By Paul “Max” Le Pera and Jessica McNaughton
In a previous issue of Countertops & Architectural Surfaces magazine, we further set the foundation of holistic sustainability by focusing on industrial definitions that are rapidly emerging, namely Environmental, Social and Governance (ESG) and its criteria for businesses. Regardless of perspective, using conscious choice aligned with personal values and motivations to groom one’s company toward evolving investment strategies — sustainability managed — is not an expense; it is an investment that can yield a return. Let’s look at some ways fabricators can begin the path toward ESG and break it down into achievable action items.
A study by McKinsey & Company shows that ESG links to cash flow in five ways:
- Reduce costs
- Regulate compliance
- Facilitate top-line growth
- Optimize investment and capital expenditures
- Increase employee productivity
Using these five pillars, fabricators can implement ESG according to their goals, budget and timelines. These pillars give structure to how leadership can focus efforts and whose actions are aligned with the efficacy of their sustainability journey.
Whereas these initiatives may seem like a stretch to those fabricators who have little context or experience with implementing sustainable initiatives, the endgame is to help their businesses mature, align with investor expectations, create mindfulness and make a difference while building equity. We can drill down into some practical applications of the five pillars:
- Decrease energy use. Revamp light fixtures, climate control, hours of use/operation.
- Use renewable energy like solar. Take advantage of local or state tax abatements!
- Decrease water consumption and pollution. Install recycling and filtration systems, rain catchment.
- Reduce waste costs and tonnage by diverting waste streams from landfills. Implement material recycling programs, reuse offal, repurpose materials and repair instead of replace.
- Increasing knowledge and compliance with OSHA and other safety standards reduces long-term risks and costs.
- Compliance with local requirements can help you qualify for subsidies, government incentives or programs, and avoid costly fees for noncompliance. Promote adherence to standards to elevate your company’s public profile.
Facilitate Top Line Growth: Sales, Marketing and Public Relations Opportunities
- Implement Customer Relationship Management (CRM) systems, such as Salesforce, to facilitate data management which facilitates product line, region and customer profile optimization.
- Connect with the local community. Support philanthropic efforts and sponsor community events and programs. Create awareness for your company by publicizing your involvement.
- Participate in and host events with industry-related organizations such as the American Institute of Architects (AIA), American Society of Interior Designers (ASID), International Interior Design Association (IIDA), National Kitchen and Bath Association (NKBA), and International Surface Fabricators Association (ISFA).
Optimize Investments and Capital Expenditures with Better Mechanical Infrastructure
- Increase throughput, efficiency, quality and capacity.
- Reduce labor or production costs by streamlining processes.
- Avoid long-term breakdowns by repairing and upgrading problematic machinery.
- Use less raw material with optimized software and hardware.
- Explore eco-friendly transportation and tooling solutions that increase efficiency, mitigate safety risks and decrease fuel consumption.
Increase Employee Productivity by Fostering a Positive Company Culture
- Create incentive programs and position sustainability as a priority.
- Develop effective leaders and encourage 360-degree accountability. Lead by example, encourage engagement and participation, volunteerism and open dialogue.
- Acknowledge employees for their hard work, achievements and commitment to excellence.
- Improve your employee incentives. Revisit compensation packages, offer signing bonuses, referral programs, flexible schedules and minimize waiting periods for benefits.
- Promote teamwork, inclusivity and proactively seek feedback to engage employees in company goals and developmental programs.
- Foster postivity and company pride with activities like family picnics, happy hours or softball tournaments — even a bonus day off for a job well done. Offer company swag items such as shirts, hats and more, which doubles as brand awareness for your company.
By embracing some of these initiatives, you can increase morale, decrease turnover, increase loyalty, improve camaraderie and increase productivity. Positivity is contagious, and good energy created by your company culture via these initiatives will have positive effects that ripple within the company and throughout your customer base. These intangible benefits should be supplemented with measured results as well, and information must be captured and assessed.
However, implementing infrastructure and systems aligned with ESG principles can be only as good as the data that you can measure from them in order to understand the results. Knowing if these efforts are helping grow your revenue or decreasing your expenses is critical, so having a platform that captures the data is an important part of the process. Not everyone wants to overlay a data management system over their existing infrastructure, but if the interest is there, it can be a lucrative piece of the puzzle.
Strategic technological deployment can play a critical role in efficiencies as well as be leveraged to align with ESG. CRM tools are growing in popularity as the data surrounding executables can be tracked and results monitored over a number of parameters such as applications, opportunities, time frame or customer profile. It facilitates the management and optimization of your efforts.
For example, Salesforce is one of the most popular CRM platforms. Dave Baldwin, a customer success executive for a large health care vendor, has been using Salesforce for 15 years. When asked about sustainability and how Salesforce could be used as a tool to help create and manage this initiative within a company, Dave said, “Tools like Salesforce are exceptionally powerful in helping drive a single source of truth, to consolidate and analyze data, to yield truly actionable information, that if used and embraced accordingly, can have a profound impact on business operations by driving efficiencies, managing growth and focusing on the best way to engage a customer — the right solution, in the right place, at the right time.
“Customer-first collaboration tools like Salesforce have been experiencing amazing growth,“ continued Dave. “Likely due not just to their ability to turn data into information, but to allow an entire organization to understand the scope of engagement with complex customers.”
Dave says tools like Salesforce can be used as an engagement tool, to manage activities, track and plan call routes, or an alert when systems or projects could be at risk. Using a CRM for something as simple as route planning can optimize use of time, minimize costs, and increase throughput and efficiency, which directly impacts your bottom line.
“While these types of capabilities impact supplier operations,” added Dave, “there are much further-reaching implications to these types of technologies. By tracking and aligning to operational goals with sustainability in mind, you can do well while doing good, which has been the mantra of Marc Benioff, Salesforce founder and CEO.”
ESG can be systematically implemented into any size or type of company, but sustainability is a journey, not a destination. Fabricators individually or as a group can make a difference in their businesses and environments by taking a hard look at where they are now and strategically choosing any number of these action items to get started. Leadership needs to remain mindful that putting these measures in place is not an all-or-nothing effort; it is taking steps toward doing better and aligning your business with defined core values, specific initiatives and other emerging ESG requirements targeted to protecting future generations, investors and customers.
About the Authors
Paul “Max” Le Pera is the president and founder of Proprietary Ventures, LLC, a boutique-style global firm devoted to researching, discovering and deploying disruptive and sustainably oriented proprietary products and technologies. He serves on the ISFA board of directors as vice president of standards.
Jessica McNaughton serves as president at CaraGreen, a provider of sustainable building materials, including many alternative surfacing materials. She has 20 years’ experience in sales, marketing, business development and strategy. Previously the director of sales and marketing at CaraGreen, Jessica has maintained her status as a LEED Accredited Professional since 2009 and she hosts a podcast, Build Green Live Green.