The event links London to regional centres all round the country, at least the first one did two years ago. We voted on issues, shared the results with the nation and spoke direct to the national audience. A bit like the Last Night of the Proms, actually, with big screens and reporters across the country. Not this time, though. This year we watched as the Prince and other speakers addressed what looked like a very small London audience. And we only watched - there was no feedback from the regions.

Strange - and disappointing - because since the Carbon Budget and Obama’s green grandstanding, low carbon and climate change are almost mainstream. I was at the regional session in Hull, an enthusiastic meeting ably chaired by Peter Hobday. If we hadn’t had the London link I’d have come away encouraged that more and more people were on side. In Hull the presentations were positive. They didn’t minimise the climate change risks and they showed us best practice and they showed us opportunities. They made us realise that the world is fundamentally changing, that established and accepted business models may suddenly cease to be relevant and unimagined models may suddenly steal your market. Think Amazon. Think iTunes store.

Case studies showed how companies are actively reducing their carbon footprint, and doing it for business reasons. Ariel low-temperature detergent was developed because more CO2 was released through heating water in the washing machine than in the rest of the production, distribution and usage cycle. Marshalls the paving people were the first to footprint all 500 of their products - the nearest competitor has footprinted nine - and they now know how and where to cut carbon further. Their customers know that this is a company which is serious about the environment. ASDA recycles, sources locally and deals with sustainable suppliers. KCOM engages with staff to support its green initiatives.

We learnt about scenario planning; not as a means of predicting the future nor as business continuity planning. Scenarios ask “What if?” What if your key materials double or quadruple in price? What if energy rises by a factor of 10? What if your major customer goes bust? Examining such scenarios helps your company be prepared. The value is in the process, not the result; the process of questioning unquestioned truths, establishing the consequences, weighing the risks and defining the options.

One statistic that I won’t forget showed that while material wealth has steadily grown in the UK since 1960, satisfaction has stayed at the same level. Apparently, we do not need material wealth for a fulfilling life. The problem is that growth has been the only goal for more than a generation; we have no alternative vision and people are scared to give up what they have.

So here’s the challenge. Let’s stop scaring people with global meltdown, climate catastrophe and the end of the world. Let’s draw up our low carbon futures and show people how they can be more relaxing, more fulfilling and maybe more stimulating than the ambitions we have now. At least I came away from the May Day Summit believing that we certainly have the people who can imagine these futures - and the people able and determined to make them reality.

Is the future of your business a low-carbon future? It’s got to be! If you want to talk about how, give me a call - 01904 654986.

Electric Cars? Electric Dreams!

Why do government pronouncements keep bringing the phrase "Away with the fairies" to mind? So the future is the electric car. Where are we supposed to get the electricity from? We have no surplus electricity; we have ageing power stations with replacements at least a decade away and a national grid close to capacity. We generate our electricity from imported coal (dirty), imported gas (expensive since the pound fell) and nuclear (overdue for replacement). Renewables provide 5% at best and will take time and money to increase their unpredictable and intermittent output.

The UK is on the brink of an energy crisis and the answer is not Noddy cars but urgent and comprehensive energy conservation.

Insulate, insulate, insulate, and dare to ask the question, "Is your journey really necessary?"

Sustainable Savings

SUSBIZ Sustainable Business Strategies.

A few notes on how climate change and sustainability affect business. I’m going to talk about the Archbishop of Canterbury, Lord Stern and the Institute of Directors. I’m running a teleclass with a few places left on Tuesday, and next week I shall be going up to the Low Carbon Best Practice Exchange in Newcastle. The RPI has come down, the CPI has gone up but the COBRA Matrix will help you deal with it, and at the beginning of May the Prince of Wales has his Mayday Summit on Climate Change.

Although the economy is in a state that nobody has seen for many, many years, it hasn’t pushed climate change and sustainability off the agenda. Pressure is coming from all quarters. The latest is the Archbishop of Canterbury who said that the case for action on climate change was a moral as well as a practical one. On Tuesday’s Radio 4 Today Programme he warned that billions could die if governments and individuals did not take moral responsibility for climate change now. Didn’t James Lovelock say much the same a few weeks ago? This comes after Lord Stern’s presentation to the Copenhagen Climate Conference when he said that the situation was very much worse than he had thought when he prepared his report on the economic consequences of climate change back in 2006.

