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Categories Sustainability Strategy

United Airlines

Bumping passengers already seated on a plane is a bad enough decision. Physically removing a paying customer against their will is incomprehensible. If you haven’t yet watched the video, you should. It should be no surprise United’s stock took a nose dive. After another incident in late March, both having caused social media firestorms, United has a steep hill to climb to win over customers.

It all comes down to leadership

How United got here is really a story of culture, governance and corporate responsibility. For all the claims United makes about customer service and being a responsible corporate citizen, those claims are clearly not reflected in its policies and procedures. Actions are dictated by governance, governance is embodied by policies and procedures, policies and procedures are guided by culture, and culture is set at the top.

So how did the top respond? The CEO, Oscar Munoz, made a first attempt at addressing the situation by taking a sterile tone that put the company’s fear of litigation ahead of customer service. He blew it. His tone was wrong and he did not apologize to the passenger who was forcibly removed (or the other passengers who either agreed to be bumped or bore witness). The PR team also botched the tone of their initial attempts at crisis management. Munoz finally had to go on Good Morning America to get the tone right. During that interview Munoz blamed the incident on a system failure.

The failure Munoz referred to is a policy for a very low-probability situation that doesn’t seem like it was well-thought through. At any company, governance and policy are reflections of culture. Bumping passengers already seated on the plane, while legal, was a terrible business decision driven by a bad policy. Not sincerely apologizing during the first attempt at crisis management was an even worse decision.

Good policies create solutions to low-probability challenges

A lot of us understand why United and other airlines overbook flights. Unsold seats are lost revenue. And I can only image how low of a probability this event seemed: an overbooked flight, all passengers show up, four crew members need a lift, no passengers take the vouchers offered during pre-boarding. But it’s the low probability events that matter most. If United handled this well, there’s a good chance no one would have heard about it. We saw what happened when handled poorly. And this mishandling was by design because of bad policies and procedures.

It will be interesting to see how United changes this policy. Maybe they’ll increase or change the incentives they give. If they had offered a voucher worth more than $400 before people boarded and got comfortable, I bet some passengers would’ve taken the offer. Change the policy to draw a line of bumping to pre-boarding, or allow passengers to say no if asked to leave (especially when they say they have patients to treat early the next morning).

This situation not only reflects United’s culture, but must have damaged it further by putting customer-facing employees in an very difficult position. Who wants to bump a passenger who’s already seated on the next flight while all the other passengers are watching, listening and filming or live streaming? What pilot or crew member wants to catch a ride to their next gig only to be heckled by surrounding passengers?

Leadership, trust, and the bottom line

United leadership needs to do some soul searching because competition for customers and talent is fierce. The search for talent now and in years to come will be exacerbated by a looming pilot shortage. Will United get the picked over pilots or cut into their bottom line to offer higher salaries to attract and retain good pilots? Trust also matters when attracting customers who are willing to pay a little more than the lowest fare to feel better about the purchase. Beyond trust, more of us seek purpose in our work. While United has had some good stories in the past few years, the bad seems to drown out the good, highlighted by recent events suggesting a culture that doesn’t provide a strong sense of purpose.

Munoz has been at the helm of United for over a year and a half. This is his legacy. It’s also his opportunity to change that legacy by taking the necessary steps to earn trust and reinvigorate the purpose behind the brand. The responsibility you display as a corporate citizen isn’t just about your charitable giving or sustainability measures, it’s reflected in all choices, both large and small. How you plan for low probability events—like the one United mishandled this week—speaks volumes about who you are and what you stand for as a company. While investors may get over this quickly, passengers are less likely to, and that would be the most serious repercussion of this debacle.

United has a long road ahead if it’s serious about turning around perception. That road involves figuring out what they stand for and making changes to satisfy stakeholders, not just shareholders.

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Categories Sustainability Strategy



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Q&A on how the new WELL Building Standard helps employers boost productivity and eliminate common workplace gripes

Symantec’s corporate office is among the first buildings to be certified to the new WELL Building Standard — a holistic approach to designing spaces that directly supports human health and wellness.

In annual workplace surveys that track the leading gripes of office workers, temperature and noise levels consistently top the list of problems. Design trends that favor open floorplans have exacerbated these problems by spreading noise and reducing temperature zoning. A growing body of health and wellness research suggests that employers should take staff complaints seriously. The quality of the indoor environment directly affects the bottom line through health problems, absenteeism, reduced productivity and reduced employee satisfaction.

Third Partners co-founder John Haugen recently became one of the first WELL Building Certification practitioners (WELL APs) in New York City.

