Friday, September 2, 2011

Sustainability in the cloud

I recently reviewed Workday Inc.'s 2010 Sustainability Report for Workday Inc. is a medium sized privately-owned company (with 676 people) and this is their first report. It's always nice to see companies boarding the reporting train and especially private companies. So well done to Workday!

The company is an SaaS specialist. The meaning of SaaS was the first new thing I learnt while reading the Workday report. SaaS means Software-as-a-Service, which roughly translates to computing in the cloud. And if you don't know what THAT means, then just go to Workday's report and all will be revealed. Cloud-computing is a Big Thing in sustainability. This has not gone unnoticed by the Carbon Disclosure Project who issued a report on Cloud Computing as the IT solution for the 21t Century, stating, "Through the forecast uptake of cloudcomputing, US businesses with annual revenues of more than $1 billion can achieve economy-wide savings in energy alone of $12.3 billion a year by 2020."  Workday Inc. is one of those lucky businesses which has sustainability built into the business model. So, no surprise that I say this in my review:

"There is no doubt that the owners of Workday have identified this as the core of their sustainability mission, presenting what they do as a contributor to global sustainability. The joint CEO introduction states: "So in a time when ‘going green’ is high on the priority lists of most organizations, Workday advances the cause by providing sustainable technology alternatives for our customers and demonstrating our commitment with practical programs internally." This clearly aims to position Workday's sustainability approach and ‘social mission’ as one which helps customers run their businesses more sustainably."

Nonetheless, this is not reflected especially well in the body of Workday's report:

"The Workday report contains a Materiality Analysis, which appears to have been internally developed (though the real value of a Materiality Analysis is gained when its development involves external stakeholders). However, the core business impacts on customers' sustainability are not reflected in the Materiality Analysis. The top issue is noted as privacy and data protection, followed by customer satisfaction, business continuity, talent retention, innovation, integrity, employee satisfaction, community engagement and energy efficiency – all rather generic issues. Given the discussion about helping customers run their business sustainably, I would have anticipated that Workday would prioritize reducing customers' energy consumption levels, as this represents Workday's single greatest area of impact.

However, the thinking about materiality is good practice and this has helped to inform the content of Workday's report. All terms used in the Materiality Matrix are explained, which is another nice aspect. All too often, companies present a headline Materiality Matrix without really explaining what they mean, which leads to lack of clarity about expectations and deliverables."

Workday Inc. Materiality Matrix, Sustainability Report (page 8)

More from my Workday Inc. report review:

"Workday makes a strong case for walking its own talk with several initiatives to reduce its own operational energy consumption and emissions. A comprehensive plan for virtual working, participation in the Climate Savers initiative to reduce total computing power consumption, purchasing of renewable energy credits, offsetting 100% office electricity usage, renting a LEED Silver certified building and pursuing Gold certification are good examples. Unfortunately, the company has not yet measured Scope 3 emissions which include business travel, which must be a relatively important element of overall emissions for a non-manufacturing company operating globally. Workday recognizes this and commits to ‘evaluating potential ways to capture and report on Scope Three emissions’.

Workday's employee-positive workplace practices show a range of supportive programs for employees and families (the ‘one-finger zinger’ is a great program! – look at the report to see what that means!). However, there is nothing on core Human Resources practices such as employee training and development, performance management, hiring practices, compensation practices, safety performance or aspects of embedding a business-related sustainability culture beyond the corporate Green Team. Workplace diversity remains at a declarative level, with no details, including level of women in senior roles. Talent retention, a stated material issue, is not addressed in the report. Neither are talent attraction and hiring practices which, in a business with employees in several countries, as well as many remote employees, must be a challenge. The report tends to leave an impression that Workday is a fun place to work, with a collegial team spirit and a host of non-salary benefits (Workday has been recognized as a ‘Best Place to Work’). In future reports, I would recommend providing more depth about sustainable Human Resources policies and performance in areas such as employee attraction, development, retention, turnover, absenteeism and overall employee productivity. After all, SaaS really is a knowledge business and people are key."

The review rounds off with:

"A nice touch is the 'Areas for Improvement' sections, in which specific challenges are explained together with actions that Workday is taking to address them. No company can claim to be without challenges in sustainability, stating shortfalls and specific difficulties adds to the credibility of the report.

Workday's first report is a credible effort and a great start, especially for a medium sized private company. As the company matures in its sustainability journey, the report should reflect more of the core processes which demonstrate that sustainability is truly embedded in the way Workday develops business plans, policies and delivers performance. A robust sustainability strategy with objectives, goals and targets would make sense."

Anyway, off now to continue my workday. You will be able to find me somewhere in the cloud.

elaine cohen, CSR consultant, Sustainability Reporter, HR Professional, Ice Cream Addict. Author of CSR for HR: A necessary partnership for advancing responsible business practices   Contact me via  on Twitter or via my business website  (BeyondBusiness, an inspired CSR consulting and Sustainability Reporting firm)

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