5

MEASURING SUCCESS AND TRANSLATING RESULTS

Jim Blackburn, professor of the practice of environmental law at Rice University, discussed sustainability in the context of a triangle that has social, economic, and ecological points at each of the three corners (Figure 5-1). He noted that the midpoints between each corner—meeting basic needs, eco-efficiency, and place-based initiatives—are also important. As a course project with the Shell Center for Sustainability at Rice University, Mr. Blackburn engaged students to review 20 studies that addressed sustainable indicators for a city. They started with 1,000 indicators and then developed a winnowing process to identify 25 indicators which were discussed in detail in a report issued in 2011.10 The project aimed to identify indicators that were quantifiable and to use GIS imagery to identify spatial patterns within the city. The spatial patterns, noted Mr. Blackburn, were just as informative as the numerical values given by the indicators.

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10Available at http://shellcenter.rice.edu.



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5 MEASURING SUCCESS AND TRANSLATING RESULTS Jim Blackburn, professor of the practice of environmental law at Rice University, discussed sustainability in the context of a triangle that has social, economic, and ecological points at each of the three corners (Figure 5-1). He noted that the midpoints between each corner—meeting basic needs, eco-efficiency, and place-based initiatives—are also important. As a course project with the Shell Center for Sustainability at Rice University, Mr. Blackburn engaged students to review 20 studies that addressed sustainable indicators for a city. They started with 1,000 indicators and then developed a winnowing process to identify 25 indicators which were discussed in detail in a report issued in 2011.10 The project aimed to identify indicators that were quantifiable and to use GIS imagery to identify spatial patterns within the city. The spatial patterns, noted Mr. Blackburn, were just as informative as the numerical values given by the indicators. 10 Available at http://shellcenter.rice.edu. 39

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40 PATHWAYS TO URBAN SUSTAINABILITY-HOUSTON FIGURE 5-1 Illustration depicting social, ecological, and economic components of sustainability as points of a triangle. SOURCE: Jim Blackburn, presentation, January 18, 2012. One indicator demonstrating that basic needs are not being met for some of Houston’s population is the number of individuals living below the poverty level; twenty percent of Houston’s population is below the poverty level. Some neighborhoods in Houston, added Mr. Blackburn, can have as many as 40 to 60 percent of its residents below the poverty level (Figure 5-2). Income disparity is another indicator. A report issued by the Center for Budget and Policy Priorities and the Economic Policy Institute stated that the income disparity between the top 5 percent and middle 20 percent in Texas is greater than in any other state in the United States (Bernstein et al., 2006). This is a sustainability issue for the entire nation, and not just for Houston, said Mr. Blackburn. Other social, economic, and environmental indicators he discussed included: • Air quality: Monitored Benzene levels in 2010 in Houston were 1.39 ppb relative to a standard of 1.40 ppb. • Environmental justice: Minority areas on the east side of Houston have high air pollution levels. • Education: In 2009 Harris County had a high school dropout rate of 35 percent, which draws in racial disparity issues. • Food supply: 143 square miles in total and 60 percent of the low- income area of Houston is a food desert, meaning there is not enough access to healthy food (Figure 5-3).

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MEASURING SUCCESS AND TRANSLATING RESULTS 41 • Community gardens: There are 125 community gardens in the Houston metropolitan region. • Cost of living: In Houston the ACCRA11 cost of living index is 8 percent below the national average, and 34 percent of the population spends more than 30 percent of income on housing. • Land use: The City of Houston has a density of 3,492 people per square mile.12 • Flood damage: For the years 2007 to 2009 in Houston, three percent of the total gross domestic product (GDP) annually went to flood damages. Floodplains increased by 34,000 acres from 1996 to 2007. The increases were due in part to better data but also to more flow, resulting in less protection for development built along or within the floodplains. Standard economic indicators—such as GDP, commercial leasing, home sales, building permits, new housing starts, and unemployment— do not address sustainability issues very well, said Mr. Blackburn. Economics is generally discussed in the context of production, distribution, and consumption of goods and services that meet the needs of today. Sometimes economic indicators are not entirely informative; hurricane damage, for example, is taken into account as positive GDP because of the economic activity associated with rebuilding, rather than being negative, which would account for the damage inflicted on communities. This is an issue, stated Mr. Blackburn, which should be addressed if GDP is to be considered a major economic indicator. An alternative way of viewing economic success could be by the minimization of the use of energy and water in the production of goods. An example of an energy efficiency indicator would be one that takes total electricity consumption and compares that to GDP to come up with an index of gross area product (GAP) divided by residential energy consumption per capita. This number should increase over time with higher levels of efficiency. 11 The ACCRA Cost of Living Index is a measure of living cost differences among urban areas in the United States compiled by the Council for Community and Economic Research. 12 New York City has approximately 27,000 people per square mile (NYC Department of Urban Planning, 2012).

