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I’m extremely proud to share that one of my “CVS Effect” articles was picked as the top leadership article for “Best of 2014 in Sustainability.”

Bestof2014

 

 

 

 

 

 

 

It’s this one: The “CVS Effect” in Effect: Apple, Disney and Chipotle Step Up

Five major brands have just made news for decisions that buck the bottom-line mantra. Could this be momentum for the “CVS Effect”? Take a look and see if you agree. And note too how brands are joining with allies on these issues, while one brand — Chipotle — is potentially breaking major new ground. Keep reading…

Here’s my latest for Sustainable Brands.

Previous articles in this series talked about leading businesses taking bold steps on their own for the common good — because it’s the right thing to do — even if it costs the company financially in the short term.

This time I want to point to the latest wave of businesses working collaboratively on the urgent, common ground issues of renewable energy and climate policy. In America’s history of westward expansion and exploration, pioneer families came together in wagon trains for mutual support. In the same way, the examples below show that businesses are taking action, together, to ensure a more certain future that’s good for all of us and for business.

To start off, a June 2014 clean energy report by Ceres, WWF and Calvert Investments supports the idea that this trend is gaining momentum. The report makes the case that big US companies are already investing in renewable energy as a basic “business as usual” material issue, including UPS, Cisco Systems, PepsiCo, United Continental and General Motors. These and the other companies in the report have already saved a billion dollars in energy costs and upped their business planning certainty. Far from a fringe or boutique concern, renewable energy investment is about knowing where your energy is going to come from tomorrow, and having some sense of how much it will cost.

It’s worth noting that several cross-sector partnerships and multi-stakeholder groups for climate issues have been working on these issues for years. The UK- and EU-focused Prince of Wales’ Corporate Leaders Group first convened in 2007. And the US-focused group BICEP has been advocating for energy and climate legislation since 2008, with its Climate Declaration attracting over 700 corporate signatories to date. (For more examples of creative, effective partnerships on climate-impacting issues, take a look at Sustainable Brands’ collaboration and co-creation channel.)

But just in the past three months, there have been several high-profile announcements, as well as one intriguing low-key entry. These are four groups to watch:

1. March 2014 — Business Alliance for the Future Meets for First Time
The Business Alliance for the Future is a new alliance of alliances that’s being organized and supported by about 40 business affiliations including BSR, B Team, Ceres, World Business Academy, SVN, National Association of Women Business Owners, Young Presidents’ Organization and others to “to connect, magnify and exponentially accelerate, business’ role in building a world where business excels, people thrive and nature flourishes.”

The group first met in March in Santa Barbara, CA and it is scheduled to meet again in October at the Fowler Center for Sustainable Value at Case Western University. The Alliance is formulating its strategy around the intention to dramatically impact existing game-changing projects (to the tune of 5x in 5 years) by fostering action-oriented collaboration.

According to Alliance member Jeana Wirtenberg, co-founder of the Institute for Sustainable Enterprise, who is heading up one of the working groups, “There are several collaborative action team initiatives already well under way, including: amplifying and spreading a new business narrative; creating 100 percent renewable energy economy; participating, aligning around, and designing a grand economic strategy; and developing and implementing a new corporate scorecard and metrics.”

2. May 2014 — We Mean Business Coalition Launches
While we don’t have specifics yet about what this group will tackle, We Mean Business stated goal on their website is to call for “ambitious climate policy and bold climate action.” The group is like a super-pod of business action leadership, with partners from BSR, CERES, CDP, the World Business Council for Sustainable Development, the Climate Group, and the Prince of Wales’s Corporate Leaders Group, in conjunction with Nike and IKEA.

3. June 2014 — Small Business Poll Shows Support for Market-Stabilizing Rules
In late June, the American Sustainable Business Council released poll results showing that US small business owners support climate rules for market stability and predictability.

The survey found that “clear majorities of small business owners are concerned about how climate change will affect their companies, including its impact on energy costs, health care costs and the infrastructure they depend on. Survey respondents voiced strong support for government action to address climate change, specifically, efforts to limit carbon pollution from power plants which produce a third of all U.S. carbon emissions.”

I find this poll interesting because it shows that leaders from small US businesses are on the same page when it comes to wanting business certainty in the face of climate instability as many of their colleagues at global behemoths.

4. July 2014 — Launch of Renewable Energy Buyers’ Principles
And on July 11, the World Wildlife Fund (WWF) and the World Resources Institute (WRI) announced that 12 major companies — spanning communications, manufacturing, consumer goods and tech — are jointly asking utilities and energy suppliers to offer more renewable energy products.

