The Business Impact of Environmental & Sustainable E/BRGs

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DBP RESEARCH REQUEST

In our current reality of climate change, the challenges and threats posed to people and the business bottom line are undeniable. As a result of these challenges, and increased pressure from consumers, community and employees to adopt more sustainable practices, the purpose of the corporation is now shifting from purely profits-driven, to one where social, environmental and sustainable responsibility are key drivers to lasting engagement and loyalty. Organizations are seeing the greater value in increasing their sustainability efforts, and understand that it as integral to the future of their business management processes. According to Deloitte’s third-annual Readiness Report, “The Fourth Industrial Revolution: At the Intersection of Readiness and Responsibility,” nearly all 2,000 business leaders surveyed expressed concerns about climate change’s negative affect on the organization, with almost half citing it as a top priority.

With the rise of employee and customer advocacy, organizations are waking up to the call of environmental sustainability and figuring out ways to incorporate it into their business practices. Employee-led E/BRGs and Green Teams are being created in D&I and Sustainability departments to address this growing need; however, many leaders are left wondering what the impact on business will be from these newly created “Green” E/BRGs.IMPACT OVERVIEW:

- Increased employee engagement, retention, recruitment- Sustainability and environmental goals met or exceeded

- Reduction in environmental/carbon footprint

Overview

CAPGEMINI CARES (Community Action, Responsibility and Environmental Sustainability)

• CARES efforts resulted in overall community engagement of 1,818 employees, 8445 hours donated and over $200,000 donated to 70 unique charities.

• ISO14001 Certification: the CARES ERG played a pivotal role in securing this environmental certification for Capgemini NA, and has promoted sustainability through national in-office signage campaigns and by teaching offices how to improve their recycling programs.

• Pro Bono Consulting: The biggest contribution CARES led in this arena was for Habitat for Humanity. Leveraging consultants in between projects, the CARES ERG worked with H4H on a SharePoint project in order to improve their internal processes. In addition to this charity, Capgemini has successful completed pro-bono consulting projects at Boys and Girls Club and the Atlanta Ronald McDonald House, donating 2,160 pro bono hours through the 2015 year end.

• CARES Local Leads Community Service: Beginning in February 2015, the CARES ERG began its Local Leads campaign to engage CARES members in cities across North America. Each local team is encouraged to organize a community service event and/or drive once a month – this results in over 250 community service acts a year.

• The goal is to be able to fully track and account for all community service activities across all cities in North America by the end of 2016. The CARES ERG is doing this through 2 venues: Completing a pre-event form with details about the city’s upcoming event or drive and completing a post- event survey-documenting amount raised, number of volunteers, etc. The combination of these efforts will lead to a firm system for tracking metrics for NA Community Programs, which we hope will translate into a system for Global Capgemini Outreach programs.

Capgemini CARES

Northrop Grumman - “greeNG Employee Resource Group”• Northrop Grumman is committed to providing a safe and healthy workplace for our employees,

contractors, visitors and communities; to environmental sustainability and ensuring our operations are conducted in an environmentally responsible manner; and to conducting all business activities in accordance with applicable legal requirements and company-established goals.

• In addition, as part of our corporate responsibility efforts, we are aligning our business with environmental sustainability practices, embracing green initiatives and translating our values into measurable actions.

• Northrop Grumman has established a pilot program for greeNG Employee Resource Groups. These groups allow employees to actively contribute to the implementation of greeNG — a broad enterprise initiative that renews the company's commitment to enhancing the environment.

• Our employee resource group, greeNG, is dedicated to environmental stewardship both within the company and in our local communities. In partnership with local non-profits, greeNGmembers lead clean-ups of beaches, parks and waterways, as well as removal of invasive species.

Northrop Grumman greeNG

• According to Northrop Grummans 2018 Corporate Social Responsibility report, through the efforts of greeNG, Northrop Grumman is achieving measurable success in reducing their environmental footprint, driving operational efficiency and realizing long-term cost savings.

