Erb Institute Toolbox: Climate Change Strategies for Detroit and Small Businesses

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SUSTAINABILITY TOOLBOX

Climate Change Strategies for Detroit Small Businesses IN PARTNERSHIP WITH THE DETROIT CLIMATE ACTION COLLABORATIVE


S U S TA I N A B I L I T Y T O O L B O X

Climate Change Strategies for Detroit Small Businesses

Contents Introduction........................................... 1 Six Good Reasons for Small-Business Action on Climate Change................... 3 A Six-Step Approach for Small Businesses............................................. 7 Case Studies........................................ 12 Additional Resources.......................... 14 Appendix ............................................ 15


Climate Change Strategies for Detroit Small Businesses

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Introduction Background The Detroit Climate Action Collaborative has teamed up with the University of Michigan’s Erb Institute for Sustainability in Business to create this toolbox for use by Detroit-area small businesses.1 The collaborative recently prepared a Climate Action Plan for Detroit—a road map for combating climate change and adapting to its likely effects. The plan addresses several different Detroit stakeholder communities, including small businesses. Although it’s focused primarily on climate change, the plan is part of a

Social

larger sustainability initiative for Detroit. It sees Detroit as a global model of a vibrant urban center, where business and community thrive in environmental, economic and social

Bearable

health. This “triple bottom line” aspect of the plan is the

Equitable Sustainable

essence of true sustainability.2

Environmental

Economic Viable

The Plan’s Goals The plan lays out four broad climate change goals that apply to all businesses and institutions, large and small alike:

GHGs Reduce greenhouse gas (GHG) emissions from transportation, energy sources and the built environment 10% from 2012 levels by 2022, 30% by 2032 and 80% by 2050.

B2B Create resilient business and institutions and a green businessto-business (B2B) culture.

H2O Preserve and conserve water and water quality.

JOBS Increase awareness of career options in fields that lead to reducing GHG emissions.

1 A small business is one that has annual revenues less than $1 billion and/or employs fewer than 500 people. 2 Throughout this toolbox, we think of “sustainability” initiatives as the broad group of efforts intended to achieve the triple bottom line. Addressing climate change is one part of work in sustainability.

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Reaching these goals will take significant work. The plan itself lays out five challenges in meeting its vision for Detroit: 1. Funding the changes required

2. Ensuring participation

4. Dealing with a legacy infrastructure

5. Facing a culture often resistant to change

3. Aligning policy and legislation

Keep these challenges in mind—especially as they relate to your own business— as you read through this toolbox.

THIS TOOLBOX

OTHER TOOLBOXES

This toolbox is designed to help Detroit-area small businesses meet the plan’s climate change goals.3 This toolbox should help your business identify specific climate change risks and opportunities and then design and implement strategies to reduce your impacts and adapt to inevitable changes.

The Erb Institute has developed a suite of toolboxes that address additional corporate sustainability issues. Although most of these toolboxes were designed with large organizations in mind, you might be interested in learning about these:

We’ll focus on two main topics: 1. Six good business reasons for investing in climate change work

2. A six-step approach that can help your business tackle this issue Toward the end of the toolbox, you’ll find case studies that illustrate this information and a list of additional resources.

3 This toolbox does not directly address many non-climate-change sustainability issues.

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• Stakeholder Engagement: how to identify and engage important individuals, groups and others in your sustainability work • Materiality Assessment: a process to identify what matters most in company sustainability impact and to define a set of priorities for action • Strategy + Implementation: how to create a sustainability vision, supporting goals and tactics, and then put all of it to work • Global Supply Chain: the special sustainability challenges faced by companies that purchase from, and sell, around the globe • Metrics + Reporting: how to develop useful data to track and report on sustainability activities • Human Rights: a deeper dive into the unique challenges of this important area of corporate social responsibility

Please contact ErbInstitute@umich.edu if you would like to review one of these other toolboxes.

