Executives at a big electronics firm were in a quandary. With the sluggish economy, they were shipping fewer items, but they still had the same delivery contracts, meaning they were sending out trucks half-empty and needlessly burning fuel.
Seeking a greener solution, they did something that their kids do every day but grownups have been slower to embrace — they tapped into the collective knowledge of their peers on a social networking web site.
This isn’t your typical Facebook or MySpace network, of course. The company logged into an exclusive business-to-business site called 2degreesnetwork. There, it was able to set up a blind challenge among business leaders from around the world to find a solution.
The discussion forum yielded an interesting idea: a truck space sharing cooperation with non-competitor, off-season businesses. Garden furniture manufacturers experience their highest volume of business during the summer, while electronics firms experience theirs during Christmas.
2degreesnetwork began revolutionizing b2b communication in 2008, when it launched the social network with a mission to help business leaders collaboratively strategize to reduce their carbon emissions in order to comply with imminent greenhouse gas legislation. While the legislation is designed to make businesses compete to cut their emissions, 2degrees has successfully reframed it to make them cooperate.
Acting as an enabler, 2degrees can create a “safe” environment where businesses don’t have to feel threatened by competitors, says CEO Martin Chilcott. In this way, it facilitates conversations between businesses facing similar challenges and helps businesses find solutions they might not otherwise.
“There are few examples of social media as a b2b platform. If you simply build the platform and think people will simply turn up and participate, they won’t,” Chilcott said. “The people we need to participate tend to be middle management and senior middle management in large corporations and in solution providing organizations. … These people are enormously time poor and they can’t afford to just turn up on a platform and hope to bump into someone.”
In the UK, new emissions reduction legislation demands that businesses operating in Britain (wholly British owned or not) re-assess the methods they use to manage risk and bring customers value or face prohibitively exorbitant fines. Accordingly, they are under pressure to innovate solutions and do so yesterday.
The British Carbon Reduction Commitment legislation extends the EU cap-and-trade scheme on a domestic scale and mandates that the 5,000 largest companies in Britain (those using in excess of 6,000 megawatt-hours of electricity) register with the government by April 2010.
These businesses will be required to measure their emissions for 12 months and begin purchasing carbon allowances from the British government in April 2011. To be certain that businesses are doing the most they can to reduce their carbon allowances, they will compete for top spots (lowest emissions) in an annual league table published by the Department of Energy and Climate Change. The legislation leaves room for explanation to businesses that use 3,000 to 6,000 megawatt-hours in a few years time.
British businesses that get a jump on reducing their carbon emissions will be rewarded with a higher place in the league tables. And that’s where 2degrees comes in. It helps stakeholders get a jump start on finding carbon solutions by bringing together differently sized, specialized business, governments, academics and non-governmental organizations.
By the numbers, 2degrees is growing quickly: It averages 500 new members per month. As of the end of October, it had more than 5,200 members, over 1,400 of them American.
Chilcott attributes the network’s success to its quality standards: Membership is by invitation only and restricted to proven professionals (no undergraduates, start-ups or head-hunters allowed). After a two-month free trial period, members pay based on sector and size: £190 + VAT per annum for small businesses and government authorities, and £495 +VAT per annum for medium and large businesses.
The businesses drive the network by telling the 2degrees administrators what challenges they are facing. The challenges are listed in member profiles, and members join groups within the network based on both their expertise and business challenges. 2degrees compiles the information, hosts webinars and initiates discussion forums on the topics.
Chilcott says getting businesses on board with sustainability is part of 2degrees’ responsibility — the name comes from scientists’ warnings that the current climate cannot be sustained if temperatures rise more than 2 degrees Celsius over pre-industrial times.
He says he has seen a decided difference in the way businesses view climate change. Businesses, he explains, usually see carbon compliance as something outside of the core strategy,
“But those businesses that start engaging on it, they almost universally come round to the view that carbon is a cost. That sustainability strategies are core ways of engaging consumer value.”
Chilcott gives an unnamed “major global airline” airline as another example. The airline had been disposing of seat cushions and covers every three months. “To date they’ve not known what to do with them, so they’ve been going into landfill,” he says. The airline asked 2degrees to set up a blind challenge in its Zero Waste discussion forum to find a solution (and protect itself from bad PR), and it’s had plenty of suggestions: building insulation, pyrolysis for energy and a few offers to innovate new material.
2degrees membership is driven by and caters to large business, since they’re the ones targeted by current climate legislation. Sony, Sun Microsystems, Systems Biologica, Mersk Logistics, Proctor and Gamble, Tata, and Rio Grande Solar are just a few of the members. They’re a segment that 2degrees expects will drive its business into the American and Chinese markets in the next two years.
“Psychologically, a case can be made for fear being a more powerful motivator," said Thomas Atterstam, a CSR consultant with Oliver Wyman, "but then we know that even that is sometimes not enough, so you have to be more clever in how you engage people in making their own decisions etc. in order to have them share a responsibility for the impetus to change.”