Green Mountain Power Creates B Corp Energy
(3BL Media/Justmeans ) - Environmental advocates: They are leaders in solar, wind and hydroelectric energies with 62 percent of their portfolio in renewables. Empowered employees: They were named one of the âBest Places to Work in Vermont.â Approachable leadership: Their CEO knows the names, partnersâ names and petsâ names of 600+ employees.
Which company am I describing? You might have guessed I was referring to sustainable business poster children like Patagonia, Ben and Jerryâs or Cabot Creamery. Guess again and instead, think âmonopoly.â Iâm describing the first, publicly regulated utility company to become a Certified B Corp: Vermontâs power provider, Green Mountain Power (GMP).
If you fell out of your chair or stood up and clapped after you read that, your response was appropriate. This is an earth-shattering, groundbreaking accomplishment for both GMP and for the B Corp movement. It means that a utility company is creating power while generating positive impact, a capability not typically associated with traditional fossil-fuel utilities. Thatâs because GMP is far from traditional.
Green Mountain Powerâs B Corp journey began in 2009 when John Tedesco, project manager of GMPâs Enterprise Resource Team and GMP employee since 2005, knew that he wanted to take GMPâs measurement of impact to the next level. Previously, the company had been tracking their impact via the Global Reporting Initiative (GRI), but Tedesco felt it lacked meaning for GMP stakeholders. He sensed that the GRI wasnât pushing GMP to pursue sustainability in tangible ways nor was it making a difference to customers. Tedesco knew GMPâs impact story was one worth communicating; so did B Lab. Around the time Tedesco began considering other ways to dig deeper into other measurement tools, Jay Coen Gilbert, co-founder of B Lab, approached Green Mountain Powerâs CEO, Mary Powell.
âJay is a mover and a shaker. In B Labâs early days, he was constantly asking B Corps which other companies should also become B Corps. He spent a lot of time knocking on doors in Vermont and our name kept coming up,â says Tedesco.
Coen Gilbert and Powell agreed it was time to start GMPâs B Corp âjourneyâ together. They knew that if it were possible for GMP to complete the B Impact Assessment and obtain a minimum score of 80 out of 200, they would be breaking major ground together. First the companies needed to begin speaking the same language. For the first two to three years in their relationship, GMP and B Lab worked together to redefine the B Impact Assessment questions according to GMPâs publicly regulated monopoly structure, with which B Lab had no previous experience. Tedesco regularly met with Coen Gilbert and spent many hours on the phone with others from B Lab to understand the assessment and to contextualize the questions.
Katie Kerr, Director of Communications at B Lab, says that because GMP has operations geared toward a product that is not âphysical,â it was a challenge to determine the application of questions.
âThe challenge was in identifying how to quantify best practices they were engaged in and the practices they do because of regulatory requirements and compliance,â says Kerr. Â
According to Tedesco, it took a lot of perseverance and dedication from both parties.
âThe biggest part of the whole process was to tailor the assessment to our needs. We worked to frame the questions in an appropriate way. For example, B Lab measured our carbon footprint not only from our 200 employees at the time but from all of the carbon used by our 95,000 customer base, including customers like IBM who uses as much electricity as the city of Burlington. We had to deconstruct questions like this, which didnât fit the regulated structure of a utility. It took an extreme amount of effort on everyoneâs part,â explains Tedesco.Â
In fact, it took two years for GMP to complete their first attempt at the B Impact Assessment. By 2011, Tedesco realized he wanted to make it a priority. He decided to make it the focus of his final Capstone project in his MBA in Managing for Sustainability program at Marlboro College Graduate School. Through the encouragement of his adviser, Will Keyser, Tedesco completed the B Impact Assessment for GMP by the end of 2011, and the company scored 104 out of 200 on the B Impact Assessment. Then, Green Mountain Power and Central Vermont Public Service (CVPS) became one entity and GMPâs B Corp journey was put on hold.
