Putting Trust Back Into Corporate America

Originally posted on February 4, 2015

by Lana Bluege
Marketing & Social Media Editor

Green labeling appears on shelves in supermarkets, drug stores and convenience stores, veritably swarming in over the last five years, signaling environmental consciousness as a growing focus for both the private and corporate sector. The consumer puts an enormous amount of trust in a company claiming to be sustainable and to stand by its green label.  But how can we, the consumer, trust that a corporation is sustainable? How can the customer recognize that a corporation is acting for the wellbeing of the environment and not the wellbeing of its bank account? The answer is that as a consumer we have no way to know the motivations behind a corporation’s actions, but we can take a peek at how Fortune 1000 companies take steps in becoming more energy efficient.

Steve McDonough is the development manager of Global Energy and Sustainability Solutions at Schneider Electric, a company providing strategic consulting, optimization assessment, and software analysis to Fortune 1000 companies.  McDonough has worked in the environmental field for over twenty years. Currently he specializes in software development, although he started out in the field, taking soil and water samples as a consultant. McDonough graduated from the University of Vermont with a degree in environmental engineering and a hope to save the world. As a consultant he found life different then he visualized. Instead of helping the environment, he was helping companies meet environmental compliances. McDonough confessed that he ran into “companies doing the bare minimum.”

McDonough decided to go back to school and received a masters of business administration (MBA) at the University of Massachusetts Amherst. Upon graduation, he began working in the software field, specializing in environmental work. Once again, McDonough began working with large companies, but twenty years later things were very different. When he began working in the field, “regulations drove companies,” but now “companies see there is a big cohort of people that are attracted to sustainability.” The incentive for environmental efficiency has changed dramatically. Companies want to reduce costs and are acting for efficiency’s sake rather than legal pressure. The stress now comes from stakeholders and, yes, the consumers.

McDonough stated, “All consumers have a buying power. Bad press is a big risk to a company.” Stakeholders also have a huge impact on the company’s interest in efficiency. Stakeholders and larger corporations want their companies to be industry leaders in setting sustainable efficiency standards or they may not get business. Today, it is more about avoiding the stigma of being a poor corporate citizen than following the letter of environmental law.

Due to this large push by stakeholders and citizens, companies contact consulting and sustainability software groups like Schneider Electric to track energy use and determine how to make their operations more efficient. For companies that are starting at square one, Schneider Electric provides strategic planning focusing on the company as a whole, or specific energy plans and incentives. For corporations looking for specific data, computer software systems can be connected directly to utility meters and machines, or individuals can insert data into the software manually.

This system is what McDonough has been working with for almost 3 years at Schneider Electric. Through this technology, companies address energy efficiency issues and pinpoint their specific problems. More importantly, this system provides data to sustainable reporting organizations like Global Reporting Initiative and The Carbon Disclosure Project. These organizations deliver certifications and verifications for companies that promote sustainability.

These certifications and sustainability reports are seen by stakeholders and consumers, but what does a certification or sustainability report actually mean? There are pages of data produced through software technology, but does that mean that the company is in fact working as efficiently as possible? Is a company still doing the bare minimum to punch a sustainable label on the name?

I wanted to understand the internal process behind the data and if the consumer can trust that the numbers are not altered. McDonough agreed companies can manipulate data but extra points are rewarded when a third party reviews the data. In order to get a certification, a company must contract a third party. However, there are no rules for a sustainability report. McDonough states that a company can put information out to the public without getting it verified. He acknowledged that consumers “have to trust the company and it can be scary.”

Large companies now parade their sustainability reports in front of consumers and stakeholders, a new “green” label encouraging trust in their product. To those individuals unaware of the certification standards, a sustainability report, like a label, can seem like the company is wholesome and environmentally efficient. However, this is not always the case. These labels are very dangerous to consumers and McDonough admits that his main wish in this field is to “empower the consumer to know more about what these companies are doing.”

Luckily, there are grassroots organizations working to pull the carpet out from under large corporations that distribute false information. After discussing the data and sustainability reporting process with Steve McDonough, I am acutely aware that the power is in the hands of the consumer, but it is up to every individual to research companies providing his or her purchases. McDonough reported, “you can trust the data out there but consumers need more information on certain processes.” In essence, data is likely to be true, but claims about the data may be stated in such a way that it is misleading.

As a consumer myself, I read labels skeptically, and often raise an eyebrow if I walk by a product that claims to be organic or sustainable. I am uncertain about trusting a company’s mission of sustainability. McDonough reminded me that the sustainability field is relatively new for companies and at this point every Fortune 500 company has a sustainability department of some sort. I see progress in corporate sustainable practices over the last twenty years, even if the incentive is to save energy costs.

McDonough discussed a current project, where his company provided software to the city of Boston to track the municipal buildings’ energy use. Every building over 25,000 square feet must report energy data. While the city’s energy plan is a progressive step, companies still pique McDonough’s interest in sustainability. He stated:  “I think it will be corporations that push the environmental agenda. The government is starting to do its part but corporations are doing it bit by bit and getting better at it.”

As consumers, we can trust that many corporations are trying to change their actions and bring the business world into an age of sustainability. It is our responsibility to build a market for “green” products and services and to pay attention to the standards and certifications claimed by the companies behind our favorite products. It takes time to make changes and, as McDonough reminds, “There are no quick wins,” but I am encouraged by the fact that as a consumer I have a great deal of power to influence corporate policy toward truly sustainable solutions.


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