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42 PATHWAY TO URBAN SUSTAINABIL -HOUSTO YS LITY ON FIGUR 5-2 Percent RE tage of populat tion below povverty level in th Houston he metrop politan region in the year 2000 n 0. SOURC Jim Black CE: kburn, presentattion, January 1 2012. 18, The loss of nat T tural capital is as much an economic iss as an sue ecologgical one. The Galveston B contribute billions of dollars per e Bay es year in ecological s n services to the Houston eco e onomy; howe ever, the bay seems to be treated as though it h no value a all, said Mr Blackburn. has at r. Freshwwater inflow i necessary to maintain Galveston Bay, and it needs is s two an a half to th million ac feet of inf nd hree cre flow per year, but perhaps , more. Currently the are only ab ere bout 300,000 acre feet permanently dedica to the futu of Galves ated ure ston Bay. More water, need to be ds dedica to the bay as an econo ated y omic propositi as well as an ecological ion, s one. It is key to thin about the f t nk future, and to develop metr to measure rics succes in the long- ss -term. Walter Peacoc professor a director o the Hazard Reduction an W ck, and of nd Recovvery Center at Texas A&M University, d t M discussed sus stainability in terms of disaster res silience—red ducing levels o damage following natur of ral disaste and speedi a system’ recovery— ers ing ’s —and what can be learned n from such events. S s Such learning allows comm munities to rec cover, build more sustainability into their sys s stems, and redduce the poten ntial for loss and failures with fuuture disasters The recover process is a window of s. ry opporttunity in whic communiti can enhance their mitig ch ies gation status and the robustness o their system in order to reduce expo of ms o osure and riskk,

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MEASU URING SUCCE AND TRA ESS ANSLATING RE ESULTS 43 4 said Dr. Peacock. R D Recovery can also be sustai inable when eecological, enviro onmental, and social sustain d nability are al increased d ll during the processs. FIGUR 5-3 Map of food deserts i the Houston metropolitan r RE f in region where triangle indicate grocery stores, and lighter to dar es rker shades ind dicate median househhold income fro lower to hig om gher dollar figu ures. SOURC Jim Black CE: kburn, presentat tion, January 1 2012. 18, An example of how to addr social vul A f ress lnerability meeasurements and resiliency issue is with a fra es amework that has been dev t veloped by Susan Cutter, Dr. PPeacock said. This Disaster Resilience o Place r of (DROP Model take into accoun a range of indicators—e P) es nt ecological, social, economic, in , nfrastructure, institutional capacity, and community d compe etencies—to a assess a commmunity’s over resiliency. Another rall examp is the Sust ple tainable Livel lihoods Frame ework, stemmming from work done internati d ionally. This f framework de efines categor that shou ries uld be targ geted at the co ommunity lev in order to feed and enh vel o hance the commu unity’s overa sustainabili It identifi the differe phases of all ity. ies ent the dis saster process the kinds of resources req s, f quired to mee particular et

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44 PATHWAYS TO URBAN SUSTAINABILITY-HOUSTON needs, and the activities that need to be undertaken at the different phases of the process. Another approach taken by Dr. Peacock was to place disaster phases into a Community Disaster Resilience Framework (CDRF), which can be thought of as a wheel that has different types of capital subsumed under each section (Figure 5-4). This framework still needs to have natural capital and ecosystem resources incorporated so that they feed into the different phases. The framework tries to capture the social, economic, physical, and human capital needed to carry out given activities under each phase, as shown for hazard mitigation in Figure 5-5. The unit of analysis used for the framework is at the county level, and data sources include national agencies, such as the Census Bureau, Federal Emergency Management Agency (FEMA), Department of Health and Human Services, Centers for Diseases Control and Prevention, Internal Revenue Service, and others. The framework incorporates 75 indicators across the four areas of capital: social, economic, physical, and human. FIGURE 5-4 Relationship between community capital assets and disaster management phases under the Community Disaster Resilience Framework. SOURCE: Walter Peacock, presentation, January 18, 2012.