The Buyers’ Principles provide a coordinated starting point for what these companies need in terms of options, financing, contracts and emissions levels. The inaugural signers are Bloomberg, Facebook, General Motors, Hewlett-Packard, Intel, Johnson & Johnson, Mars, Novelis, Procter and Gamble, REI, Sprint, and Walmart. I’m hoping that this will be an unmistakable unmet need signal to the energy market that yes, business wants more renewables and is willing to pay for them.

In my mind, these groups are coming together now for one profound reason. With government paralysis on one side and entrenched lobbying for the fossil fuel status quo on the other, the Cavalry isn’t coming. If renewable energy and climate action are going to be truly become Business as Usual for successful companies — as Ceres’ clean energy report posits — then business has to make it happen.

Together, I see all these efforts leading up to this September’s UN Climate Summit in New York City, where business will be asked to take on larger and more meaningful commitments. Just last week, the UN event’s organizers and partners called for business leaders willing to stand up for carbon pricing “as a necessary and effective measure to tackle climate change.”

And then, it will be time to take all this positive forward momentum to the COP21 meeting in Paris in December 2015. That’s where, once again, the entire world will attempt to agree on climate action and who is going to pay for it. I’m hopeful that, by the time we get there, collaborative efforts like these will have blazed the trail for business to be a major part of the solution.

Here’s my latest for Sustainable Brands.

Here are three new examples of the CVS Effect in action that show how brands can change how business operates — for the better (the “CVS Effect” is shorthand for recognizing brands that are doing the right thing, because it’s the right thing to do). In these cases, the “right thing” is choosing to share information and resources, even when there’s a risk of losing market dominance or taking a financial hit.

In the past few years, we’ve seen a surge in businesses coming together to work on sustainability issues that span entire supply chains, affect sectors as a whole and transcend location. It’s been called collaborative competition, co-opetition, and the Collaboration Economy.

A well-known example is the three-year-old Sustainable Apparel Coalition.

Another is what Sustainable Brands ’14 attendees experienced inside the conference’s Activation Hub tent. This convivial, shared physical space showed how collaborative conversations and sharing knowledge can work in the real world, in real time.

And just last week, the open innovation platform LAUNCH announced its newest System Challenge for breakthrough ideas in Green Chemistry.

But while these examples are important, they’re about strength in numbers. What I’d like to highlight in the examples below are these leaders’ willingness to stick their necks out beyond a short-term horizon to a possibility of radically transformed marketplaces

On June 12, Tesla’s CEO Elon Musk announced he’s making the electric car company’s secret, patented information available to everyone, in order to turbocharge the rollout of electric vehicles (EVs).

The potential risk, of course, is that competitors that have lagged in the EV space might now leapfrog ahead of Tesla in the marketplace. This could be a real-life Innovator’s Dilemma, if you will, where the person who initially creates a new product, service or market gets crushed by the ones who follow.

But as a long play, it’s a good bet. Tesla can’t roll out electric cars if there’s nowhere to charge them and no one interested in buying them. Giving away the company’s patents raises the floor for all players — it’s like the ultimate golf handicap — for faster, broader EV innovation and adoption that good for everyone (Only a week later, Nissan & BMW are reportedly discussing how to work together on charging networks).

Then on June 16, Starbucks CEO Howard Schultz announced that the coffee giant wants to help its 135,000 workers go to college — for free. The reasons he gave for this move are to help close the inequality gap and help more Americans graduate from college without debt.

My first thought about the potential risks is that Starbucks stands to lose trained workers once they have a college degree in hand and are better qualified for jobs outside of Starbucks.

But that’s not what’s likely to happen. PwC’s 2013 NextGen research shows that millennial workers want to work for companies that care about more than the bottom line. So this “goodwill” benefit may wind up making Starbucks’ people — now better educated, college-degree holding — even more loyal.

This move is also notable because it blows the traditional tuition reimbursement benefit out of the water in terms of breadth and scope. A partnership with digital learning giant ASU offers Starbucks more opportunities to more workers companywide than would be economically feasible with the old reimburse-money-for-grades model.

And finally, on June 17, SAP’s 6-week MOOC course “Sustainability and Business Innovation” ended, having attracted over 16,000 students (including me).

Course instructor and SAP CSO Dr. Peter Graf was a knowledgeable, personable guide to how SAP approaches sustainability innovation. His weekly videos made the course feel like a personal experience, even though I was one of thousands in a global virtual classroom.

