It's one thing to successfully introduce a sustainable CSR policy when you have 12,000 staff, occupy more than 200 buildings and have a fleet of 6,500 vehicles. But when you are also responsible for environmental regulation and flood risk management across England and Wales the heat is on. Not only do you have to be exemplary in managing your own environmental impact but you also have to help others to do the same.
In carrying out its remit the Environment Agency (EA) inevitably has a significant impact on the environment. As such, a year ago it embarked on a five-year change programme to review the way it operates, to take into account climate change and to reduce its own carbon footprint. The agency is doing this for two main reasons: first, legislation and regulation to tackle climate change are already moving on to the statute books, and more are heading this way, and government departments, just like the private sector, will have to adapt. Second, as the main agency responsible for ensuring England and Wales adapts to the inevitable consequences of climate change, it must lead the way to mitigate against the worst effects of climate change.
So what can be learned from its experience and expertise? HR magazine asked HR director Graham Ledward and head of internal environment management Simon Pearson to outline how the EA is tackling this challenge.
The biggest asset in the Environment Agency's campaign to green the business is its people. It recognises that it can only do so much with efficiency and the use of new technology. Ultimately it will only deliver the challenges it has set itself by engaging and energising its staff.
The EA wants people to think and act differently. To reflect this it has moved its internal environmental management team into its human resources directorate. This is helping it draw closer links between environmental performance and people management and development.
The idea is the brainchild of HR director Graham Ledwood, who joined the organisation after years in the private sector and last month added responsibility for IT, premises and fleet to his role.
"The main reason we have brought it all under HR is that we see greening the organisation as being primarily about attitudes and behaviours," Ledward explains, "and this is HR's core business."
"The environment is the most important thing we have to deal with and it is made or broken by what employees do," he continues. "They make decisions outside your remit, such as whether to drive cars or take public transport. We want them to be in the psychological position where they choose to take public transport."
It helps that former chief executive Baroness Barbara Young demonstrated visible leadership in this area. Last year she travelled more than 7,000 miles on trains and only 250 by car. She also made herself accessible to all staff through a forum call 'chat with the chief'. For an hour, once a month, she answered questions on a named topic over an internet forum. The chat on environmental performance raised a good debate and some interesting ideas, the best of which are now being carried forward into delivery.
Pulling environmental management into HR was not without its difficulties, namely scepticism about the benefits it would deliver. But, as Ledward says: "So many of the levers and buttons needed to be successful are located here in HR."
Indeed, head of internal environment management Simon Pearson agrees. "The move into HR has brought me much closer to the directors and policies that affect how people work and behave," he says.
OFFICES AND WORKING PRACTICES
Since 2003 99% of the electricity the agency buys has been on a green tariff. It has a number of green buildings, such as Red Kite House in Wallingford (below), which incorporate a variety of energy and water-saving measures. These include intelligent design to allow natural air ventilation and cooling, a canopy of photo-voltaic cells, solar water heating, rainwater harvesting and use of desks that maximise space and keep costs down. Red Kite House has won several green building awards.
Office space needs to perform at environmental best practice levels but the EA does not simply want to move into new purpose-built, green buildings. There will be some new buildings but it wants to provide leadership and demonstrate to others what can be done with existing premises.
To help it move forward in this area a number of its regions have commissioned the Carbon Trust to carry out carbon audits. These have identified significant carbon savings that can be delivered quickly and will pay back financially within a couple of years. It is also in the process of developing specialist knowledge within the facilities teams so that they are better able to maximise efficiency on a day-to-day basis.
"We have a mixed estate, with some very utilitarian buildings. Getting greener water and energy in new premises is not difficult but the priority is to look at existing ones. We are retro-fitting our estate," explains HR director Graham Ledward.
One of the biggest consumers of energy in the offices is IT equipment, hence IT coming under Ledward's responsibility. The IT department is currently producing an action plan, which is tasked with reducing energy and making financial savings.