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Climate Change Strategies for Detroit Small Businesses

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Six Good Reasons for Small-Business Action on Climate Change Our planet is changing. The effects of post-industrial emissions of greenhouse gasses (GHGs) into the atmosphere have altered our climate—and continue to do so at a rapid pace. Experts believe that many of these changes will have serious, negative, lasting effects on the planet and us. To slow down climate change and adapt to the inevitable parts of it, everyone needs to pitch in—including businesses. It’s part of being a good citizen. It also pays off in terms of practical business opportunities. But how does climate change work pay off in the near and medium terms? Leading businesses—especially those with a history of investing in addressing climate change—know that climate change investments are needed now and that they do pay off. For example, they know that using less electricity means burning less fossil fuel, reducing their carbon footprint and saving them money in the form of utility bills. Of course, the exact returns a business receives depends

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on that company’s circumstances—its size, its stakeholders, its industry, the nature of its product/ service lineup, its supply chain and its culture. But despite each company’s unique situation, there are some common benefits that small businesses likely can obtain if they address climate change headon. Let’s look at six key payoffs from a business standpoint. We’re sure you’ll find at least one that fits your situation.

SAVE MONEY The easiest way for any business to capture savings from addressing climate change is to reduce energy consumption: The less energy you buy, the lower your utility bills. So you should consider evaluating ways to reduce purchases of • electricity—for lighting and heating, ventilation and AC (HVAC) • steam—for heating • fuel—for boilers, burners and transportation • water—for daily operations, fixtures and flush fixtures How can your business use less energy? We’ll illustrate this a bit more in the step-by-step portion of this toolbox, but a great way for small

businesses to reduce energy consumption is to swap out or retrofit inefficient energy-consuming equipment, such as lighting, flush and flow fixtures, machinery and HVAC equipment. Yes, this requires an up-front cost, but lower energy bills quickly repay that investment—and then some. Also, government and/or private subsidies often can help defer some of the up-front cost. Other cost-saving opportunities lie in operations, facility management and procurement/supply chain. In general, it’s all about maintaining or even increasing your output while using fewer resources—which saves money and increases profitability.

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REDUCE RISKS All business activity creates economic, environmental and social impacts, and many of these pose risks to a business’s ability to continue, as a profitability concern. For example, the impacts of emitting GHGs into the atmosphere could eventually lead to stranded assets (such as buildings, transportation infrastructure and even employee-owned assets like houses and cars) because of sea level rise and other weather-related events resulting from climate change. Without these assets, a business could struggle or even collapse. And the picture becomes even worse when your suppliers’ assets are included. • What would happen if a supplier’s main factory were incapacitated by extreme weather conditions associated with climate change?

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• What if an agricultural supplier couldn’t provide adequate quantities of a commodity you need because of climate-change-related drought? • What if a transportation provider could not pick up shipments destined for you because it couldn’t access its fuel supply because of weather-related flooding? This all might sound unlikely or too far off in time to be of concern now. But the risks are real, and their root cause—GHG emissions—is well understood by scientists and other experts. Reducing GHG emissions and preparing to adapt to climate change reduce business risk—a linchpin in the case for small-business action on climate change.

ENHANCE YOUR BRAND On the opportunity side, many small businesses can directly or indirectly benefit from climatechange-related investments that position them as:

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Right now, you can take simple steps to set your business apart from other businesses in the community, in your industry or of your size category. Larger companies have succeeded in boosting their brand image based on sustainability: Think of Clorox’s “Green Works” product line or GE’s “Ecomagination” initiative. The same principle can work for small businesses that invest in climate change actions (even businesses that are primarily B2B). Customers, investors, potential employees and many others increasingly seek out sustainable businesses that address climate change head-on. This is another strong case for small businesses to make sustainability investments.


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CREATE NEW SALES REVENUE New products and new markets for existing products can come from small-business investments in sustainability and climate change. For example, some potential customers buy primarily from “responsible” businesses (suppliers that actively address environmental and social impacts), or at least give these companies preference in bidding. After making some key sustainability and climate change investments, a small business can take advantage of these opportunities to generate new revenue. Or what about collaborating with a supplier to

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change one or more of its products to address climate change, such as eco-friendly packaging, fewer petrochemical ingredients or less energy usage during its life span? Customers want products like these. These types of changes can generate new revenue. And this is as true in the B2B space as it is in the B2C (business-to-consumer) space. What new products or markets could your business have if it invested in climate change?