The potential risks here are the same as Tesla’s, albeit at a much lower wattage. By pulling the curtain back on how SAP innovates for its clients, there’s the chance that others will do just that.

Obviously, the course brought the company good press. But I believe the real reason is about leadership. Since SAP is in the business of helping companies manage their resources more effectively, it has knowledge and experience to share that can help jump-start sustainability innovation and progress across industries and sectors.

When it comes to sustainable innovation and sustainable supply chains, I believe that a rising tide lifts all boats. And that it’s the leaders from forward-looking brands — such as Musk, Schultz and Graf — who are turning that tide and can be examples for others to follow.

As Schultz told host Jon Stewart, “We can’t wait for Washington. We’ve got to step up as we have done in the past and demonstrate true leadership.”

What Schultz is saying is backed up by strategist Alice Korngold’s compelling conclusion that corporations are the only thing that can save the world. But she’s not suggesting that companies go it alone. Her research shows that companies need to work with others, especially NGOs and other businesses, and “engage effectively with stakeholders; recognize that sustainability is a matter for board governance; and commit to accountability and transparency.”

By stepping up and proactively sharing their resources, these leaders will help us move us faster to the tipping points we need for adopting sustainable business practices everywhere.

My bet is that these moves will pay off in a stronger, more robust marketplace where there’s room for everyone to grow and thrive.

“Reducing risk” rules over “More profits” PwC Survey Finds Majority of Investors Consider #Sustainability http://t.co/autZ8qpqsd

Kudos to the Alabama planning director working with climate deniers to help his state. Tough job #actonclimate http://t.co/VhH4584FKX

A MINING exec talking about sustainable license to operate, zero-waste, zero-harm. Asking the right questions http://t.co/RyrHOs4gAV

Vision! Revived Longitude Prize offers £10m to solve greatest scientific challenges/ http://t.co/vJmBI3GYAZ

Important & encouraging: Evangelicals in Florida working for climate change. http://t.co/PUDSyvWYwR

Some practical “where-to-invest-once-you-divest” suggestions. http://t.co/287G24Dk4W

My latest: The ‘CVS Effect’ in Action: Lessons from Chipotle’s #BurritosNotBullets CSR Win.  http://t.co/pX4ZDQSNEr

In Shell carbon bubble argument, Guardian rockyrex commenter reminds that fates can swiftly shift, a la asbestos litigation. http://t.co/fZ6D0g4SrC

Shell reassures investors that carbon bubble is not a biz risk. Want to ask the reinsurers about that? http://t.co/78nNhVduGv

Great article! Jeana Wirtenberg: How 9 leaders are building sustainable culture http://t.co/wS7gDBvYam

IMO, the open-carry folks weren’t there for burritos. My $.02 on #BurritosNotBullets  http://t.co/nClfM7qHW4

Andrew Winston at Fortune Green this week: In terms of climate change, “the cost of doing nothing is now. Not next year or next century.” –

10 Companies That Are Actually Listening to Customers. http://t.co/JJhLqcmRIP

Bottomless salad bowl in your own backyard! http://t.co/Y1uFyDkrsR

Leave the gun, enjoy my burrito. Thanks Chipotle for standing up for your customers’ peaceful enjoyment http://t.co/QpX9quD0Rl

TweetChat #fails….grats to Aman Singh for hosting productive collegial #sustybiz chats http://t.co/R7eRsWQTod

“Get to Yes” progress from Obamacare opponent shows change is possible for climate action. http://t.co/znAYTQpC8o

A poem that cleans the air—literally a breath of fresh air! http://t.co/uarkyxGjtD

“What everyone does when no one’s looking” Good MITsmr piece on corporate culture http://t.co/vn91PkjW20

Andrew Winston: How CEOs Can Save the World http://t.co/Gh2iQuWOd

Here’s my latest trend piece for Sustainable Brands.

In earlier articles, I asked whether consumers will back up brands that makes decisions “because it’s the right thing to do” over pure profit motives.

My bet is that these decisions will be rewarded by consumers as it become more normal for companies to make bold pro-health and pro-environmental choices. Here are five recent examples that point positively in that direction.

1. On April 1, Avon announced that it will stop using the antibacterial chemical triclosan in its products “based on the preferences expressed by some of our customers.” This move isn’t that surprising, since triclosan is already on the phase-out list for Proctor & Gamble and Johnson & Johnson. But nonetheless, it’s a statement that some customers’ voices matter enough to stop selling products that other customers might still want to buy.

