One of the most challenging and, at times, contentious issues that the building products industry is wrestling with is sustainability. New requirements for product transparency and reporting are popping up like prairie dogs. Architects and governmental bodies are asking for a host of reporting requirements that the building products industry is just beginning to grasp.
Many leading companies and trade associations in the industry have worked with thinkstep (formerly PE International) to help navigate these challenges. While attending the recent Aluminum Extruders’ Council (AEC) conference, I sat down with Heather Gadonniex, director of sustainable building and construction at thinkstep, for her insights as to where this all is going, and how it will affect our businesses.
Last week, PE International changed its name to thinkstep. What is the significance of the change?
Yes, it’s a very exciting time for the company! Our new brand reflects the analysis and the action, the “think” and the “step,” it takes to drive positive results. With the rebranding, we are celebrating our mission – to help customers succeed sustainably – and the launch of our next generation platform, thinkstep.one. thinkstep.one dramatically improves the efficiency and effectiveness of energy, environmental compliance, EHS [environmental health and safety], and sustainability management. The new corporate identity, including our new logo – a dynamic globe that features continually changing color bars – reflects the ever-evolving knowledge that is critical for sustainable business success, and the future of the planet.
Some people hear the word “sustainability” and check out, thinking that it’s another level of regulation of business that has no value. Why should companies care about, and work on, sustainability?
In our changing world, sustainable business is better business – whether it’s motivated through compliance, innovation or social responsibility. Business as usual is no longer an option in the era of changing weather patterns, resource scarcity and population growth. In light of these changes, today’s complex, global value chains carry substantial risk. Companies that embrace sustainability as a strategic pillar are empowered to address these risks head on and as a result are improving overall business performance, reducing risk, increasing profits and realizing greater shareholder return.
When companies work on making their practices more sustainable, what is the impact to their internal processes and efficiencies? How do you measure these?
The companies we work with see four main benefits of incorporating sustainability into their corporate and product strategies: increased efficiency, reduced cost, reduced risk and increased brand value.
When concentrating on internal processes and efficiencies, we focus on three areas: corporate, product and supply chain sustainability through implementation of software, data and services. On the corporate side, we develop and implement software to track KPIs [key performance indicators] such as reduced energy use, which leads to cost and environmental footprint reduction. We also focus on social metrics such as improved corporate governance. When dealing with product and supply chain, we often calculate product carbon emissions; screen ingredients for things like Prop 65, RoHs [restriction of hazardous substances], REACH [Registration, Evaluation, Authorisation and Restriction of Chemicals] or conflict minerals; and implement supply chain sustainability management systems.
Many companies whose products primarily serve residential markets haven’t heard requests for sustainability/EPD information from their customers yet. What is their incentive to work in these areas?
You are correct in your observation. The commercial construction market is far advanced in adopting and rewarding manufacturers that embed life cycle thinking into product design processes and report on environmental footprint reduction via EPDs. Residential market drivers tend to focus primarily on user-benefit such as increased home energy efficiency. However, this is changing. The International Green Construction Code is starting to reward products with accompanying EPDs and the National Association of Home Builders is working on incorporating life cycle thinking into upcoming releases of their NAHBGreen home standard.
Perhaps the greatest incentive lies with opportunities for manufacturers to improve their operations. Manufacturers that incorporate life cycle thinking into their product development and production processes are running smarter, more efficient operations.
What have you learned from your work in other segments of the building products industry that can shed light on the results of working on sustainability, both internally and for product marketability?
I could talk about companies becoming better corporate citizens or tell stories of how organizations are reducing risk and gaining market share. There are hundreds of cases I can point to and am happy to share those with anyone interested – just reach out. But the most fascinating component of my work is reflected in the people I get to interact with every day.
Companies that adopt sustainability have more excited employees. They realize higher employee retention and engagement. Some of the most passionate people I’ve met are those working on sustainability within their organizations, or helping to translate product and company benefit to the marketplace. They are dedicated to their organizations and to leaving the world a better place in which they found it. Just last week, I was chatting with a client that received a higher paying offer to jump to a competitor. He turned it down. Why? Not because the job wasn’t enticing. He turned it down because he was committed to his current employer’s sustainability mission and felt he was a part of something bigger – something that will have a lasting, positive impact.
The statistics I’ve read show that young people care deeply about sustainability. In five years, how do you think sustainability will be ranked in importance in relation to other priorities of employees?
It’s amazing. I often mentor individuals emerging from universities or just starting their careers. Yes, they are concerned about making a good living and having a solid career. However, they are equally concerned about working for a company and in a role where they are contributing to a more sustainable society. According to a 2014 survey conducted by Corporate Responsibility magazine, 71 percent of Americans want to work for a company whose CEO is actively involved in corporate responsibility.
It’s not just young people! I’m hiring for a positing at the moment and I’ve received applications from the most talented individuals; some more senior in their career. They are excited about the possibility of working for a company with a core mission focused on helping organizations succeed sustainably. This is not an anomaly.
Sustainability represents one of the biggest sea changes that building products businesses will be faced with in the coming years. While its not prudent to jump into big new areas too early, being too late often results in missed opportunity and higher risk.
Like the song says, “People get ready, there’s a train a’comin.”