1.
Sustainability in Practice
Adam Hand, PhD, PE
California Asphalt Pavement Association
2019 Fall Conference
Sacramento, CA November 7, 2019

2.
A little context on this morning…
• SIP-101: Sustainability Overview
• SIP-102: Sustainability Specifics
• SIP-103: Procuring and Evaluating
Sustainability
• SIP-104: How to Develop a
Sustainability Program
• Associated Webinar Series
http://store.asphaltpavement.org/

3.
What is Sustainability?
“Sustainable development is development that meets the
needs of the present without compromising the ability of
future generations to meet their own needs.”
- United Nations, World Commission on Economic
Development: Our Common Future, “Bruntland Report”
(1987)

4.
What is Sustainability? FHWA says…
Sustainable pavements should:
• Achieve the engineering goals for which
they were constructed
• Preserve and (ideally) restore surrounding
ecosystems
• Use financial, human, and environmental
resources economically
• Meet human needs such as health, safety,
equity, employment, comfort, and
happiness

5.
What is Sustainability? NAPA has a practical approach…
• Doing More than the minimum
• Going above and beyond standard
practice and/or required national
regulatory minimums
• Be innovative
• Showing innovation in meeting these
standards and minimums
• Support people & environment
Photo courtesy Ajax Paving

6.
The Triple Bottom Line
3 P’s
• People, Planet, Profits
3 E’s
• Environment, Ethics,
Economics
Broad framework to evaluate
performance

7.
https://en.wikipedia.org/wiki/Triple_bottom_line
Business perspective on the Triple Bottom Line

8.
What is ESG?
ESG = Environmental, Social, &
Governance
• Subset of “sustainability”
• Specific factors to evaluate
company performance
• Defined under corporate
reporting frameworks (GRI,
SASB, IIRC)
https://responsibleinnovation-summit.com/esg-award-2018

9.
What about CSR?
CSR = Corporate Social Responsibility
• CSR is the “S” in ESG, Sometimes companies define it more broadly
https://www.legrand.co.uk/about/corporate-social-responsibility/

10.
Have you heard of the SDGs?
SDGs = Sustainable Development Goals
• Developed by the United Nations in 2015
• Set of 17 goals to end poverty, fight
inequality and injustice, and tackle
climate change by 2030
• Companies often align their
ESG/Sustainability goals with the SDGs

11.
What about CSR?
CSR = Corporate Social Responsibility
• CSR is the “S” in ESG, Sometimes more broadly defined
https://www.legrand.co.uk/about/corporate-social-responsibility/

12.
Developing Company Sustainability Goals Based on the SDGs
1.No Poverty – Pay employees a living wage.
2.Zero Hunger – Food drives, Employees
volunteer at soup kitchen
3.Good Health & Well-Being – Employee
wellness program
4.Quality Education – Tuition assistance program
5.Gender equality – Antidiscrimination policies;
Equitable pay policies
6.Clean water & Sanitation – Utilize recycled
water where possible
7.Affordable & Clean Energy – Utilize renewable
energy
8.Decent Work & Economic Growth – Create
value for shareholders & stakeholders
9.Industry, Innovation, & Infrastructure –
Promote perpetual pavements
10.Reduced inequalities – Evaluate supply chains
for equity
11.Sustainable Cities & Communities – Complete
streets
12.Responsible Consumption & Production –
Use more RAP
13.Climate Action – Develop science-based GHG
targets
14.Life Below Water – Stop using cutbacks, coal
tar sealants, etc. Wetland restoration projects
15.Life On Land – Establish habitat conservation
areas
16.Peace, Justice, & Strong Institutions –
Evaluate supply chains for conflict minerals
17.Partnerships for the Goals – Establish
partnerships with NGOs

13.
https://www.pickthebrain.com/blog/3-surprising-ways-a-deep-breath-can-reduce-your-anxiety/

14.
A few things to remember about “sustainability”
• High level strategy
• It is the ultimate goal of a business or project
• It is NOT an add-on feature to be added at the end
• Emphasizes humans, environment, and long-term
• Asks you to do more for people and the environment than you’re doing
today
• Asks you to think long-term
• Priorities and trade-offs
• You cannot do everything; you must pick priorities
• Sustainability depends on the context
• Priorities depend on context of program, project, company, etc.