IMPROVE YOUR SUPPLY-MANAGEMENT PROCESSES AND SUPPLIER RELATIONSHIPS Many sustainability and climate change initiatives can improve supply-management processes (such as sourcing, procurement, inventory management and supplier management). Without a doubt, this work changes the relationship between the business and its suppliers from seller-buyer to a true partnership. Today, many suppliers expect— and are prepared for—customer requirements related to sustainability and climate change.

For example, your business may work with a supplier to collect information about that supplier’s GHG emissions so that you can better understand your overall carbon footprint. The data collection project likely will improve the way you and the supplier communicate. It is also likely to identify inefficient supply-management practices. Although change often is hard, this work pays off in the end.

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RESPOND BETTER TO OUTSIDE DEMANDS Many small businesses may think that creating a more open and accountable business would add costs, expose the company to unnecessary scrutiny and invite meddling by various stakeholders. However, today’s business environment already requires transparency and accountability about environmental and social impacts. Businesses that don’t measure up are considered laggards at best, or frauds at worst. This isn’t to say that every aspect of a business should be made available for view, but many climate change actions are best practices, and they are almost standard fare in some industries and geographies. They include: • collecting and managing accurate environmental data, especially GHG emissions, water use and energy consumption data

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• giving key stakeholders regular updates on climate change work • using publicly available supplier codes of conduct to require suppliers to work on climate change Small businesses that don’t have these accountability tools in place yet will benefit from their work. This is another part of the business case for sustainability and climate change investments. So that’s a total of six good arguments for investing in climate change work. Which one(s) fit best with your business situation?


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A Six-Step Approach for Small Businesses Now that you have a few ideas about how addressing climate change can pay off for your business, let’s look at a step-by-step approach to tackling climate change. For some small businesses, this approach might result in one or more written plan documents. Other businesses might choose a more informal approach, with only certain parts put into writing. The decision is mainly up to your company’s culture and its resources. Whatever the approach, here are the steps to begin designing and implementing a climate change strategy.

Step 1

IDENTIFY CLIMATE CHANGE RISKS AND OPPORTUNITIES Hundreds of possible risks and opportunities are associated with climate change, even for a small business. So the first step in creating a climatechange-focused sustainability plan is to narrow down the possibilities and focus on those that are most important to your situation.

Sample Tasks: • Establish a team of inside stakeholders: operations people, supply managers, finance people and organizational leadership. • Have the team scan the list of risks and opportunities in the appendix to get a few preliminary ideas about which issues might apply. What are they looking for? Items on the list that are worth investigating because they’re more likely than not to be true. Try to get consensus, but don’t throw out ideas that not everyone agrees on. • Check the list you develop with some outside stakeholders if possible. Talk to some experts, nonprofits, customers, suppliers and/or industry representatives.

• See whether you can classify the issues into four buckets: a. not very important to our stakeholders, and not essential to our business b. important to our stakeholders, but not essential to our business c. not very important to our stakeholders, but essential to our business d. important to our stakeholders and essential to our businesses

Approximate Time to Complete: 30-60 days Deliverable: • a written document that identifies the issues you need to address, hopefully with a sense of where to start

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Step 2

SET AMBITIOUS BUT REALISTIC GOALS Each issue that you’ve identified as important needs to have a goal (some issues may be grouped together and share a common goal). The goals you develop need to be ambitious in the sense that they will stretch your organization a little. Often, managers and others will be asked to do new things and address unfamiliar subjects. This is good! But goals also need to be achievable within real-world constraints (such as budget, other projects and customer commitments). Your business needs to remain viable. Best advice: Walk before you run. And establish a few goals that can be “quick wins.” Those get folks excited!

Sample Tasks: • Choose no more than two to four issues from Step 1 to start. • For each issue, get the team to agree on a goal that’s ambitious and achievable. Goals need to be concrete and easy to understand. ɗɗ For example, a goal “to reduce total Scope 1 and 2 GHG emissions by 20 percent from a 2014 baseline” is a well-stated goal (if 20 percent is meaningful!). But a goal “to reduce our CO2 footprint” is not sufficiently specific. ɗɗ Energy goals should be stated in either reductions in kilowatt hours (kWhs) consumed or total GHG emissions output in CO2 equivalents. ɗɗ Water goals should be stated in either “overall water usage” or something specific like cubic feet.

