Brand Accountability Corp.’s New CEO Measures to Manage

You can’t manage what you don’t measure.

That could well be the motto of Helle Bank Jorgensen, the new CEO of Brand Accountability Corp., a global leading advisor in corporate accountability management, sustainable performance strategies and integrated reporting, headquartered in Toronto.

Whether it’s financial, environmental, stakeholder or other integrated data, Jorgensen, an accountant and business lawyer by training, has always believed in ensuring “the right things to measure in the right way.”

“It’s so easy in financial reporting,” continues Jorgensen, also a WNSF board member. “After all, finance is based on numbers. But add data from environmental, ethical, trust, commercial and social performance indicators and external data traditionally viewed as externalities, and the going gets tougher.

A pioneer in sustainable performance metrics and integrated reporting, which merges economic, commercial, environmental and social data, Jorgensen contributed to the first environmental report in the world and years later on the first integrated report in the word. She was instrumental in building the Sustainable Business Solution practices at PricewaterhouseCoopers (PwC) in her native Denmark and in the US.

At Brand Accountability, Jorgensen plans to bring sustainable performance “to the next level, where accountability equals profitability. With our proprietary methodology, software solution and strategic management services, we can help companies integrate sustainability into core operations, tie it to performace, incentives and strategic goals, and show how sustainability is a key contributing factor to protect and enhance brand value and profitability. In addition with our proprietary software solution companies can report this value creation externally,” either in integrated reports or reports based on guidelines from the Global Reporting Initiative, UN Global Compact, Carbon Disclosure Project, or requirements from customers, among others.

Information in this form can also be blended into integrated reports, so that “companies get much more profitability, sustainability and brand value protection with fewer resources. Some great business leaders even call us the missing link!” she adds.

That approach should help solve what she sees as one of the next big challenges for business, namely “how to move to integrated models, compare integrated reports, how to compare companies in the same industry and across industries,” while recognizing each company’s unique features, she says.

What Brand Accountability can add to the equation is an elegant system to helping companies with integrated planning, managing and reporting of all the KPI’s that contribute to brand value: financial, environmental, operational, human, supply chain, etc.,” Jorgensen says.

At the base of that work is the company’s integrated management and reporting system, spotlighted by Gartner Group last spring, which serves as a repository and interconnection system for data from within an organization and its value chain.

With that system Brand Accountability can “help companies achieve integrated accountability, maximize profitability and mitigate risk by using the integrated dashboards across the corporation. The dashboards and reports to can link to external sources like GRI, customers, shareholders, etc., that are based on the same documented sources,” Jorgensen says.

“Being accountable to your stakeholders is a must in the 21st century,” she continues. “In order to be accountable, manage your company and report to all your stakeholders, you need to be able to measure and report in an auditable and transparent way”.

“So basically I’m heading a company that has a global leading product and service which is becoming more and more essential for all companies, especially those that want to protect and enhance their brand value which today is business value.”

She adds that integrated business and reporting is the future, not just because it’s the right thing to do but because it is the most profitable. It’s a way to get all brand practices valued–and it’s easier and in the long run it can be cheaper with a single report.”

Currently, companies may segregate some key information in the sustainability report that in fact may have significant financial value, but “not all make the connection,” she remarks.

In the current weak economy, companies have “few resources to choose between different things,” to incorporate sustainability into the fundamental business case is a move to both save money and create more value.

That goes for companies around the world, whether based in Europe, Asia, the Americas or elsewhere, she says: “There’s no part of the world where companies are more advanced than others. There are lots of interesting things happening in different parts of the world. It’s individual companies that are global leaders.”

A Review of Ottman’s Latest Book

Jacquelyn A. Ottman’s The New Rules of Green Marketing: Strategies, Tools, and Inspiration for Sustainable Branding (Berrett-Koehler and Greenleaf, 2011) is so rich, it’s hard to believe the question ‘is green marketing dead?’ came up in 2011.

In fact, it seems that in its new incarnation, green marketing is just getting underway: the former eco-fringe niche has now swelled to a $290 billion market encompassing everything from organic food to hybrid cars. Covering a spectrum of green manufacturing, service and purchasing shifts–in product design, innovation, partnering, communicating, and avoiding greenwash–Ottman makes a strong case for why companies can no longer afford to market conventionally.

