February 27, 2017
In our Membership-based Strategic Advisory & Support Service at Sustainability Roundtable, Inc (SR Inc), we have the privilege of working with dozens of companies, many in the Fortune 500, and we communicate with scores of others all year long. Among our leading clients, we share one example of how companies are scoring the financial impact of their Corporate Sustainability program as a business strategy. Bloomberg, named our Corporate Leader of the Year in both 2013 and 2016, has made their Corporate Sustainability strategy investible by demonstrating the financial gains over years of incorporating Corporate Sustainability into their annual budgeting. To underscore that achievement, Bloomberg (a private company) publicly reports their cost savings and has set a 2020 corporate goal for cost savings. Bloomberg’s goal is to achieve $100 million in cost savings by 2020 and has reported that they saved $25.5 million in 2015. Notably, hand in hand with these financial gains, they also report that they have reduced carbon emissions by 35% from a 2007 extrapolated baseline and absolute emissions by 11% despite approximately doubling in size since 2007.
There are three interdependent dimensions to Bloomberg’s approach that we find particularly impressive and repeatable by other companies:
The chart below was part of a presentation by Bloomberg’s Jason Shulman to many of our client executives at SR Inc’s Summit for Sustainable Operations V in December in Washington DC. The first graph depicts the overall savings achieved since a 2007 baseline, with a breakdown of Capex and Opex savings within their Facilities budget targeted for an audience of leading Corporate Real Estate (CRE) and Sustainability executives.
Total 2008-2015 Portfolio-wide Project Savings/Cost Avoidance by Project Type
The second graphic shows the impressive emissions reduction achieved hand-in-hand with the expense savings.
We consider this highlighted example as among best practice approaches in particular because it has materially changed the way Bloomberg invests in its company. Jason also explained how this investment grows as upper management – as well as implementing operating departments – increasingly buy-in to the strategy because of the proven good-for-business track record. Additionally, in the “war for talent”, being able to speak credibly to the full triple bottom-line impact of Corporate Sustainability favorably impacts Bloomberg’s ability to attract and retain talent.
Unsurprisingly, this approach is now of interest to other Member Executives, and SR Inc will examine this approach further in 2017 along with other promising approaches tied to more integrated reporting. SAP serves as one of those examples that also quantifies the impact on operating profit from drivers often impacted by Corporate Sustainability programs like talent retention, SAP’s own Health & Culture index and employee engagement improvements. (See my relevant tweet on this from January.)
Bringing the financial and shareholder value impact (see prior SR Inc blog on Harvard Business School’s study showing 7-9% shareholder growth impact from strong Environmental, Social & Governance (ESG) performance, particularly on “Material” ESG drivers – Corporate Sustainability Shareholder Value Impact) to the C-Suite will serve this megatrend well. While the largest corporations have done a great deal, we are still in the early days of this change. The Paris Accord, signed by 196 countries in December 2015, demonstrates governmental leadership buy-in. However, to get the job done will require businesses globally to be a (if not THE) primary driver of implementation. To make that happen, companies need to understand the full business case and performance benefits of aligning their strategy and operations with the ever-growing resource efficiency, social and governance demands of customers, competitors, talent and investors within the bounds established by regulators.
David Osborn is an accomplished corporate sustainability advisor serving dozens of SR Inc’s Fortune 500 and mid-sized client companies as they drive significant operational efficiencies and better align with talent, customers, investors, and regulators through corporate sustainability strategy. From his career in business consulting and executive leadership, David brings to SR Inc over 25 years of experience in building professional services and technology-driven businesses serving a broad range of client industries. David graduated from Dartmouth College where his studies concentrated in Economics and Geology. He received numerous academic honors highlighted by a citation in mathematics from the then college President John G. Kemeny. After IT systems experiences at Arthur Anderson (now Accenture) and Wang Labs, David graduated from Northwestern’s Kellogg Graduate School of Management with honors, a member of the Beta Gamma Sigma Honor Society and in the top 3% of his class.
After receiving his MBA, David cut his teeth at Bain & Company in their Boston office and then progressed up to Managing Partner at Booz, Allen & Hamilton (BAH) where he was ultimately elected by his Partners to head their Australasian business. After helping to grow that business from a very early stage to a staff of more than 100, David returned to the US to head BAH’s Retail Financial Services practice in North America. After a few years back in the US market, David transitioned out of his highly successful consulting career and served as Managing Partner / EVP at two innovative business service companies: the first a 150 employee, VC-backed innovative technology services provider in Boston, and the second a high-end, 200+ employee proprietary marketing services provider located in Princeton and New York. In both companies, David led over 200% growth within 2-3 years while substantially building the companies’ delivery teams and capabilities.