ɗɗ B2B goals may be less quantitative, but that does not mean they should not be specific. For example, “create and communicate a revised supplier code of conduct that contains sustainability language to all suppliers by August 2018” is a well-stated goal. ɗɗ Similarly, if you’re addressing green jobs, many goals will be part numbers and part narrative. ɗɗ Whenever possible, state a goal in terms of an outcome, not an activity. • Obtain necessary sign-offs for your goals. This is where your business case comes into play: What risks and opportunities are you trying to address with your goals? What’s the likely payoff for your small business? • Announce your goals. Making a public statement is ideal, but that choice is up to your leadership team. You might choose to limit your announcement to internal stakeholders only, perhaps as a first step toward a future public announcement.

Approximate Time to Complete: 30-60 days Deliverables: • a written list of goals for each issue you identified in Step 1 (some companies find it’s easiest to do this in the Microsoft Excel spreadsheet that is later included in a plan document) • senior-level approval of goals

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Climate Change Strategies for Detroit Small Businesses

Step 3

CREATE STRATEGIES THAT SUPPORT YOUR GOALS To achieve your goals, you need strategies—and the actions you’ll take to reach the goals by the time they’re due. Each goal might have its own strategy, or a group of similar goals might go together under one strategy. Most likely, though, each goal will require several different strategies. • For example, meeting a GHG emissions reduction goal probably will require strategies related to energy and fuel consumption.

Sample Tasks: • Brainstorm strategies that go with each goal. Expand the project team to include the managers who will be responsible for rolling out strategies and implementing projects, if they are not already included in your project team. If your team lacks expertise in a particular area, reach out to:

• As you create strategies, consider how they might get broken down into concrete tasks or projects. Ask yourself whether you have the resources to accomplish the tasks (time, money, expertise)—and then check with others. This is a good way to “reality check” your strategies before acting. ɗɗ Obtain necessary approval for all your strategies.

Approximate Time to Complete: 30 days Deliverables: • a written document stating the strategies for each goal • management’s approval of strategies and required resources

ɗɗ subject matter experts/consultants ɗɗ nonprofits/environmental associations ɗɗ for energy issues, the U.S. Environmental Protection Agency (EPA), the Detroit Greenhouse Gas Business Index or your local energy provider ɗɗ for water issues, the EPA or the Detroit Department of Water and Sewerage

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Step 4

ESTABLISH METRICS THAT TRACK YOUR PROGRESS An old business adage says that “what doesn’t get measured doesn’t get managed.” Leading sustainable businesses have found this to be true especially of sustainability and climate change challenges—an important lesson for small businesses. Some basic metrics can help you track your climate change work. You should have a mix of high-level metrics tied directly to your goals (for example, reduce carbon footprint from operations by 30 percent over 2015 by 2020) and some strategy-level metrics (for example, reduce energy consumption from lighting and HVAC by 25 percent by 2018 and 35 percent by 2020) as well. Metrics are all about data, so you must have the systems necessary to collect, manage and report your data.

Sample Tasks: • Have your project team set up metrics for each goal and strategy. ɗɗ Metrics should be numeric whenever possible. Some B2B and green jobs metrics might be narrative.

Step 5

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ɗɗ Don’t establish metrics that you can’t act on. Don’t collect data just for data’s sake. • Identify the systems you have to collect, manage and report the data. And consider the issues of collecting both internal and external information. • Consider data storage and security issues up front. • Systems should include a “dashboard” reporting tool that allows project managers and others to see progress on a regular basis.

Approximate Time to Complete: 30-60 days Deliverables: • list of metrics associated with each goal • data management system and a “dashboard” to track and review metrics over time

TAKE ACTION Somewhere between 120 and 180 days after starting, you’re ready to take your first steps in implementing your plans to address climate change. If your company has a routine way of running projects, you’ll want to follow that very closely. But allow for some flexibility, because many aspects of climate change work are new to most businesses and might not fit into established procedures. Many businesses beginning sustainability/climate change work like to roll out strategies in pilot phases. This might be a good idea if your business doesn’t have a lot of experience with this subject or deep resources.