• 2020 greenhouse gas goals were exceeded for two consecutive years, reducing 244,110 metric tonnes of greenhouse gas emissions and representing a 33% reduction from the 2010 base year.

• Since establishing our water goal in 2015, we have implemented water conservation projects estimated to reduce 155 million gallons of potable water per year. Our global potable water use has declined by nearly 7%, relative to our 2014 base year, and 14% specifically in California where drought is an ongoing concern. By implementing recycling and waste diversion practices, our solid waste diversion from landfill rate has increased from 52% in 2014 to 62% in 2018.

• We are integrating environmental sustainability into our organizational culture, applying a multi-faceted strategy that supports our corporate values and is balanced to drive value creation and performance. To increase and maintain focus on performance, our executives are accountable for achievement of sustainability goals. Environmental Sustainability is one of the company's non-financial corporate performance metrics.

• The link between environmental sustainability and executive compensation demonstrates the level of commitment from our Board of Directors and reinforces the role of leadership and engagement throughout Northrop Grumman.

Source: Northrop Grumman , 2018 CSR Report and Northrop Grumman Environmental Sustainability

Impact: Northrop Grumman - “greeNG” ERG

Verizon’s Green Team• The Green Team is Verizon’s voluntary, grassroots effort that builds sustainability into everything we do. In 2018,

27,248 employees in 36 countries and territories were part of the Green Team.

• Green Team members work to help Verizon reduce our environmental impact at work and to reduce their personal impact at home.

• In 2018, we exceeded our goal to conduct 250 Green Team events – encompassing tree plantings, green space cleanups, beautification projects, recycling events and more. Green Team members in 36 countries pledged nearly 14,000 hours in the month of March.

• Sponsored the planting of more than 82,000 trees in 2017 (in partnership with Arbor Day Foundation) exceeding the goal of 60,000.

• Verizon has a public goal of 20 percent of employees participating on the Green Team by 2020. At year-end 2018 Verizon met that goal early, with 20.4 percent of employees participating, and set a new goal of having 25 percent of employees on the Green Team by 2025.

• Verizon’s ESG Data on Green Team’s environmental impact shows the significant increase in employee engagement between 2016 and 2018

Sources: 2017 Verizon CSR Report & 2018 Verizon CSR Report ESG Data Center

Verizon Green Team

Salesforce’s Earthforce - Community for Sustainability• At Salesforce, we strive to create workplaces that are reflective of the communities we serve and

where everyone feels welcomed, valued, heard, and included in our company. One of the ways we do this is through our employee resource groups, which we call Ohana Groups. Salesforce supports 12 Ohana Groups to provide a community for underrepresented groups and their allies, offer professional development and mentoring opportunities, and empower employees to be responsive equality leaders in their community.

• Salesforces’ green team, Earthforce, is made up of more than 8,000 passionate employee volunteers dedicated to promoting and celebrating environmental responsibility at Salesforce.

• “We are a group of employee volunteer champions dedicated to promoting and celebrating environmental responsibility at Salesforce. We share a passion for sustainability and believe in equal access to clean energy, air, and water. Our members live green at work and at home while inspiring their networks to do the same. We currently have active member groups at offices around the world, and we host quarterly activities and ongoing learning campaigns. In addition, we work with local communities to create a greener world for all.”

Salesforce Earthforce

• At Salesforce, we consider the environment a key stakeholder and leverage the power of our people and our products to reduce the impact that we and our customers have on the planet. We recognize that climate change is a human issue impacting everyone — not only does it impact every individual, company, city, and nation, but it also weighs heaviest on the world’s most vulnerable communities, amplifying global inequality

• 20,000+ hours of volunteer time contributed towards Salesforces sustainability goals• 7,500+ Badges earned on Trailhead completing internal sustainability trainings• 1,500+ Badges earned on Trailhead completing external sustainability training

• Trailhead: Training modules that cover everything from Salesforce’s climate action strategy and how they partner with innovative organizations to drive collective impact, to tangible examples of how businesses, governments, and individuals can make more sustainable decisions to positively impact the globe.