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MEASURING SUCCESS AND TRANSLATING RESULTS 45 Using the framework, Peacock examined 144 counties from six Gulf Coast States, including Florida, Texas, Louisiana, Mississippi, Alabama, and Georgia. The social capital indicators were used to capture civic and political organizations, religious organizations, housing, professional associations, and other components of social networks. Economic indicators included per capita income, median household income, employed civilian population, and median value of owner- occupied housing units. The largest set of indicators were for physical capital and human capital. Physical capital captured components such as nursing homes, hospitals, landscape firms, housing units, and fire stations, among others. Human capital targeted technical expertise and communities, including zoning regulations, building code, FEMA- improved mitigation plans, environmental consulting workers, building inspectors, and construction workers. FIGURE 5-5 Framework matrix for indicator selection, shown for hazard mitigation and disaster preparedness as examples. SOURCE: Walter Peacock, presentation, January 18, 2012. The indicators were then scaled and standardized. They were combined into a variety of resiliency indices, with separate indices for phases (mitigation, preparation, response, and recovery) and for capitals

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46 PATHWAYS TO URBAN SUSTAINABILITY-HOUSTON (economic, human, social, and physical) in order to develop an overall County Disaster Resilience Index (CDRI). When the CDRI was mapped over the counties in the Gulf Coast region, a range of community resilience was shown (Figure 5-6). The darker the color, the higher the resiliency index for the county, and from the map it can be seen that there are many light-shaded areas across the Gulf Coast States that remain vulnerable. FIGURE 5-6 Map indicating the degree of resiliency for different communities. The lighter the shading, the lower the resilience and more vulnerable the community. SOURCE: Walter Peacock, presentation, January 18, 2012. There is a range in CDRI values across the Gulf Coast States, with Texas holding the last position when ranked (Table 5-1). In general, counties with comprehensive planning, that adopt hazard-relevant building codes and zoning regulations, participate in FEMA CRS rating, and implement other similar policies, were more disaster resilient. Overall, the CDRI was shown to have the potential as a measure of community resilience and as a way to facilitate future research to promote disaster resilience. Resiliency research, Dr. Peacock added, is

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MEASURING SUCCESS AND TRANSLATING RESULTS 47 critically important as it brings into focus crucial lines of research, sustainability, social vulnerability, mitigation, recovery, and coupled social-ecological systems. Consistent community disaster management and response plans are also important in order to better address damage from disasters and decrease vulnerability, and these plans ultimately need to be integrated into ongoing community development. TABLE 5-1 Ranking of CDRI scores for six states. SOURCE: Walter Peacock, presentation, January 18, 2012. Bruce Wilcoxon, HSE/SD lead for Deepwater Gulf of Mexico Exploration, ConocoPhillips, and a member of their corporate sustainable development group, provided a private sector perspective on measuring sustainable development performance in the context of a large, multi- cultural urban setting. A number of key points were highlighted. First, when measuring the success of a sustainability program, metrics and feedback mechanisms must be aligned with the goals of the program, he said. Second, developing meaningful metrics is not a trivial exercise, but one that requires proper attention to integrating economic development, environmental performance, and social benefits. Third, it is important to gain integrated feedback on sustainable development performance at a variety of scales and to ultimately move away from a simple dashboard model to developing more inclusive metrics. The challenges and issues that fall under the umbrella of sustainability are complex and numerous, further complicating efforts to develop a set of metrics or feedback programs that accurately capture progress in this area, Mr. Wilcoxon said. ConocoPhillips adheres to the triple bottom line approach to