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For example, if your approach to cutting your carbon footprint includes reducing the amount of energy that lighting in your company’s facilities consumes, consider upgrading the equipment in one facility before moving on to others. But be aware that using many pilot projects will take longer to reach your goals.


Climate Change Strategies for Detroit Small Businesses

Sample Tasks: • Notify department managers about planned project details. Key managers should have been involved in establishing strategies, so few surprises should come up at this point. • Using procedures that you’re comfortable with, roll out strategies and tactics. If you don’t have project-management procedures, you can use an ad hoc approach, so long as it includes: ɗɗ identifying project “owners” ɗɗ providing a clear understanding and identification of what’s included in each project

Step 6

ɗɗ demonstrating a clear understanding of expected outcomes and timeline for each project ɗɗ outlining required and available resources for all projects ɗɗ listing metrics and ways that you’ll collect and report tracking data

Approximate Time to Complete: ongoing Deliverable: • completed/closed out project reports from project owners and managers

IMPROVE, IMPROVE, IMPROVE If you follow the steps outlined in this toolbox, you’re likely to succeed. Congratulations— celebrate your wins! But don’t worry if some goals were too lofty, some strategies didn’t work, some metrics tracked the wrong things or some resources weren’t there when needed. Addressing climate change risks and opportunities is a marathon and not a sprint. Just remember to review and adjust on a regular basis.

Sample Tasks: • Conduct post-completion reviews of projects with project teams and other stakeholders as appropriate. • Review metrics for areas where improvement did not meet goals.

• Reconvene project teams to update action plans. • Beef up your business case as a part of requesting additional resources.

Approximate Time to Complete: ongoing Deliverables: • project debrief meetings and reports • Six Sigma and other process evaluation/ error control methods • resource realignments and additional resource requests

That’s our summary of the steps your business should take. It may sound like a lot of work—and it can be. But we know that the work you do will pay off for your business and for Detroit.

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Case Studies

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ENERGY SAVINGS

IDENTIFYING RISKS

ABC Warehouse Company purchases electricity for lighting, fans and HVAC uses. Management assembled a team to review options for addressing climate change challenges and selected reducing energy consumption as their first project. After reviewing their internal skills, the team hired an outside energy auditing firm to review their current situation and recommend changes. They also collected the past 12 months of utility bills and entered consumption and financial data from those invoices into a Microsoft Excel database to get a baseline record.

XYZ Logistics Company, which offers many logistics services, has a transportation division with a fleet of 43 diesel-powered tractor trailers. These units are used to complete deliveries for its shipper customers throughout the midwestern and eastern U.S.

The energy auditor found that energy consumption in ABC’s three warehouses could be reduced by 20 percent by making the following two changes: • replacing all metal-halide lights with T5 fluorescent fixtures • replacing all old ceiling fans with (fewer) largeblade ceiling fans with variable speed motors, directly tied to a software-based thermostatic control system ABC budgeted $69,000 for the changes for each warehouse, totaling $207,000. Projects were completed by outside contractors within six weeks. ABC’s project team continued to enter data from utility bills after the retrofits. The first month after the installation, energy consumption declined by 27 percent. Based on ABC’s utility expenses, the project returned its total investment in 16 months. NOTE: ABC did not complete pre-retrofit and postretrofit carbon footprints for its facilities. If it had done so, it would have been able to demonstrate significant reductions in GHG emissions—with data to back up its claims.

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In 2014, XYZ experienced significant losses due to increased fuel costs that XYZ was unable to pass on to its customers. Although it changed its pricing strategy, XYZ’s management hired a risk-management expert in 2015 to help it better understand risks from the uncertain supply and pricing of diesel fuel. In conversations with XYZ, the consultant recommended expanding the scope of the project to look for other risks—particularly risks associated with current and expected climate change impacts. Because XYZ was reluctant to investigate something it considered far off in time, XYZ’s management set up an internal team to scan all possible environmental issues that could negatively impact the company’s operations and revenue stream. This way, XYZ could have some confidence that the outside contractor was heading down the correct path. XYZ’s team chose a leader for its project and held four one-hour meetings over the course of five weeks. During these discussions and in between meetings, the group considered a wide range of possible environmental issues from a long list it found through the EPA website, through industry connections and on the website of a nonprofit organization specializing in corporate environmental responsibility.