• (In 2019) with the help of Earthforce, we celebrated our most successful Earth Month ever. Together we volunteered more than 4,000 hours, partnering with more than 50 external organizations throughout the month. Earthforce also hosted more than 70 Earth Day celebrations in offices around the world.

Sources: 2019 Stakeholder Impact Report & Salesforce Blog

Impact: Salesforce’s Earthforce

Johnson Controls - “Empact” Sustainability BRG

• Our employees help create an inclusive workforce through initiatives like Business Resource Groups (BRGs). These are led by employees: each volunteer group is open to all employees with the goal to improve attraction, retention, inclusion, and engagement of a diverse and global workforce. All BRGs are organized by employees and funded by the company. All BRGs go through an official chartering process and must develop programming and initiatives focused in four areas: Career, Commerce, Culture and Community

• At Johnson Controls BRGs fall under their People Strategy. Sustainability (EMPACT) is one of nine BRGs at Johnson Controls and aims to foster a culture of sustainability that engages and attracts people who want to make a difference

• Our philanthropy and employee volunteer programs strengthen and improve the hundreds of communities we call home. Johnson Controls contributes millions of dollars annually and our employees give freely of their time, skills, and energy. In 2019, the company’s global corporate philanthropy efforts resulted in contributions of more than $9.6 million. In addition, our employees gave in excess of $3.5 million.

• Sustainability is an integral part of our vision and values. Our company’s sustainability efforts are guided by our leadership’s “triple bottom line” philosophy focused on achieving economic prosperity, social responsibility, and environmental stewardship. We believe balanced management attention to profit, people, and the planet will result in the greatest long-term benefit for our customers, employees, shareholders, and society as a whole.

Johnson Controls Empact

• 2025 Goals: • Volunteer 2.5 million hours by 2025 • Align 80% of volunteer activities with U.N. Sustainable Development Goals • Establish employee engagement groups globally • • Integrate sustainability into recruitment

• Progress by the end of FY 2019: • In 2019, employees brought our total volunteer hours to 1.74 million, both individually and on group

projects in communities around the world. • More than 83% of our volunteering and philanthropy efforts align with U.N. Sustainable Development Goals. • Our sustainability employee group has grown from one chapter in North America to multiple chapters in

Asia, North America, South America, and Europe.

• Named to the Dow Jones Sustainability Index in 2018; upgraded to AAA status by MCSI; named one of the 100 Best Corporate Citizens by CR Magazine; named to Fortune Magazine’s 2018 “Change the World” list

Sources: 2020 Non-Financial Disclosure Report & 2018 Corporate Sustainability Report

Impact: Johnson Controls’ “Empact” Sustainability BRG

Hasbro’s Green Team

• OUR ECO-MINDED CULTURE: We believe that our culture of creativity and innovation is key to our sustainability

progress. When we engage our employees and apply their talents to help shape our sustainability efforts, our

sustainability results are strongest.

• Our employees are passionate about the environment and we support their ambitions by providing them with

opportunities to make a difference, including greening their local offices, and ways they can personally embrace

sustainability at work and at home… Hasbro’s Global Green Team is employee led and provides ways for

employees to develop sustainability leadership skills and engage their fellow colleagues in taking positive action

to help the environment.

Hasbro Green Team

• According to Hasbro’s 2016 CSR report: ERGs “aid recruitment and retention, and track trends and cultural themes that are important to our employees.”

• Offering employees a change to pursue diverse interest with support of company sends message that diversity is celebrated and creates environment of inclusion

• Employee engagement is driven by understanding of the organizational vision and the employee’s role in the delivery of that vision. In order for employees to be engaged, they must feel that their actions and behaviors related to sustainability are meaningful to the organization and to their own performance evaluation.