Everyone’s Green

Indeed, now we’re all green–one shade or another–so even thinking about how to sell to “consumers with lifestyles” is a remnant of the corporate past, she reports in her fourth book.

Green is “mainstream,” with over 90 percent of adults now aware of ‘global warming;’ nearly that number familiar with ‘biodegradable’ products; and over three quarters having heard of ‘renewable resources’. Hence, companies need to approach “people with lives,” Ottman notes in her chart on “The new green marketing paradigm.”

Female Factor

How did we get here?

A big factor is women. Since the “green consumer revolution” was spawned in the 1970s, it has been “led by women aged between 30 and 49 with children and with better-than-average education…motivated by a desire to keep their loved ones free from harm and to secure their future,” Ottman writes.

“That women have historically been in the forefront of green purchasing cannot be underestimated. They still do most of the shopping and make most of the brand purchasing decisions,” she continues.

“Poll after poll shows that women weigh environmental and social criteria more heavily in their purchasing decisions than do men.”

With their influence on daughters–and sons–women traditionally have led the rest of the population toward greater green demand, so that succeeding generations expect products that aren’t just green in name, but also deliver results–and don’t cost more.

Thankfully, Ottman reports, with the advances in technology, “people” can now shop for green products that, unlike some of their predecessors, also compete on price and performance.

Paradigm Shift

The new paradigm, Ottman writes, requires “new strategies with a holistic point of view and eco-innovative product and service offering.”

One big innovation: offering a product as part of a larger service, as well as providing the service electronically. Such strategies have been part of new business models pioneered by companies like Zipcar, the car-sharing service, and Netflix, offering rental films online, along with DVDs sent by mail.

In addition to considering people vs consumers, the new business paradigm also includes thinking about: ‘cradle-to-cradle’ vs ‘cradle-to-grave’ products; ‘values’ vs ‘product-end benefits’; and corporate transparency vs secrecy.

In fact, these days, to appeal to an increasingly curious and demanding green audience, companies have to be pro-active in promoting their products, pointing out their added value, including benefits of better health, superior performance, good taste and cost-effectiveness.

Me First

Still, while these days everyone’s green, to get the end-customer on board, companies have to address people’s self-interest, Ottman insists. Even as consumers demand green products and investigate green company claims, everyone must see ‘something in it for me.’

Indeed, the main reason consumers will pay to save the planet isn’t to save it, but themselves, Ottman notes, highlighting that the number one reason they buy green is “to protect their own health.”

So, to effectively communicate, companies would do well to “integrate relevant environmental and social benefits within your brand’s already established market positioning,” with those responsible benefits featured as ‘extra,’ to complement a ‘me first’ attitude. Underscoring the point, products “closely aligned with health are growing the fastest,” Ottman notes.

What’s more, to help consumers feel “empowered” by their choices, “Invite consumer participation through simple actions and the prospect of a better future,” both physical and financial, Ottman advises, adding that, with the advent of social media, community engagement is more critical than ever. “Acknowledge the consumer’s new role as co-creator of your brand.”

All the Rest of Us…

As if it weren’t hard enough to engage the real person at the core of each consumer and invite them into the creation process, now business must not only beware sending a green message without credible back-up–but also stay on the look-out for new stakeholders, hatched all the time, it seems.

Gone are the days when business could aim to please just those with direct interest in the company, such as employees, investors, consumers and the like. Under the “new rules,” everyone’s potentially got a stake, including kids looking ahead to their future, as well as bloggers and so-called citizen journalists, who weren’t even on the scene when green products came to life decades ago.

That means engaging youth and families in special programs and making sure any media campaigns are designed to involve the general public, at least partly through the Internet, Ottman advises.

In the end, it all boils down to backing up any marketing message with the genuine article–products and services that really deliver the goods.

In other words, take care of business first.

And take a look at Ottman’s book. It’s the sort of marketing guide you’ll likely want to refer to again, almost an encyclopedia of trends, tips, tales, and–given her past record–likely spot-on predictions.

Kathy Nieland, who leads PwC’s Sustainable Business Solutions practice and is the partner in charge of the firm’s New Orleans’s practice, learned about sustainability quite personally while living through the devastating hurricane there six years ago.