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Climate Change Strategies for Detroit Small Businesses

WATER CONSERVATION Through conserving water, businesses have a unique opportunity to conserve resources and improve their bottom line. Simple actions to implement water conservation techniques can help reduce water consumption, mitigate challenges to water quality and streamline wastewater elimination. According to the EPA, water conservation techniques have led to lower costs and consumption. For example, a rainwater recovery system installed at the EPA’s Region 7 Science and Technology Center in Kansas City, Kansas, provides water for flushing toilets, cooling towers and site irrigation. This innovative system uses a state-of-the-art rain capture system and storage tank that is estimated to save the laboratory over 300,000 gallons of water per year. Additional water conservation techniques for businesses include replacing older restroom fixtures. Many older toilets use 3.5 gallons per flush (gpf ), which is significantly higher than more recent fixtures. This amount of water consumption is nearly double the consumption of water-efficient fixtures that have flow rates of 1.28 gpf or 1.6 gpf. The EPA has noted that 37 percent of water used in the typical office building is used for sanitation, while EPA facilities—after being retrofitted with more efficient fixtures—use only 13 percent of water for sanitation. The EPA’s Mid-Continent Ecology Division Laboratory saved an estimated 360,000 gallons of water per year by replacing restroom faucets, toilets and urinals with low-flow, efficient fixtures. This dramatic decrease in water consumption can be realized by any business willing to make the commitment to conserve water, and doing so will also help reduce its water utility costs.

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Additional Resources To read the Detroit Climate Action Plan, visit: www.detroitenvironmentaljustice.org/climate-action-plan.

For more information on climate change in general, visit www.wri.org/our-work/topics/climate and www.c2es.org.

For a discussion of how climate change fits in with the United Nations Sustainable Development Goals, visit www.un.org/sustainabledevelopment/climate-change-2.

The World Business Council for Sustainable Development is a group of leading businesses addressing sustainability issues, including climate change. Visit www.wbcsd.org/Clusters/Climate-Energy.

The Association of Chief Climate Change Officers (ACCO) is a membership group of sustainability practitioners from leading businesses and institutions whose responsibilities include tackling climate change issues. ACCO provides training, conferences and other forums for members to learn and share best practices. See www.accoonline.org.

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Climate Change Strategies for Detroit Small Businesses

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Appendix List of Common Climate Change Business Risks and Opportunities Explanation of one-letter codes appearing below: M = mitigation—reducing climate change and its impacts A = adaptation—coping with unavoidable impacts from climate change

ENERGY: ELECTRICITY, STEAM AND FUEL General • Create “Scope 1 + 2” GHG emissions inventory in accordance with the Greenhouse Gas Protocol Initiative (www.ghgprotocol.org). M

Facilities/Built Environment • Replace inefficient lighting systems (switch to T5, T8 or LED; install on-only-when-occupied systems). M • Replace inefficient HVAC systems (replace motors, install variable-speed fans, adjust thermostats, ensure efficient airflow, check heating systems for leaks in boilers and pipes, upgrade boilers). M • Check for substandard building insulation and airflow (have building envelope and airflow audited, use white roofs for warehouses, install ceiling fans). M • Integrate solar and/or wind into your energy supply. M/A • Increase natural light (especially in warehouses). M/A • Identify and replace inefficient food service equipment in onsite cafeterias (upgrade vending machines, cold storage, cooking equipment). M • Buy renewable energy certificates (RECs) to offset CO2 emissions. M • Install efficient backup generators (in case grid goes down). A

Operations • Replace inefficient/outdated machinery and equipment motors (upgrade/replace). M • Swap out constant-run machinery and conveyors (install idling equipment). M • Replace inefficient materials-handling equipment (consider propane or fuel-cell energy sources). M • Choose EnergyStar® office/service and IT equipment). M