• Demonstrating the impact that employee actions can have on sustainability goals and empowering them through vehicles such as green teams drives change.

• 94% of Hasbro employees engaged in volunteer services in 2018

• #3 Green Company in the U.S. by Newsweek Magazine

• The below chart is from the 206 CSR Reports Data Dashboard on employees, showing the level of Hasbro employee engagement from year to year as it relates to environment and sustainable practices:

Sources: Hasbro 2016 CSR Report and Becoming a Sustainable Organization, by Kristina Kohl

Impact: Hasbro Green Team

nVent Grass Roots

• One of nVent’s social responsibility priorities, as stated on the company website, is to “focus on continuous improvement of our operations and products in ways that protect our precious natural resources and add value to our customers and surrounding communities.”

• By driving sustainability projects in locations across multiple continents, their environmental ERG, Grass Roots, is helping nVent to become a better corporate citizen.

• The vision of Grass Roots is that nVent would become an industry leader in modeling environmental responsibility at their sites and supporting sustainable living practices for employees, both at work and at home.

• To this end, they have developed initiatives at multiple sites in North America and Europe to increase sustainability, particularly in the area of waste reduction.

nVent Grass Roots

• nVent’s team in Solon, Ohio has conducted waste stream inventory exercises on over 270 pounds of rubbish and found that over half could be diverted from landfill into recycling and reuse streams.

• In St. Louis Park, Minnesota, at the corporate office, Grass Roots has inspired over half of the office workers to give up their personal trash and recycling bins, an effort which will keep over 25,000 single-use plastic bags from being landfilled in 2020.

• The team in St. Louis Park has also initiated a “Community Mug” program and provided metal cutlery in order to eliminate waste which resulted from single-use coffee cups and utensils. This effort has reduced the office’s waste by over 1,300 utensils per month, and over 780 cups per month.

• In Edmonton, Canada, the team conducted an onsite composting pilot in 2019, and was able to turn 1,500 pounds of food waste into ultra-rich, nutrient dense soil that was returned to the earth.

• A pilot of their communal waste bin initiative resulted in a 68% adoption rate.

• Grass Roots has been able to capture and sustain support from company leadership and the employee community, and great progress is being made.

Impact: nVent Grass Roots

Source: DBP’s 2020 Above and Beyond Awards

Freddie Mac GREEN ERG

At Freddie Mac, they launched a new GREEN ERG connecting environmentally conscious employees with corporate services, building on an existing corporate initiative to promote recycling and sustainable practices. The 500-member Green employee resource group provides a central hub for environmentally conscious employees to connect and do good for Freddie Mac’s community and the planet. The group actively works to identify new areas for green improvements and embraces sustainable changes both on Freddie Mac's home campus and within the corporate culture.

Freddie Mac GREEN ERG

Source: DBP’s 2019 Above and Beyond Awards; Freddie Mac

• In their first year of existence, GREEN eliminated disposable paper cups from all Freddie Mac cafes and across 70 pantries resulting in the elimination of 2.1 million disposable cups from landfills. Their efforts have also supported the recycling of more than 10,000 tons of materials such as paper, construction materials, compost materials and more.

• Of Freddie Mac’s total waste, 58 percent is recycled, which has translated into saving 1.170 million gallons of water from mercury and waste contamination, the preservation of one million gallons of water through paper recycling, saving 756 barrels of oil and saving over 1,470 cubic yards of landfill space. Most recently, a new volunteer-run recycling program on campus has collected and recycled 10,000 plastic bags on campus.

• The ERG also helped Freddie Mac expand its community partnerships resulting in the donation of eight tons of food to local food rescues and the donation of six tons of compost to local farmers in their community.

• A new partnership with JK Moving Community Farm in Purcellville produces food for insecure families in local communities by donating nutrient rich compost material.

Impact: Freddie Mac GREEN

Source: DBP’s 2019 Above and Beyond Awards