But let’s not be negative! At a recent Institute of Directors event addressed by IOD environment spokesman David Boomer and by Todd Holden from Enworks we were told how adopting environmental policies could lead to a direct improvement in the bottom line. On the basis of studying more than 2000 companies it’s been shown that they saved 8% on energy, 2% on materials, 13% on water and up to 50% on waste. You can do a lot of this without spending any money. Apparently 70% of savings come from behaviour change. If you do need to invest to save, there’s a range of low carbon grants and soft loans. I’ve recently been looking at the work of Bob Willard who is a specialist in sustainable business based in Canada who also talks about the savings on staff costs which can be made from environmental policies; from improved morale and productivity to lowered recruitment costs and less turnover. It all depends on the structure of your business, of course, but anything that can make a quantifiable improvement to your bottom line, particularly in the present economic climate, must be valuable regardless of where it comes from.

Next Tuesday 31st March I’m running a teleclass which will cover these points and expand on them. This event is by invitation only but there are one of two places still available so if you want to take part please log on now to this link and you’ll find full details. The session will take place at 18:00 BST but if you can’t make it there will be a recording which will be available the following day.

Next week on 2nd April I shall be running a roundtable discussion session at the Low Carbon Best Practice Forum in Newcastle. If you haven’t already registered for the event go to www.Carbon–innovation.com

The big news this week is that inflation is going up, or at least it is as far as the Consumer Price Index is concerned. It’s risen from 3% to 3.2% while the Retail Price Index has declined to zero; no change. The difference is that the RPI includes housing costs which have been falling as house prices fall and mortgage rates are cut. Both these inflation indices are very crude instruments; it all depends on your lifestyle as to whether your costs are rising or falling. The other issue is the oil price. It peaked at $147 last July and crashed to $36 in January. Now it’s on the rise again - and after adjusting for the exchange rate in the UK it’s halfway back to last year’s peak.

In business, each organisation has its own set of risk factors and I’ve derived the COBRA Matrix to help managers balance impact against possibility. I’ll be covering this in Tuesday’s teleclass and there will be examples of the COBRA approach in the accompanying working papers. Download them here.

As I said to start with, pressure and the realization of the impact of climate change are coming from all quarters. On 1st May the Prince of Wales’s Mayday Summit on Climate Change takes place for the third year running. It brings together businesses at regional centres all over the country to report on progress and to commit to Carbon Reduction and environmental improvements for the year ahead. You can sign up here.

Government regulations demand that business become environmentally responsible and despite the economic environment, consumers are continuing to demand that organisations are green as well. You can find details of a survey published by the Carbon Trust here.

You don’t have to look far to find people who say how dreadful, how terrible, how earth-shattering the risks from climate change are. I prefer to concentrate on the opportunities for staying in business and staying in profit. In the coming weeks I shall be interviewing people from the Carbon Trust and Virgin Media among others to reinforce the positive message.

If you want to add your comments I look forward hearing from you. Add them to this blog or give me a call.
My name’s Anthony Day and my number is 01904654986. I hope we’ll talk soon.

The Age of Stupid

Do we need another misery movie?

Review: The Age of Stupid - premiere at Leicester Square and 65 cinemas across the country.

In The Age of Stupid Pete Postlethwaite addresses us from the wrecked planet of 2055 and asks how we could be so stupid as to let climate change destroy humanity. He flicks through endless archives showing us the obvious clues to catastrophe from 2009 and before. It seemed a long film, partly because technical problems meant that about 30 minutes of footage was played twice. Partly, too, because it replayed the breast-beating and lamentations already seen in Al Gore’s An Inconvenient Truth, Leonardo di Caprio’s The Eleventh Hour, The Day After Tomorrow and all the rest.

What these films lack, and that includes the live debate following The Age of Stupid, is a credible call to action. Watching this film you might conclude that the best thing to do is to run your car on chip fat, live self-sufficiently on a small holding and protest against the nasty nimbies who oppose wind farms. It goes without saying that there’s not enough chip fat and not enough smallholdings. The effectiveness of wind farms is also very much in doubt. After the film Pete Postlethwaite pledged to give back his OBE if the government approved the proposed new Kingsnorth coal-fired power station. Ed Milliband was there to respond, but they let him off extremely lightly by not once mentioning government support for Heathrow’s third runway. Surely that’s a much more powerful national political issue than some power station down in Kent.

Sustainable economic growth is still possible in a low carbon economy, but if we are going to solve this problem we must all drive less, heat less and consume less. Life will be very different - potentially much more pleasant - if we take the low-carbon route. The Age of Stupid has missed the opportunity to show what ordinary people can do to safeguard our future, and to show what sort of future we can all enjoy if we act now. Certainly the showing raised enthusiasm both in Leicester Square and in the cinema where I was, but I fear that people will be rushing off to protest, rather than rushing off to change their lives.