15.
A few things to remember about “sustainability”
• Improvement
• We should get better over time
• Go beyond the bare minimum
• Regulations are the bare minimum
• Regulations do not drive improvement or innovation
• Constantly evolve
• What was once exceptional becomes standard practice
• Create value
• Sustainability must create value over the long term
• If it is only a cost, it will be a low priority

16.
Sustainability –
Why should you do it?

17.
Interesting Reading
• The BIG Pivot – Radically Practical Strategies for a Hotter, Scarcer, and
More Open World
• Green to Gold
• Andrew S. Winston, Harvard Business Review Press
• https://www.youtube.com/watch?v=AimD2NPdKcI

18.
Levels of sustainability in business
• Managing impacts – Reactive not proactive
• Driving value – Promoting it
• Leadership – Driving the agenda
Where should your company be?

19.
Big Picture – Why Sustainability?
1. Goodwill
2. Project Requirements
3. Business Opportunity
4. Investor Relations

20.
Reason 1: Goodwill

21.
Goodwill
Tilcon New York Inc., a CRH Company
Winner, 2018 NAPA Community Involvement Award
2nd Annual Touch-A-Truck Event
Pompton Lakes Quarry, New Jersey

22.
Reason 2: Project Requirements

23.
The Rise of the Rating Systems

24.
Project
Requirements
• SR 522 / SR 527
Bothell Crossroads
• Bothell, WA
Photo credit: Atkinson Construction

25.
Project
Requirements
• WSDOT SR 520 92nd
Street lidded
overpass and transit
stop
• Bellevue, WA
Photo credit: Atkinson ConstructionPhoto credits: WSDOT

26.
Project
Requirements
• Caltrans to require
EPDs for asphalt
mixes
• Pilot projects in
2019
• All projects in 2020

27.
Reason 3: Business Opportunity

28.
Business
Opportunity
• Microsoft has been
carbon neutral (and
then some) since
2012
• Internal carbon fee
saves them $10
million/yr
Photo credit: WSDOT

29.
Business
Opportunity
• Starbucks pledged
to hire 10,000
veterans and
military spouse by
2018
• They actually hired
21,000!
• They have pledged
to hire 10,000
refugees by 2022
Photo credit: WSDOT

30.
Business
Opportunity
• The Ford Rouge
Center achieved
landfill-free status
in 2016
• They divert 14
million lbs of waste
• Recycling saves
them $15
million/mo
Photo credit: WSDOT

31.
Business
Opportunity
• Fremont Brewing in
Seattle, WA has
zero-waste
production
• 60% renewable
energy
• They use cans, not
bottles, because of
higher recycled
content, reduced
shipping costs, and
better beer
Photo credit: WSDOT

32.
Sustainability as a Business Opportunity
1. Increased revenue
and market share
2. Reduced expenses
3. Increase employee
productivity
4. Reduced risks
Photo credit: Jennifer Coleman
From The New Sustainability Advantage
(2012) by Bob Willard

33.
Increased
Revenue and
Market Share
• Clark Group
(building industry)
• 2017 Green Building
revenue: $3.56
billion
• 72% of total
revenue
Photo credit: WSDOT

34.
Sustainability in the Highway Sector
Top three priorities in pavement-type selection decisions
2016 market research conducted by
GolinHarris, on behalf of NAPA
• Performance and cost are the top
priorities
• “Sustainability” scored low, but
performance and cost are
themselves aspects of
sustainability
Q7. Below is a list of items that individuals consider when choosing a pavement type. Thinking about
your roadway priorities, which of these would you say are your top 3 priorities when choosing a
pavement type?