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48 PATHWAYS TO URBAN SUSTAINABILITY-HOUSTON sustainability, meaning a focus on economic growth, social progress, and environmental stewardship. He added that if the sustainability program is not furthering the bottom line, then the program itself will not be sustainable. Mr. Wilcoxon listed several key areas for measuring success in the area of sustainability: producing energy in a cost-competitive manner, growing the business, identifying and managing risks, identifying and capitalizing on new opportunities, and providing a fair return to shareholders. He noted that ConocoPhillips is moving away from developing a dashboard approach or a set of key metrics to assess their sustainability efforts due to the limitations of defining a simple metric to capture all of the complexity in their programs. He added that measuring good data can be a resource-intensive effort; it requires buy-in from all necessary parties, which can sometimes be difficult given that businesses are already under resource constraints. Mr. Wilcoxon added that it can be more difficult to develop metrics that address performance within communities and societal issues than to assess environmental data. It is also challenging to develop metrics that cross various timeframes— metrics that can be used in the company’s quarterly and annual performance reviews and in five-year and 10-year planning cycles. The company now uses classic business performance metrics in its annual report, such as revenues, net income, and return on investment in production. Additionally, ConocoPhillips developed a variety of planning processes to assist in directing business efforts and in measuring performance. For example, in 2008, the company adopted a five-year climate change action plan. The plan includes 31 actions, all of which have accountability measures and goals associated with them. The company measures and tracks performance according to the plan and has its own operating standards and auditing process that includes issues related to environmental impact. Mr. Wilcoxon added that it is imperative that sustainable development feedback be communicated both internally and externally. The company uses its website and sustainable development report to communicate information to the public. Internally, these reports are provided on a regular basis to management and the public policy committee of the board of directors. Participants discussed incentives that could be used to move organizations towards better sustainability practices. Often metrics are not available to show that sustainability is a good long-term business decision and is worth the investment in better practices, noted one participant. Mr. Wilcoxon said that there are different types of

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MEASURING SUCCESS AND TRANSLATING RESULTS 49 individuals in an organization— those who respond to the carrot, the stick, or the halo. How you shape your message depends on which of these audiences are being addressed. Quantitative metrics are really helpful in demonstrating the benefits of integrating sustainability, but often the evidence is anecdotal, which works well with those who respond to the carrot. Being mindful of the bottom line is important in the private sector, and those who watch this closely respond to the stick—the risk associated with not doing business properly and affecting that bottom line. Lastly, noted Mr. Wilcoxon, there are those who try to integrate sustainability into their practice because they believe it is the right thing to do—the halo. For any of these types, qualitative and quantitative metrics and results are important for strengthening the business case for sustainability. Mr. Blackburn noted that he has had his students track the language used on corporate websites to capture the evolution of corporate rhetoric on sustainability. He noted that overall there has been increasing substance to the statements made on the sites and that increasingly there are more quantitative metrics reported, such as water and energy balances. There is a strong movement in which more companies are internalizing sustainability principles and practices so that much progress has been made across the corporate sector, he said. Participants discussed the difficulty in operationalizing sustainability principles and practices. The Houston-based group of ConocoPhillips developed a sustainable development scorecard for major projects, Mr. Wilcoxon said. In order for funding to be approved on a new project, a sustainable development scorecard is required. The score is not the real endpoint of this process, though. The scorecard requires that the conversation be expanded to include a diverse set of other employees, which expands the group’s view of potential risks and opportunities associated with the project. This approach provides an organizational structure and formal process for integrating these concepts across the different groups within one company. In contrast to this scorecard, which serves as a vehicle for furthering sustainability principles, ConocoPhillips has a reward system in place for individual performance that can prevent some sustainability activities, Mr. Wilcoxon said. For example, business unit managers are rewarded

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50 PATHWAYS TO URBAN SUSTAINABILITY-HOUSTON on the basis of production, and when presented with an energy efficiency project versus a project that includes drilling a natural gas well, the manager has more incentive to move forward with the well in order to demonstrate performance in production. This is a challenge that should be addressed so that energy efficiency projects are not disincentivized, said Mr. Wilcoxon.