Panic Over?

Tanker drivers back at work - oil price stable (more or less) - Dyson to build electric cars and Honda launches a hydrogen car - five new main railway lines - retail sales up in May - Gordon in Saudi - ...and a renewable energy strategy which will cut our use of oil. So is it all over?

I’ve been away on holiday and it’s amazing what can change in a week. Before you ask, no, we didn’t fly anywhere, we went to Newcastle by train and walked the whole length of Hadrian’s Wall. (Well, all but 10 miles!)

Hello. I'm Anthony Day and I’m back again to talk to you about staying in business and staying profitable. Last time we were worried about the price of oil and a tanker drivers’ strike which was making petrol unobtainable as well as unaffordable. This week the drivers have gone back to work for a pay rise of only 14% and oil has (almost) stopped rising. But who’s worried about oil when there are suddenly a range of alternatives?

First, James Dyson, the vacuum cleaner king, is turning his talents to designing electric cars. He’s developed a super-efficient electric motor. Honda have announced their hydrogen car and Network Rail are looking into building no less than five new high-speed rail lines across the UK. The feel-good factor is reinforced by the news that retail sales in May were the highest for 22 years, but if you still think we need cheaper oil Gordon’s been out there in Saudi not only asking them to pump faster but also suggesting that they should invest in renewables in the UK.On 26th June the government publishes its Renewable Energy Strategy. The predictions are that this will include plans for 3,500 wind turbines and will reduce the nation’s use of oil by 7% by 2020.

So is this all good news? Is the panic over? Can we all go back to making money? People accuse me of being depressing, but all I’m trying to do is be realistic and look at the best choices for business in a future that’s far from clear.

The most important point is that we have an energy crisis, and while there are solutions like electric cars, new railway lines and thousands of wind turbines; none of these can become a reality in less than 5 years and the rest will take more like ten or twenty. Oil prices are high today. They may drift up and down over the coming months, but they are unlikely to drop below $100. My prediction is $180 by the end of the year and $300 by the end of 2010 unless we see a dramatic global recession. as I predicted last time, gas and electricity are on the rise and some reports talk of a 40% increase by Christmas.

As business people, what can we do? Maybe we should try a protest - it worked well for the tanker drivers! However, few businesses can hold their customers to ransom like that. Rather than waste time and effort on protests and demonstrations (a bit like Canute trying to turn back the waves) we should consider what to do to make the best of it. We need to assess the effect on our supply chain; on our suppliers and our customers. This need not be negative - suppliers of home insulation are surely going to see an upturn!

We need to act now, but we also need to plan for the future. Scenario planning lets you prepare for a number of alternative futures and therefore be more ready to cope with what actually happens. Take some time with your team to brainstorm to think the unthinkable and decide what you could do about it.

The truth is that the future is not rosy for those who believe that we can go back to business as usual. The good news is not good when we examine it in detail. For example, electric cars need to be built and bought, and are you going to buy one? How much energy will it take to replace the UK’s 30m cars? We’ll all charge them up a night when electricity demand is low - except demand won’t be low because we’ll all be charging our cars. So we’ll need more coal or gas or nuclear to run the power stations. Could be a bit of a problem as we are already finding it difficult to cope with current demand for electricity without all this demand displaced from oil. Much the same applies to hydrogen. The car itself is pollution-free but there’s a massive carbon footprint at the power station where they generate the energy to produce the hydrogen. The renewables strategy will apparently reduce our dependency on oil by 7% over 12 years. Given that North Sea oil output is declining by about 6% per annum, this is merely a drop in the bucket. And even Gordon Brown admitted that his visit to Saudi would have no immediate effect on prices at the pumps.

My message is that we have to plan for a different future in order to succeed. Those that don’t, like Canute, will first get their feet wet and then be washed away.

I’m Anthony Day. If you want to talk about scenario planning for how energy, climate and resources will affect your business, give me a call on 01904 654 986.

Fuel Prices and Your Business

It’s always tempting to say I told you so, but those of you who have attended one of my workshops or seminars will know that I have been predicting energy shortages and fuel price increases and I always said that they would hit us much sooner than climate change.