Like most organisations the EA says it doesn't make its offices work hard enough. The average desk use is less than 50% because most employees are out doing their jobs in the field. The plan is to get this to above 80%. To achieve this staff will need to be flexible and adopt to new ways of working. They won't have a desk they can call their own and will now have to make use of a desk that is available.
The five-year internal strategy covers all environmental impacts, such as energy, water, waste, transport, construction, procurement and pension fund management, but an increased focus is on reducing carbon emissions.
Of the three biggest sources of emissions at the Environment Agency, two are related to the workplace. Its vehicle fleet emits 17,000 tonnes per year, while running its offices produces 15,000 tonnes. Only pumping water either for flood defence or to move water to the South East for drinking emits more carbon (22,000 tonnes). Together these three activities account for more than 80% of the EA's 65,000-tonne annual carbon emission. The target is to reduce this footprint by 30% by 2012, which will lift the agency to current best practice levels in every aspect. The plan is to achieve this through efficiency and the use of technology, so it won't be counting any carbon credit for the green electricity it already buys and won't participate in carbon -offsetting in a big way until it has achieved the 30%.
Instead, the EA has established a fund to allow it to finance carbon reduction projects, such as wind power, solar or hydro schemes at offices and depots. "One of the first things we did was look to reduce carbon emissions," says head of internal environment management Simon Pearson. "However, what we really want to reduce is the amount of electricity we use. You can purchase 'green' without changing any behaviours, without changing the amount you use. That is too much of any easy win."
STAFF TRAVEL AND CHOICE OF FLEET
To reduce the impact of travel, the EA promotes the use of a travel hierarchy. This basically asks people to question if they need to travel at all. When travel is essential the preferred option is train. The EA has set a policy that employees won't fly for any journey that can be done by train in five hours or less.
When employees do drive, the preference is to use lease cars. By selecting vehicles carefully over the past five years, the EA has managed to reduce total vehicle emissions by 55%. Recently it launched a new lease car policy that offers a much reduced vehicle choice based on low CO2 emissions. The aim is to reduce the average CO2 emissions for new vehicles leased, from 2009/10 onwards, to 130g/km or below. This policy applies to all, including the chief executive and directors.
"We are bringing down the threshold of CO2 emissions all the time," says head of internal environment management Simon Pearson. "But greener cars are not enough. We are trying to incentivise staff to commute in other ways rather than single occupancy cars. And directors and regional leaders have their travel habits published so everyone can see the top 100 highest mileage drivers."
EA badged vans and 4x4s are used at the operational end of the business. Again, the vehicles are restricted based on emissions. Ninety of the fleet are currently running on 22% biodiesel as part of a trial. The aim is to demonstrate that non-modified vehicles can run on high blend biodiesel without causing mechanical damage.
The agency is working hard to make its total benefits package as green as possible. Its pension fund was the only UK case study in last year's United Nations Environment Programme Finance Initiative report on good practice in responsible investment by public pension funds from around the world - one of seven forms of public recognition the scheme received last year.
The EA has deployed an environmental strategy across 100% of its pension funds and all investment activities that its managers must comply with. It selects investment managers who integrate environmental risk assessment into their investment decision-making and monitors financial and environmental performance.
The fund keeps an eye on investment manager performance and asks managers to justify investment decisions. It favours investing on a positive best-in-class selection basis, takes an active approach to the exercise of its shareholder rights and encourages the use of engagement rather than negative screening. Managers are expected to engage on behalf of the pension fund with companies on the following issues: climate change, emissions, contaminated land and related clean-up issues, and natural habitats and wildlife issues.
The agency launched its responsible investment policy in 2005. In 2006 the fund's overall return was 22.8% (0.8% above its benchmark). Seven managers exceeded their performance benchmarks and four beat their performance targets.
Other innovative benefits schemes are now being investigated, including discounts on organic food boxes.
While leadership at the top is essential in getting organisational buy-in, the agency encourages employees to get involved at a local level by joining their office green group. These teams identify solutions to local issues, ranging from composting to setting up car share schemes.