In this Q&A interview with John we explore why healthy building design matters to firms that compete for top staff talent and performance.

Q: What is WELL Certification?

John Haugen (JH): The WELL building standard is a new way to design offices and buildings that are better for health and wellness of people.

Q: Who should care about the WELL Standard?

JH: People, not the real estate itself, are the leading source of cost or investment in offices. Keeping people healthy is the best investment an employer can make.

Q: Is there a financial ROI for pursuing WELL building certification?

JH: It all comes down to the value of a healthy, productive employee. Managers are extremely aware of healthcare costs and the cost of their workforce. If you’re investing what might equate to basis points on a construction project it’s a no brainer. It’s important to note up front that the WELL design approach is science-based and not green for the sake of green. Because it’s a new standard, it’s critical to understand that the process is a bottom line driven business imperative.

Q: What problems with buildings does WELL address?

JH: First off, many buildings actually make people sick by exposing them to allergens, mold, exterior pollution, water contaminants, bad lighting, no sound control, etc. Using the latest in scientific research and technology, WELL identifies and eliminates the problems related to air quality, water quality, and occupant comfort and mental acuity. Companies already spend a bunch of money on wellness programs, but if you have a wellness day and then employees go back inside and breath in moldy air or toxic chemicals all year, what’s the point?

Q: What types of buildings does WELL apply to?

JH: There are certification options for offices, retail, multifamily and restaurants but it’s less about the type of building and more about the kind of owner or organization. High performance cultures will receive a lot of benefit, especially creative firms, competitive talent pools, and brands that express their values through their spaces. If you have high-end talent, such as lawyers or traders, you’re going to give WELL a serious look to protect and optimize that huge investment in human capital.

Q: Can you give an example of how WELL actually applies to building design?

JH: Broadly, the focus is on body systems and human health. By applying public health data to design tactics, WELL leads to a direct positive impact on people. There are seven impact categories broken down into prerequisites and optimizations. The number of optimizations determines the certification level, either silver, gold or platinum. In the case of air quality there are 12 prerequisite features that prevent harmful pollutants. To achieve top performance, design teams are going to make strategic materials selections to reduce toxic chemicals off-gassing. They will also choose ventilation systems with strong control over fresh air rates, advanced particle filtration and sensors that improve indoor air quality.

Q: Why would an employer care about indoor air quality? Isn’t building code good enough?

JH: Codes are improving especially in places like NYC but there are still huge gaps. We aren’t just talking about energy usage here. Even modest improvements to air quality and physical activity during an otherwise sedentary work day can have drastic improvements in wellness, cognitive function, obesity, heart disease hypertension. Tackling these major health issues requires a dedicated focus on multiple interrelated design factors. That’s where having the structure of WELL is a real asset. The health research behind the WELL Standard ensures that the project actually achieves the desired health outcomes for workers.

Q: As a WELL AP how involved do you get in the building process?

JH: I am at the table from day one along with all the other construction team members. Like any other discipline, the first step is to get everyone on the same page, followed by design recommendations that help the project achieve the desired level of WELL certification.

Q: Can you tell a WELL office apart from a traditional office just by looking — without knowing more about the technical aspects of the standard?

JH: Yes, a person spending time inside a WELL building will feel alert, they’ll notice that light levels are appropriate which supports health in both visible and invisible ways. You’ll see healthy food being served, you might hear music in transition spaces, and you’ll probably see interior gardens. In a WELL building everything is intentionally designed to produce a positive response on a subconscious level. To a manager, it sends a positive message about the company and ensures the office is a great work environment.

Contrast that to offices that are poorly lit, the smell of fried slop food being served, the wrong lighting levels and color temperatures, too hot or too cold…we’ve all been in those offices, but no one really wants to be there.

Q: Are there half-measures when it comes to WELL?

JH: For certification, there isn’t a lite version. But there is a way to implement as many of the tactics as possible within the constraints of the project to achieve a better interior space. In the case of air filtration and ventilation management, adding a set of activated charcoal filters is an easy mod that most buildings can make today to improve air quality from leading sources of harmful indoor pollution.

Q: Where’s the slack? How do people undermine the intentions?

JH: The WELL Standard isn’t some idealistic roadmap, it’s designed with human nature in mind. It’s designed to trigger behaviors that improve health. For example, it is not about removing all fried foods but about making healthy options readily available and attractive. It still requires people to make the ultimate decision about what is or isn’t good for them. If someone doesn’t want a standing desk, they’re not going to have to use one. WELL makes it easier to make the healthier choice. If you’re in charge of thousands of people, the multitude of financial benefits associated with wellness are so huge, this certification is your way to build wellness into an office environment in a predictable way.