2. Two days later, on April 3, Nabisco’s graham cracker brand Honey Maid released a video called “Love” as a response to anti-gay comments about the brand’s March 2014 “This is Wholesome” commercial. That commercial, which shows gay and multi-racial families, had been blasted by conservative group One Million Moms as “promoting sin.”

We don’t know yet how the “Love” response video will impact sales. But with 3.5 million views and counting, I predict a graham cracker bump. On Twitter, the #thisiswholesome feed was awash with feel-good comments about wanting to make s’mores and one photo showing empty shelves.

3. Also on April 3, Mozilla’s new CEO Brendan Eich resigned after only two weeks on the job. He faced pressure to do so after online protests and a brief boycott campaign by OKCupid for his support of California’s anti-gay marriage law, Proposition 8, including a $1000 donation Eich made to the campaign in 2008. The OKCupid boycott caught eyeballs, but the real story, in my view, was about talent war pressure.

You can see that in Mozilla’s official corporate apology for Eich’s brief appointment, which cites an “organizational culture” that values “equality for all.” In other words, the most in-demand people want the best workplace. That increasingly assumes pro-equality and pro-environment policies.

The Eich resignation story is also notable for how fast it happened: his resignation was an about-face from his weather-the-storm stance just days earlier.

4. Then on April 6, restaurant brand Chili’s announced that it was withdrawing support for an autism-awareness group’s fundraiser, scheduled for the next day. Chili’s said it cancelled the event “based on feedback we heard from guests.” Others have noted that the autism awareness group’s website includes questionable statements about vaccination safety and the causes of autism. By responding fast to customer feedback, on a Sunday no less, Chili’s was able to extinguish a volatile public relations situation with a minimum of lost face.

5. And finally, on April 8, California lawmakers considered the so-called “Blackfish bill” that would ban keeping orcas in captivity. State assembly member Richard Bloom says that he wrote the bill after seeing the film Blackfish. Months of positive citizen support on social media surely helped, too.

The April 8 hearing attracted hundreds of people, but after testimony from the bill’s supporters and opponents, the committee declined to take up a vote. Instead, they sent the bill for further study, a process that could take up to a year.

For now, SeaWorld’s orca shows will go on as scheduled. I’m curious about what anti-captivity campaigners will do next, and if they will be able to influence ticket sales.

Together, what the first four examples show is that being a good business is good for sales. When customers speak up, and brands respond, everyone wins. Most of the time, at least.

That’s because what’s good for SeaWorld visitors, and good for sales, and good for California jobs, is really bad for these animals. Keeping captive orcas has been compared to spending one’s whole life in a small bathroom. SeaWorld has a huge opportunity here to be a world leader for truly responsible oceanic stewardship. It’s up to the company’s leadership to imagine — and create — that reality for its next generation of guests.

They won’t have to do it alone. As more customers speak up, there will come a day when SeaWorld says, “It’s wrong. So we’re stopping.” I plan to be a customer who supports them in that decision.

Here’s my latest trend piece for Sustainable Brands.

Five major brands have just made news for decisions that buck the bottom-line mantra. Could this be momentum for the “CVS Effect”? Take a look and see if you agree. And note too how brands are joining with allies on these issues, while one brand — Chipotle — is potentially breaking major new ground.

Feb. 28: Apple CEO defends doing the right thing — not just the bottom line

Last week at a shareholder meeting, CEO Tim Cook said that investors who don’t agree with the company’s commitments to renewable energy among other sustainability issues should divest.

Cook knew that he was on safe ground with this issue. A related shareholder proposal against pursuing renewable energy investment got less than 3 percent of the vote. And just two days earlier, Apple had announced that it had signed the Climate Declaration along with more than 120 other California companies.

I don’t know if these two issues occurred to or mattered to Cook before he spoke. But as a high-profile, profitable CEO, his stance creates more “safe ground” for other brand leaders to publicly talk about doing things because they are just and right, not just to make money.

Mar. 2: Disney stops Boy Scouts of America funding because of gay troop leader policy

According to CNN, Disney joins Lockheed Martin, Caterpillar, Major League Soccer, Merck, Intel, Alcoa, AT&T and UPS as companies that have ended partnerships with the Scouts because of its anti-gay policy. So, Disney wasn’t the first to make this move, but this is a noteworthy step because of Disney’s close brand identification with childhood and families.

Mar. 3: Kroger and Safeway say no to GMO salmon

This one is interesting because it’s about something that doesn’t exist yet. The FDA is currently considering whether to allow genetically modified salmon to be sold.