Transportation • Identify fuel-hogging transportation equipment (increase percentage of logistics spend with SmartWay® carriers). M • Look for and change any inefficient transportation routing (upgrade owned/leased assets to latest transportation management systems (TMS) with telematics). M • Eliminate onsite truck idling (create/enforce noidling rules). M • Reduce percentage of shipments by air (improve inventory management/order fulfillment systems, consult with subject-matter expert or third-party logistics on modality choices). M • Reduce percentage of employees commuting alone by automobile, especially during peak hours (offer carpool/bike options, public transportation subsidies, flexible shifts). • Eliminate unnecessary business travel (consider off-the-shelf or dedicated telepresence options). M • Create backup/secondary inbound and outbound routing options (have a second plan in place in case routes/modalities are unavailable). A

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B2B/SUPPLY CHAIN • Establish a code of conduct for suppliers that includes environmental and social responsibility language (redraft and redistribute as necessary). M/A • Include environmental and social responsibility/ performance requirements in your RFPs and supplier contracts (redraft and redistribute as necessary). M/A • Use supplier performance-management systems to hold suppliers accountable for environmental and social impacts (create/update supplier scorecards). M/A • Provide mentoring to diverse suppliers on environmental and social responsibility. M/A • Award high-performing suppliers on sustainability bid preference (created tiered bidding system). M/A • Put sustainable/responsible purchasing policies and practices into place (create policies and practices that reach the category level). M/A • Catalog the life-cycle impacts of products and services (conduct life-cycle assessment on a select group of products/services). M • Understand the supply risk landscape, especially around climate risks (undertake multidimensional supply risk analysis; whenever possible, avoid single-source supply). A • Disclose GHG emissions inventory and request that business partners do the same (consider CDP or other public platforms). M/A • Disclose climate change goals, actions and progress and request that business partners do the same. (M/A)

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WATER General • Engage with Detroit Water and Sewerage Department (help identify water quality and efficiency strategies and opportunities). M/A • Consider creating an organizational “water footprint” to gain understanding of which parts of the business are water “hot spots.”

Facilities/Built Environment • Eliminate inefficient water use by chillers/HVAC (conduct system integrity audit). M • Reduce water use in restrooms (install low-flow toilets, waterless urinals). M • Eliminate inefficient/excessive landscape irrigation (switch to “brownwater” landscape irrigation). M/A • Divert water runoff/poor stormwater management for secondary uses (capture water prior to runoff, consider site survey for site-level adaptation options). M/A • Identify and eliminate water pollution from pipes, drains (stop discharges, review pipe/drain integrity). M/A • Reduce water pollution from landscape treatment (reduce fertilizer use). M/A

Operations • Check for excessive process water consumption (review all systems for leaks). M • Check for excessive water consumption for cleaning/sanitization (consider air cleaning options). M

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Climate Change Strategies for Detroit Small Businesses

Products/Services • Identify any excessive water consumption during product use phase (conduct life-cycle analysis focused on water, re-engineer product). M/A • Reduce the amount of water as a product ingredient (consider concentrated product options). M/A • Work to understand excessive “embedded” water in a product (for example, product manufacturing is energy intensive, raw materials/commodities require high water consumption in growing, harvesting, processing; consider product reengineering options). M/A

GREEN JOBS • Promote the company as “sustainable,” with facts to support claims (review marketing and recruiting materials, recruiting processes). • Engage the local community about energy, water and waste issues ( join/sponsor community groups). • Upgrade your employees’ technical skill sets required in alternative energy, waste and water management (offer paths to education and promotion based on acquiring these skills, support community and other educational institutions with these in their curricula, participate in/ promote “green” job fairs). • Check out any industry-level focus on green jobs (review alliances and consortia offerings, act as an advocate for these). • Mentor those interested in green jobs (hire interns, connect with academic institutions seeking clinical opportunities for students, help with capstone projects focused on sustainability). • Finance green jobs (work with banks, lenders, investors, analysts to create the connection between access to capital and green job opportunities).

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PREPARED BY:

WITH CONTRIBUTIONS FROM U-M FACULTY AND STAFF

Robert W. Kuhn, Kuhn Associates Sustainability Advisors LLC

Dr. Joe Árvai Faculty Director, Erb Institute | Business for Sustainability

August 2017

Dr. Ravi Anupindi Professor of Operations Management and Research, Stephen M. Ross School of Business

In Partnership With the Detroit Climate Action Collaborative

Terry Nelidov Managing Director, Erb Institute | Business for Sustainability

© 2017 by the Regents of the University of Michigan