35.
Sustainability in the Highway Sector
Favorability of messages from NAPA’s Drivability campaign
Sustainability messages in the Drivability campaign improved respondents’ perceptions of
asphalt the most
• Our stakeholders care about sustainability, but it’s not playing into decision making yet.
9%
13%
9%
10%
21%
24%
40%
45%
49%
40%
57%
41%
41%
36%
37%
3%
6%
3%
5%
1%
6%
1%
1%
Safety
Noise
Smoothness
Speed of construction
Sustainability
Much more favorable Somewhat more favorable No impact
Somewhat less favorable Much less favorable
Q25. What impact does the information contained in this statement have on your perceptions of asphalt?

36.
Reduced
Expenses
(energy, waste,
materials, water,
hiring/attrition)
• Using RAP can save
money
• Perhaps $5/ton if
using 20% RAP
• RAP saves $2
billion/yr nation
wide
Photo credit: WSDOTPhoto credit: Astec, Inc.

37.
Increased
Employee
Productivity
• Pavia Systems/UW
research shows
Headlight© can
boost project
inspector
productivity by 25%
Photo credit: WSDOT
Photo credit: Astec, Inc.

38.
Stock Market Performance
Evolution of $1 invested in value-weighted portfolios
From Eccles, Ioannou, and Serafeim, 2011
• “High sustainability” firms
outperformed “low
sustainability” firms
• Both in the stock market and
accounting measures
• Performance recognized only in
the long term.
Low = address social/environmental issues by adhering
to regulations
High = address social/environmental issues beyond
regulatory requirements

39.
Stock Market Performance
BlackRock – 2018 ESG Study
https://www.blackrock.com/corporate/literature/whitepaper/bii-sustainable-investing-may-2018-international.pdf
• Companies that reduced their
carbon intensity the most out-
performed the market

40.
Stock Market Performance
BlackRock – 2018 ESG Study
https://www.blackrock.com/corporate/literature/whitepaper/bii-sustainable-investing-may-2018-international.pdf
• European companies with the
best ESG metrics outperformed
their peers
• The “middle” companies (Q3)
performed the worst
• The lesson? It pays to have a
focused strategy

41.
Green Bonds
Potential new market opportunity
https://www.bondbuyer.com/news/columbia-south-carolina-issues-first-green-bond
• Green bonds tie sustainability into the
performance metrics for capital
infrastructure spending
• Columbia, SC has issued the first green
bonds for storm water infrastructure
• Opportunity for porous asphalt
pavements???

42.
Bond Yields
BlackRock – 2018 ESG Study
https://www.blackrock.com/corporate/literature/whitepaper/bii-sustainable-investing-may-2018-international.pdf
• Bonds with high ESG ratings have
lower yields
• Companies with high ESG ratings
can borrow money at better rates

43.
Reason 4: Investor Relations &
Stakeholder Expectations

44.
Sustainable, Responsible, and Impact (SRI)
Investing
•SRI investing is growing rapidly
https://www.forbes.com/sites/annefield/2017/01/31/more-evidence-impact-investing-growth-and-what-it-means-for-social-entrepeneurs/#762a43027b7f

45.
Share Holder Influence
Morgan Stanley – 2018 ESG Study
•$23 trillion in assets invested “sustainably”
• $1 in every $4 under professional management
• Of this, institutional investors own 75%
https://www.morganstanley.com/ideas/asset-owners-embrace-sustainable-investing

46.
Share Holder Influence
Morgan Stanley – 2018 ESG Study
https://www.morganstanley.com/ideas/asset-owners-embrace-sustainable-investing

47.
Growth in Company Disclosure
CDP – 2018 Scores
https://www.cdp.net/en/scores

48.
Takeaways and Lessons Learned

49.
Organizational Culture is Critical for
Sustainability Commitment
You have to believe it
2017 Ecological Award winner – Superior Asphalt Inc., Grand
Rapids, Michigan, Dutton Plant
Pennington (2014) study:
• Commitment to sustainability is
rooted in an organization’s culture:
their collective values, beliefs, and
principles
• It’s not enough to advertise a
commitment to sustainability
through procedures and
marketing. You must believe it.