While the firm was already growing its corporate responsibility efforts, that ‘aha’ moment eventually led to six capabilities, including two examined in Part 1: devising strategy and integrating new metrics with traditional.

Four other capabilities help take sustainability reporting to the next level:

Translating Sustainability Performance into Financial and Tax Terms

“Typically companies are measuring sustainability through non-financial metrics,” Nieland says, “and we discuss how to translate environmental and social activities into financial outcomes for the company.

“The kind of thing you might see in companies’ internal reporting might be ways of making links between greenhouse gas (GHG) to financial issues, like amount of GHG emitted per revenue equivalent, ton of product produced or per revenue dollar earned.”

She adds that translating social aspects of sustainability, such as impact on the community, into financial terms is more leading edge. Understanding and translating the impact of company actions on the community–for instance, the impact of Wall Street layoffs on various supply chains, like food companies–is complex. “How far down the supply chain do you go and what are we actually valuing?” she asks.

Helping Companies Automate Sustainability Reporting

One key was recognizing that, while business has been reporting financial information for years, and with the guidance of significant regulation since 1933, it has been reporting sustainability data for a very short time. As a result, much of the data collection and reporting aren’t as mature–both in the rules for calculating impact, as well as the processes to collect and report data throughout the value chain.

The firm also realized that some skills, processes and systems used to measure financial data might be transferred to measure effects of water, energy, emissions, waste and so on–first by designing the right reporting strategy, then by aiding companies to integrate reporting practices into business and supply chain operations, and then by automating those practices.

Integrating Sustainability into the Business

Often that means integrating sustainability not just into the reporting process but into the business lines, helping to open up channels between environmental and social decision-makers and those responsible for finance and operations, for instance. Much of PwC’s value has come by helping companies design criteria to integrate such issues into their core systems and establish standards to determine the most effective suppliers, geographical locations and other key sustainability elements.

Even more important may have been the realization that sustainability metrics, unlike traditional metrics, require long-term thinking, versus “short-term needs, like quarterly earnings and revenue per person,” Nieland says.

Going forward, the hope is to get business to focus on integration, in both operations and reporting. “In this economy, where companies have few resources, it’s almost a plus” to combine traditional financial and sustainability reporting, since sustainability often have very positive financial results.”

New Trends

As for new trends in metrics, in addition to integrated reporting, Nieland says environmental profit and loss (P&L) statements could be the next big thing, though it’s still in the early stages. “We’re supporting companies if they want to go down that path, but it’s a lot of work for those who take it on,” she says. Such reporting “creates a different vision of environmental impact, understanding the company’s impact on the environment, both positive and negative, and putting it in financial terms.”

And the industries most likely to need special attention? They’re likely to be in the consumer goods, apparel and heavy industrials, which have a big footprint on the environment and international sourcing and supply chain. Says Nieland: That’s where customers expect a lot.”

There’s nothing like a natural disaster to bring to life the business need to anticipate and prepare for the future.

That’s what happened when Kathy Nieland, who leads PwC’s Sustainable Business Solutions practice, lived through the devastating hurricane in New Orleans six years ago.

The disaster happened while PwC was growing its corporate responsibility efforts, recognizing increasingly critical community and environmental issues, along with the business imperatives to help resolve them, both internally and as a client service.

“The hurricane had a profound effect,” says Nieland, also the partner in charge of PwC’s New Orleans’s practice. “There were so many systemic issues for so many cities, individuals and organizations that it became clear that sustainability thinking had to be cultivated as a strategic business issue.”

PwC’s internal efforts have grown significantly since that coincidental ‘aha’ moment -as has its sustainability client practice.

The firm’s services now include helping clients with six capabilities for sustainability metrics and reporting:

1. Researching stakeholder needs and macro trends to devise a strategy

2. Recognizing the need to integrate traditional financial and new sustainability metrics

3. Helping companies speed the sustainability reporting process through automation

4. Helping to integrate sustainability into the business

5. Translating environmental and social impact into financial and tax terms

6. Recognizing key trends for the future, including environmental P&L reporting and industries that may need special help

7. Strategy: Stakeholder Needs, Macro Trends

The stimulus for the firm’s sustainability voyage was its 10-yearscenario planning exercise on macro-trends, including: climate change; demographic population change and growth in places like China and Brazil; increasing resource scarcity and consequent price volatility; and US positioning in the global economy.