Will climate change your business? Yes that’s still an issue, but what about the current fuel situation? We have hauliers protesting and threatening a blockade if the government doesn’t cut tax within a week, we have politicians saying that the government should shelve the increase in car tax and the proposed 2p increase on fuel duty. Apparently the Prime Minister and the Chancellor are meeting the oil industry today to find out whether they can pump more oil out of the North Sea.
So what’s the background to all this? Simply, supply and demand. Rapid economic expansion in China and India are driving the demand for oil and the supply of oil is finite. There is only a certain amount of oil in the ground and at the moment there are some problems with refinery capacity as well, which is restricting supply. Last week the International Energy Agency revised its forecasts for future oil production downwards leading to some of the speculation which has also driven up the price. So oil has gone up, and this has driven up the price of petrol and diesel, but it’s the government which is getting the pressure. It’s all too easy to blame the government and at the moment people are busy blaming it for everything. But it’s not just this government; it’s the previous government and every government we’ve had for the last half century. This is not an oil shock; this is not a surprise. Shortages and price increases have been predicted for about 50 years. Anyway, we are where we are so what do we do about it?

As you will have noticed, prices accelerated over a relatively short period of weeks. Any solutions like finding more reserves, just supposing there are any, will take years if not decades to bring on-stream. Even though the government may bow to pressure in the short term, we have a problem. In the long term we face continually rising energy costs and we may well see the pace of that increase rising rapidly.
In today’s Guardian, Gordon Brown talks about free insulation for people on low incomes, smart metering, carbon capture and storage generating stations and more nuclear power. None of this will solve the price or supply of petrol and diesel. Oil prices are going up and gas and electricity will not be far behind. This will affect you individually and it will affect your business.

Governments can be criticized because they have assumed that oil and energy will continue to be widely and cheaply available, in spite of the evidence which has been around for at least 50 years. It does not make sense to build more roads and more airports if there is going to be an energy shortage. It does not make sense to close post offices and to centralize schools and hospitals and other public services if there’s going to be an energy shortage. It does not make sense to encourage out of town shopping and the growth of supermarkets if there is going to be an energy shortage. Supermarkets are fine for the operators because they rely on the consumers to handle the last part of the distribution. The last part of the supply chain –from store to home – is arguably the most expensive and has the biggest carbon footprint. But it’s the consumer that pays for this.

Let’s also remember that oil and gas are not just fuels. They are raw materials for plastics, pharmaceuticals, fertilizers and many other products. We have not yet seen the full effect of the oil price on product prices, due not only to increased distribution costs but increased costs of manufacture. So everyone is going to see increased costs of living.

Your business will be affected because it will cost you more to run your vehicles, it will cost you more for lighting and heating and it will cost you more for energy used in the production processes. Most of us, though, are in a global supply chain so we need to understand the effects all this will have on our customers and the effect this will have on our suppliers. Even if the government cuts road tax and fuel duty there is a point beyond which it cannot go, and in any case it will have to replace lost revenues through other taxes. As the oil price continues to rise, the cost of fuel, the cost of travel, will rise. As an individual you will become increasingly aware of the costs of driving to the supermarket, of taking the kids to school, and taking trips at the weekend. You and your staff will become increasingly aware of the costs of commuting to work and for some people that will be a deciding factor on who they work for. We need to look at how people can work from home and we need the government to ensure that the bandwidth is available so that people can work from home. Of course we have to recognize that many jobs cannot be carried out from home so we have to plan to be able to get the right staff in the right places.
We live in a global economy and very many organizations now either have their own factories in China and the Far East or buy from suppliers in those countries. The decisions to rely on those sources of supply were not taken overnight and were frequently many years in the planning. You need to look again at your supply chain and ask how increasing energy costs and material costs will affect it in the future. If you need to change, you need to plan. You may be facing a process which will take years to implement. Unless you start now you could be out of business if things get really bad in a few years time. Now is the time for scenario planning. What if? What if? What if?

I know it’s a cliché but the pace of change is accelerating and only those who plan will survive. Oh, and what about climate change? Climate change is still a business issue in even though the signs are that the government will cave in to pressure over fuel prices and help people to continue to use as much energy and emit as much carbon as before, at least in the short term. Nevertheless, there is still the Climate Change Bill shortly to be passed and there is still a wide range of environmental regulations affecting all businesses. We have still got to make sure that we comply.

Next month I present a workshop entitled Best Practice for Environmental Champions at the Low Carbon Innovation Exchange in London. I shall be covering all these issues, and whatever else has arisen in the meantime.

Maybe see you there, but if you want to talk about scenario planning and how these issues affect your business give me a call on 01904 654986.

I’m Anthony Day and I look forward to hearing from you.