Q: What organizations would want to consider WELL certified buildings?

JH: It takes a forward thinking CEO to sign off on something like this by understanding the interconnection between the many factors within the workplace that influence health and wellness. In terms of direct connections to the bottom line, there’s a lab at the Mayo clinic devoted to assessing building systems and the connection to human health so it will be a matter of time before insurers incorporate data into health care cost calculations.

Q: What is the most common workplace gripe that WELL addresses?

JH: The top complaint of office workers is overhearing other peoples’ conversations within an open office setting. There are ways to fix that using materials that absorb sound, limiting sound levels from mechanical systems, using sound masking equipment, and good general construction practices.

Q: After receiving certification is there ongoing performance measurement?

JH: Yes, re-certification verifies that the building continues to meet the criteria for original certification. For some features this is as simple as the facility manager verifying that water and air filters were changed. For others, a site visit and performance verification every three years is required.

WELL AP
Q: What do you look for when representing a client’s interests on a WELL project?

It’s important to have a strong sense of the cost-benefit of each of the features in order to make the smartest choices for the individual organizations or building. Messaging to staff is also a huge consideration. The standard is less valuable if employees are not given exposure the importance behind the WELL tactics their employer has invested in.

Q: For many people LEED is synonymous with a green building. Is WELL the new LEED?

JH: Not exactly. A lot of the features LEED added in its latest iteration are synergistic with the WELL standard, but WELL is a much more comprehensive standard for health and wellness. It’s more like healthy is the new green when it comes to buildings. While energy efficiency and locally sourced materials are beneficial, purely environmental factors fail to consider the biggest cost centers and performance drivers for businesses, which are entirely reliant upon humans. Healthy humans perform better than sick humans.

If you are looking to send a strong message on both employee wellness and environmental stewardship, there are 36 WELL building features that overlap with LEED v4 credits. You’re on your way to LEED by pursuing WELL.

To learn more about WELL Building Certification contact John Haugen at Third Partners.

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Tennaxia and Third Partners

co-authored by Juliette Barré, Sustainability Principal at Tennaxia

Sustainability is increasingly a topic of conversation in the boardroom because company leaders are realizing the value that sustainability can bring. This higher profile is great for sustainability directors, and it also increases the importance of setting the right goals, managing performance, and reporting accurately to leadership.

High quality, relevant sustainability data is the key to unlocking and growing this strategic relevance. Without good data, you risk missing the data party as our colleague JD Capuano describes in a deep dive on the topic.

Companies need better solutions
A big challenge sustainability directors face is the gap between reporting needs and existing capabilities: outdated systems, cookie-cutter software, and spreadsheet-based surveys just don’t cut it anymore. Companies need a comprehensive cloud-based solution to centralize sustainability data collection from across the enterprise. Moreover, systems need to be flexible enough to handle unique organizational needs and smart enough to roll up accurate and validated data. On the analysis and reporting side, a good solution helps directors navigate the ever-expanding maze of sustainability reporting requirements and standards in order to achieve external transparency goals.

Three common mistakes
Consider a sustainability director’s ultimate goal of strategic relevance as analogous to a person’s 10 mile commute to work, with the ultimate goal of arriving as quickly and efficiently as possible.

  • Using outdated software or a homemade spreadsheet-based collection method is like locking your keys in the house and having to walk the 10 mile commute. Yes, you might eventually get there but it won’t be quick or efficient, and you’ll arrive burnt out. Achieving strategic relevance should not be slow or arduous.
  • Using an expensive software tool with all the bells and whistles – even the ones you don’t need – is like driving to work in a Ferrari when a decent Nissan will do. You’ll get there, but too many resources will be tied up in your vehicle. And if you need service, expect to pay dearly.
  • Using a cookie-cutter software solution that cannot handle the nuances of your company, industry, and your specific reporting requirements is like having a GPS system that routes you into traffic gridlock. Invariably you’ll get stuck on a key issue

Strategic Relevance: How to get there
Ultimately the best data collection and reporting solution optimizes across both vehicle type and route. The most resource-efficient way to achieve strategic relevance is to implement a solution that:

  1. centralizes sustainability data collection from across the enterprise,
  2. collects the right data using cloud software,
  3. ensures data completeness and validity, and
  4. provides flexible reporting and output solutions to help you manage complex external and internal reporting needs.