“The trends showed that as developing countries grow, US influence would be reduced over time, so PwC as a firm had to be able to respond to help clients in new areas, requiring different skills and background, including science, engineering and general understanding of issues like climate change, resource scarcity and related supply change issues,” Nieland says. These trends were gradually incorporated into PwC’s approach to help businesses devise a strategic approach to sustainability.

1. Integrating Traditional and New Metrics

Among the most significant accomplishments for the client practice has been designing the integration of sustainability metrics and reporting with more traditional financial reporting techniques–along with the integration of sustainability throughout companies’ often discretely functioning units.

The firm, known for its accounting, tax, financial audit and advisory and reporting services, approached the coming changes by extending its more traditional reporting services to the environmental and general sustainability area, eventually becoming a proponent of so-called integrated reporting, which allows stakeholders to evaluate the financial and non-financial aspects of business together. Reporting, of course, can take many forms (digital, print, several, one, and so on). The key is for the company to tell an ‘integrated story.’

Next week: learn how macro trends and the ‘integrated story’ helped take sustainability metrics and reporting to the next level with four more capabilities.

What’s a stock exchange? Easy: It’s a venue where equities in publicly held companies are traded, right?

Right–and wrong. NYSE Euronext, the company once known as the New York Stock Exchange, is much more. It’s a technology company, a data center, a derivatives clearing center, and a majority owner in an energy market, among other functions.

Oh, and it’s a socially responsible multinational, too, as it harnesses the “value of community” of leading companies from around the globe, as Michelle Greene puts it.

That role isn’t likely to change as the exchange operator explores the pros–and recently cons–of its current merger opportunity with Deutsche Borse AG, no matter the outcome.

Since Greene came on board just over a year ago as vice president and head of corporate responsibility, the company has been formalizing its role as a global business sustainability leader–into four internal and four external functions.

Why now? “At a time when companies around the world are focusing on responsibility and sustainability, the NYSE Euronext can be a sort of role model and convener,” Greene says of the company’s thinking, as it seeks to “lead by example” through its own actions.

Her job building the sustainability initiative has been a two-pronged effort, Greene says, focusing her attention on the exchange’s internal and external roles.

Internally there have been four main functions:

1. Identifying opportunities for initiatives on corporate responsibility (CR) and helping to launch and lead them.
2. Acting as a sounding board and advisor to internal staff on CR-related issues.
3. Working to ensure that everyone throughout the company knows what corporate social responsibility is and what might be done to act sustainabily, so as to “help people think through that lens about everything they do,” she says.
4. Tracking and reporting sustainability results throughout the company, primarily in its CR report.

Greene notes that NYSE Euronext recently became the first global exchange operator to become carbon neutral.

And while she has a small team, she insists that, indeed, “it should be small,” mainly because ultimately the goal is to “integrate corporate responsibility throughout the organization in its many different forms,” instead of making it the job of a single department.

Externally, given the prominence of the exchange, it has the opportunity to bring together companies from its roster of 4,000 listed issuers from 55 countries to both showcase best practices and to help them improve their sustainability performance in four ways by:

1. “Celebrating” the companies doing good work on corporate responsibility, through, for example, summit meetings on governance, environmental sustainability and financial literacy.
2. Helping those companies share their examples and experiences.
3. Bringing together leaders to discuss challenges and emerging CR issues.
4. Offering forums, trainings and tools for those looking to build CR capacity, especially in areas where the Exchange is a clear leader, such as financial literacy.

“The external role here is larger than elsewhere because we represent an international community of leading companies,” Greene points out. “Being part of this community has value,” she adds. She points out that 88 percent of companies in the 2010 Dow Jones Sustainability Index and 89 percent of those in the 2010 Carbon Disclosure Project Leadership Index are listed on the NYSE Euronext Exchanges in the US and Europe, including NYSE Euronext, which was included in both indices.

As for the next CR challenge for NYSE Euronext itself, Greene notes: “To do sustainability at any company, you have to closely align with broader corporate strategy. For example, at the Exchange, we realize sustainability is increasingly important to our companies, so, to continue to provide value in this area, we need to integrate sustainability into all we do.”