From The Director - November 2009

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EHS Advantage Newsletter

From the Director

November 2009

A Global Imperative: Sustainability

The need to demonstrate better sustainable performance, both as individual consumers and as businesses, is becoming more and more critical. To meet the challenges of climate change, live fulfilling lives, and conduct business in a manner that “meets the needs of the present without compromising the ability of future generations to meet their own needs,”1 we must become more sustainable.

The SEMI EHS Division is working to understand the current state of sustainability efforts within member companies and is developing programs and services that support improved performance. However, over the last year and a half, I have learned that two principle challenges exist as we work to provide services to support members: determining how companies define sustainability and identifying common issues applicable across a broad range of companies.

SEMI Sustainability Initiatives

To help us better understand these areas, SEMI kicked off a sustainability initiative earlier this year which began with a survey of the high technology industry2 and culminated in a sustainability workshop at SEMICON West in July. The SEMI sustainability survey obtained industry feedback needed by the EHS Division to:

  • Define the current state of sustainability initiatives in the global semiconductor supply chain
  • Characterize why sustainability is important to member companies
  • Understand the current challenges for achieving sustainability.

The results of the SEMI sustainability survey (n = 49 responses) indicates that:

  • Top sustainability priorities: energy conservation, protecting the health & safety of workers and pollution prevention.
  • Reasons to engage in sustainability initiatives: strengthen brand value, protect reputations and increase market share.
  • Major obstacle: lack of financial resources.
  • Most important sustainability resources: industry standards and CEO awareness raising campaigns.

Key Findings of MIT Sustainability Survey of 1,500 Corporate Executives

Coincidentally, the MIT Sloan Management Review has just released a report on the results of their global survey of more than 1,500 corporate executives and managers about the intersection of sustainability and business strategy. From my perspective, the key findings of this survey are that:

  • The majority of respondents felt that their companies were not acting decisively enough to exploit the business opportunity presented by sustainability or to fully mitigate the risks that sustainability presents. The MIT Sloan survey identifies three root causes:

        a. Companies often lack the right information upon which to base decisions.

        b. Companies struggle to define the value proposition for sustainability (more than 70 percent said that their company has not developed a clear business case for sustainability).

        c. When companies do act, their execution is often flawed.

  • The biggest drivers of corporate sustainability initiatives are government legislation, consumer concern, and employee interest in sustainability.
  • The principle benefits of addressing sustainability are improved image or brand recognition, cost savings and competitive advantage.

A key finding in each of the surveys is the lack of sufficient resource commitment and the failure to secure appropriate sustainability action, due to the failure of company sustainability advocates to clearly articulate the business case for sustainability.

Three Key Challenges in Developing the Business Case for Sustainability

The MIT Sloan survey findings offer some additional insights on the three main challenges that companies face in their efforts to develop the business case for sustainability:

  • The first is that sustainability is a long-term view which requires forecasting and planning beyond the one to five year horizon typical of most investment frameworks. Therefore, it is difficult to calculate the costs and benefits of investments made in sustainability with traditional economic approaches.
  • The second challenge is that a company’s ability to get a true sense of the value of investments in sustainability is hampered by the difficulty they have in identifying, measuring and controlling intangibles such as the environmental and societal costs and benefits of their current business activities and sustainability efforts.
  • The final challenge is that sustainability efforts require planning amid high uncertainty. Whereas sustainability drivers are never predictable, traditional organizational strategic planning is deductive – companies use standard metrics to predict where the market is heading and then execute strategies on the basis of those predictions.

Unfortunately, the MIT Sloan survey findings do not offer satisfactory solutions to the challenges presented to company efforts in articulating the business case for sustainability.

Needed: Your Survey Input and your Feedback

Rather, these three challenges present an ideal opportunity for the SEMI EHS Division to tap into our members’ collective experiences and utilize this knowledge to develop “best practices” in this area. Your feedback and comments on successes (and failures) in obtaining sufficient resource commitment and securing appropriate sustainability action are solicited.

SEMI continues to evaluate the survey findings and workshop outcomes to learn about member company sustainability challenges and needs. If you have not had the opportunity to do so, please visit the SEMI sustainability website and complete the survey.

Your feedback matters!

November 23, 2009

1 World Commission on Environment and Development (WCED). Our Common Future (The Brundtland Report). Oxford: Oxford University Press, 1987 p. 43.

2 High Technology Industries includes: Semiconductor; Thin Film Transitor Liquid Crystal Display (TFT-LCD); Micro-Electro-Mechanical Systems (MEMS); Solid State Lighting-Light Emitting Diodes (SSL-LED); and Photovoltaic (PV) manufacturing