The US’s two largest grocery store brands — Safeway and Kroger — have joined other leading national retailers in saying they won’t carry the product if approved, which include Target, Whole Foods, and Trader Joe’s. Sure, this isn’t as big as CVS pulling tobacco off the shelf. But it still matters because it shows big companies saying “no” to a product that some customers might want, even if peremptorily.

Mar. 5: Chipotle names climate change as a material risk in its 10-K. As reported by Climate Progress’ Emily Atkins, last month Chipotle listed climate change as a risk for the company in its SEC filing and then downplayed it.

Atkins countered that it is a big deal, because, “The fact that Chipotle openly acknowledges climate change, even as a ‘routine risk,’ is news — as there are likely companies that wouldn’t mention the words ‘climate change’ if their business depended on it. And they do.”

Which leads to another reason why this is potentially a big deal.

It’s no secret that SEC disclosure requirements leave room for companies to be opaque about climate change risks.

Bill Russell, of Transitioning to Green (and a Green Accounting professor), noted that, “Chipotle taking this leading position on climate-change risk disclosure could allow shareholders of any competitor company to ‘demand’ that their company explain how climate change is not a material risk to their company. At any time in the future, should it turn out to be material and they had ‘demanded’ the question be addressed, they could potentially be set up for a shareholder lawsuit.”

While climate-change risk might still be a hard thing for some people to grasp, litigation risk sure isn’t. This is something that corporations are finely attuned to — and take action to prevent.

So with this move, Chipotle may have blown a transparency hole in climate-change risk disclosure for shareholders of other companies to climb on through.

I wrote earlier that I’m betting that forward-looking brands that make bold pro-health and pro-environmental choices will be rewarded by investors and consumers — and others will follow.

It’s just the “Diffusion of Innovations” theory in action. Innovators take the risk and go way out on the limb. Early adopters see it and spread the news. Then others follow it and it becomes normal.

As a whole, these announcements — as signs of changing times — were met at worst neutrally (Disney) and at best positively (Apple) in the press. I’m betting on more to come.

When consumers hear an end-date of 2017 for the tiny problematic beads, does this tell them that crucial environment and climate actions can wait?

L’Oreal’s (and others’) announcement that they are phasing out the use of microbeads in their skin cleansing products by 2017 is laudable and a good step forward. There’s new scientific research linking the tiny, polystyrene balls to Great Lakes pollution.

Meantime, a new “ban the bead” law is shaping up in the New York state legislature. But like the manufacturers’ phase-outs, it will take years for the ban law, if passed, to go into effect.

But these announcements have me wondering:

*Does a multi-year “phasing out” or ban of this problem ingredient inadvertently send a signal to consumers that there’s time to wait on other important environmental and climate change actions?

*Is this the best that our sustainability and government leaders can do? Could they be doing more, faster?

*Are the full costs of the environmental harm being done to the Great Lakes today, and repair, being priced into these companies’ phase-out plans? If not, why not?

*And if companies do decide to act faster, with some short-term financial hit, will investors and consumers support them for doing the right thing in the long-term?

We could call it the “CVS Effect”—playing off the recent news of the drugstore chain’s decision to no longer sell tobacco in its stores—and the burgeoning “Blackfish Effect” movement sparked by the anti-Seaworld film.

These questions deserve a closer look. Here’s why: the answers will either support—or hinder—important climate action steps finally getting underway by the Obama administration and leading businesses.

These questions come from a place of examining what’s possible for forward looking brands that are already committed to sustainability. It bears repeating that all of these brands already are sustainability leaders in their industries. I’m completely aware of the reality that global manufacturing supply chains can’t be turned off overnight. But when necessity demands it, such as in a case like the 1982 Tylenol poisonings, things can happen very quickly.

It strikes me that change can only happen today. That’s true for any choice we make as individuals, as citizens, and as business owners to protect and restore the environment. So why not start stretching the bounds of what’s possible, sooner, as a better way of doing business?

Forward-looking brands can be leaders in this movement, by taking faster, bolder action that takes natural capital into account, as well as the bottom line.

Our responsibilities in life and business don’t end at the factory wall. That’s where they begin. It’s time for sustainability actions that have global impact to be the norm for leading companies, instead of the exceptional.

It remains to be seen how consumers and investors will respond to CVS’ “no smokes” announcement, and if other retailers will follow their lead. One encouraging trend is the collaboration we’re starting to see among leading brands across industries.

Here’s hoping that the CVS Effect is just getting started.