Case Study: How WGL Aligns with Sustainable Development Goals

COMMIT!Forum will convene hundreds of corporate social responsibility leaders and CEOs from CR Magazine’s annual 100 Best Corporate Citizens ranking.  The event includes a pre-conference workshop on integrated CSR and sustainability reporting from BrownFlynn. Join MGM's Chief Diversity and CR Officer Phyllis James, Terracycle CEO Tom Szaky, Leidos CEO Roger Krone on the corporate response to the opioid epidemic at the 2017 Commit!Forum in Washington DC this October. 3p readers get 20% off with discount code 3P2017CF

Earlier this year, the Climate Disclosure Standards Board, a consortium of businesses and other green organizations announced a new initiative to prompt companies to get behind the G20 Task Force on Climate-related Financial Disclosures. According to the CDSB, the platform will showcase those "forward-thinking businesses" that are willing to show transparency in how they address climate risk and align their operations with their investors' expectations.

More than 100 CEOs of companies ranging from small NGOs to Fortune 500 corporations have already endorsed the initiative, signaling a growing effort through a variety of similarly aimed mechanisms, to ensure sustainable business practices.  They not only speak volumes about what many companies see as a mandate for how they should do business but the potential for innovation to resolve some of the world's biggest challenges today.

For energy leaders like Washington Gas and Light (WGL), those efforts are reflected in its support of another mechanism: the United Nations Sustainable Development Goals (SDGs). As John Friedman, sustainability manager for WGL Holdings describes the SDGs, they consist of "seventeen winning strategies” -- common-sense goals that reflect on both businesses and the global community’s sustainability: eradicating poverty, resolving hunger, addressing climate change, ensuring clean water and sanitation is available for all, etc.

“If a business wants to be successful over the long term it must have goals that reflect the need to meet short-term expectations and long-term needs,” explained Friedman. “Sustainable business goals do just that; they incorporate the business plan that generally focuses on meeting the shorter term of direct stakeholders such as customers and regulators with the longer term perspective of what communities want and need, what actions will result in long-term success.”

According to WGL’s 2016 sustainability report, the company strives to meet those goals through its materiality assessment which prioritizes how those goals are addressed by the company.

“Every company has a sense of what matters most, but an independent materiality assessment makes sure that all stakeholders (both internal and external) are heard,” Friedman said. “And the results are often revealing.” In this case, they are the social, economic and environmental issues that have a direct role in addressing those SDGs: job safety, infrastructure investment and environmental compliance, for example.

“[That list] also lets you know if there’s something that perhaps you feel you are managing well that your customers (or suppliers, or the community) may be more concerned about. Or a new issue may be on the horizon that someone within your organization recognizes but it hasn’t really emerged yet,” said Friedman.

Its value chain allows the company to “rate” the impact that certain activities and stakeholders have related to the making, selling and using of the company’s products. Those include things like cybersecurity, greenhouse gas emissions and environmental compliance.

By identifying the materiality factors and value impacts, the company is also able to identify new strategies for to improving its sustainability efforts.

In 2010 WGL began offering carbon offsets to its customers. Its WGES CleanSteps program allows its consumers to match their carbon offsets to their natural gas consumption. Between 2014 and 2015, the program grew more than 40 percent.

“In 2015, through purchases of carbon offsets, WGL Energy customers avoided more than 176 million pounds of carbon dioxide emissions. That’s equivalent to taking almost 17,000 cars off the road for one year or recycling more than 25,000 tons of waste,” said Friedman. He said it is one of several ways that WGL has developed in which consumers can participate in achieving the company’s sustainability goals.

In 2011, the company set two primary sustainability goals to be met by 2020: The first was a 70 percent reduction of its emissions below the 2008 levels. The second was to cap its fugitive emissions by 18 percent below 2008 levels.

In 2015, WGL announced it had exceeded both of those goals. It continues to work toward reducing its carbon emissions below 2008 levels.

Setting sustainability development goals, Friedman said, allows stakeholders – including the board – to see the tasks and the challenges ahead and set a pathway for achieving those goals.

“First of all, sustainability professionals need to be business professionals. We have to explain in the context and using the language of business, if we’re going to resonate and be respected in the c-suite. And we have to understand the perspective of those sitting in those roles.

"So, we need to know what people are asking in the executive and board meetings. And some of their conversations sound like this; 'What is the next BIG thing?' 'What should we be making or providing NEXT?' 'Where is the market going and how can we meet that need faster, better and more profitably than our competitors?'”

While each company sets its own goals and identifies its own material matrix and values, Friedman said, WGL’s approach helps to align it with a winning business strategy that is both sustainable and supportive of effort to meet the environmental challenges in coming years.

Friedman said that while it seems "typical" to say it's "our people" that are responsible for the successes of WGL's sustainability program, it truly is the staff "[from] the top leadership emphasis and putting sustainability onto our corporate scorecard to the hard working people in the field," that make it possible.

"Everyone has a role to play. When we met our GHG reduction and intensity targets ahead of schedule, we went back and asked people why it mattered to them; and their answers had one thing in common – an awareness and appreciation that those efforts have a direct impact both long and short term on the health and wellbeing of themselves, their families and their friends as well as where they live and work."

Harnessing that awareness is part of making SDGs work for the community, by making sustainability goals personal aspirations that help companies like WGL align for success.

Images courtesy of WGL