âEveryone was so excited about our score, but the timing was off,â says Tedesco. âThe announcement for the merger with CVPS came late 2011, and we merged in June 2012. I donât think it was a very easy decision for Mary Powell to put our B Corp journey on hold. Clearly, it was the right decision.â
By 2013, GMP and CVPS had successfully merged without laying off a single employee. Tedesco continued to stay in contact with B Lab staff. It wasnât long until Powell and other GMP executives, including Don Rendall, GMPâs General Counsel at the time, saw the B Corp model as an incredible opportunity, and the journey began again.
Though Tedesco was not part of the second iteration of the B Impact Assessment, his groundwork made it possible for GMP to complete it the second time in four months. Tedesco had developed a contextualized a platform from which to measure impact and, most importantly, assess areas for growth. Green Mountain Power scored an 84 out of 200 on the B Impact Assessment with their highest rating in environmental impact. This comes at no surprise.
According to Tedesco, everyone at GMP feels a responsibility to reduce environmental impact, internally and externally. Employees are constantly assessing their personal impact, and they are evaluated on their environmental commitment in their annual review.
âEmployees are empowered to streamline activities, whether they work in finance or as a line worker. We ask ourselves questions like, âI need to meet individually with my 40 direct reports every month. How do I do that? Do I hop in a car? Or can we meet face to face online?â Little environmentally conscious decisions like that happen all around the organization. Itâs our underlying ethos,â says Tedesco.
Big, environmentally conscious decisions are happening all around the organization, too. GMP hosts a 62 percent renewable energy portfolio, including 45 percent from large-scale hydroelectric power and 17 percent from wind, solar, low-impact certified hydroelectric energy, and âcow powerâ whereby methane from cow poop is converted into usable energy.
âMost utility companies are fighting renewable power. We say, letâs do more, faster. Thatâs our message. GMP is overcoming challenges to make the grid a two-way street, not a one-way street, â says Tedesco.
And, somehowâget ready to fall out of your chair againâthis year, GMP has also reduced costs to customers by 2.46 percent, and it wonât stop there. According to Tedesco, GMPâs goal is to save the customers $144 million over the next ten years.
âWe are realizing that savings more and more. We will exceed our goal, no doubt,â says Tedesco.
Tedesco says GMP can push towards a 100 percent renewable energy portfolio and continue to save the customer money. He says this is possible by paying attention to efficiencies, making long-term investments in technology and taking advantage of the growing affordability of renewables. In 2009, GMPâs first 300-kilowatt solar array cost $7.00 per kilowatt-hour. Today, it costs just $2.25 per kwh. Tedesco says technology improvements in renewables are saving them money, too. For example, transmission lines in wind and solar were found to be no longer needed, saving GMP $140 million in repairs. Green Mountain Power is determined to pass cost savings along to their customers.
âWhen we save money, it impacts our customersâ rates deeply,â says Tedesco.
Cow Power: A Personal Anecdote
These cost savings are also passed down to GMPâs suppliers. During my MBA in Managing for Sustainability program at Marlboro College I had the privilege of working with GMPâs Energy Innovation Center and Cow Power Team, which included Tedesco. My team was amazed by GMPâs passion and dedication in partnering with local farmers. We saw cow manure turned into energy, and we saw multi-generational dairy farms gain access to new revenue--incredible accomplishments for farmers and for GMP. The Cow Power program is just one way GMP forms relationships with the communities of Vermont. GMP is so much more than a utility company. They are a bridge-builder.
GMP has built the bridge from publicly regulated monopoly to Certified Benefit Corporation. They will undoubtedly lead the way for utility companies to join the B Corp movement and inspire other companies that may be unsure if making money and creating positive impact are complementary strategies.
âGMP has cleared the path for others to follow. They are a further proof that any company, regardless of size, industry and location can create a positive impact and use business as a force for good,â says Kerr.
Cheers to you, Green Mountain Power and to all of us committed to using business as a force for good!
Read about GMP as the first Certified B Corp utility. Check out their B Impact Assessment. Learn about Cow Power. Get your MBA in Managing for Sustainability at Marlboro College Graduate and Professional Studies.