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FT Investing in a Sustainable Future March 24, 2010, New York

White Paper

Crossing the Green Divide

By Jessica Bier, David Linich, Christopher Park / Deloitte Consulting LLP

Ways to channel your team's passion for greening into actions that will affect your bottom line

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One challenge in creating a green workplace is that traditional methods of communicating do not apply. Research has shown that centralized greening
plans distributed from the top down have little effect on people’s behavior.¹ Such communication can fail to engage employees and tap their ideas.

A different approach is called for – one that makes people aware of their green performance, provides a platform for change, communicates the message in a credible way and rewards behavior that furthers company objectives.

Friendly competitions can be an effective way to raise awareness and change behaviors. For example, a recent experiment in California tested the power of "social norms" in energy consumption.² Households received electric bills showing energy consumption relative to their neighbors. Residents with below-average energy consumption saw a positive message highlighted by a smiley face on their bill. When residents realized their energy consumption was higher than their neighbors, they reduced their consumption.

How a company communicates about greening, internally and externally, can make or break a program.

A competition in a California neighborhood is one thing, but how could this play out in the workplace? At Deloitte, visibility into green performance was achieved through two online tools: a registry and a scorecard. Through the registry, employees completed a brief questionnaire to measure their "green footprint." In the process, they learned about their effect on the environment, saw how their scores compared with others in their office and in their region, and were given personalized tips on ways to improve their performance. The scorecard highlighted each office’s progress against 37 projects in the office greening program. As the office completed more projects, the symbol representing their office became greener. As with the experiment in the California neighborhood,this initiative worked because it created visibility in environmental performance compared with a peer group, provided timely performance feedback to encourage behavioral change, and educated people in a nonthreatening way.

How a company communicates about greening, internally and externally, can make or break a program. For example, in an effort to encourage employees to bring their own reusable mugs, the management of one company decided to stop providing disposable coffee cups. The disposable cups were removed without advance notification. When workers realized the disposable cups were gone, they were understandably upset (and severely under-caffeinated). Employees did bring their own mugs – but the action was perceived as negative – the opposite of its intent.

Inaccuracy or exaggeration can also cause communications strategies to fail. One company, for instance, aired an advertisement claiming that its waste CO2 was used to grow flowers. In fact, only 0.325 percent of the company’s carbon emissions were used to grow flowers.³ As a result, a record number of complaints were filed with the Advertising Standards Authority (ASA). The company quickly pulled the ad, but the damage was done.^{4, 5
Rewarding green behavior can drive positive results, but failing to reward it can boomerang.}
Creative, credible rewards and incentives are another way to ignite a higher level of green passion and performance. Simply engaging in greening activities at work can be intrinsically rewarding, because it allows people to align their actions with their personal values and concern for the environment. Supplementing these intrinsic rewards is important, while failing to reward desired behaviors can backfire.

In the California energy consumption experiment, households were shown to radically alter their energy consumption to adapt to the social norms of a neighborhood. But the experiment also showed the effects of failing to reward desired behaviors. While one group of households received bills with positive/negative reinforcement (smiley and sad faces), another group received bills that simply showed their consumption relative to others in the neighborhood. Researchers observed a pronounced “boomerang effect” for these households, meaning that those whose energy consumption was below average changed their behavior to adapt to the mean. Rewarding green behavior can drive positive results, but failing to reward it can boomerang.

So how do companies reward employees who adopt more green behaviors? First, rewards should involve minimal (if any) incremental resources and waste. There is an environmental cost to buying new products, for example, and employees may never reach the environmental break-even point with rewards like new ceramic mugs. What’s more, they may view such rewards as hypocritical.

Instead, rewards such as recognition on an internal Web site or newsletter, or gift certificates for downloadable music, carry a small environmental footprint. At one company, the “green teams” took it upon themselves to create rewards, including preferred parking for hybrid cars and funky mug contests.⁶ The company’s environmental program manager noted that these efforts “captured the imagination” of its employees who were interested in learning and taking action.⁷
People care about the impact they make on the environment. Crossing the divide between attitudes and actions requires companies to understand their green performance, provide a platform with guidance for ways employees can engage in greening at work, communicate greening with credibility and authenticity internally and externally, and reward green behaviors in a creative and credible way. Crossing the divide can enable companies to help the environment and their bottom line.⁸

Corporate Governance & Compliance;Corporate Social Responsibility;Marketing & Communications;

*Footnotes