50.
Takeaways
Practical sustainability
• Doing more than the minimum for people & environment
Sustainability can be:
• Business opportunity
• Make money, reduce costs, increase productivity, reduce risk
• Project requirements
• What others ask you to do for sustainability; get paid for these

51.
“Sustainability is about more than just doing the right thing
and getting good business performance. It’s about looking
after our employees, protecting the environment, and
engaging our communities – all of which enables us to work
safely and effectively, and it provides us our license to
operate.”
- James H. Roberts, President and CEO, Granite Construction, Inc.

52.
NAPA Resources to Help You With
Sustainability

53.
The big 4 sustainability topics in asphalt pavements are…
• Quality
• Long Life (Perpetual Pavements)
• People
• Environment
Not coincidentally, these are what NAPA and its
members have been talking about for decades.

54.
Paving awards are given for quality, safety, community,
and ecology/environment. Sustainability.
• Paving Awards
• Sheldon G. Hayes Award for Highest Quality in Construction
• Ray Brown Airport Pavement Award – Highest Quality
• Larry H. Lemon Quality in Construction Awards
• Quality in Construction Awards
• Operational Excellence Awards
• Asphalt Operations Safety Innovations
• Community Involvement Award
• Ecological Award → Environmental Excellence Award

55.
Diamond Commendations are given for above-and-
beyond efforts. Sustainability.
Diamond Achievement Commendation
Diamond Sustainable Commendation
Diamond Terminal Commendation
Diamond Paving Commendation
Diamond Quality Commendation

56.
Emerald Eco-Label – NAPA’s Tool for Environmental
Product Declarations (EPDs)
• Evaluate plant operations and supply
chains to optimize sustainability
• Quantify improvement of environmental
impacts of your products over time
• Provide new marketing opportunities
(leadership through disclosure of env.
Impacts)
• Meet requirements under Agency EPD
policy and green rating systems (LEED,
Envision, etc.)
www.asphaltpavement.org/epd

57.
Other NAPA Resources
• Practical Guide to Sustainable Asphalt
Pavements
• Webinar Series (SIP-104) Nov 12th!
• Black & Green Sustainability Report
• Porous Pavement Guidance
• LEED v4 Guidance
• APA Resource Documents
• Recycled Materials & Warm Mix Survey
• Publications on energy efficiency, RAP,
RAS, SMA, OGFC, etc.
www.asphaltpavement.org/sustainability

58.
95th AAPT Annual Meeting and Technical Sessions
The 2020 Annual Meeting will be held March 22-25, 2020
Westin San Diego Gaslamp Quarter, San Diego, California USA
2020 Annual Meeting
The Annual Business Meeting and Technical Sessions of the
Association of Asphalt Paving Technologists (AAPT) will be March
22-25, 2020 in San Diego, California at Westin San Diego Gaslamp
Quarter. The annual meeting includes asphalt-related technical
sessions comprised of peer-reviewed papers, and invited
presentations on specific topics in the AAPT-ISAP International
Forum, and Symposium as well as a Student Poster Session. Please
see the Annual Meeting page (http://asphalttechnology.org/annual-
meeting.html) for more details as they become available.
Important dates
December 2020 – Annual Meeting registration opens
March 22-25, 2020 - Annual Business Meeting and Technical Sessions
Our 2020 venue
For the latest information please check our web site at: http://www.asphalttechnology.org
AAPT Office:
6776 Lake Drive, Suite 215
Lino Lakes, MN 55014
Phone: 651-293-9188
Email: aapt@asphalttechnology.org