Improving Circularity, Social Inclusion, and Biodiversity at the World’s Second Largest Utility
In many ways, the transition from a linear “take-make-waste” economy to a more sustainable one is already underway. As companies begin to understand that an economy based on renewable resources and circularity is good for business, they have in large part become stewards for sustainability. No longer is it an option to ignore the risks of climate change or biodiversity loss, and there is an increasing cultural awareness of the importance of the planet to human well-being. Similarly, companies are beginning to recognize the importance of diversity and inclusion in order to increase productivity, differentiate themselves from their competitors, improve communities, and reach customers in vulnerable conditions.
But, as more people continue to move to urban areas, the population gets older, and production and consumption continue to grow, innovative methods are needed to address new sustainability challenges that arise.
At Columbia Climate School’s Research Program on Sustainability Policy and Management, we seek to tackle these challenges by researching and developing methods to overcome barriers to institutionalizing sustainability in the routine management of organizations. Led by Steven Cohen, who also directs the M.S. in Sustainability Management (a Climate School partner program), this research program focuses on organizational innovation, public policy initiatives, and sustainability metrics and management. Currently, we are partnering with a company that is also working in this space: Enel X Global Retail, the global business line and energy transformation arm of Enel Group, the Italy-based multinational producer and distributor of electricity, and the second largest utility company in the world. Enel X’s products and services include smart home energy management solutions and domestic photovoltaic panels for consumers; energy storage, demand response, energy management systems and photovoltaic for companies; and assistance building sustainable cities via resources including electric buses and smart lighting.
During a five-month study, the research program is reviewing Enel X’s Sustainability Boosting Program, a new assessment and innovation framework aimed at identifying opportunities for products to improve their circularity, social inclusion, and biodiversity performance. Existing methods of defining, measuring, and operationalizing sustainability are broad, and have largely lacked general acceptance due to the different interpretations of sustainability itself. In order to achieve sustainable development goals at every level, it will be crucial to find a way to accurately evaluate and track sustainability. The Enel X framework offers one specific set of metrics and a process to measure and then improve the different aspects of sustainability of products and services, and they hope their model will become a manual for companies across sectors.
Discussing why the Enel X framework was initially created, Nicola Tagliafierro, head of global sustainability at Enel X and Aspen Institute First Mover Fellow, commented, “Sustainability is not a point of arrival, but a progressive path that needs metrics so that it can be followed with credibility and effectiveness. For this reason, we have activated a permanent improvement program applicable to every solution in the product portfolio, the Enel X Sustainability Boosting Program. It is based on three levers: Circular Economy, Social Inclusion and Biodiversity, and—thanks to the innovative process—it is able to measure, scout and implement improvements which are able to bring both business value and product sustainability.”
As part of the study, our research team is benchmarking the boosting program against publicly available, product-level sustainability metrics frameworks that have been adopted or proposed across a wide range of entities, including competitors and other sustainability vanguards. We are also drawing from a large pool of case studies from another ongoing project by our group that collects case information about companies’ efforts to incorporate environmental sustainability into their organizations.
With assistance from Jackey Shen, a research assistant and M.S. in Sustainability Management graduate, the research program has built a benchmarking database consisting of more than 60 corporate frameworks, 10 international- or national-level regulatory frameworks, nine frameworks from consultancies and non-governmental organizations, and 15 proposals from peer-reviewed academic publications. Through this extensive database, we hope to answer key questions of: (1) how Enel X’s product-level sustainability metrics compare with those implemented by some of the world’s most prominent industry leaders such as Toyota, Alphabet, Shell, as well as vibrant startups; (2) whether Enel X’s metrics are extensive enough to cover all the dimensions of some of the most comprehensive sustainability regulatory frameworks such as the European Commission’s Product Environmental Footprint; and (3) how Enel X’s framework compares with what the academic community has conceptualized and proposed, and what various NGOs and consulting firms have been implementing.
To ensure the metrics across the different frameworks we benchmarked are comparable, we have separated sustainability measures into environmental metrics (including biodiversity) and social inclusion metrics—each with a list of dimensions. This “master list” of environmental and social dimensions standardizes the terminologies and measures the inclusiveness or accessibility of a product by all population groups (instead of other social contributions that a company may work toward at a corporate level, such as donations for disaster relief or financial support for education).
Beyond scoring their products, the Enel X framework also follows a formalized process to identify opportunities for improvement that take environmental, community, and market needs into account, and then tests and implements the selected opportunities. Silvia Ruta, head of sustainability initiatives and circular economy competence center at Enel X, added, “To achieve challenging results, it is essential within organizations that everyone contributes, and this is even more true when the objectives concern sustainability. It requires putting people with different skills and backgrounds at the same table, and allowing them to incorporate innovation and sustainability expertise with business and technical know-how. By facilitating the collaboration among them we create new solutions that are able to meet social, environmental and economic objectives.”
The Columbia research team, which includes Satyajit Bose and Dong Guo, will provide transparency of this framework by conducting a thorough review of the program, and will also formulate recommendations for strengthening it. According to Christoph Meinrenken, a principal investigator at the Columbia Climate School who leads the project with his expertise in life cycle assessment, energy systems, and enterprise-scale product analytics, “Our research team is still reviewing some details of the product-level evaluation scheme—including compatibility with pending frameworks such as the European Commission’s Product Environmental Footprint. What we have noticed already is that Enel X’s stakeholder engagement process to further improve each product—whether it’s an electric bus or a charging station integrated with streetlights—is substantially more robust than what we see in most other companies.”
With this review, Enel X Global Retail will join the long list of companies the Research Program on Sustainability Policy and Management has previously worked with, such as Siemens, Nike, Colgate-Palmolive, PepsiCo, Philips China, Tencent, and the State Grid Corporation of China, and will also add to the overall academic literature on sustainability management and innovation.