Juliette Barré is Sustainability Principal at Tennaxia, a French market leader in sustainability data collection and analysis software. John Haugen is Co-founder & Sustainability Strategist at New York-based Third Partners, a boutique sustainability strategy group. Tennaxia and Third Partners recently formed a partnership to offer both technology and services for companies looking to improve, scale up or streamline their efforts in this evolving field. Reach out at this link or contact (at) thirdpartners.com.

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Tennaxia and Third Partners

We are excited to announce our partnership with Tennaxia, a leader provider of sustainability data collection and analysis software. Together we offer a full-scale technology and service solution for companies looking to improve, expand, and streamline their reporting and sustainability management efforts.

We help companies that need to meet and report on sustainability performance, as well as bring sustainability and core business objectives in alignment. This includes businesses involved in measuring, analyzing and improving environment, health and safety (EHS) and corporate social responsibility (CSR) strategies and programs.

We provide managers with all the tools required to measure, comply, and analyze performance. Additionally our four-step verification and validation process creates additional reliability and accountability. Accurate and comprehensive data is a strategic imperative in every department, and CSR is no exception.

Global data collection is not meant to be done with spreadsheets and emails. We provide a cloud-based tool that can help managers expand reach across dozens or even hundreds of sites. Our implementation support is tailored to each client, and we provide as much hands-on support services as needed, or give your team the tools it needs to go further, faster.

Our solution supports clients with the features and services they need – and nothing they don’t. We design our scope accordingly, and can implement in as little as one month.

For more information, please contact us today or read more in our joint press release with Tennaxia.

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1. Business stepping up to the table because of public uncertainty

Sustainability trends for the new year

Third Partners joined more than 600 leading businesses and investors in signing a business-backed call-to-action on climate change. The letter – addressed to President-elect Trump, President Obama, Members of the US Congress, and Global Leaders – calls for three actions:

  • Continuation and amplification of U.S. low-carbon policies
  • Investment in low-carbon economy to boost investor confidence
  • Continued participation in the Paris Climate Agreement to limit temperature rise to 2 degrees celsius

The business community cites cost-effectiveness, innovation, job creation and risk of failing competitiveness of the American economy.

2. Investors as the new climate champions

ESG investing has taken off in the US recent years and the market shows no sign of slowing down. More and more research is providing investors with confidence that they can employ socially responsible investing strategies without sacrificing returns and, potentially, even gaining some additional financial upside. Research from Barclays in late 2016 showed bond portfolios with an ESG tilt had a small performance advantage.

The Green Bond market is also poised for strong growth in 2017. The first Sovereign Green Bonds were recently issued by Poland and France. Several other countries have expressed their intent to follow suit this year. As sustainable investing goes mainstream, investors want better data and may find themselves in the somewhat unexpected role of climate change advocates.

3. Data certainty and planning

Data and analytic resources for investors are growing in number and quality. Despite issuing more ESG information in their sustainability reports, corporations often take a piecemeal approach to data collection and analysis. This happens for three reasons:

  • Sustainability evolved for most companies as a response to external pressure or risk, rather than a profit opportunity.
  • Sustainability data within companies come from disparate sources
  • Much of this sustainability data is unstructured (unlike the neat rows and columns of structured financial data).

Tools to collect & organize data, the skills to analyze it, and overall availability of data is on the rise. More extensive data collection and analysis tools for sustainability is being integrated for internal decision-making, not just for external reporting.

4. Climate change disclosure pivots towards corporate risk

Most large US companies are already reporting at least some portion of their greenhouse gas emissions. While this gives stakeholders an understanding the company’s contribution to climate change, investors are asking for an analysis of climate change impacts on company operations. Raw numbers and business impact are two different things.

The newly released findings from the Financial Stability Board Task Force on Climate-related Disclosures recommends (among other things) that companies disclose climate-related risks and opportunities to the company under different future states – including a 2-degree scenario. For more, read our list of four key takeaways from this report.

5. Skyrocketing interest in health, well-being, and productivity in building standards

In the world of sustainable workplaces and facilities, healthy is the new green. Americans spend upwards of 90 percent of their time indoors, much of that time spent in buildings loaded with toxic chemicals, poor air quality and unhealthy nutrition options.

The WELL Building Standard connects design and construction best practices with positive outcomes for human health and well-being. A newly discovered financial bottom line for businesses is driving rapid adoption of the standard.

The return-on-investment from healthy buildings is easy to illustrate. In the long run, businesses spend far more on wages and healthcare costs for their workforce than they do on building design, construction, leasing and energy.

In 2017 Third Partners will become an early adopter of the “WELL AP” certification — the design and construction practitioner credential for achieving performance under the new WELL Building Standard.

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